Finding 43465 (2022-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-30

AI Summary

  • Core Issue: The District failed to keep necessary documentation to confirm compliance with the Davis-Bacon Act for two federally funded construction projects.
  • Impacted Requirements: Contracts over $2,000 must include provisions for Davis-Bacon compliance, including weekly certified payroll submissions to the Department of Labor.
  • Recommended Follow-Up: Implement review procedures for bid documents to ensure contractors are informed about federal funding and compliance requirements.

Finding Text

2022-001 Davis-Bacon Act Compliance CFDA Number 84.041 Program Title Impact Aid Federal Agency U.S. Department of Education Compliance Requirement N. Special Tests and Provisions Finding Type Noncompliance, Significant Deficiency Questioned Costs N/A CONDITION The District did not retain documentation sufficient to determine the Davis-Bacon compliance clause was included in advertised specifications for two construction projects paid with federal Impact Aid funds. CRITERIA Davis-Bacon Act Department of Labor (DOL) 29 CFR part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction. Non-federal entities shall include in their federally funded construction contracts in excess of $2,000, that are subject to the Wage Rate Requirements of the Davis-Bacon Act, a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the U.S. Department of Labor weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). This reporting is often done using Optional Form WH-347, which includes the required statement of compliance. CAUSE The District did not have the adequate review procedures in place to ensure bid documents included notification that federal Impact Aid monies were to be used for payment of the construction projects and the contractors needed to be in compliance with the Davis-Bacon Act. EFFECT The District was not in compliance with the notification requirements of the Davis-Bacon Act. As a result, the contractor could be subject to penalties and fines, and possible debarment from federal contracting if prevailing wages were not paid. RECOMMENDATION We recommend that the District establish proper review procedures of bid documents to ensure that any federally funded construction projects in excess of $2,000 the contractors are notified the projects are being funded with federal Impact Aid funds and the contractors are required to be in compliance with the Davis Bacon Act.

Corrective Action Plan

CORRECTIVE ACTION PLAN - FINDING 2022-001 We have prepared the accompanying corrective action plan as required by the standards applicable to the financial audit contained in Government Auditing Standards and by the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). CFDA Number 84.041 Program Title Impact Aid Federal Agency U.S. Department of Education Condition The District did not retain documentation sufficient to determine the Davis-Bacon compliance clause was included in advertised specifications for two construction projects paid with federal Impact Aid funds. Corrective Action Plan The District has implemented a review of all construction bids funded with federal Impact Aid funds to ensure that the bid notifications include a clause that the contractors will have to be in compliance with the Davis-Bacon Act. District Contact Leah Begay, Business Manager Completion Date March 24, 2023

Categories

Procurement, Suspension & Debarment Special Tests & Provisions Reporting Significant Deficiency

Other Findings in this Audit

  • 619907 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.041 Impact Aid $11.25M
84.425 Education Stabilization Fund $3.30M
10.559 Summer Food Service Program for Children $1.11M
32.009 Emergency Connectivity Fund Program $510,652
84.060 Indian Education_grants to Local Educational Agencies $300,508
21.027 Coronavirus State and Local Fiscal Recovery Funds $198,342
84.367 Improving Teacher Quality State Grants $145,482
84.048 Career and Technical Education -- Basic Grants to States $87,671
15.130 Indian Education_assistance to Schools $80,562
84.027 Special Education_grants to States $52,111
12.000 Marine Corps JR Rotc $52,024
84.424 Student Support and Academic Enrichment Program $45,214
84.358 Rural Education $16,524
10.555 National School Lunch Program $15,834
84.173 Special Education_preschool Grants $9,320
10.665 Schools and Roads - Grants to States $8,208
93.576 Refugee and Entrant Assistance_discretionary Grants $4,787
10.542 Pandemic Ebt Food Benefits $3,063
84.010 Title I Grants to Local Educational Agencies $1,301