Finding 498965 (2023-001)

Assistance Listing Number: 84.356A Program Title: Alaska Native Educational Programs Federal Award Identification Numbers and Years: S356A 190004; October 1, 2022 - September 30, 2023 S356A 220041; September 30, 2023 - September 29, 2024 Federal Agency: U.S. Department of Education 2023-001 Significant Deficiency in Internal Control over Compliance - Special Tests and Provisions - Wage Rate Requirements New or Repeat: New. Criteria: According to the wage rate requirements of the Department of Labor regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction), for each week in which any Davis-Bacon covered work is performed, the contractor must submit weekly certified payrolls to the Sealaska Heritage Institute as the grantee organization. The certified payrolls submitted must set out accurately and completely information such as the worker's correct classification of work performed; hourly rates of wages paid; daily and weekly number of hours worked in total and on each covered contract; deductions made; and actual wages paid. Each certified payroll submitted must be accompanied by a “Statement of Compliance,” signed by the contractor who pays or supervises the payment of the persons working on the contract, and must certify the following: (1) That the certified payroll for the payroll period contains the information required to be provided, the appropriate information and basic records are being maintained as required, and such information and records are correct and complete; (2) That each laborer working on the contract during the payroll period has been paid the full weekly wages earned, and that no deductions have been made either directly or indirectly from the full wages earned; and (3) That each laborer has been paid not less than the applicable wage rates and fringe benefits for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. Condition: During the year ended December 31, 2023, the Institute began work on a federally assisted construction contract in excess of $2,000. The construction contract included a provision for the contractor to comply with the wage rate requirements and the DOL regulations. The Institute did not receive any required certified payrolls (copy of the payroll and a Statement of Compliance) from the construction contractor and subcontractor, so the Institute was unable to verify if the Davis-Bacon prevailing wage and pay requirements were met. Cause: The Institute did not obtain the certified payrolls during the year ended December 31, 2023. Context and Effect: Because the Institute did not obtain any required certified payrolls from the construction contractor and subcontractor, the Institute was unable to verify if laborers or mechanics who worked on the site were paid prevailing wage rates (including fringe benefits). Not obtaining the certified payrolls from the contractor and subcontractor to ensure that laborers and mechanics are paid wages not less than those established for the locality of the project (prevailing wage rates) by the DOL could result in laborers and mechanics not being paid the prevailing wage rate they are entitled to for such work and could ultimately result in loss of federal funding for the Institute. Questioned Costs: None noted. Recommendation: The Institute should require and monitor that construction contractors and subcontractors paid from federal funds timely remit the required certified payrolls (copy of the payroll and a Statement of Compliance) to ensure compliance with the Uniform Guidance as related to the Davis-Bacon Act. Views of Responsible Officials: Management concurs with this finding. See Corrective Action Plan.