FAC Explorer

Finding 1219591 (2021-007)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2021
Accepted
2026-06-26
Audit: 405175
Organization: University of the Virgin Islands (VI)
Auditor: ERNST & YOUNG PUERTO RICO LLC

AI Summary

  • Core Issue: None of the sampled construction contracts included the required prevailing wage rates clause, violating federal wage rate requirements.
  • Impacted Requirements: The absence of this clause means the University is not compliant with the Wage Rate Requirements under the Davis-Bacon Act.
  • Recommended Follow-Up: Implement internal controls to ensure all applicable construction contracts include the prevailing wage rate clause moving forward.

Finding Text

Federal Program Economic Adjustment Assistance - 11.307 Requirement Special Tests and Provisions – Wage Rate Requirements 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 the established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL). Nonfederal 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 DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work was performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition Out of a sample of 6 construction contracts, none had the prevailing wage rates clause. Cause Processes and controls over the inclusion of the prevailing wage rates clause do not exist. Effect The University did not comply with the applicable wage rate requirements, leading to regulatory non-compliance. Questioned Costs Not applicable. Context We performed a test of detail where our statistically validated sample consisted of 6 items from a population of 6 construction contracts. Section III – Federal Award Findings and Questioned Costs (continued) Finding Number: 2021-007 (continued) Identification as a repeat finding, if applicable Not applicable. Recommendation We recommend the University implements internal controls and procedures to ensure the prevailing wages rate clause is included in all applicable construction contracts. Management’s Response The University of Virgin Islands concurs with this finding. Management response is included in a separate document.

Corrective Action Plan

The University will implement internal controls and procedures to ensure that the prevailing wage rate clause is included in all federally funded construction contracts in compliance with applicable regulations. The Principal Investigator (PI) will collaborate with Purchasing & Contracts (P&C) and the Office of Sponsored Programs (OSP) on construction-related projects and will be responsible for flagging the prevailing wage requirement during the planning phase. The Purchasing Department will ensure the clause is included in all solicitations and bid packages for applicable projects. The Project Manager (PM) will be responsible to review all submitted bids to verify that minimum standards, including federal prevailing wage requirements, are met. Finally, the prevailing wage clause will be explicitly incorporated into the final contract and associated Purchase Orders (POs) to ensure full compliance with federal grant conditions and U.S. Department of Labor regulations. This process ensures consistency, accountability, and compliance across all units involved in construction.

Categories

Special Tests & Provisions Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1219581 2021-003
    Material Weakness Repeat
  • 1219582 2021-003
    Material Weakness Repeat
  • 1219583 2021-003
    Material Weakness Repeat
  • 1219584 2021-003
    Material Weakness Repeat
  • 1219585 2021-004
    Material Weakness Repeat
  • 1219586 2021-004
    Material Weakness Repeat
  • 1219587 2021-004
    Material Weakness Repeat
  • 1219588 2021-004
    Material Weakness Repeat
  • 1219589 2021-005
    Material Weakness Repeat
  • 1219590 2021-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425J Education Stabilization Fund $5.29M
84.063 FEDERAL PELL GRANT PROGRAM $3.72M
84.425F Education Stabilization Fund $3.67M
84.938 DISASTER RECOVERY ASSISTANCE FOR EDUCATION $3.33M
47.083 Integrative Activities $3.27M
11.307 ECONOMIC ADJUSTMENT ASSISTANCE $3.16M
84.268 Federal Direct Student Loans $2.48M
10.203 Payments to Agricultural Experiment Stations Under the Hatch Act $1.82M
84.425E Education Stabilization Fund $1.30M
10.511 SMITH LEVER EXTENSION $1.26M
59.037 Small Business Development Centers $1.15M
43.008 EDUCATION PROGRAM $644,284
93.632 University Centers for Excellence in Developmental Disabilities Education, Research, and Service $527,455
84.425H Education Stabilization Fund $459,450
10.855 Distance Learning and Telemedicine Loans and Grants $376,045
93.859 Biomedical Research and Research Training $358,118
17.504 CONSULTATION AGREEMENTS $344,115
11.433 Marine Fisheries Initiative $190,283
47.049 MATHEMATICAL & PHYSICAL SCIENCES $190,221
47.076 Education and Human Resources $136,522
47.079 PIRE Advancing Global Strategies $130,577
84.007 Federal Supplemental Educational Opportunity Grants $113,803
93.464 ACL ASSISTIVE TECHNOLOGY $113,747
93.434 Every Student Succeeds Act/Preschool Development Grants $98,993
10.202 COOPERATIVE FORESTRY RESEARCH $96,621
84.027A Special Education Grants to States $91,958
15.805 Assistance to State Water Resources Research Institutes $88,997
10.514 Expanded Food and Nutrition Education Program $85,249
11.008 NOAA Mission-Related Education Awards $80,050
11.482 Coral Reef Conservation Program $69,916
47.049 Mathematical and Physical Sciences $65,114
10.516 Rural Health and Safety Education Competitive Grants Program $61,281
10.308 Resident Instruction, Agriculture, and Food Science Facilities and Equipment Grants $60,310
84.033 FEDERAL WORK-STUDY PROGRAM $51,186
43.001 Science $50,736
10.025 Plant and Animal Disease, Pest Control, and Animal Care $42,008
11.999 MARINE DEBRIS PROGRAM $40,637
10.322 Distance Education Grants for Institutions of Higher Education in Insular Areas $39,070
10.678 Forest Stewardship Program $38,377
15.945 Cooperative Research and Training Programs – Resources of the National Park System $32,433
66.951 Environmental Education Grants Program $25,725
15.875 Economic, Social, and Political Development of the Territories $17,752
45.149 Promotion of the Humanities Division of Preservation and Access $17,282
47.050 GEOSCIENCES $13,237
93.307 Minority Health and Health Disparities Research $12,556
84.031 Higher Education Institutional Aid $11,896
93.310 Trans-NIH Research Support $6,819
10.515 Renewable Resources Extension Act $3,308
10.170 Specialty Crop Block Grant Program - Farm Bill $3,065
11.011 Ocean Exploration $2,888
47.074 BIOLOGICAL SCIENCES $899
11.472 Unallied Science Program $500
11.482 Monitoring of Coral Reefs 2006 $439
11.012 Integrated Ocean Observing System (IOOS) $427
81.041 State Energy Program $124
93.600 Human Services Research Partnership $-40,424