Finding Text
Finding - District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000, resulting in questioned costs totaling $120,795.
Criteria - The ES Fund provides Federal funds for school facility repairs and improvements. Title 29, Section 5.5, Code of Federal Regulations (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The United States Department of Labor established “prevailing wages” by geographic area and interprets the Davis Bacon Act to apply to construction, alteration, or repair of a public building or public work.
Condition - For the 2022-23 fiscal year, the District expended ES Fund moneys totaling $3,967,101, including $120,795 for three construction contracts related to heating, ventilation, and air-conditioning replacements and remodeling renovations. While the contracts included a general requirement to comply with Davis-Bacon Act provisions, the contracts did not explicitly require, and the contractors did not submit, weekly certified payrolls to the District demonstrating prevailing wage rates were paid.
Cause - District personnel indicated that they were not aware that the Davis Bacon Act applied to these Federally funded projects and, therefore, did not include the appropriate wage rate clauses in the applicable procurement documents.
Effect - Absent specific contract clauses and weekly certified payrolls, there is an increased risk that construction contractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Although we requested, the District did not provide certified payrolls from the contractors demonstrating that the prevailing wage rates were paid for the services, resulting in questioned costs totaling $120,795.
Recommendation - The District should enhance procedures to ensure compliance with all Davis-Bacon Act requirements. Such enhancements should ensure that applicable Federally funded facility contracts require submittal of weekly certified payrolls and that District personnel verify the payrolls were received. In addition, the District should document to the FDOE the allowability of the questioned costs or contact the FDOE regarding necessary corrective action.
District Response - Vendors cited for the 22-23 fiscal year have been solicited for wage records as per the Davis-Bacon act. Once they have been provided, they will be issued to the State Auditors General's Office.
All future projects occurring on Federal Funds in the amount of $2,000 or more will require copies of the prevailing wage records by vendors.