Finding 21237 (2022-001)

Finding 2022-001 - Elementary and Secondary School Emergency Relief Fund (ESSER)- COVID-19 - Assistance Listing No. 84.425D and American Rescue Plan - Elementary and Secondary School Emergency Relief(ARP ESSER) - COVID-19 -Assistance Listing No. 84.425U Recommendation: The School should ensure that processes are in place to require contractors and subcontractors to comply with the Act, including proper provisions in any construction contracts over $2,000. The School should also require documentation that the contractors are following the regulations and paying proper wages and the School should review and confirm that the contractors are compliant. Action Taken: In regard to the ESSER II Grant finding; the school signed a contract without a prevailing wage requirement with the best bidder and the school used its general funds to pay the contractor for its labor-related charges which are generally allowed for the charter schools. The total project cost is $1,433,266 of which only $277,174 is paid using the Federal ESSER II Grant. The cost of the materials for this project is a minimum $372,377(See Document#1). The remaining amount of the cost is a combination of the materials and the labor costs. The school's intention was to use ESSER II funds to pay for materials only. The school will contact its NYSED ESSER Agency to find out if this finding can be removed based on the aforementioned clarification. In regard to the ESSER III Grant finding; the school signed a contract without a prevailing wage requirement with the best bidder and the school used its general funds to pay the contractor for its labor related charges except the labor cost of $22,400 (See Document#2). The total project cost as of 6-30-2022 is $1,981,026 of which $757,400 is from the Federal ESSER III Grant. The school paid $735,000 for materials only. The remaining $22,400 was paid for the labor. We will contact NYSED ESSER Agency to amend the Federal Grant to remove payment for labor and replace it with materials because the total cost for materials only is more $757,400. As a result of the amendment, all of the Federal Funds will be used for covering materials cost only. The school still improve its current procedures to align with the federal requirements for future projects if Federal Grant will be used for the construction wages. The school will educate the Business Administrator, CEO and the Finance Committee on the requirements of the Davis-Bacon Act. The school will add the requirement to its federal procurement policy and procedures. The school will also add this requirement to its bid proposal for any future federally funded construction contracts in excess of $2,000. The finance committee will review and approve any future federally funded construction contracts over $2,000 so that they can ensure the proper verbiage is included. The Business Administrator will monitor the contractors involved to ensure that they are complying with wage requirements. The CEO will monitor the Business Administrator and ensure this is occurring. See Corrective Action Plan for chart/table.