Finding Text
Finding - District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000, resulting in questioned costs totaling $216,031.
Criteria - The ES Fund provides Federal funds for school facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental health hazards, and to support student health needs.
Title 29, Section 5.5, Code of Federal Regulations (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The United States Department of Labor established “prevailing wages” by geographic area and interprets the Davis-Bacon Act to apply to construction, alteration, or repair of public buildings or public works.
Condition - During the 2022-23 fiscal year, the District expended $216,031 from the ES Fund for projects related to two construction contracts totaling $412,189 for heating, ventilation, and air-conditioning (HVAC) renovation projects. While each of the two contracts included a general requirement to comply with all Davis-Bacon Act provisions, the contracts did not explicitly require, and the contractors did not submit, weekly certified payrolls to the District demonstrating prevailing wage rates were paid.
Cause - The contracts did not specifically require contractors to submit to the District weekly certified payrolls and District personnel overlooked this requirement.
Effect - Absent specific contract clauses and weekly certified payrolls, there is an increased risk that contractors and subcontractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Although we requested, the District did not provide the certified payrolls from the contractors demonstrating that the prevailing wage rates were paid for the construction contracts. Consequently, the $216,031 expended by the District are questioned costs.
Recommendation - The District should enhance procedures to ensure compliance with all Davis-Bacon Act requirements. Such enhancements should ensure that applicable Federally funded facility contracts specifically require submittal of weekly certified payrolls and that District personnel verify the payrolls were received. In addition, the District should document to the FDOE the allowability of the questioned costs or contact the FDOE regarding necessary corrective action.
District Response - The District's procedures will be enhanced to ensure compliance with the Davis-Bacon Act prevailing wage requirements by specifically updating Federally-funded construction contracts with the requirement for submittal of weekly certified payroll from the vendor to appropriate District personnel for review.