Finding 36351 (2022-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-06-14

AI Summary

  • Core Issue: The District failed to obtain required certified payroll reports for a construction contract over $2,000 and did not include necessary wage rate provisions.
  • Impacted Requirements: Compliance with 2 CFR part 200 Appendix II and the Davis-Bacon Act, which mandates prevailing wage rates for federally funded projects.
  • Recommended Follow-Up: Ensure all future construction contracts over $2,000 include prevailing wage provisions and require weekly certified payroll reports from contractors.

Finding Text

2 CFR part 200 Appendix II requires all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147. 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). This reporting is often done using Optional Form WH-347, which includes the required statement of compliance (OMB No. 1235-0008). The DOL, Employment Standards Administration, maintains a Davis-Bacon and Related Acts web page (https://www.dol.gov/agencies/whd/government-contracts/construction). The District did not obtain the required certified payroll reports for a construction contract in excess of $2,000. In addition, the contract did not contain a provision to comply with wage rate requirements. The contract cost was $30,206. The District should include prevailing wage provisions in all construction contracts or agreements involving federal funds exceeding $2,000. The District should obtain weekly certified payroll reports from the contractor.

Categories

Reporting Matching / Level of Effort / Earmarking Special Tests & Provisions

Other Findings in this Audit

  • 36348 2022-001
    Material Weakness
  • 36349 2022-002
    Significant Deficiency
  • 36350 2022-001
    Material Weakness
  • 612790 2022-001
    Material Weakness
  • 612791 2022-002
    Significant Deficiency
  • 612792 2022-001
    Material Weakness
  • 612793 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $1.11M
32.009 Emergency Connectivity Fund Program $319,502
10.553 School Breakfast Program $288,923
84.425 Education Stabilization Fund $113,428
10.555 National School Lunch Program $87,186
84.027 Special Education_grants to States $76,244
84.424 Student Support and Academic Enrichment Program $73,600
10.582 Fresh Fruit and Vegetable Program $65,494
84.367 Improving Teacher Quality State Grants $57,872
84.371 Striving Readers $54,049
21.019 Coronavirus Relief Fund $8,553
84.173 Special Education_preschool Grants $6,673
10.649 Pandemic Ebt Administrative Costs $3,063
84.323 Special Education - State Personnel Development $922