Audit 4885

Program: Education Stabilization Fund (Assistance Listing No. 84.425) Compliance Requirement – Special Tests & Provisions – Wage Rate Requirements Finding Type: Material Noncompliance / Material Weakness in Internal Controls over Compliance Criteria: 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction requires that nonfederal entities include in their federally funded construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the related DOL regulations. This includes a requirement for the contractor or subcontractor to 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. Condition: The District’s design of the internal control procedures surrounding wage rate requirements for federally funded construction contracts was not properly designed so that it failed to appropriately meet the control objective of identifying and complying with federal requirements. Cause: The District failed to design an adequate internal control related to ensuring compliance with Wage Rate Requirements for federal funded construction contracts, specifically ensuring construction contracts contained the appropriate provisions and ensuring certified payrolls were received prior to the contractor being paid for services rendered. Effect: The failure to properly comply with Wage Rate Requirements could cause the District to repay the federal government for noncompliant payments. Recommendation: The District should implement standard procedures to ensure all construction contracts funded with federal dollars contain the appropriate contract provisions as well as ensure that certified payrolls are received with each request for payment. View of Officials: The District is in agreement with the finding as it is presented. The District has begun to issue change orders for existing contracts to ensure appropriate contract provisions are included. All future contracts will undergo additional review procedures prior to execution to ascertain if funded under federal funds and to ensure appropriate contract provisions are included. In addition, the District has implemented procedures to ensure receipt of certified weekly payrolls prior to issuing payment to construction contractors.

Program: Education Stabilization Fund (Assistance Listing No. 84.425) Compliance Requirement – Special Tests & Provisions – Wage Rate Requirements Finding Type: Material Noncompliance / Material Weakness in Internal Controls over Compliance Criteria: 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction requires that nonfederal entities include in their federally funded construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the related DOL regulations. This includes a requirement for the contractor or subcontractor to 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. Condition: The District’s design of the internal control procedures surrounding wage rate requirements for federally funded construction contracts was not properly designed so that it failed to appropriately meet the control objective of identifying and complying with federal requirements. Cause: The District failed to design an adequate internal control related to ensuring compliance with Wage Rate Requirements for federal funded construction contracts, specifically ensuring construction contracts contained the appropriate provisions and ensuring certified payrolls were received prior to the contractor being paid for services rendered. Effect: The failure to properly comply with Wage Rate Requirements could cause the District to repay the federal government for noncompliant payments. Recommendation: The District should implement standard procedures to ensure all construction contracts funded with federal dollars contain the appropriate contract provisions as well as ensure that certified payrolls are received with each request for payment. View of Officials: The District is in agreement with the finding as it is presented. The District has begun to issue change orders for existing contracts to ensure appropriate contract provisions are included. All future contracts will undergo additional review procedures prior to execution to ascertain if funded under federal funds and to ensure appropriate contract provisions are included. In addition, the District has implemented procedures to ensure receipt of certified weekly payrolls prior to issuing payment to construction contractors.

Program: Education Stabilization Fund (Assistance Listing No. 84.425) Compliance Requirement – Special Tests & Provisions – Wage Rate Requirements Finding Type: Material Noncompliance / Material Weakness in Internal Controls over Compliance Criteria: 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction requires that nonfederal entities include in their federally funded construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the related DOL regulations. This includes a requirement for the contractor or subcontractor to 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. Condition: The District’s design of the internal control procedures surrounding wage rate requirements for federally funded construction contracts was not properly designed so that it failed to appropriately meet the control objective of identifying and complying with federal requirements. Cause: The District failed to design an adequate internal control related to ensuring compliance with Wage Rate Requirements for federal funded construction contracts, specifically ensuring construction contracts contained the appropriate provisions and ensuring certified payrolls were received prior to the contractor being paid for services rendered. Effect: The failure to properly comply with Wage Rate Requirements could cause the District to repay the federal government for noncompliant payments. Recommendation: The District should implement standard procedures to ensure all construction contracts funded with federal dollars contain the appropriate contract provisions as well as ensure that certified payrolls are received with each request for payment. View of Officials: The District is in agreement with the finding as it is presented. The District has begun to issue change orders for existing contracts to ensure appropriate contract provisions are included. All future contracts will undergo additional review procedures prior to execution to ascertain if funded under federal funds and to ensure appropriate contract provisions are included. In addition, the District has implemented procedures to ensure receipt of certified weekly payrolls prior to issuing payment to construction contractors.

Program: Education Stabilization Fund (Assistance Listing No. 84.425) Compliance Requirement – Special Tests & Provisions – Wage Rate Requirements Finding Type: Material Noncompliance / Material Weakness in Internal Controls over Compliance Criteria: 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction requires that nonfederal entities include in their federally funded construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the related DOL regulations. This includes a requirement for the contractor or subcontractor to 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. Condition: The District’s design of the internal control procedures surrounding wage rate requirements for federally funded construction contracts was not properly designed so that it failed to appropriately meet the control objective of identifying and complying with federal requirements. Cause: The District failed to design an adequate internal control related to ensuring compliance with Wage Rate Requirements for federal funded construction contracts, specifically ensuring construction contracts contained the appropriate provisions and ensuring certified payrolls were received prior to the contractor being paid for services rendered. Effect: The failure to properly comply with Wage Rate Requirements could cause the District to repay the federal government for noncompliant payments. Recommendation: The District should implement standard procedures to ensure all construction contracts funded with federal dollars contain the appropriate contract provisions as well as ensure that certified payrolls are received with each request for payment. View of Officials: The District is in agreement with the finding as it is presented. The District has begun to issue change orders for existing contracts to ensure appropriate contract provisions are included. All future contracts will undergo additional review procedures prior to execution to ascertain if funded under federal funds and to ensure appropriate contract provisions are included. In addition, the District has implemented procedures to ensure receipt of certified weekly payrolls prior to issuing payment to construction contractors.

Program: Education Stabilization Fund (Assistance Listing No. 84.425) Compliance Requirement – Special Tests & Provisions – Wage Rate Requirements Finding Type: Material Noncompliance / Material Weakness in Internal Controls over Compliance Criteria: 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction requires that nonfederal entities include in their federally funded construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the related DOL regulations. This includes a requirement for the contractor or subcontractor to 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. Condition: The District’s design of the internal control procedures surrounding wage rate requirements for federally funded construction contracts was not properly designed so that it failed to appropriately meet the control objective of identifying and complying with federal requirements. Cause: The District failed to design an adequate internal control related to ensuring compliance with Wage Rate Requirements for federal funded construction contracts, specifically ensuring construction contracts contained the appropriate provisions and ensuring certified payrolls were received prior to the contractor being paid for services rendered. Effect: The failure to properly comply with Wage Rate Requirements could cause the District to repay the federal government for noncompliant payments. Recommendation: The District should implement standard procedures to ensure all construction contracts funded with federal dollars contain the appropriate contract provisions as well as ensure that certified payrolls are received with each request for payment. View of Officials: The District is in agreement with the finding as it is presented. The District has begun to issue change orders for existing contracts to ensure appropriate contract provisions are included. All future contracts will undergo additional review procedures prior to execution to ascertain if funded under federal funds and to ensure appropriate contract provisions are included. In addition, the District has implemented procedures to ensure receipt of certified weekly payrolls prior to issuing payment to construction contractors.

Program: Education Stabilization Fund (Assistance Listing No. 84.425) Compliance Requirement – Special Tests & Provisions – Wage Rate Requirements Finding Type: Material Noncompliance / Material Weakness in Internal Controls over Compliance Criteria: 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction requires that nonfederal entities include in their federally funded construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the related DOL regulations. This includes a requirement for the contractor or subcontractor to 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. Condition: The District’s design of the internal control procedures surrounding wage rate requirements for federally funded construction contracts was not properly designed so that it failed to appropriately meet the control objective of identifying and complying with federal requirements. Cause: The District failed to design an adequate internal control related to ensuring compliance with Wage Rate Requirements for federal funded construction contracts, specifically ensuring construction contracts contained the appropriate provisions and ensuring certified payrolls were received prior to the contractor being paid for services rendered. Effect: The failure to properly comply with Wage Rate Requirements could cause the District to repay the federal government for noncompliant payments. Recommendation: The District should implement standard procedures to ensure all construction contracts funded with federal dollars contain the appropriate contract provisions as well as ensure that certified payrolls are received with each request for payment. View of Officials: The District is in agreement with the finding as it is presented. The District has begun to issue change orders for existing contracts to ensure appropriate contract provisions are included. All future contracts will undergo additional review procedures prior to execution to ascertain if funded under federal funds and to ensure appropriate contract provisions are included. In addition, the District has implemented procedures to ensure receipt of certified weekly payrolls prior to issuing payment to construction contractors.