Audit 14376

Finding - District controls did not always ensure compliance with the Davis-Bacon Act for a Federally funded construction project exceeding $2,000. Criteria - The ES Fund provides Federal funds for school facility repairs and improvements. 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 - For the 2022-23 fiscal year, the District expended ES Fund moneys totaling $2.6 million. The Board entered into a contract for $425,974, and the District paid that amount from ES Fund moneys, to replace the existing mechanical control system that controls the air handling units, chiller plant, and lighting controls. We noted that the purchase order, request for proposal, and contract 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 the wage rate documentation that demonstrated the prevailing wage rates were paid by the contractor. Cause - District personnel indicated that they initially did not consider this project as construction and, therefore, did not include the required prevailing wage rate clause 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 procedures should ensure that applicable Federally funded construction contracts require submittal of weekly certified payrolls and that District personnel verify the payrolls are received and demonstrate that prevailing wage rates are paid. District Response -The District will enhance its procedures to ensure that it complies with the Davis‑Bacon Act.

Finding - District controls did not always ensure compliance with the Davis-Bacon Act for a Federally funded construction project exceeding $2,000. Criteria - The ES Fund provides Federal funds for school facility repairs and improvements. 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 - For the 2022-23 fiscal year, the District expended ES Fund moneys totaling $2.6 million. The Board entered into a contract for $425,974, and the District paid that amount from ES Fund moneys, to replace the existing mechanical control system that controls the air handling units, chiller plant, and lighting controls. We noted that the purchase order, request for proposal, and contract 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 the wage rate documentation that demonstrated the prevailing wage rates were paid by the contractor. Cause - District personnel indicated that they initially did not consider this project as construction and, therefore, did not include the required prevailing wage rate clause 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 procedures should ensure that applicable Federally funded construction contracts require submittal of weekly certified payrolls and that District personnel verify the payrolls are received and demonstrate that prevailing wage rates are paid. District Response -The District will enhance its procedures to ensure that it complies with the Davis‑Bacon Act.