Finding 48254 (2022-002)

Significant Deficiency
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2023-04-23

AI Summary

  • Core Issue: The District failed to include the required prevailing wage rate clause in a contractor's agreement for HVAC installation, violating the Davis-Bacon Act.
  • Impacted Requirements: Weekly certified payrolls were not submitted, leading to non-compliance with federal labor laws.
  • Recommended Follow-Up: Ensure all future contracts include Davis-Bacon Act compliance notifications and obtain weekly certified payrolls; consult with the Arkansas DESE for guidance.

Finding Text

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION "COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U" PASS-THROUGH NUMBER 4602 AUDIT PERIOD - YEAR ENDED JUNE 30, 2022 2022-002. Equipment and Real Property Management Criteria or specific requirement: The Davis-Bacon Act requires all contractors and subcontractors performing work on construction contracts in excess of $2,000, financed by Federal funds, to pay their laborers and mechanics not less than the prevailing wage rates as determined by the Department of Labor. Non-federal entities are to include in the applicable construction contracts a requirement that the contractor or subcontractor comply with the provisions of the Davis-Bacon Act and the Department of Labor regulations. Such requirements included the submission of weekly certified payrolls, for each week in which any contract work is performed, to the non-federal entities. Condition: The District paid a contractor $215,980 from the Education Stabilization Fund for installation of an HVAC system without obtaining a written contract that included the prevailing wage rate clause. Additionally, weekly certified payrolls were not submitted to the District. Cause: Lack of internal controls and management oversight resulted in the Davis-Bacon Act provisions not being properly followed. Effect or potential effect: The District did not comply with the notification requirements regarding compliance with the Davis-Bacon Act and was unable to provide copies of weekly certified payrolls for workers paid on the project. Context: Examined the only construction contract for facility repairs and improvements paid from the Education Stabilization Fund. Recommendation: The District should ensure that all applicable construction contracts contain the required notification regarding compliance with the Davis-Bacon Act. Copies of the weekly certified payrolls should be obtained for the applicable projects. The District should also contact the Arkansas Division of Elementary and Secondary Education (DESE) for further directives regarding this matter. Views of responsible officials: If Federal funds are used in any future construction projects the district will ensure all contracts contain the required notification regarding compliance with the Davis-Bacon Act. Procedures will be put into place to ensure that the district stays in compliance with the Davis-Bacon Act.

Corrective Action Plan

The Davis-Bacon Act requires all contractors and subcontracts performing on construction contracts in excess of $2000, financed by Federal funds, to pay their laborers and mechanics not less than the prevailing wage rates as determined by the Department of Labor. (Reference #EDSD24422-003) If Federal funds are used in any future construction projects the district will ensure all contracts contain the required notification regarding compliance with the Davis-Bacon Act. Procedures will be put into place to ensure that the district stays in compliance with the Davis-Bacon Act.

Categories

Equipment & Real Property Management Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 48253 2022-001
    Material Weakness
  • 48255 2022-001
    Material Weakness
  • 48256 2022-002
    Significant Deficiency
  • 624695 2022-001
    Material Weakness
  • 624696 2022-002
    Significant Deficiency
  • 624697 2022-001
    Material Weakness
  • 624698 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425 Covid-19 - Education Stabilization Fund $449,385
84.010 Title I Grants to Local Educational Agencies $293,026
10.553 School Breakfast Program $219,177
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $53,979
84.027 Special Education_grants to States $43,440
84.367 Supporting Effective Instruction State Grants $38,114
84.358 Rural Education $27,705
84.424 Student Support and Academic Enrichment Program $24,620
10.555 National School Lunch Program $19,705
84.173 Special Education_preschool Grants $6,173