Finding Text
Finding 2024-004 - COVID-19 Education Stabilization Fund (ESF) ALN 84.425 - Special Tests and Provisions - Wage Rate Requirements US Department of Education and PA Department of Education Grant Numbers: 200-210474, 223-210474, 225-210474, 224-210474, 181-212476, 253-200474
Criteria: In accordance with Uniform Guidance requirements found in Part 3 Section N, “Special Tests and Provisions” of the Compliance Supplement, all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than the prevailing wages rates established by the Department of Labor (DOL). Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and DOL regulations. This includes 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.
Condition: The School District did not have adequate internal control procedures in place to ensure that all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds were paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. As a result, the School District did not properly notify 1 of the 3 contractors tested of the requirements to comply with the wage rate requirements via the including of a prevailing wage rate clause in the contract between the contractor and the School District, and therefore, the use prevailing wage rates were not determined.
Cause: The School District did not have formal procedures in place to ensure that prevailing wage rate requirements were met on all construction projects over $2,000.
Effect: The School District was not in compliance with the Special Tests and Provisions – Wage Rate Requirements of the Uniform Guidance.
Repeat Finding: No
Questioned Costs: Unknown
Recommendation: We recommend that the School District revise its purchasing policy to formally reflect the requirements of Special Tests and Provisions – Wage Rate Requirements. Additionally, we recommend that the School District establish procedures to ensure that prevailing wage rate requirements are met for federally funded construction projects over $2,000.
Views of Responsible Officials and Planned Corrective Action: The School District agrees with the recommendation. See separate Corrective Action Plan.