Finding 1135703 (2024-003)

Finding: Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must 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). During fiscal year 2024, the Board entered into two construction projects with the contracts totaling $13,219,577.00 without including the prevailing wage rate clauses. The Board approved $1,801,803.86 of these projects to be paid with COVID-19 Education Stabilization American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Funds. As of September 30, 2024, the Board had expended $1,567,401.21 of COVID-19 Education Stabilization Funds American Rescue Plan (Elementary and Secondary School Emergency Relief (ARP ESSER) Funds on the projects with $335,172.53 related to labor costs. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in the construction contracts; therefore, the construction project contracts awarded did not include prevailing wage rate clauses nor did the contractors or subcontractors submit weekly certified payrolls to the Board. As a result, the Board was not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation: The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds (ESSER) to fund construction contracts in excess of $2,000 by ensuring prevailing wage rate clauses are included in contracts and certified payrolls are obtained. View of Responsible Officials of the Auditee Management agrees with this finding and will take corrective actions.