Finding Text
Davis-Bacon Act Wage Compliance. Federal Program: Public and Indian Housing, Federal Assistance Listing No. 14.850. Criteria: The Davis-Bacon Act requires that all laborers and mechanics employed by contractors or subcontractors for work on construction contracts more than $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the DOL (40 USC 276a to 276a-7). Condition: A review of internal controls over monitoring of the wage rates for compliance with the Davis Bacon Act revealed that contracts were not being monitored for compliance with the Act. Wage rates for local and smaller contractors were not being monitored nor were any certified payrolls provided to the Authority. Effect: Wage rates may not be in compliance with federal regulations. Recommendation: Internal controls should be established to collect, review, and monitor wages paid by contractors to its workers. The Authority should enforce submission of payrolls by withholding funds until the contractor has complied with the certified payroll submission. The Authority should review each payroll to ensure wages are at least the minimum wage rate for the worker’s classification. The Authority should periodically interview construction workers on site to verify the validity of the payroll information. View of Responsible Officials and Planned Corrective Actions: We were not aware of the requirement to monitor wage rates for contracts below the sealed bid procurement requirements. We will establish internal controls to collect, review and monitor wages paid by contractors to its workers. We will enforce submission of payrolls by withholding funds until the contractor has complied with the certified payroll submission. We will review each payroll to ensure wages are at least the minimum wage rate for the worker’s classification. We will also periodically interview construction workers on site to verify the validity of the payroll information.