Finding 403245 (2023-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-06-27
Audit: 310401
Organization: Rsu 84/msad No 14 (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, leading to non-compliance with federal wage rate requirements.
  • Recommended Follow-Up: The District should establish internal controls to ensure compliance with wage rate requirements in future contracts.

Finding Text

2023-001 - Special Tests and Provisions - Wage Rate Requirements Federal Program Information: Department of Education: Passed through the State of Maine Agency 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 $82,188, all of which were performed without contracts containing the required clauses and without obtaining certified payrolls. It was noted that the project was from the prior fiscal year and not entered into during the fiscal year under audit. Context: We reviewed a sample of two contracts for construction and renovation projects out of a total population of two. It was determined that the contracts did not include the prevailing wage rate clause and that the contractor did not submit the certified payrolls to the District. This is a not statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the District 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 the RSU 84/MSAD 14.

Corrective Action Plan

CORRECTIVE ACTION PLAN (Concerning Finding 2023-001) Contact Person Responsible for Corrective Action: Margaret White, Superintendent Corrective Action: RSU 84 will take the following actions to address finding 2023-001 Wage Rate Requirements: As stated in RSU 84's April 20, 2023 Corrective Action Plan, starting on May 1, 2023, RSU 84 began implementing internal control processes and procedures to ensure we followed the criteria for 2022-001 Special Test and Provisions Wage Rate Requirements. We asked for a prevailing wage rate clause in the contract provisions for construction contracts and obtained copies of certified payrolls. Based on conversations with the auditing team throughout the FY23 audit process, the district has worked with vendors/contractors to correct the issues to comply with CFR(s): 2 CFR Appendix II to Part 200; 29 CFR 5.2; 29 CFR 5.5. We made contact regarding the Davis Bacon language for FY 23 vendors that we had contracts with before May 2023. Payroll certifications for those individuals have been received from one company but not the other. The payroll was reviewed by the Business Manager and Auditor for Davis Bacon compliance. Moving forward to the current fiscal year (FY24), current and future year construction projects paid for with federal and/or state funding will include Davis Bacon language. Payroll certifications will be received with each invoice submitted for payment to the district and reviewed by the Business Manager for compliance with Davis Bacon guidelines as applicable. A copy of the 0MB Circulars containing the CFR guidelines has been received and reviewed by the Business Manager and applicable grant managers/coordinators to implement a more stringent internal control process and procedure to ensure all requirem ents are followed. The Business Manager will update the district's administrative team and central office staff on applicable guidelines to ensure compliance with all projects paid for by federal and/or state funding. Anticipated Completion Date: June 30, 2024

Categories

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

Other Findings in this Audit

  • 403246 2023-001
    Material Weakness Repeat
  • 403247 2023-001
    Material Weakness Repeat
  • 403248 2023-001
    Material Weakness Repeat
  • 979687 2023-001
    Material Weakness Repeat
  • 979688 2023-001
    Material Weakness Repeat
  • 979689 2023-001
    Material Weakness Repeat
  • 979690 2023-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $93,230
84.027 Special Education_grants to States $81,160
84.010 Title I Grants to Local Educational Agencies $63,954
10.553 School Breakfast Program $22,018
84.173 Special Education_preschool Grants $21,044
10.868 Rural Energy for America Program $10,520
84.367 Improving Teacher Quality State Grants $9,263
10.555 National School Lunch Program $6,042
84.287 Twenty-First Century Community Learning Centers $4,712
10.582 Fresh Fruit and Vegetable Program $2,952
10.559 Summer Food Service Program for Children $642
10.649 Pandemic Ebt Administrative Costs $628