Finding 11265 (2023-002)

Finding 2023-002: Special Tests and Provisions – Wage Rate Requirements Condition: The District did not have sufficient controls in place to ensure that all construction contracts in excess of $2,000 financed by federal assistance funds included verbiage to ensure that all laborers and mechanics employed by contractors or subcontractors were paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (40 USC 3141-3144, 3146, and 3147). Criteria: In accordance with the Wage Rate Requirements, nonfederal entities shall include in their construction contracts in excess of $2,000 financed by federal assistance funds a provision that all laborers and mechanics employed by contractors or subcontractors to work on construction contracts must be paid wages not less than the prevailing wages rates established by the Department of Labor (DOL) (40 USC 3141-3144, 3146, and 3147). 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. Cause: The District’s internal control structure did not ensure that prevailing wage rate requirements were included in all construction contracts. Effect: The District did not properly include verbiage of prevailing wage rates in their construction contracts. Recommendation: We recommend that management implement internal control procedures to review all construction contracts and ensure prevailing wage requirements are met. View of Responsible Official: Management agrees with finding. See the corrective action plan.