Finding Text
Material Weaknesses:
2023-001 Federal Agency: U.S. Department of Education
Pass Thru Entity: Oklahoma State Department of Education
Program: COVID-19 ARP ESSER III
Assistance Listing: 84.425U
Grant Period: Year Ending June 30, 2023
Condition: Construction projects paid with federal monies did not meet the compliance requirements of the Davis-Bacon Act.
Criteria: The Davis-Bacon Act requires that nonfederal entities shall meet certain requirements for the construction, alteration or repair of public buildings or public works in excess of $2,000.00. Any contract entered into must include the locally prevailing wage to be paid to workers including fringe benefits. The contractor is obliged to pay at least the prevailing wage listed in the contract. Contractors are required to pay covered workers weekly and submit weekly certified payrolls to the contracting entity. They are also required to post the applicable Davis-Bacon wage determination along with the Davis-Bacon poster at the job site.
Cause: The District was unaware of the need to follow the requirements of the Davis-Bacon Act when expending federal monies on the purchase and installation of HVAC units.
Effect: The District could be liable for paying any additional wages if the contractor did not pay prevailing wage rates to laborers working on the project, or the expenditures could be disallowed for the expenditures that were subject to the Davis-Bacon Act.
Recommendation: We recommend the District develop internal controls to meet the requirements of the Davis-Bacon Act that ensure any time federal awards are used on construction that compliance with contracts, including inserting the prevailing wage clauses and ensuring that federal wage rates and fringes are met by an effective monitoring process which includes collecting and reviewing weekly certified payroll reports from the contractor or subcontractor. Also, ensuring that all items are posted at the work site to ensure compliance.
District’s Response: The District will develop internal controls to ensure that in the future if federal awards are expended on construction that all requirements of the Davis-Bacon Act will be met.
Questioned Costs: $ 0