Finding 382379 (2023-002)

2023-002 Special Tests Department of Education - COVID-19 Education Stabilization Fund (ALN #84.425) Criteria: Recipients and subrecipients that use ESF funds for minor remodeling, renovation or construction contracts that are over $2,000 and use laborers and mechanics must meet the Davis-Bacon prevailing wage requirements. Condition: The School Board was unable to provide evidence that certified payrolls were received and reviewed for one out of twenty files tested. Questioned Costs: $309,161 Context: See “Condition” above. Effect: Failure to comply with program requirements could result in loss of grant funding. Cause: The School Board did not have adequate controls in place to monitor compliance with prevailing wage requirements. Recommendation: We recommend that the School Board review its current policies for oversight of compliance with prevailing wage requirements for this grant. The School Board should also work with the grantor agency and ensure that for the file identified in our testing they obtain evidence that the contractors and subcontractors complied with the prevailing wage rate requirements of this grant or discuss the matter with the grantor agency and seek guidance from the grantor agency on how to proceed if evidence of compliance cannot be obtained. Views of responsible officials and planned corrective action: The School Board Administration Building (SBAB), Cooling Tower Replacement project 02190000 was originally funded using Comprehensive Needs for the Design Phase. When the project was ready to commence to the construction phase it was decided to fund this phase with ESSER Funds. Subsequently, the contractor was not advised this project was subject to Davis Bacon requirements. All other projects reviewed did adhere to the Davis Bacon prevailing wages and certified payroll. We consider the SBAB Project to be an isolated incident. Moving forward, we have changed our procedures when requesting project numbers. The requestor must identify the funding source and include a note in the project description when requesting project numbers. We have also updated our Contracting Software so that projects funded with ESSER Funds are identified at the beginning of the project. These procedures will prevent this from occurring in the future.