Finding Text
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR part 200, Appendix II(D), states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following. The “Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144 and 3146-3148) as supplemented by Department of Labor regulations (29 CFR § 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.”
29 CFR § 5.5(A)(3)(ii) requires the contractor to submit weekly payroll reports certifying, among other requirements, “that each laborer or mechanic employed on the contract has been paid the full weekly wages earned.”
During fiscal year 2022, the School District incurred expenses with contractors for work done which was paid out of the Elementary and Secondary School Emergency Relief Fund as follows:
• Dixon Electrical for the high school baseball / softball fields lighting project in the amount of $331,293
• Tierney for the Interactive Smart Panel Project in the amount of $418,066
• Tribute Contracting and Consultants, LLC for Construction of Outdoor Classrooms in the amount of $116,325
• GLS Electric Inc for electrical work for smartboard installation in the amount of $43,800
Although the required clauses concerning prevailing wages were included in the contracts for these services, as a result of a lack of proper internal controls, certified payrolls were not provided by the School District to support that for each week in which work was performed under the contract or subcontract, the contractor or subcontractor was submitting the required certified payrolls.
Failure to have effective controls in place over wage-rate requirements may result in the School District and its contractors or subcontractors failing to pay prevailing wages when required by Federal law and could result in reduction of future Federal funding or other sanctions imposed by Federal grantors.
When required by Federal grant legislation, the School District should ensure prime construction contracts in excess of $2,000 paid with Federal grant monies contain provisions that require the contractor to comply with wage rate requirements. Further, the School District should ensure certified payroll reports are provided weekly by the contractor.