Finding Text
2023-003 - Wage Rate Requirements Finding Type: Material Noncompliance/Material Weakness in Internal Control over Compliance (Special Tests and Provisions). Program: Education Stabilization Fund; U.S. Department of Education; passed through the Michigan Department of Education; Assistance Listing Numbers 84.425D and 84.425U; Award Numbers 213712-2021 and 213713-2122. Criteria. The Uniform Guidance requires that all laborers and mechanics employed by contractors to work on construction contracts in excess of $2,000 financed by federal assistance funds be paid wages not less than those 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 a provision that the contractor or subcontractor comply with those requirements and the DOL regulations, which include a requirement to obtain weekly certified payrolls from contractors. Condition. The School did not include the federal wage rate requirements in their contracts and did not obtain the required certified payrolls for its contractors subject to the federal rate requirements. Cause. The School did not have the proper internal controls in place to ensure that all contracts awarded have complied with federal requirements. Effect. As a result of this condition, the School did not follow federal requirements to include the prevailing wage rate provision in its contract. Questioned Costs. The total charges that were not supported by appropriate prevailing wage documentation amount to $489,293. Recommendation. We recommend that the School reviews its policies to ensure that applicable prevailing wage requirements are included in construction contracts whenever federal funds are used and certified payrolls are obtained. View of Responsible Officials. Management concurs with the finding. Going forward, if Black River participates in a federally funded project, we will make sure that prevailing wage requirements will be included in the contract.