Finding Text
Finding 2022-002: Wage Rate Requirements Program Name: Education Stabilization Fund ? Assistance Listing 84.425D Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance Questioned Cost Amount: Unknown ? from $0 to $60,000 Context / Criteria: All construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act as supplemented by Department of Labor regulations. Condition: The School District did not have controls in place to ensure construction contracts in excess of $2,000 included provisions for compliance with the Davis-Bacon Act. Cause / Effect: The School District entered into a contract with a construction manager for a project not funded by federal funds. Subsequent to the agreement being placed into effect, a change order was added to include a HVAC project that would be funded by federal funds. The original contract and the change order did not include a provision for compliance with the Davis-Bacon Act. As a result, the School District entered into a construction contract that was not in compliance with 2 CFR Part 176 Subpart C. Recommendation: We recommend management implement procedures to ensure construction contracts entered into that utilize federal funding are reviewed for compliance with federal requirements. Views of Responsible Officials and Corrective Actions: Management is in agreement with the finding. See accompanying Corrective Action Plan.