Finding Text
Special Tests – Wage Rate Requirements
Federal Program: Education Stabilization Fund (ALN 84.425D & 84.425U)
Federal Agency: U.S. Department of Education
Federal Award Year: 2022-2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria: Under the Uniform Guidance, nonfederal entities shall include in their construction
contracts subject to the Wage Rate Requirements (which still may be referenced as
the Davis-Bacon Act) a provision that the contractor or subcontractor comply with
those requirements and the DOL regulations (29 CFR Part 5, Labor Standards
Provisions Applicable to Contacts Governing Federally Financed and Assisted
Construction). 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 payrolls)
(29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB
Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part
176, Subpart C; and 2 CFR section 200.326).
Condition: During our review of the federal program, we determined that the District lacks
internal controls and therefore, cannot detect whether the District receives the
required documentation for Davis-Bacon prevailing wage requirements on a timely
manner.
Cause: The District does not have sufficient detection and prevention procedures.
Effect: Without proper controls, the District cannot prevent or detect instances of Davis-
Bacon prevailing wage requirements noncompliance. Lack of internal controls may
result in questioned costs and noncompliance with the terms of the grant.
Questioned Costs: $0
Recommendation: We recommend the District adhere to the Uniform Guidance and establish internal
controls to ensure the District obtains the required documentation for the Davis-
Bacon prevailing wage requirements on a timely basis.
Management’s views Management agrees with the finding. See corrective action plan on page 88.