audit_findings: 6

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rowid source report_number finding_number muni_id state entity_name entity_type entity_ext_id place_geoid match_method auditor report_title audit_type fiscal_year period_start period_end published_date finding_category severity questioned_cost cost_basis finding_title finding_text report_url fetched_at
6 wa-sao 1019842 2016-002   WA Ferry County County 0113 53019 no_match Washington State Auditor's Office Financial and Federal audit — Ferry County Financial and Federal 2016 2016-01-01 2016-12-31 2019-02-19 federal_award_compliance material_weakness 0.0 Questioned Cost Amount: $0 The County did not have adequate internal controls to comply with Davis-Bacon Act (wage rate) requirements. CFDA Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, Department of Transportation Federal Award/Contract Number: NA Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA Background The County spent $1,970,353 federal Highway Planning and Construction funds in 2016. $1,372,075 was spent on the Boulder Creek project for construction of about three miles of roadway. The County spent $529,662 on the Curlew Storm project for construction of a thin lift overlay. The Davis -Bacon Act (Act) requires all laborers and mechanics employed by contractors or subcontractors for work on construction projects financed with more than $2,000 of federal funds to be paid wages no less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. The Act includes a requirement for the contractor and subcontractor to submit to the County weekly, for each week in which any contract work was performed, a copy of its payroll and a signed “Statement of Compliance” (weekly certified payroll reports). The prime contractor may collect the weekly certified payroll reports for the County during the project, but the County remains responsible for compliance and maintaining the documents according to records retention requirements. Washington State Auditor’s Office Page 10 Description of Condition The County did not have adequate controls in place to ensure it collects all weekly certified payroll reports from its prime contractor and subcontractors performing work on its federally funded projects. We consider this deficiency to be a material weakness. This issue was not reported as a finding in the prior audit. Cause of Condition The County documented subcontractors that worked on the projects and used that information to request weekly certified payroll reports for those periods from the prime contractor. However, the prime contractor did not collect all weekly certified payrolls from subcontractors, and the County did not have a process to follow up when its prime contractor did not respond to the initial request, or separately collect them. Effect of Condition and Questioned Costs The County did not collect 11 of the 89 required weekly certified payroll reports for work performed on the Boulder Creek West and Curlew Storm projects. Also, the County did not ensure that 16 weekly certified pay roll reports were received within seven days for the Boulder Creek West project. Without adequate internal controls, the County cannot demonstrate workers were paid prevailing wages as the Act requires. The County could be liable for paying additional wages if prevailing wages were not paid. Recommendation We recommend the County strengthen internal controls over compliance with the Act’s requirements, including implementing effective controls to ensure it collects all weekly certified payroll reports when due. County’s Response The prime contractor on the Boulder Cr project was a subcontractor on the Curlew Storm/Overlay project. This contractor has a history of not complying when it comes time to hand in required paperwork. The County has a documented history of attempting to collect missing or late paperwork from this contractor. The County did not know at that time that it could seek required paperwork directly from subcontractors as leverage for such required documents. In light of this new Washington State Auditor’s Office Page 11 understanding of what the County ca n do to collect missing paperwork they have developed a Corrective Action Plan that will help in resolving this issue. The County will use a checklist to ensure the timely receipt of all required documents and will withhold payment when necessary to enforce this compliance. The County will notify the prime contractor that compliance of handing in required paperwork will be a part of the contractors performance review and that the County will seek further actions if issues persist; including the request of n ot allowing the prime contractor awards of future projects. Auditor’s Remarks We appreciate the County’s commitment to resolving the issues noted. Applicable Laws and Regulations The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, paragraph 11. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303 Internal controls, establishes internal control requirements for management of Federal awards to non-Federal entities. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516 Audit findings, establishes reporting requirements for audit findings. Title 29, U.S. Code of Federal Regulations (CFR), Section 3.3 – Weekly statement with res pect to payment of wages, and Section 3.4 – Submission of weekly statements and the preservation an inspection of weekly payroll records, establishes requirements for submission of weekly certified payroll reports. Washington State Auditor’s Office Page 12 https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1019842&isFinding=false&sp=false 2026-07-30 13:24:54