Finding 1130902 (2024-002)

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – EDUCATION STABILIZATION FUND – FEDERAL ALN 84.425 2024-002 Internal Control Over Compliance and Material Noncompliance With Special Tests and Provisions Over Wage Rate Requirements Criteria – 29CFR part 5 requires the District to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including wage reate requirements applicable to the education stabilization fund. Condition – During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its educaiton stabilization fund federal program to ensure compliance with wage rate requirements related to minor remodeling, renovation, or construction contracts that are over $2,000 that use laborers and mechanics that are required to meet Davis-Bacon Act prevailing wage rate requirements. Questioned Costs – None. Context – The District did not have any policies in place regarding wage rate requirements and did not have the proper documentation of compliance with wage rate requirements related to minor remodeling, renovation, or construction contracts that are over $2,000 that use laborers and mechanics that are required to meet Davis-Bacon Act prevailing wage rate requirements. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Effect – Noncompliance with wage rate requirements could result in the District not paying wages on these contracts that are required to meet Davis-Bacon Act prevailing wage rate requirements.