U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 5503 AUDIT PERIOD - YEAR ENDED JUNE 30, 2022 2022-002 EQUIPMENT AND REAL PROPERTY MANAGEMENT Criteria or specific requirement: The Davis- Bacon Act requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by Federal funds, to pay their laborers and mechanics not less than the prevailing wage rates as determined by the Department of Labor. Non-federal entities are to include in the applicable construction contracts a requirement that the contractor or subcontractor comply with the provisions of the Davis-Bacon Act and the Department of Labor regulations. Such requirements included the submission of weekly certified payrolls, for each week in which any contract work is performed, to the non-federal entities. Also, property records should be maintained for real property and improvements made to real property acquired with federal awards as specified in OMB 2 CFR section 200.311. Condition: The District paid a heating and air company $34,370 to install new heating and air systems in the district without obtaining a written contract that included the prevailing wage rate clause. Additionally, weekly certified payrolls were not submitted to the District. Also, the HVAC system was not recorded in the District's capital asset subsidiary records. Effect: The District did not comply with the notification requirements regarding compliance with the Davis-Bacon Act and was unable to provide copies of weekly certified payrolls for workers paid on the project. The District's capital assets subsidiary records were not accurate. Cause: Lack of internal controls and management oversight resulted in the Davis-Bacon Act provisions not being properly followed and the capital asset subsidiary records not being accurate. Context: Examination of payments made to the heating and air company and supporting documentation for the replacement of heating and air systems. Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District will ensure that all contracts are obtained and all applicable construction contracts contain the required notification regarding compliance with the Davis-Bacon Act. We will make sure to get copies of the weekly certified payrolls for applicable projects. We will be in contact with ADE for guidance and implementation of proper controls over program expenditures by June 30, 2023.
2022-019 Oregon Housing and Community Services Controls are needed to ensure subrecipients? compliance with equipment and real property requirements Federal Awarding Agency: U.S. Department of Housing and Urban Development Assistance Listing Number and Name: 14.231 Emergency Solutions Grants Program (COVID-19) Federal Award Numbers and Years: E-20-DW-41-0001, 2020 (COVID-19) Compliance Requirement: Equipment and Real Property Management Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.311; 2 CFR 200.313 There are specific requirements when equipment is purchased using federal funds and in use. At a minimum, procedures for managing equipment must meet the following requirements: ? Property records must be maintained that include key details (e.g. property description, ID number, Title, etc); ? A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years; ? A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated; and ? Adequate maintenance procedures must be developed to keep the property in good condition. Real property purchased must be used for the originally authorized purpose as long as needed for that purpose. When real property is no longer needed for the originally authorized purpose, the non-federal entity must obtain disposition instructions from either the federal awarding agency or pass through entity. During our review, we determined OHCS was not monitoring its subrecipients to ensure the equipment and real property requirements were being met. Because subrecipients were not being monitored, we were unable to determine if there was a population of equipment and real property on which to perform our audit testing procedure. As a result, the department may not be in compliance with federal equipment and real property requirements. We recommend department management develop internal controls to ensure compliance with federal requirements for equipment and real property.
U.S. DEPARTMENT OF EDUCATION Significant Deficiency 2022-01: Education and Secondary School Emergency Relief Fund ? CFDA #84.425D and #84.425U Grant Period: Year Ended June 30, 2022 Condition and Context: The District purchased equipment greater than the Uniform Guidance capitalization threshold and failed to complete a listing of equipment containing all pertinent data. The lack of compliance did not result in any material noncompliance, fraud, or abuse with respect to the major program. Criteria: The Uniform Guidance requires entities to follow equipment procedures set out at 2 CFR sections 200.313(c) through (e) and real property procedures set out at 2 CFR section 200.311(b). Entities must retain a listing of equipment greater than or equal to the capitalization policy of either the entity or Uniform Guidance with relevant data including, a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, a and any ultimate disposition data including the date of disposal and sales price of the property. Property records must be maintained and include the name, part number and description, and other elements as necessary and required in accordance with the terms and conditions of the contract, quantity received, unit acquisition cost, unique-item identifier, accountable contract number, location, disposition, and posting reference and date of transaction. Cause: The District was unaware of the requirements set out by Uniform Guidance. Effect: An important component of equipment policies is retaining information to ensure that the award is used for authorized purposes, complies with the terms and conditions of the award, and achieves performance goals. Without equipment policies, there is a higher risk of noncompliance with program requirements. Recommendation: Management should determine procedures for equipment purchases and apply them to all equipment purchases equal to or exceeding the threshold to comply with the Uniform Guidance. Grantee Response: Management agrees with the finding and recommendation. The District will establish policies and procedures for future grant awards to comply with Uniform Guidance requirements.
Finding 2022-003: Equipment (50000)Assistance Listing No. 84.425 ? Education Stabilization Fund,Elementary and Secondary School Emergency Relief (ESSER) FundU.S. Department of EducationPassed through California Department of EducationCriteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity.Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). 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 (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326).Condition: The District made three expenditures above the capital threshold for federal purchases but did not obtain prior approval from the California Department of Education. Furthermore, the District was unable to provide documentation that federal wage rate requirements were included in the contracts.Question Costs: $66,608Context: These were the only capital purchases made from this federal program in the year under audit.Cause: The District was unaware of the requirements to obtain prior approval from CDE and to obtain federal wage rate data.Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency.Recommendation: We recommend that the District obtain prior approval from CDE and that contracts include federal wage rate requirements for all capital purchases from the Education Stabilization Fund.Views of Responsible Officials: The District will ensure it receives prior approval from CDE prior to making expenditures utilizing ESSER funds and will update its agreements to reflect the federal wage rate requirements when utilizing this funding.