Finding 38222 (2022-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-02-28

AI Summary

  • Core Issue: The District failed to collect weekly certified payroll documents from contractors, which is necessary to ensure compliance with prevailing wage requirements for construction projects funded by ESSER.
  • Impacted Requirements: Contracts over $2,000 must comply with the Davis-Bacon Act and provide certified payroll reports to verify that laborers are paid at least the prevailing wage.
  • Recommended Follow-Up: The District should update contracts to include wage compliance provisions and ensure weekly payroll reports are obtained to document adherence to federal requirements.

Finding Text

Title of Finding: Approval and Prevailing Wage Rate Requirements Finding Number: 2022-001 Assistance Listing Number and Title: AL # 84.425D ? Elementary and Secondary School Emergency Relief (ESSER) Fund Federal Award Identification Number / Year: 2021/2022 Federal Agency: U.S. Department of Education Compliance Requirement: N. Special Tests and Provisions ? Wage Rate Requirements Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance/Significant Deficiency 2 CFR Section 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. Section 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 USC. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by nonfederal entities must include a provision for compliance with Davis-Bacon Act (40 USC. 3141-3144 and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. 2 CFR Section 176.190 Award term ? Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance or repair the agency shall use the award term to describe in the following paragraphs: (a) Section 1606 of the Recovery Act requires all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. During fiscal year 2022, the District used a portion of ESSER funds for two projects related to 1) cooling system purchase and installation, and 2) health lab renovations. Both contracts required compliance with Davis-Bacon prevailing wage requirements which was communicated by the District to the related contractors. However, the District did not require weekly certified payroll documents from these contractors to monitor compliance with prevailing wage. As auditors, we are not expected to determine whether prevailing wage rates were paid. We recommend the District ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then the District has an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

Corrective Action Plan

The District will implement the following procedures immediately to ensure all compliance requirements related to Davis Bacon are met: 1. An attached document will be included in all contracts with the section marked and discussed, signed off on stating there is a clear understanding of the requirements to pay laborers not less than one time a week and submit weekly payroll records to the District. 2. The District will present a schedule with a list of items that need to be submitted to the contractor. 3. The Treasurer or designee will monitor timely receipts of the payroll details and check for completeness ? then log the receipt of each item presented on the Contractor Log for each project. 4. As invoices are presented for payment, the Treasurer or designee will compare the date on the invoice to the payroll record log to ensure that all required documents have been received, checked for compliance and logged. 5. If all records have been received and noted, the invoice can move to Accounts Payable to obtain the proper approvals and be paid. 6. If all payroll records have not been received, the invoice will be returned to the vendor with a clear explanation of reason and a list of items that are missing. 7. Once all items are received and compliant, the invoice can move to Accounts Payable to obtain the proper approvals and be paid. Anticipated Completion Date: These procedures will be put into place immediately; all projects in process will be addressed to ensure these compliance procedures are implement and documents are received prior to issuance of future payments. Responsible Contact Person: Terri Eyerman, Treasurer

Categories

Special Tests & Provisions Procurement, Suspension & Debarment Subrecipient Monitoring Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 38223 2022-001
    Significant Deficiency
  • 38590 2022-001
    Significant Deficiency
  • 614664 2022-001
    Significant Deficiency
  • 614665 2022-001
    Significant Deficiency
  • 615032 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.027 Special Education_grants to States $422,600
10.553 School Breakfast Program $179,377
84.424 Student Support and Academic Enrichment Program $96,037
84.367 Improving Teacher Quality State Grants $67,983
84.358 Rural Education $61,147
10.555 National School Lunch Program $48,350
84.425 Education Stabilization Fund $48,279
21.019 Coronavirus Relief Fund $422
84.010 Title I Grants to Local Educational Agencies $214