Audit 3916

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.

Special Tests and Provisions – Wage Rate Requirements U.S. Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425W, and 84.425U Pass-Through Agency: Minnesota Department of Education Award Period July 1, 2022 – June 30, 2023 Material Weakness in Internal Control Over Compliance Criteria Grant recipients that use Education Stabilization Funds for construction projects over $2,000 must adhere to the wage requirements of the Davis-Bacon Act and obtain weekly certified payrolls for work performed and a statement of compliance from contractors on these contracts, as per 29 CFR section 5.5. Condition In a test of 6 out of 18 contractor applications for payment, it was noted that one contractor’s certified payroll was not on file for the pay application tested. It was further noted that the other 2 applications for payment from this contractor during the period under audit, also did not include the required certified payrolls on file at the time of payment. All 3 certified payrolls and statements of compliance for the pay applications in question were eventually obtained subsequent to payment. Cause The District or its agent did not review the information submitted with the payment requests to determine all required documentation was included before authorizing payment. Effect Lack of proper controls over payments for contracts subject to the wage requirements of the Davis-Bacon Act could result in improper wages being paid on these contracts. Questioned Costs None. Context 3 pay applications for one contactor were approved for payment without the required certified payrolls and statements of compliance for the periods requested. They were subsequently obtained after the fact. The sample selected was not a statistically valid sample. Repeat Finding No. Recommendation We recommend that the District or its agent review their internal controls and policies over payments on contracts subject to the Davis-Bacon Act provision to ensure the required weekly certified contractor and subcontractor payrolls and statements of compliance are obtained and compared to applicable approved wage rates before approving payment.