Finding 25727 (2022-001)

SECTION III ? FINDINGS AND QUESTIONED COSTS ? MAJOR FEDERAL AWARD PROGRAMS AUDIT 2022-001 ? Significant Deficiency ? Special Tests and Provisions Federal Program Title: Education Stabilization Fund - Assistance Listing No. 84.425; Federal Agency: United States Department of Education Pass-through entity: Oregon Department of Education Criteria: In accordance with 2 CFR Part 176, Subpart C, 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 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 is performed, a copy of the payroll and a statement of compliance (certified payroll). Cause: The District?s internal controls to identify and collect required certified payroll reports from contractors and subcontractors on contracted work exceeding $2,000 was not effective for the year ended June 30, 2022. Context: We selected two construction projects that exceeded $2,000 approved by ODE and spent with ESSER funds. For one of the two projects selected for testing, certified payroll reports were not collected by the District. Effect or Potential Effect: The nonfederal entity does not notify contractors and subcontractors of the requirements to comply with Wage Rage Requirements and obtain copies of certified payrolls and the District is not in compliance with the Department of Labor regulations. Recommendation: We recommend the District review their internal controls to strengthen the processes and improve procedures. We recommend the District notify all contractors and subcontractors of required submission of certified payroll reports prior to the start of any contracted work spent with federal assistance funds exceeding $2,000. Views of Responsible Officials: The District agrees with the finding and recommendation and plans to implement a system of reviewing a copy of the payroll and a statement of compliance (certified payroll), as necessary.