Finding Text
U.S. DEPARTMENT OF EDUCATION
PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION
COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U
PASS-THROUGH NUMBER 4003
AUDIT PERIOD - YEAR ENDED JUNE 30, 2023
2023-001. Special Tests and Provisions
Criteria or specific requirement: 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities.
Condition: The District paid $219,500 for installation of an HVAC system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate clause. Additionally, weekly certified payrolls were not submitted to the District.
Cause: Lack of internal controls and management oversight.
Effect: The District did not comply with Wage Rate Requirements.
Context: A total of two contracts for facility repairs and improvements were paid from the Education Stabilization Fund. Both were examined.
Identification as a repeat finding: No
Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures.
Views of responsible officials: The architect responsible for the project and supervision of sub-contractors was contacted regarding the non-compliance issue. He obtained the required documentation from the sub-contractor (weekly payrolls). The Superintendent, Assistant Superintendent and CFO/Business Manager have all reviewed the prevailing wage requirements within Davis-Bacon.