The Benefits and Risks of Federally Funded Projects

Obtaining a federal grant can enable an agency to accomplish work that would otherwise not be possible.  However, especially for smaller public agencies not familiar with administering federal grant requirements, there may be problems when the auditor reviews the files.

Audit finding:  The Washington State Auditor's Office recently issued audit findings against RiverCom 911 for failing to ensure compliance with federal prevailing wage requirements on the purchase and installation of telecommunications equipment.  RiverCom 911 is a municipal corporation serving Chelan and Douglas Counties in Washington state.  In 2010 and 2011, they were a sub-recipient of $755,084 in federal funds through the Chelan County Fire Protection District No. 5.  It was RiverCom's first federal grant.

Non-compliance:  RiverCom failed to include provisions in their contract with their contractors requiring  payment of federal prevailing wages and submission of weekly payroll reports from the contractor and all subcontractors.  While RiverCom noted that they took actions to try to be in compliance, they were "not aware of the Davis-Bacon Act and its specific requirement to provide weekly reports for prevailing wages."  They noted that "this oversight was in no way intentional on the part of RiverCom."

Tips for grant compliance:  If your agency receives any grants, whether from the federal government or other sources, here are some practical tips for ensuring compliance:

• Read the grant provisions:  There is no substitute for actually reading the grant provisions.  If you don't understand them, research them.

• Communicate with the granting agency:  Work with the granting agency to discuss the grant provisions and their expectations for compliance.

• Talk with other public agencies:   Reach out to other public agencies who may have more experience with complying with the grant provisions and learn from them.

• Ask the Auditor's Office:   Ask the Washington State Auditor's Office for assistance in interpreting and explaining provisions.  Find out them them what issues are on their audit checklist.

• Seek assistance from associations:  There are many associations for specific types of local government agencies (and functions within agencies) that have resources to help guide and steer your agency to ensure you comply with grant provisions.  Associations include, but are not limited to the Association of Washington Cities (AWC), Washington State Association of Counties (WSAC), Washington Public Ports Association (WPPA), Washington Association of School Business Officials (WASBO), Washington Finance Officers Association (WFOA), and the Washington Public Utility Districts Association (WPUDA).

• Consult with MRSC:   If you are a city, county, special purpose district that is a member of the Association of Washington Public Hospital Districts (AWPHD), Washington Association of Sewer & Water Districts (WASWD), or the Enduris Insurance Pool, the Municipal Research and Services Center can provide valuable advice regarding compliance with grant provisions, and direct you to other resources as well.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
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