Purpose

To determine whether the Shorefront Mental Health Board (Shorefront) complied with the prevailing wage laws under its janitorial contract with the New York State Office of Mental Health (OMH). The audit covered the period from November 1, 2011 to March 31, 2014.

Background

OMH contracted for $2.3 million with Shorefront to provide janitorial services to six outpatient facilities located in Brooklyn for the period November 1, 2011 to October 31, 2016. These outpatient facilities are operated by OMH’s South Beach Psychiatric Center. This contract was procured under OMH’s “Buy OMH” program, which gave preference to contractors employing OMH consumers. Under the New York State Labor Law, contractors must pay prevailing wages for the locality where the work is performed to certain employees performing work on a public works contract. Janitorial workers are included in the employee category covered by the prevailing wage law. OMH is required to monitor that its contractor’s employees are paid the prevailing wage by reviewing certified payrolls, which are required by the contract to be submitted by the contractor.

Key Findings

• Shorefront did not pay its janitorial workers the prevailing wage. For calendar year 2013, we estimate that Shorefront underpaid its 26 workers a total of at least $123,224.
• Shorefront submitted incorrect certified payrolls to OMH, showing it was paying the employees at the prevailing wage rate, when the wages paid were in fact substantially below the prevailing wage rate.
• For a period during our audit field work, employees were paid for fewer hours than they actually worked. For instance, one worker posted 72 hours to the time sheet, but the payroll showed that he was paid for only 22 hours at the prevailing wage rate and 12 hours at the supplemental benefits rate.

Key Recommendations

• Enforce the requirement that contractors submit certified payrolls and ensure that they are accurate.
• Work with the Department of Labor to determine whether contractor employees are due back wages for the periods they were underpaid.