B-167645, SEP 15, 1969

B-167645: Sep 15, 1969

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THE CONTRACTOR FOR BOTH PROJECTS WAS MR. IT IS REPORTED THAT THE CONTRACTOR WAS ADVISED OF THESE IRREGULARITIES AND OMISSIONS IN LETTERS DATED JULY 19 AND OCTOBER 22. THAT COPIES OF SOME OF THE PAYROLLS FROM THE SARLES PROJECT WITH ERRORS INDICATED WERE RETURNED FOR CORRECTION. THAT SUBSEQUENTLY THE CONTRACTOR SUBMITTED MOST OF THE MISSING PAYROLL FORMS AND EXPLAINED THE REMAINING NONSUBMISSIONS REPRESENTED WEEKS DURING WHICH NO WORK WAS PERFORMED. THAT ARITHMETICAL ERRORS WERE LARGELY IGNORED. ALTHOUGH THEY ARE THE ONES MOST DIRECTLY AFFECTED BY THESE ERRORS IN WAGES. MCCARTHY NOW ADVISES THAT OBTAINING CORRECTIVE PAYROLLS OR SIGNED RECEIPTS FROM THE WORKMEN IS VIRTUALLY IMPOSSIBLE. SINCE SEVERAL OF HIS FORMER EMPLOYEES HAVE DIED AND OTHERS ARE SERIOUSLY ILL.

B-167645, SEP 15, 1969

CONTRACTS - LABOR STANDARDS - DAVIS-BACON ACT - WITHHOLDINGS DECISION TO SECRETARY OF TREASURY CONCERNING AMOUNTS WITHHELD FROM CONTRACTOR FOR WAGE UNDERPAYMENTS UNDER DAVIS-BACON ACT FOR CONTRACT FOR CONSTRUCTING BORDER STATIONS AT SARLES AND WALHALLA, NORTH DAKOTA IN 1963.

MR. SECRETARY:

BY LETTER DATED AUGUST 1, 1969, THE ACTING COMMISSIONER OF CUSTOMS REQUESTED OUR ADVICE ON A MATTER INVOLVING THE ADMINISTRATION OF THE LABOR STANDARDS REQUIREMENTS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A.

IT APPEARS THAT DURING THE CONSTRUCTION OF A BORDER STATION AND TWO RESIDENCES EACH AT SARLES AND WALHALLA, NORTH DAKOTA, IN 1963, IRREGULARITIES UNDER THE AFOREMENTIONED ACT IN THE PREPARATION AND SUBMISSION OF PAYROLL DATA BECAME APPARENT. THE CONTRACTOR FOR BOTH PROJECTS WAS MR. GEORGE J. MCCARTHY OF BENSON, MINNESOTA. IT IS REPORTED THAT THE CONTRACTOR WAS ADVISED OF THESE IRREGULARITIES AND OMISSIONS IN LETTERS DATED JULY 19 AND OCTOBER 22, 1963; THAT COPIES OF SOME OF THE PAYROLLS FROM THE SARLES PROJECT WITH ERRORS INDICATED WERE RETURNED FOR CORRECTION; THAT SUBSEQUENTLY THE CONTRACTOR SUBMITTED MOST OF THE MISSING PAYROLL FORMS AND EXPLAINED THE REMAINING NONSUBMISSIONS REPRESENTED WEEKS DURING WHICH NO WORK WAS PERFORMED; THAT ARITHMETICAL ERRORS WERE LARGELY IGNORED; AND THAT FULL COMPLIANCE WITH THE PAYROLL PORTIONS OF THESE CONTRACT REQUIREMENTS HAD NEVER BEEN ACCOMPLISHED BY MR. MCCARTHY.

THE ACTING COMMISSIONER SAYS THAT IT MAY BE NOTED THAT NONE OF THE WORKMEN, ALTHOUGH THEY ARE THE ONES MOST DIRECTLY AFFECTED BY THESE ERRORS IN WAGES, HAS EVER FILED A COMPLAINT; THAT MR. MCCARTHY NOW ADVISES THAT OBTAINING CORRECTIVE PAYROLLS OR SIGNED RECEIPTS FROM THE WORKMEN IS VIRTUALLY IMPOSSIBLE, SINCE SEVERAL OF HIS FORMER EMPLOYEES HAVE DIED AND OTHERS ARE SERIOUSLY ILL; AND THAT IT APPEARS THAT THE INFORMATION NEEDED FOR COMPUTATION OF THE AMOUNTS OF THE UNDERPAYMENTS, IF ANY, HAS BECOME UNAVAILABLE.

THE ACTING COMMISSIONER FURTHER SAYS THAT IN VIEW OF THE FACT THAT THERE HAS BEEN NO INDICATION FROM THE WORKMEN OF ANY DISCREPANCIES IN THEIR WAGES, AND IN VIEW OF THE RELATIVELY SMALL AMOUNT OF MONEY INVOLVED, IT WOULD NOT SEEM INAPPROPRIATE AT THIS TIME TO PAY THE MONEY WITHHELD, LESS CHARGES FOR CORRECTIVE ACTION TAKEN; THAT BECAUSE OF REPEATED SEWER STOPPAGE, DISBURSMENTS WERE MADE BY THE BUREAU OF CUSTOMS AMOUNTING TO $1,080.80; AND THAT THIS AMOUNT SHOULD BE DEDUCTED FROM THE MONEY WITHHELD AS FOLLOWS: AMOUNT WITHHELD ON SARLES, NORTH DAKOTA, PROJECT $1,000 AMOUNT WITHHELD ON WALHALLA, NORTH DAKOTA, PROJECT 1,000

$2,000.00 LESS REPAIRS TO SEWAGE SYSTEM

1,080.80 BALANCE WITHHELD 919.20

IN VIEW OF THE FOREGOING, OUR ADVICE IS REQUESTED AS TO WHETHER THE $919.20 BALANCE OF CONTRACT MONEY WITHHELD MAY NOW BE PAID TO MR. MCCARTHY.

IN THE ABSENCE OF ANY CLAIMS OR COMPLAINTS BY LABORERS OR MECHANICS EMPLOYED ON THE PROJECTS, AND SINCE IT APPEARS THAT NO ADMINISTRATIVE DETERMINATIONS OF UNDERPAYMENTS UNDER THE DAVIS-BACON ACT OR OTHER LABOR STANDARDS LAWS WERE EVER MADE AND THAT INFORMATION CANNOT BE OBTAINED AT THIS LATE DATE ON WHICH SUCH DETERMINATIONS COULD BE MADE, THE BALANCE OF CONTRACT MONEY WITHHELD MAY PROPERLY BE PAID TO MR. MCCARTHY.