Finding Text
2024 – 002: Special Tests and Provisions
Federal Agency: U.S Department Education
Federal Program Name: Education Stabilization Funds
Assistance Listing Number: 84.425D, 84.425U
Pass-Through Agency: Indiana Department of Education
Pass-Through Numbers: S425D210013, S425U210013
Award Period: July 1, 2023 – June 30, 2024
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Per 2 CFR 200.303, "The non-Federal entity must: (a) Establish and
maintain effective internal control over the Federal award that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller
General of the United States or the ‘Internal Control Integrated Framework’ issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). If governors, SEAs, and or
subrecipients propose to use ESF funds for construction they must also comply with applicable
requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction
projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s
regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all
construction contracts using laborers and mechanics financed by federal education funds, recipients
and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon
prevailing wage requirements.
Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for
construction projects financed by federal education funds.
Questioned costs: $365,489.
Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing
wage requirements.
Cause: PLA was not familiar with using federal education funds for construction costs and were not
aware of the prevailing wage requirements
Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage
rates.
Repeat Finding: Yes – 2023-002.
Recommendation: We recommend that for future construction contracts financed by federal education
funds PLA verify that subcontractors comply with prevailing wage requirements.
Views of responsible officials: There is no disagreement with the audit finding.