Audit 11195

Finding - District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000. Criteria - The ES Fund provides Federal funds for school facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental health hazards, and to support student health needs. Title 29, Section 5.5, Code of Federal Regulation (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and to ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The United States Department of Labor established “prevailing wages” by geographic area and interprets the Davis‑Bacon Act to apply to construction, alteration, or repair of a public building or public work. Condition - During the 2022-23 fiscal year, the District expended $665,669 from the ES Fund for a project related to a construction contract totaling $1,524,853 for heating, ventilation, and air-conditioning renovation projects. We noted that the purchase orders, requests for proposal, bid specifications, and contracts for the project did not contain clauses that required compliance with the Davis-Bacon Act provisions and the contractors did not submit weekly certified payrolls to the District. Subsequent to our inquiry, District personnel obtained wage rate documentation that demonstrated the prevailing wage rates were paid by the contractor. Cause - District personnel indicated that they normally do not fund construction projects with Federal funding. As a result, they did not realize that Davis-Bacon Act provisions would apply to this project and, therefore, did not include the appropriate wage rate clauses in the applicable procurement documents or obtain required certified payrolls. Effect - Absent specific contract clauses and weekly certified payrolls, there is an increased risk that contractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Recommendation -The District should enhance procedures to ensure compliance with all Davis‑Bacon Act requirements. Such enhancements should ensure that applicable Federally funded construction contracts contain the prevailing wage rate clauses and require submittal of weekly certified payrolls and that District personnel verify the payrolls were received. District Response -The District updated its purchasing procedures on July 11, 2023, to include language that would ensure that future contract templates contain applicable provisions per Appendix II to 2 CFR Part 200.

Finding - District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000. Criteria - The ES Fund provides Federal funds for school facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental health hazards, and to support student health needs. Title 29, Section 5.5, Code of Federal Regulation (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and to ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The United States Department of Labor established “prevailing wages” by geographic area and interprets the Davis‑Bacon Act to apply to construction, alteration, or repair of a public building or public work. Condition - During the 2022-23 fiscal year, the District expended $665,669 from the ES Fund for a project related to a construction contract totaling $1,524,853 for heating, ventilation, and air-conditioning renovation projects. We noted that the purchase orders, requests for proposal, bid specifications, and contracts for the project did not contain clauses that required compliance with the Davis-Bacon Act provisions and the contractors did not submit weekly certified payrolls to the District. Subsequent to our inquiry, District personnel obtained wage rate documentation that demonstrated the prevailing wage rates were paid by the contractor. Cause - District personnel indicated that they normally do not fund construction projects with Federal funding. As a result, they did not realize that Davis-Bacon Act provisions would apply to this project and, therefore, did not include the appropriate wage rate clauses in the applicable procurement documents or obtain required certified payrolls. Effect - Absent specific contract clauses and weekly certified payrolls, there is an increased risk that contractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Recommendation -The District should enhance procedures to ensure compliance with all Davis‑Bacon Act requirements. Such enhancements should ensure that applicable Federally funded construction contracts contain the prevailing wage rate clauses and require submittal of weekly certified payrolls and that District personnel verify the payrolls were received. District Response -The District updated its purchasing procedures on July 11, 2023, to include language that would ensure that future contract templates contain applicable provisions per Appendix II to 2 CFR Part 200.