Finding Text
U.S. DEPARTMENT OF EDUCATION
PASSED THROUGH THE ARKANSAS DEPARTMENT OF EDUCATION
COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U
PASS-THROUGH NUMBER 7009
AUDIT PERIOD - YEAR ENDED JUNE 30, 2023
2023-001.Equipment and Real Property Management and Special Tests and Provisions
Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in 2 CFR Section 200.313. In addition, 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract.
Condition: The District paid $54,427 for installation of a security camera system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not obtain a performance bond from the contractor, as required by Ark. Code Ann. § 18-44-503, and the system was not recorded in the District's equipment subsidiary ledger.
Cause: Lack of Internal controls and management oversight.
Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. Additionally, the District's equipment subsidiary records were not accurate.
Context: Examined all payments/contracts for facility repairs and improvements, four in total.
Identification as a repeat finding: Yes
Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures.
Views of responsible officials: The District will conduct a training for all supervisors indicating and sharing what forms are required for each item purchased or purchased service prior to releasing any funds. Links to required Work Force forms(Davis Bacon Forms; Bond Contractor Form, etc. ) will be shared with all supervisors to use during collaboration with contractors and subcontractors. We are currently working with the company to determine how best to obtain these records from past services.