Finding Text
2023 – 002 – Special Provisions
Federal Agency: U.S. Department of Education
Federal Program Name: Impact Aid
Assistance Listing Number: 84.041
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period: July 1, 2022 – June 30, 2023
Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample.
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147 All 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 the locality of the project (prevailing wage rates) by the Department of Labor.
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).
This reporting is often done using Optional Form WH-347, which includes the required statement of compliance (OMB No. 1235-0008).
Condition/Context: For two out of three contracts sampled there was no prevailing wage clause noted to be followed in the contract agreements. Also, for the same two contracts sampled weekly certified payrolls were not collected and maintained for any relevant weeks during the fiscal year. Also, we did not note the superintendent’s signature on the contracts.
Questioned costs: None
Cause: Current process and controls are not at the correct precision level to ensure review of wage rate requirements are properly documented/processed to ensure compliances are being met.
Effect: Ineffective internal controls may result in questioned costs and noncompliance with the terms of the grant award.
Repeat finding: No
Recommendation: The District should refine its current process and associated controls surrounding the requirements in 29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction.
Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan