Finding Text
2023-010 Wage Rate Compliance
CFDA Title: ESSER II Base
CFDA Number: 84.425D
Federal Award Number: 011-0206-92-2021
Federal Agency: U.S. Department of Education
Pass-through Entity: Montana Office of Public Instruction
Condition:
The District did not comply with the wage rate compliance related to the roofing project expenditures paid from ESSER monies.
Criteria:
Education Stabilization Funds used for minor remodeling, renovation or construction contracts that are over $2,000, and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements.
All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141--3144, 3146, and 3147.
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).
Context:
During the testing of significant claims for the Education Stabilization Fund major program, we noted a claim in which the wage rate requirements would apply.
Effect:
Noncompliance with the Wage Rate Requirement.
Cause:
The District was not aware of the requirement.
Recommendation:
The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented:
1. any construction vendor is by contract which includes the Prevailing Wage clauses for the contractors and subcontractors.
2. the weekly certified payrolls are submitted.