Finding 51706 (2022-001)

Significant Deficiency
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2023-07-12
Audit: 43090
Organization: Prescott School District (AR)

AI Summary

  • Core Issue: The District failed to include the required prevailing wage rate clause in a construction contract and did not collect weekly certified payrolls.
  • Impacted Requirements: Non-compliance with the Davis-Bacon Act led to inadequate oversight and reporting on federally funded construction projects.
  • Recommended Follow-Up: The District should seek guidance from the Arkansas Division of Elementary and Secondary Education and establish stronger controls for future expenditures.

Finding Text

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 EDUCATION STABILIZATION FUND - AL NUMBERS 84.425D AND 84.425U PASS-THROUGH NUMBER 5006 AUDIT PERIOD - YEAR ENDED JUNE 30, 2022 2022-001. 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 include 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 $870,560 for construction of a Health & Physical Education Facility 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: 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 projects. Context: Examined the only construction contract paid from the Education Stabilization Fund. 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 Prescott School District will contact the Arkansas Division of Elementary and Secondary Education for guidance regarding this matter and implement proper controls over program expenditures on any further projects.

Categories

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

Other Findings in this Audit

  • 51705 2022-001
    Significant Deficiency
  • 51707 2022-001
    Significant Deficiency
  • 628147 2022-001
    Significant Deficiency
  • 628148 2022-001
    Significant Deficiency
  • 628149 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $301,801
10.553 School Breakfast Program $271,533
84.027 Special Education_grants to States $219,916
84.367 Supporting Effective Instruction State Grants $50,735
84.371 Comprehensive Literacy Development $34,399
10.555 National School Lunch Program $30,537
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $26,740
84.424 Student Support and Academic Enrichment Program $25,547
84.358 Rural Education $20,724
84.173 Special Education_preschool Grants $5,367
84.425 Covid-19 - Education Stabilization Fund $705