Audit 289386

2 CFR § 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. Appendix II to 2 CFR part 200, Paragraph D states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. . . The District entered into a contract with Panzica Construction Company for installation of kitchen equipment for East Tech Culinary Art Renovation project, in the amount of $783,659. During fiscal year 2022, the District paid Panzica $58,207 with Elementary and Secondary School Emergency Relief (ESSER II) Fund monies related to this project. These expenditures included contractor payroll charges for periods prior to June 30, 2022. However, due to the lack of formal controls and procedures, the District did not obtain the certified payroll information until December 12, 2022.This weakness resulted in the District being non-compliant with the aforementioned federal codes and could result in future reductions or loss of federal funding.The District should ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under Appendix II to 2 CFR part 200 to report all suspected or reported violations to the Federal awarding agency.

2 CFR § 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. Appendix II to 2 CFR part 200, Paragraph D states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. . . The District entered into a contract with Panzica Construction Company for installation of kitchen equipment for East Tech Culinary Art Renovation project, in the amount of $783,659. During fiscal year 2022, the District paid Panzica $58,207 with Elementary and Secondary School Emergency Relief (ESSER II) Fund monies related to this project. These expenditures included contractor payroll charges for periods prior to June 30, 2022. However, due to the lack of formal controls and procedures, the District did not obtain the certified payroll information until December 12, 2022.This weakness resulted in the District being non-compliant with the aforementioned federal codes and could result in future reductions or loss of federal funding.The District should ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under Appendix II to 2 CFR part 200 to report all suspected or reported violations to the Federal awarding agency.