2024-004 U.S. Department of Education, Assistance Listing #84.425D, #84.425U, and #84.425W, Elementary and Secondary School Emergency Relief Funds for the year July 1, 2023, through June 30, 2024 Criteria: In accordance with 2 CFR 200.313, property records for equipment and real property purchased with Federal funds must be maintained that include a description of the property, a serial number or other identification number, the source funding for the property, who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the Federal award, the location, use, and condition of the property. Condition: The Facilities Department maintains a spreadsheet of capital assets purchased with Elementary and Secondary School Emergency Relief Funds (ESSER) for assets procured through the Facilities Department. The City Finance Department also maintains a capital asset listing for financial reporting purposes, however, assets funded by grant proceeds are not separately identified in the listing. Cause: There are no formal procedures for tracking Federally funded assets. Effect: Federally funded assets are not identified and tracked. If the City were to sell a Federally funded asset, they may be required to remit some of the proceeds back to the grantor agency. Therefore, if the asset was not properly identified and tracked the City could inadvertently profit from the Federal funding. Recommendation: It is our recommendation that procedures be established for the tracking of federally funded assets. Questioned Costs: None
2024-005 U.S. Department of Education, Assistance Listing #84.425D, #84.425U, and #84.425W, Elementary and Secondary School Emergency Relief Funds for the year July 1, 2023, through June 30, 2024 Criteria: Recipients and subrecipients that use Elementary and Secondary School Emergency Relief Funds (ESSER) for minor remodeling, renovation or construction contracts that are over $2,000 and use laborers and mechanics are subject to the Davis-Bacon Act and must meet prevailing wage requirements. Construction contracts are required to include a prevailing wage rate clause to notify the contractor or subcontractor of the requirement. Additionally, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) are required to be submitted to the City. Statement of Condition: During compliance testing, only one of the five contracts tested subject to Davis-Bacon requirements contained the necessary contract clause. Certified payrolls were not collected for any of the projects. Cause: There are no formal procedures to ensure compliance with Davis-Bacon requirements. Effect: The City is non-compliant with Davis-Bacon requirements. The City has not obtained the required assurance that its contractors are paying workers at or above the prevailing wage rates. Recommendation: It is our recommendation that procedures and controls be implemented surrounding Davis Bacon requirements. The City should incorporate the specified contract clauses into contracts subject to Davis-Bacon compliance by inserting the contract clauses in full in the contract, or by incorporating the contract clauses by reference to an addendum or bid specification. In addition, they should be collecting certified payroll from contractors to ensure contractors are paying workers at or above the prevailing wage rates. Questioned Costs: None