Finding Text
Finding - District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000, resulting in questioned costs totaling $71,850.
Criteria - The ES Fund provides Federal funds for school facility repairs and improvements. Title 29, Section 5.5, Code of Federal Regulations (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The United States Department of Labor established “prevailing wages” by geographic area and interprets the Davis-Bacon Act to apply to construction, alteration, or repair of a public building or public work.
Condition - For the 2023-24 fiscal year, the District expended ES Fund moneys totaling $1.6 million. The Board entered into a construction contract for infrastructure renovations to accommodate a welding program expansion and, during the 2023-24 fiscal year, District ES Fund expenditures totaled $71,850 for the project.
We noted that the purchase order, request for proposal, and contract for the project did not contain clauses that required compliance with the Davis-Bacon Act provisions and the contractor did not submit required weekly certified payrolls to the District.
Cause - District personnel indicated they were aware that the Davis-Bacon Act applied to the project; however, due to oversight, they did not amend the contract to include the appropriate wage rate clauses or require the certified payrolls. In addition, the contractor of the project stated that they were unaware that the project was Federally funded and, as such, did not maintain certified payrolls.
Effect - Absent the required contract clauses and weekly certified payrolls, there is an increased risk that construction contractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. The District did not obtain certified payrolls from the contractor demonstrating that the prevailing wage rates were paid for the services, resulting in questioned costs totaling $71,850.
Recommendation - The District should enhance procedures to ensure compliance with all Davis-Bacon Act requirements. Such enhancements should ensure that applicable Federally funded facility contracts require submittal of weekly certified payrolls and that District personnel verify the payrolls were received. In addition, the District should document to the FDOE the allowability of the questioned costs or contact the FDOE regarding necessary corrective action.
District Response - The District has established procedures for ensuring compliance with Davis-Bacon Act requirements. District personnel will verify they get the required documents (weekly certified payrolls) from the contractors, if a federally funded project is awarded.