Finding Text
2023-001 – U.S. Department of Education, For the Period July 1, 2022 through June 30, 2023, Assistance Listing #84.425 – Internal Controls and Compliance over Elementary and Secondary School Emergency Relief Fund
Criteria: 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 those established for the locality of the project (prevailing wage rates) by the Department of Labor. Management must ensure that all contractors and subcontractors are submitting weekly certified payrolls and verify that they are being paid at least the prevailing wage rates. In addition, language regarding wage rate requirements must be included in the contract.
Condition: The required language pertaining to wage rate requirements was omitted from a construction contract. In addition, management did not obtain the required certified payrolls from the contractor during the contract period.
Cause: Management did not ensure that wage rate language was included in the construction contract and that certified payrolls were obtained and reviewed.
Effect: Contractors could fail to follow wage rate requirements and pay less than prevailing wages.
Questioned Costs: None
Recommendation: Management should review all construction contracts paid with federal funds to ensure they contain the required wage rate requirements. In addition, someone familiar with the wage rate requirements should ensure certified payrolls are obtained and reviewed during the contract period.