Finding Text
Material Weakness in Internal Control and Compliance
Federal Program
Education Stabilization Fund (AL 84.425U)
Special Tests
Criteria
Uniform Guidance states “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)”.
Condition
We noted during inquiry and testing that contractors were not required to submit their certified
payrolls on a weekly basis to the construction manager that oversaw the HVAC project.
Questioned Costs
None.
Context
During testing of the wage rate requirements, the Project Manual from the construction manager
contained the Wage Rate Requirements, however, it didn’t specify the requirement for weekly
certified payrolls; only certified payrolls needing to be submitted. Also, we inquired who reviews
the submitted certified payrolls to ensure the rates are paid according to federal pay rates. We
noted that the firm who the District hired to oversee the project was supposed to be in charge of
this. However, during the inquiry of the firm, we noted that they do not review or sign off on
these for accuracy.
Cause
Management oversight.
Effect
There is an increased risk of not paying appropriate wages to contractors working on the
project.
Repeat Finding
No.
Recommendation
The District should ensure the construction manager includes the weekly certified payroll
submission requirement in their Project Manual. Also, the District should implement policies and
procedures to ensure all certified payrolls are reviewed to ensure wages are paid according to
federal wage rates.
Views of Responsible Officials
The District agrees with the recommendation.