Finding 11912 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-02-06

AI Summary

  • Core Issue: The District failed to collect weekly certified payrolls from contractors for construction projects over $2,000, leading to potential wage compliance issues.
  • Impacted Requirements: This noncompliance violates federal wage rate requirements outlined in 2 CFR Part 176, risking the use of federal funds for underpaid labor.
  • Recommended Follow-Up: The District should implement a system to obtain and review certified payrolls weekly from contractors before processing payments.

Finding Text

Section III- Federal Award Findings and Questioned Costs 2023-001 Wage Rate Requirements (Significant Deficiency in Internal Controls over Compliance, Noncompliance, and Questioned Costs greater than $25k) Funding Agency: United State Department of Education Federal Award Agreement Number: N/A Award Year: 2023 Title: Education Stabilization Fund, ESSER II Assistance Listing Number: 84.425D Pass-through Agency: Texas Education Agency Pass-through Identification Number: 20521001253901 Questioned Costs: $428,498 Condition: The District did not obtain weekly certified payrolls for laborers and mechanics employed by contractors to work on construction contracts in excess of $2,000 financed by federal assistance funds. The computed likely questioned costs were determined per review of invoices and inquiries with contractor. One invoice identified labor costs of $50,880. A second invoice of $1,258,528 did not have labor costs broken out. Per further inquiries with contractor, 30% of that invoices was estimated to represent labor cost ($377,618). Out of the total program expenditures, these were the only two invoices that were subject to this compliance requirement. Criteria: The Compliance Supplement for this program includes N. Special Tests and Provisions: 1. Wage Rate Requirements. Per 2 CFR Part 176, Subpart C, non‐Federal entities are required to obtain from contractors a copy of payroll and a statement of compliance (certified payrolls) for each week in which any contract work is performed. Cause: The contractor did not submit weekly certified payroll to the District when construction work was performed. Effect: The District could be using federal funding for construction work where wages to laborers and mechanics may be less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. Auditors’ Recommendation: The Auditor recommends that the District obtain certified payroll on a weekly basis from contractor while construction is occurring and maintain records to show the District reviewed prior to payment to contractor for invoices. Management Response: Management agrees with the finding. See corrective action plan on page 139.

Corrective Action Plan

The District will obtain certified payroll related to the questioned costs and will implement a weekly process to obtain certified payroll while construction is occurring and maintain records to show the District reviewed prior to payment to contractor for invoices. Contact Person: Michelle Martinez, Business Manager Proposed Completion Date: August 31,2024

Categories

Questioned Costs Special Tests & Provisions Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 588354 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425 Covid-19 Education Stabilization Fund (esser Ii) $7.26M
84.425 Covid-19 Education Stabilization Fund (arp Esser Iii) $3.90M
84.010 Title I Grants to Local Educational Agencies $2.51M
10.555 National School Lunch Program - Cash Assistance $1.94M
10.553 School Breakfast Program $753,502
84.027 Special Education_grants to States $653,467
10.558 Child and Adult Care Food Program $243,892
84.367 Supporting Effective Instruction State Grants $198,580
10.555 National School Lunch Program - Non-Cash Assistance $194,631
21.016 Equitable Sharing (task Force) $180,126
84.425 Covid-19 Education Stabilization Fund (tclas Esser Iii) $179,994
93.323 Covid-19 Epidemiology and Laboratory Capacity for Infectious Diseases (elc Covid-19 School Health Support Grant, Cycle 2) $134,416
84.334 Gaining Early Awareness and Readiness for Undergraduate Program $131,810
84.358 Rural Education $130,761
84.365 English Language Acquisition State Grants $117,369
84.424 Student Support and Academic Enrichment Program $101,748
10.555 National School Lunch Program - Sso $91,538
10.555 Supply Chain Assistance (sca) Food Commodities $83,401
84.048 Career and Technical Education -- Basic Grants to States $74,530
12.U01 Junior Reserve Officer Training Corps $66,048
84.011 Migrant Education_state Grant Program $52,117
84.027 Special Education_idea-B Formula - Arp $46,398
84.010 Title I Grants to Local Educational Agencies School Improvement Grant $43,000
84.173 Special Education_preschool Grants $10,209
84.173 Special Education_idea B Preschool - Arp $9,281
10.560 Nslp Contracted Warehouse Private Storage and Delivery Fees (non-Cash Assistance) $8,417
84.425 Covid-19 American Rescue Plan Homeless II $6,716
84.369 Grants for State Assessments and Related Activities $5,917
10.649 Covid-19 Pandemic (p-Ebt) Administrative Costs $3,135