Finding Text
Federal program: 84.425 Education Stabilization Fund (ESF) Criteria: Construction contracts in excess of $2,000 financed by federal assistance funds are required to include: a provision that the contractor or subcontractor comply with the wage rate requirements of the Davis-Bacon Act and the U.S. Department of Labor regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction); and a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). 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. Cause: As the District does not typically fund construction projects with federal funds, 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. Effect or potential effect: Without adequate internal controls over wage rate requirements and including the required provisions in construction 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. Context: 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. Recommendation: The District should obtain an understanding of all compliance requirements and implement controls to ensure compliance with federal wage rate requirements. Views of responsible officials: The District understands and concurs with this finding.