Finding 20660 (2022-003)

Reference Number: 2022-003 Description: Federal #85.425 ? Education Stabilization Fund Criteria: The District must have internal controls in place to ensure that construction contracts over $2,000 meet Davis-Bacon prevailing wage requirements prior to charging contract related costs to the Education Stabilization Fund grants. Condition: The District used $26,070 in ESSER II funds (84.425D) and $154,853 ARP ESSER III funds (84.425U) for controls systems and HVAC upgrades with a contractor. This District did not have internal controls in place to document that the contract met Davis-Bacon prevailing wage requirements prior to charging the costs to the grants. It was ultimately determined that the contractor did comply with Davis-Bacon, however, this represents a significant deficiency in internal controls as no verification was documented beforehand. Cause: The District does not have the controls in place to ensure that construction contracts over $2,000 meet Davis-Bacon prevailing wage requirements prior to charging contract related costs to the ESSER program. Potential Effect: The District could have charged contract costs to the program that were not allowable. Questioned Costs: $-0- Auditors? Recommendation: The District should implement controls that verify compliance with Davis-Bacon for all construction contracts using Education Stabilization funds and retain supporting documentation. View of Responsible Officials and Corrective Action Plan: See attachment for District?s corrective action plan.