Finding Text
2023-002 – Special Tests and Provisions – Wage Rate Requirements (Repeat)
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. While the contract contained the required Wage Rate Requirement provision, the District did not obtain the required certified payrolls for one out of the ten vendors selected for testing.
Cause. The District does not have the proper internal controls in place to ensure that certified payrolls were being obtained for all construction contracts charged to the grant.
Effect. The District did not follow federal requirements to obtain weekly certified payrolls.
Questioned Costs. The total charges that were not supported by allowable documentation amounted to $134,725.
Recommendation. We recommend that the District reviews its policies to ensure certified payrolls are obtained whenever federal funds are used.
View of Responsible Officials. District officials will ensure that weekly certified payrolls are obtained when required.
Responsible Official. Chief Financial Officer
Estimated Completion Date. June 30, 2024