Finding Text
Audit Finding 2024-006 – Noncompliance with Prevailing Wage Requirements Identification of the Federal Program: Education Stabilization Funds; Assistance Listing Number 84.425; Year 2024 Criteria: Under prevailing wage requirements applicable to this program (e.g., Davis Bacon Act, 40 U.S.C. 3141–3148, and 2 CFR 200.327 for procurement), contractors and subcontractors performing construction work must: • Pay laborers and mechanics no less than the locally prevailing wage rates as determined by the U.S. Department of Labor (Wage Determinations). • Submit certified payrolls weekly, signed by an authorized representative, in compliance with 29 CFR 5.5(a)(3). • Maintain adequate documentation supporting labor classifications, wage rates, and hours worked. Condition: During our testing of prevailing wage compliance for the outside class structure project, we identified prevailing wage rate clauses were not included in the contract and we could not verify that certified payrolls for compliance with the applicable wage determination were submitted. Context: Documentation was not maintained for prevailing wage support of projects tested. Cause: The District has had vacancies in certain positions that are key parts of the District's control processes which led to the District not maintaining proper documentation. Effect or Potential Effect: Failure to comply with required prevailing wage laws may result in: • Workers being underpaid; • The federal awarding agency requiring back‑wage restitution; • The entity being subject to enforcement actions or questioned costs. Questioned Costs: None Recommendation: We recommend that the entity: • Strengthen internal controls to ensure all contractors adhere to applicable wage determinations. • Require consistent and documented review of weekly certified payrolls. • Obtain restitution for identified underpayments, if applicable. • Provide training to staff overseeing construction and contractor compliance.