Tacoma’s monitoring of contractors paid with federal money has been lacking, audit finds
The City of Tacoma was found to lack adequate internal controls to ensure its contractors complied with federal reporting and wage-rate requirements in 2023, according to a state audit report published this week.
City staff also did not comply with the Federal Funding Accountability and Transparency Act (FFATA), which requires recipients of federal awards to report who was awarded funding as well as any amendments to sub-awards by the end of each month.
In a response to the Auditor’s Office, the city said it was fully committed to “establishing and maintaining robust internal controls to ensure compliance with federal requirements, particularly in the administration of federal grant programs.”
In 2023 the city of Tacoma spent $2 million on payments to one contractor and seven subcontractors for a Links to Opportunity Streetscape Project to complete sidewalks and streetscape upgrades in the Stadium and Hilltop Districts. The city did not establish a contract with the contractor that included federal wage-rate provisions, an issue auditors deemed to be “a significant deficiency.”
Last year the city also made five new sub-awards totaling $2.2 million and did not prepare or submit any FFATA reports for the sub-awards, as required by federal law, errors state auditors deemed a “material weakness that led to material noncompliance.”
A state audit for 2022 also found the city of Tacoma lacked internal controls for ensuring compliance with federal requirements. In that case, the city failed to verify sub-recipients of awards were not suspended, debarred or excluded from doing business with the federal government.
Although city management took corrective action, “they did not monitor staff to ensure they completed the [FFATA] reports,” according to the 2023 audit. Failing to submit the required reports “diminishes the federal government’s ability to ensure accountability and transparency of federal spending,” the report said.
“While City officials knew about federal wage requirements, not all contract templates had been updated to include specific language to meet federal wage rate requirements,” according to the audit. “Department staff rely on the templates, and as a result, the contract with the prime contractor did not include the required federal wage rate clauses.”
Without adequate internal controls to ensure those wage rates are in contracts, the city can’t prove it complied with federal requirements, the audit said.
“Additionally, contractors may be unaware of the wage rate requirements and the City could be liable for paying additional wages if the contractor did not pay prevailing wage rates to laborers working on the contract,” according to the Auditor’s Office.
To remedy the issues, the state Auditor’s Office recommended the City of Tacoma provide training to workers to ensure they are aware of all the federal FFATA reporting requirements and insert wage-rate clauses into their contracts.
In its response, the city of Tacoma said it would update training material and conduct annual training for all accounting staff and city departments managing federal grants, in addition to update and distribute a monthly email to departments to clarify the required information for FFATA filing and require responses with supporting documentation for review. The city said it would also incorporate verbiage about wage-rate requirements into resulting contracts.
The state auditor will review the condition of the violations in its next audit.
This story was originally published December 18, 2024 at 11:27 AM.
