Audit 303365

Reference Number: 2023-001 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: None Compliance Impact: Material Noncompliance AL Number and Title: 84.425 - COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $1,029,533.57 Items purchased were not competitively bid in accordance with Procurement and Suspension/Debarment requirements. Finding The U.S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, renovation of public buildings in excess of $50,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. In addition, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2CFR 200.320, states that when the aggregate dollar amount is higher than the simplified acquisition threshold ($250,000.00), the Uniform Guidance requires one of the two “formal procurement methods”, sealed bids or formal request for proposals should be used. The Blount County Board of Education (the “Board”) entered a Public Works contract in November 2021 for the purchase and installation of HVAC units at multiple local schools totaling $1,576,971.00 of which $1,029,533.57 of COVID-19 Education Stabilization Funds were expended during the audit period, The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. The Board used a purchasing consortium contract which is not allowed under the Public Works Law or the procurement guidelines contained in the Uniform Guidance for purchases greater than the simplified acquisition threshold. As a result, the Board did not comply with Uniform Guidance procurement requirements for these purchases. Recommendation: The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and CFR 200.320 and the Code of Alabama 1975, Title 39. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-001 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: None Compliance Impact: Material Noncompliance AL Number and Title: 84.425 - COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $1,029,533.57 Items purchased were not competitively bid in accordance with Procurement and Suspension/Debarment requirements. Finding The U.S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, renovation of public buildings in excess of $50,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. In addition, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2CFR 200.320, states that when the aggregate dollar amount is higher than the simplified acquisition threshold ($250,000.00), the Uniform Guidance requires one of the two “formal procurement methods”, sealed bids or formal request for proposals should be used. The Blount County Board of Education (the “Board”) entered a Public Works contract in November 2021 for the purchase and installation of HVAC units at multiple local schools totaling $1,576,971.00 of which $1,029,533.57 of COVID-19 Education Stabilization Funds were expended during the audit period, The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. The Board used a purchasing consortium contract which is not allowed under the Public Works Law or the procurement guidelines contained in the Uniform Guidance for purchases greater than the simplified acquisition threshold. As a result, the Board did not comply with Uniform Guidance procurement requirements for these purchases. Recommendation: The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and CFR 200.320 and the Code of Alabama 1975, Title 39. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-001 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: None Compliance Impact: Material Noncompliance AL Number and Title: 84.425 - COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $1,029,533.57 Items purchased were not competitively bid in accordance with Procurement and Suspension/Debarment requirements. Finding The U.S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, renovation of public buildings in excess of $50,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. In addition, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2CFR 200.320, states that when the aggregate dollar amount is higher than the simplified acquisition threshold ($250,000.00), the Uniform Guidance requires one of the two “formal procurement methods”, sealed bids or formal request for proposals should be used. The Blount County Board of Education (the “Board”) entered a Public Works contract in November 2021 for the purchase and installation of HVAC units at multiple local schools totaling $1,576,971.00 of which $1,029,533.57 of COVID-19 Education Stabilization Funds were expended during the audit period, The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. The Board used a purchasing consortium contract which is not allowed under the Public Works Law or the procurement guidelines contained in the Uniform Guidance for purchases greater than the simplified acquisition threshold. As a result, the Board did not comply with Uniform Guidance procurement requirements for these purchases. Recommendation: The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and CFR 200.320 and the Code of Alabama 1975, Title 39. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-002 Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance AL Number and Title: 84.425- COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $2,197,968.75 Money from the COVID-19 Education Stabilization Fund (ESF) was used to fund construction contracts in excess of $2,000.00 without the inclusion of prevailing wage rate clauses. Finding Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). During fiscal year 2022, the Blount County Board of Education (the “Board”) entered into two construction project contracts totaling $6,781,138.00 that did not include prevailing wage rate clauses. As of September 30, 2023, the Board had expended $2,197,968.75 of COVID-19 Education Stabilization Funds on the projects. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts; therefore, the two construction project contracts awarded during the fiscal year did not include prevailing wage rate clauses nor did the contractors submit weekly certified payrolls to the Board. As a result, the Board was not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation: The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds to fund construction contracts in excess of $2,000. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-002 Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance AL Number and Title: 84.425- COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $2,197,968.75 Money from the COVID-19 Education Stabilization Fund (ESF) was used to fund construction contracts in excess of $2,000.00 without the inclusion of prevailing wage rate clauses. Finding Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). During fiscal year 2022, the Blount County Board of Education (the “Board”) entered into two construction project contracts totaling $6,781,138.00 that did not include prevailing wage rate clauses. As of September 30, 2023, the Board had expended $2,197,968.75 of COVID-19 Education Stabilization Funds on the projects. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts; therefore, the two construction project contracts awarded during the fiscal year did not include prevailing wage rate clauses nor did the contractors submit weekly certified payrolls to the Board. As a result, the Board was not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation: The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds to fund construction contracts in excess of $2,000. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-002 Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance AL Number and Title: 84.425- COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $2,197,968.75 Money from the COVID-19 Education Stabilization Fund (ESF) was used to fund construction contracts in excess of $2,000.00 without the inclusion of prevailing wage rate clauses. Finding Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). During fiscal year 2022, the Blount County Board of Education (the “Board”) entered into two construction project contracts totaling $6,781,138.00 that did not include prevailing wage rate clauses. As of September 30, 2023, the Board had expended $2,197,968.75 of COVID-19 Education Stabilization Funds on the projects. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts; therefore, the two construction project contracts awarded during the fiscal year did not include prevailing wage rate clauses nor did the contractors submit weekly certified payrolls to the Board. As a result, the Board was not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation: The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds to fund construction contracts in excess of $2,000. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-001 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: None Compliance Impact: Material Noncompliance AL Number and Title: 84.425 - COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $1,029,533.57 Items purchased were not competitively bid in accordance with Procurement and Suspension/Debarment requirements. Finding The U.S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, renovation of public buildings in excess of $50,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. In addition, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2CFR 200.320, states that when the aggregate dollar amount is higher than the simplified acquisition threshold ($250,000.00), the Uniform Guidance requires one of the two “formal procurement methods”, sealed bids or formal request for proposals should be used. The Blount County Board of Education (the “Board”) entered a Public Works contract in November 2021 for the purchase and installation of HVAC units at multiple local schools totaling $1,576,971.00 of which $1,029,533.57 of COVID-19 Education Stabilization Funds were expended during the audit period, The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. The Board used a purchasing consortium contract which is not allowed under the Public Works Law or the procurement guidelines contained in the Uniform Guidance for purchases greater than the simplified acquisition threshold. As a result, the Board did not comply with Uniform Guidance procurement requirements for these purchases. Recommendation: The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and CFR 200.320 and the Code of Alabama 1975, Title 39. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-001 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: None Compliance Impact: Material Noncompliance AL Number and Title: 84.425 - COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $1,029,533.57 Items purchased were not competitively bid in accordance with Procurement and Suspension/Debarment requirements. Finding The U.S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, renovation of public buildings in excess of $50,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. In addition, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2CFR 200.320, states that when the aggregate dollar amount is higher than the simplified acquisition threshold ($250,000.00), the Uniform Guidance requires one of the two “formal procurement methods”, sealed bids or formal request for proposals should be used. The Blount County Board of Education (the “Board”) entered a Public Works contract in November 2021 for the purchase and installation of HVAC units at multiple local schools totaling $1,576,971.00 of which $1,029,533.57 of COVID-19 Education Stabilization Funds were expended during the audit period, The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. The Board used a purchasing consortium contract which is not allowed under the Public Works Law or the procurement guidelines contained in the Uniform Guidance for purchases greater than the simplified acquisition threshold. As a result, the Board did not comply with Uniform Guidance procurement requirements for these purchases. Recommendation: The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and CFR 200.320 and the Code of Alabama 1975, Title 39. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-001 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: None Compliance Impact: Material Noncompliance AL Number and Title: 84.425 - COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $1,029,533.57 Items purchased were not competitively bid in accordance with Procurement and Suspension/Debarment requirements. Finding The U.S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, renovation of public buildings in excess of $50,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. In addition, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2CFR 200.320, states that when the aggregate dollar amount is higher than the simplified acquisition threshold ($250,000.00), the Uniform Guidance requires one of the two “formal procurement methods”, sealed bids or formal request for proposals should be used. The Blount County Board of Education (the “Board”) entered a Public Works contract in November 2021 for the purchase and installation of HVAC units at multiple local schools totaling $1,576,971.00 of which $1,029,533.57 of COVID-19 Education Stabilization Funds were expended during the audit period, The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. The Board used a purchasing consortium contract which is not allowed under the Public Works Law or the procurement guidelines contained in the Uniform Guidance for purchases greater than the simplified acquisition threshold. As a result, the Board did not comply with Uniform Guidance procurement requirements for these purchases. Recommendation: The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and CFR 200.320 and the Code of Alabama 1975, Title 39. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-002 Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance AL Number and Title: 84.425- COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $2,197,968.75 Money from the COVID-19 Education Stabilization Fund (ESF) was used to fund construction contracts in excess of $2,000.00 without the inclusion of prevailing wage rate clauses. Finding Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). During fiscal year 2022, the Blount County Board of Education (the “Board”) entered into two construction project contracts totaling $6,781,138.00 that did not include prevailing wage rate clauses. As of September 30, 2023, the Board had expended $2,197,968.75 of COVID-19 Education Stabilization Funds on the projects. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts; therefore, the two construction project contracts awarded during the fiscal year did not include prevailing wage rate clauses nor did the contractors submit weekly certified payrolls to the Board. As a result, the Board was not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation: The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds to fund construction contracts in excess of $2,000. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-002 Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance AL Number and Title: 84.425- COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $2,197,968.75 Money from the COVID-19 Education Stabilization Fund (ESF) was used to fund construction contracts in excess of $2,000.00 without the inclusion of prevailing wage rate clauses. Finding Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). During fiscal year 2022, the Blount County Board of Education (the “Board”) entered into two construction project contracts totaling $6,781,138.00 that did not include prevailing wage rate clauses. As of September 30, 2023, the Board had expended $2,197,968.75 of COVID-19 Education Stabilization Funds on the projects. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts; therefore, the two construction project contracts awarded during the fiscal year did not include prevailing wage rate clauses nor did the contractors submit weekly certified payrolls to the Board. As a result, the Board was not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation: The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds to fund construction contracts in excess of $2,000. Views of Responsible Officials of the Auditee The Board agrees with the finding.

Reference Number: 2023-002 Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance AL Number and Title: 84.425- COVID-19 Education Stabilization Fund Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $2,197,968.75 Money from the COVID-19 Education Stabilization Fund (ESF) was used to fund construction contracts in excess of $2,000.00 without the inclusion of prevailing wage rate clauses. Finding Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). During fiscal year 2022, the Blount County Board of Education (the “Board”) entered into two construction project contracts totaling $6,781,138.00 that did not include prevailing wage rate clauses. As of September 30, 2023, the Board had expended $2,197,968.75 of COVID-19 Education Stabilization Funds on the projects. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts; therefore, the two construction project contracts awarded during the fiscal year did not include prevailing wage rate clauses nor did the contractors submit weekly certified payrolls to the Board. As a result, the Board was not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation: The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds to fund construction contracts in excess of $2,000. Views of Responsible Officials of the Auditee The Board agrees with the finding.