Finding 580442 (2023-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2023-12-12
Audit: 6311
Organization: Granite School District (UT)

AI Summary

  • Core Issue: The District lacked processes to obtain certified payrolls from contractors for construction projects funded by the Education Stabilization Fund.
  • Impacted Requirements: This oversight risks non-compliance with federal wage rate requirements, potentially leading to underpayment of laborers and mechanics.
  • Recommended Follow-Up: Management should enhance internal controls and processes to ensure compliance with wage rate requirements for all relevant construction contracts.

Finding Text

Program: Education Stabilization Fund Governor's Emergency Education Relief Fund (84.425C) Elementary and Secondary School Emergency Relief Fund (84.425D) American Rescue Plan - Elementary and Secondary School Emergency Relief (84.425U) American Rescue Plan - Emergency and Secondary School Emergency Relieft - Homeless Children and Youth (84.425W) 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 (DOL) (40 USC 3141-3144, 3146, and 3147). 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 the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor of 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 (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215 Appendix A, Contract Provisions; 2 CFR Part 176 Subpart C; and 2 CFR section 200.326). Context and Condition: We reviewed a sample the District’s construction contracts that were financed by the Education Stabilization Fund during the year ended June 30, 2023 and performed testing over internal controls and compliance as related to the Wage Rate Requirements as outlined in the criteria above. Cause: The District did not have processes or controls established to ensure certified payrolls for each week in which contract work was performed were obtained from the contractor or subcontractor for construction contracts financed by the Education Stabilization Fund. Effect: A potential failure to pay laborers and mechanics employed by contractors or subcontractors prevailing wage rates as required by the Wage Rate Requirements exists. A failure to collect the certified payrolls for each week in which contract work was performed. Questioned Costs: No costs were questionable. Repeat Finding: No Statistically valid: Yes Recommendation: We recommend management of the District review processes related to construction projects subject to the Wage Rate Requirements and establish appropriate internal controls to ensure all wage rate requirements are met. Views of responsible officials: Management of the District has reviewed, updated and trained staff on the processes and internal controls related to construction contracts to ensure compliance with the Wage Rate Requirements as published in 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction when applicable.

Categories

Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties Special Tests & Provisions

Other Findings in this Audit

  • 4000 2023-001
    Material Weakness
  • 4001 2023-001
    Material Weakness
  • 4002 2023-001
    Material Weakness
  • 4003 2023-001
    Material Weakness
  • 580443 2023-001
    Material Weakness
  • 580444 2023-001
    Material Weakness
  • 580445 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $17.27M
84.010 Title I Grants to Local Educational Agencies $15.32M
84.027 Special Education_grants to States $9.68M
93.778 Medical Assistance Program $6.86M
10.553 School Breakfast Program $3.70M
84.334 Gaining Early Awareness and Readiness for Undergraduate Programs $1.73M
84.367 Improving Teacher Quality State Grants $1.72M
84.365 English Language Acquisition State Grants $1.13M
84.048 Career and Technical Education -- Basic Grants to States $1.05M
84.424 Student Support and Academic Enrichment Program $1.04M
84.173 Special Education_preschool Grants $570,930
93.327 Demonstration Grants for Domestic Victims of Severe Forms of Human Trafficking $382,677
93.566 Refugee and Entrant Assistance_state Administered Programs $346,311
10.582 Fresh Fruit and Vegetable Program $278,553
84.002 Adult Education - Basic Grants to States $222,128
32.009 Emergency Connectivity Fund Program $203,280
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $175,701
84.425 Education Stabilization Fund $165,583
84.060 Indian Education_grants to Local Educational Agencies $108,770
84.013 Title I State Agency Program for Neglected and Delinquent Children and Youth $56,716
93.959 Block Grants for Prevention and Treatment of Substance Abuse $42,673
45.310 Grants to States $36,546
84.196 Education for Homeless Children and Youth $35,833
21.019 Coronavirus Relief Fund $16,483
10.558 Child and Adult Care Food Program $11,072
10.665 Schools and Roads - Grants to States $9,675
84.323 Special Education - State Personnel Development $2,604