Finding Text
Federal Program Information:
Funding Agency: U.S. Department of Education
Title: Education Stabilization Fund
Assistance Listing: 84.425 U
Passthrough: N/A
Award Year: 2024
Criteria: APPENDIX II TO PART 200—CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER
FEDERAL AWARDS
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141–3148). When required by Federal program legislation, all prime construction
contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon
Act (40 U.S.C. 3141–3144, and 3146–3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ‘‘Labor Standards
Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction’’). In accordance with the statute,
contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage
determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.
The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in
each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage
determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The
contracts must also include a provision for compliance with the Copeland ‘‘AntiKickback’’ Act (40 U.S.C. 3145), as
supplemented by Department of Labor regulations (29 CFR Part 3, ‘‘Contractors and Subcontractors on Public Building or
Public Work Financed in Whole or in Part by Loans or Grants from the United States’’). The Act provides that each contractor
or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of
public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all
suspected or reported violations to the Federal awarding agency.
Condition: During our review of the requirements of Special Tests provisions of the Compliance Supplement and the District’s
implementation of controls related to compliance with these provisions for the Education Stabilization Fund, we identified the
following issues:
The District did not meet the requirement for the Davis-Bacon Act prevailing wage requirement. The District had not included the
prevailing wage requirements in the contract with the vendor who was replacing fire panels in the District nor did the District obtain
the weekly certified payroll reports from the contractor for each of the projects.
Questioned Costs: Unknown. The vendor would have obtained a state wage determination rate because of the dollar-value of the
contract, which would have required wages which would meet the Davis Bacon requirements. The District did obtain permission
from the New Mexico Public Education Department before beginning the project, and the PED did reimburse all costs, so it is likely
that questioned costs may not exist.
Cause: District personnel were unaware of the requirement to include language in contracts regarding the Davis- Bacon Act or the
Copeland “AntiKickback” Act with companies providing construction or maintenance work for the District when Federal funds are
being used to pay for those services. State personnel told the District incorrectly that Davis-Bacon did not apply unless the value of
the contract was greater than $60,000 per project or on Native American lands, even though the grant guidance puts the level at
$2,000.
Effect: The District is not in compliance with Federal requirements when using grant funds to pay for construction or maintenance
projects in excess of $2,000. Noncompliance with these provisions could cause reimbursement of these funds to be questioned or
require the District to reimburse the granting agency for any costs incurred under these projects. Additionally, companies providing
these services may not know they are subject to particular wage rate determinations for the project which may cause them to bid or
quote amounts that do not provide for payment of required wages to the employees participating on those projects. Auditor’s Recommendation: We recommend that the District establish a practice of including the required language for the Davis-
Bacon Act and the Copeland “AntiKickback” Act in contracts with all companies which provide construction or maintenance
projects to the District. When companies are selected that have Cooperative Educational Services agreements, the District should
require an additional contract be signed by the company which includes these provisions. Additionally, we recommend that District
personnel be trained in identifying which funds fall under Federal regulations versus State regulations so that when purchase orders
are created and contracts are entered into that these individuals know they are including the proper requirements.
Responsible Official’s Plan:
Specific corrective action plan for finding:
o When receiving new funding, management will review laws and regulations to make sure the district complies
with them. Training will be seek if necessary
Timeline for completion of corrective action plan:
o November 30, 2024
Employee position(s) responsible for meeting the timeline:
o Superintendent, directors, supervisors, and business manager