Finding Text
Finding - District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000, resulting in questioned costs totaling $131,819.
Criteria - The ES Fund provides Federal funds for school facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental health hazards and to support student health needs. According to the FDOE-approved grant document, the District received this funding, in part, to repair or replace gymnasium flooring so students can safely participate in physical education classes and to provide additional spacing options for social distancing and seating should the need arise.
Title 29, Section 5.5, Code of Federal Regulations (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The United States Department of Labor established “prevailing wages” by geographic area and interprets the Davis-Bacon Act to apply to construction, alteration, or repair of a public building or public work.
Condition - During the 2022-23 fiscal year, the District expended ES Fund moneys totaling $4,575,438. The expenditures included $131,819 related to a construction contract for removal, disposal, and installation of gymnasium flooring.
We noted that the purchase orders, request for proposal, bid specifications, and contract did not include clauses that required compliance with the Davis-Bacon Act provisions and the contractors did not submit weekly certified payrolls to the District.
Cause - District personnel were not aware that the Davis-Bacon Act applied to this Federally funded project and, therefore, did not include the appropriate wage rate clauses in the applicable procurement documents nor require District personnel to verify that certified payrolls were received.
Effect - Absent required contract clauses and weekly certified payrolls, there is an increased risk that construction contractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor.
Although we requested, the District did not provide the certified payrolls from the contractor demonstrating that the prevailing wage rates were paid for the project. Consequently, the District incurred questioned costs totaling $131,819.
Recommendation - The District should enhance procedures to ensure compliance with all Davis-Bacon Act requirements. Such procedures should ensure that applicable Federally funded construction contracts require submittal of weekly certified payrolls and that District personnel verify the payrolls are received and demonstrate that prevailing wage rates are paid. In addition, the District should document to the FDOE the allowability of the questioned costs or contact the FDOE regarding necessary corrective action.