Finding 3825 (2023-001)

FINDING 2023-001 DAVIS-BACON COMPLIANCE SIGNIFICANT DEFICIENCY Federal Program: Education Stabilization Fund Assistance Listing Numbers: 84.425D, 84.425U, and 84.425W Condition The School entered into an agreement with a contractor for building renovations, paid with funds from the Education Stabilization Fund. A formal contract that required compliance with the provisions of the Davis-Bacon Act was put into place. However, the School did not obtain certified payrolls from the contractor for each week that work was performed under the contract. Criteria The 2023 Compliance Supplement states: 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). Cause The School was not aware of the requirement outlined in the Criteria section above. Effect The School is unable to document that the contractor is compliant with the Davis-Bacon Act. Recommendation We recommend the School develop internal controls to ensure that certified payrolls are obtained for each week that work is performed under qualifying construction or sub-construction contracts. Views of Responsible Officials and Planned Corrective Actions The School’s Corrective Action Plan is included on page 23.