FAC Explorer

Finding 585592 (2023-002)

Material Weakness
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-01-19
Audit: 12522
Organization: Springport Public Schools (MI)
Auditor: Rehmann Robson LLC

AI Summary

  • Core Issue: The District failed to include required wage rate provisions in construction contracts funded by federal assistance, leading to material noncompliance.
  • Impacted Requirements: Contracts over $2,000 must comply with federal prevailing wage rates and require certified payrolls, as mandated by the Uniform Guidance.
  • Recommended Follow-Up: The District should update its policies to ensure compliance with wage requirements in future contracts and obtain necessary certified payroll documentation.

Finding Text

2023-002 – Special Tests and Provisions – Wage Rate Requirements Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education -  COVID-19 - Education Stabilization Fund (ALN 84.425D and 84.425U); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires that all laborers and mechanics employed by contractors to work on construction contracts in excess of $2,000 financed by federal assistance funds be paid wages not less than those established for the locality of the project (prevailing wage rates) 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 the DOL regulations, which include a requirement to obtain weekly certified payrolls from contractors. Condition. Two of the contracts selected for testing that were subject to the Wage Rate Requirements did not include the required provision, and the District did not obtain the required certified payrolls. Cause. The District does not have the proper internal controls in place to ensure that all contracts awarded have complied with federal requirements. Effect. The District did not follow federal requirements to include the prevailing wage rate provision in its contract. Questioned Costs. The total charges included in our sample that were not supported by allowable documentation amounted to $41,500. Recommendation. We recommend that the District reviews its policies to ensure that applicable prevailing wage requirements are included in construction contracts whenever federal funds are used and certified payrolls are obtained. View of Responsible Officials. District officials will ensure that construction contracts contain these requirements during the bid process. Responsible Official. Superintendent and LEA Business Manager Estimated Completion Date. June 30, 2024

Categories

Questioned Costs Special Tests & Provisions Procurement, Suspension & Debarment Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 9148 2023-002
    Material Weakness
  • 9149 2023-002
    Material Weakness
  • 9150 2023-002
    Material Weakness
  • 585590 2023-002
    Material Weakness
  • 585591 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $497,834
10.559 Summer Food Service Program for Children $156,016
10.553 School Breakfast Program $135,322
84.010 Title I Grants to Local Educational Agencies $87,894
84.367 Improving Teacher Quality State Grants $17,145
10.555 National School Lunch Program $14,404
84.424 Student Support and Academic Enrichment Program $12,305
10.558 Child and Adult Care Food Program $8,380
10.185 Local Food for Schools $3,567
84.196 Education for Homeless Children and Youth $1,383
10.649 Pandemic Ebt Administrative Costs $628