Finding 397866 (2023-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-05-20
Audit: 306609
Organization: Msad #27 (ME)

AI Summary

  • Core Issue: The District failed to include the prevailing wage rate clause in construction contracts and did not obtain certified payrolls.
  • Impacted Requirements: This violates 29 CFR 5.5 and affects compliance with federal wage rate requirements.
  • Recommended Follow-Up: The District should enhance internal controls and ensure familiarity with federal wage rate requirements to prevent future issues.

Finding Text

2023-001 - Special Tests and Provisions - Wage Rate Requirements Federal Program Information: Department of Education: Passed through the State of Maine Department of Education: ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR applies to this finding: 29 CFR 5.5 Condition: During audit procedures, it was identified that the District did not include the prevailing wage rate clause in the contract provisions for construction contracts and did not obtain copies of certified payrolls. Cause: The District does not have the necessary internal controls over compliance. Effect: Contracts are not executed in compliance with the requirement above. Identification of Questioned Costs: Identified question costs equaled construction projects totaling $154,592.79, all of which were performed without contracts containing the required clauses and without obtaining certified payrolls. It was noted that the projects were from prior fiscal year and not entered into during the fiscal year under audit. Context: There were seven contracts. All seven were tested. No contract agreements were provided, therefore, it could not be determined that the prevailing wage rate clause was included. Of the seven contracts tested, certified payroll could not be provided for five of the contracts. This is not a statistically valid sample. Repeat Finding: This is a repeat finding. Recommendation: It is recommended that the District familiarize themselves with federal Wage Rate Requirements and implement internal control processes and procedures to ensure that they are following the criteria above. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by MSAD #27.

Corrective Action Plan

CORRECTIVE ACTION PLAN (Concerning Audit Finding 2023-001) Contact Person Responsible for Corrective Action: Lucie Tabor, Director of Finance Corrective Action: The Maine School Administrative District 27 will take the following actions to address finding 2023-001: As a Federal response to COVID-19, the Federal and State Governments provided grants to school districts to address the COVID-19 pandemic response for Schools. The CARES and ESSER Grants were initially distributed with a very short timeline on spending, initially by the end on December 2020, then subsequently extended to March 31 st and then extended beyond with additional Grants provided (ESSER I, 2 and ESSER ARP). This made for a very confusing and intense period to spend, track and coordinate spending and projects across three School Districts that the Valley Unified Education Service Center oversees. Also, the initial Grant that was provided to school Districts (CARES/ESSER I) were done so without clear directives from the Department of Education as to whether these were State Funds or Federal Funds . We were well under way with Committing and spending the funds before it was communicated that the initial funds were State funds (CARES), but subsequent ones were Federal Funds. By then, most of our projects were well under way and/or had been committed and we were now dealing with COVID-19 illnesses, remote school days, school shutdowns and delays/difficulties getting our products and contractors to pro vi de their services on the timeline we needed for the grants. These grants ran concurrently with one another and panned four Fiscal Years: 2020-21 , 2021-2022, 2022-2023 and 2023-2024. It is very rare that we have the opportunity to use Federal funds to address building or renovation projects for our school districts , so we have had no experience with the David Bacon prevailing wage requirement prior to these Federal fund , and therefore, this was not something on our radar at the time. Most of the Federal funding grants that we are used to (ESEA and Special Education) are spent on wages and purchases of materials and equipment, not projects of the scope that we were able to provide using ESSER Grant Funds. For any future projects requiring contractors, we will ensure that MSAD 27 provides the Davis Bacon requirement for prevailing wage rates including the information with the Request for Proposals or Bids (if applicable) and also with the contracts for the service once awarded. We will then ensure that the prevailing wage rates app licable to the contractor were paid to the workers (if applicable) prior to us paying the invoice to the contractor. Anticipated Compl etion Date: August 31 , 2024 to develop the policy and procedure for future Request for Propo als/ Bids that require the Davis Bacon prevailing wage rates.

Categories

Questioned Costs Special Tests & Provisions Internal Control / Segregation of Duties

Other Findings in this Audit

  • 397867 2023-001
    Material Weakness Repeat
  • 397868 2023-001
    Material Weakness Repeat
  • 397869 2023-001
    Material Weakness Repeat
  • 397870 2023-002
    Significant Deficiency
  • 397871 2023-002
    Significant Deficiency
  • 397872 2023-002
    Significant Deficiency
  • 397873 2023-002
    Significant Deficiency
  • 974308 2023-001
    Material Weakness Repeat
  • 974309 2023-001
    Material Weakness Repeat
  • 974310 2023-001
    Material Weakness Repeat
  • 974311 2023-001
    Material Weakness Repeat
  • 974312 2023-002
    Significant Deficiency
  • 974313 2023-002
    Significant Deficiency
  • 974314 2023-002
    Significant Deficiency
  • 974315 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $322,946
84.358 Rural Education $53,020
84.367 Improving Teacher Quality State Grants $30,223
84.002 Adult Education - Basic Grants to States $26,247
84.027 Special Education_grants to States $4,878
84.425 Education Stabilization Fund $234