Finding 562023 (2024-005)

COMPLIANCE REGARDING DAVIS-BACON REQURIMENT Criteria Federally funded construction projects using ESSER III funds must comply with Davis-Bacon Act requirements, ensuring contractors pay prevailing wages as determined by the U.S. Department of Labor. Districts must verify wage rates and collect certified payroll records before authorizing payments Condition The District included Davis-Bacon requirements in bid documents for an ESSER III-funded window replacement project, but the contractor did not submit certified payroll documentation, and the District failed to enforce compliance before issuing payments Cause Despite outlining wage requirements in the bid, the District did not follow through with enforcement, leading to non-compliance. Potential Effect The District cannot demonstrate compliance with federal labor standards, risking liability for unpaid wages and potential audit findings, corrective actions, or withholding of future federal funding. Recommendation The District should establish procedures to verify prevailing wage compliance, require certified payroll records before payments, conduct periodic audits, and assign personnel to review payroll documentation. Strengthening oversight will ensure adherence to federal labor standards and prevent similar issues. Views of Responsible Officials and Planned Corrective Actions Management acknowledges the oversight and is implementing corrective measures, including requiring certified payroll documentation, enhancing monitoring procedures, and assigning personnel to oversee Davis-Bacon compliance. The District is working with contractors and state officials to resolve the issue and improve internal controls.