Finding Text
2025-005 Wage Rate Compliance CFDA Title: ESSER III and Impact Aid CFDA Number: 84.425; 84.041 Federal Award Number: 2021 and 2025 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction; Direct Condition: During our compliance testing of ESSER III and Impact Aid construction expenditures, we identified that the contracts did not include required prevailing wage provisions and District did not obtain supporting documentation (certified payrolls) to demonstrate compliance with wage rate requirements. Context: During the testing of claims for the ESSER III and Impact Aid major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: All 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 the locality of the project (prevailing wage rates) by the Department of Labor (DOL). Non-federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Effect: The District is not incompliance with the Federal Wage Rate Requirements for the HVAC and Controls Upgrade as the contracts did not include the required verbiage and the District did not require weekly certified payrolls. Cause: The District Clerk/Business Manager was new to the District and was not aware of the federal requirements for using federal grant monies for construction purposes. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. the weekly certified payrolls are submitted to the District.