Finding Text
Finding - District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000, resulting in questioned costs totaling $433,295.
Criteria - The ES Fund provides Federal funds for school facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental health hazards, and to support student health needs.
Title 29, Section 5.5, Code of Federal Regulations (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The United States Department of Labor established “prevailing wages” by geographic area and interprets the Davis-Bacon Act to apply to construction, alteration, or repair of public buildings or public work.
Condition - During the 2022-23 fiscal year, the District expended $53,667,312 from the ES Fund. The expenditures included $438,019 for projects related to seven construction contracts totaling $961,711 for heating, ventilation, and air-conditioning renovation, playground installation, and playground fence installation. While the contracts included a general requirement to comply with the Davis-Bacon Act provisions, the contracts did not explicitly require, and the contractors did not submit, weekly certified payrolls to the District demonstrating prevailing wage rates were paid.
Subsequent to our inquiry, District personnel obtained certified payrolls for two contracts for playground fence installation totaling $4,724, demonstrating that prevailing wage rates were paid for these projects.
Cause - Construction contracts did not specifically require contractors to submit to the District weekly payrolls and District personnel relied upon contractors to ensure wage rates paid by contractors were in compliance with Davis-Bacon Act.
Effect - Absent specific contract clauses and weekly certified payrolls, there is an increased risk that construction contractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Although we requested, the District did not provide from certain contractors certified payrolls demonstrating that the prevailing wage rates were paid. Consequently, the $433,295 (i.e., $438,019 expended by the District from the ES Fund minus $4,724 supported by certified payrolls) are questioned costs.
Recommendation - The District should enhance procedures to ensure compliance with all Davis-Bacon Act requirements. Such procedures should ensure that applicable Federally funded construction contracts require submittal of weekly certified payrolls and that District personnel verify that the payrolls were received and demonstrated that prevailing wage rates were paid. In addition, the District should document to the FDOE the allowability of the questioned costs or contact the FDOE regarding necessary corrective action.
District Response - The District's procedures will be enhanced to ensure compliance with the Davis-Bacon Act prevailing wage requirements. The District is currently working with the contractors to obtain the required documents to be in compliance with the Davis-Bacon Act.