November 15, 2022 Oregon Secretary of state, Audits Division 255 Capito! St. NE, Suite #500 Salem, OR 97310 Plan of Action for Multnomah Education Service District The Multnomah Education Service District respectfully submits the following corrective action plan in response to deficiencies reported In our audit of fiscal year ended June 30, 2022. The audit was completed by the independent auditing firm Talbot, Korvola and Warwick, and reported the deficiency listed below. The plan of action was adopted by the governing body at their meeting on November 15, 2022, as indicated by signatures below. Finding 2022.001: Significant deficiency Condition: The provisions for the prevailing wage rates requirements were not included in the construction contracts in excess of $2,000 financed by ESF funds and that the required certified payrolls were not obtained. The related deficiency in internal controls over compliance is considered to be a significant deficiency. As the District does not typically fund construction projects with federal fund, the District's staff were unaware of the $2,000 threshold for construction contacts financed by ESF funds to include prevailing wage rates requirements and used a threshold of $50,000, the Oregon Bureau of Labor & Industries' threshold for prevailing wage rate requirements for public works projects in Oregon. Cause: Effect or potential effect: Without adequate internal controls over wage rate requirements and Including the required provisions in construrtion contracts in excess of $2,000 financed by ESF funds, the District cannot demonstrate compliance with the wage rate requirements of the Davis-Bacon Act requirements. Questioned Costs: Questioned costs, if any, are indeterminable. Out of nine capital projects totaling $123,558, a sample of three capital projects was haphazardly selected. The capital projects were between $9,405 and $14,360 and totaled $26,024. Context; Recommendation: The District should obtain an understanding of all compliance requirements and implement controls to ensure compliance with federal wage rate requirements. Superintendent Dr. Faul Coakley Board of Directors Jessica Ariate ? Mary Botkin ? Kristin Corniielle < Katrina Doughty ? Dr. Samuel Henry ? Deny.se Peterson ? Helen Ying I !611 NE ??ns\?orth Circle ? Portland. Oregon 97220 ? (502) 255-18^1 ? MultnofiialiESD.org p!an ?? action: The Director oi Business & Operations is responsible for implementing the plan of action. All construction projects are managed by the MESD Facilities office. The Director instructed the MESD Contract and Risk Manager, meet with the Facilities office to inform staff of the Davis-Bacon prevailing wage requirements for construction contracts in excess of $ ? 2,00 . Facilities will include the consideration of Davis-Bacon requirements when reviewing a project request that is or has the potential of being federally funded. Facilities will implement the requirements of the Davis-Bacon Act as needed. Timeframe: The meeting took place on November 2, 2022. Facilities has updated their internal procedures. ? ' Multnora ESD Board Chair, Denyse Peterson Superintendent, Dr. Paul Coakley