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 $214,559.
Criteria - The ES Fund provides Federal funds for school facility repairs and improvements. 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 work.
Conditions - For the 2022-23 fiscal year, the District expended ES Fund moneys totaling $4.8 million, including $1,421,060 for services related to heating, ventilation, and air-conditioning replacement, flooring replacement renovation, electrical replacement, and remodeling renovations. We noted that the purchase orders, requests for proposals, and contracts for those services did not contain clauses that required compliance with the Davis-Bacon Act provisions and the contractors did not submit weekly certified payrolls to the District.
Subsequent to our inquiry, District personnel obtained certified payrolls from one contractor that demonstrated the prevailing wage rates were paid for one project totaling $1,206,501.
Cause - According to District personnel, the District was not aware that the Davis-Bacon Act applied to all of these Federally funded projects and, due to an oversight, did not include the appropriate wage rate clauses in the applicable procurement documents.
Effect - Absent the required contract clauses and weekly certified payrolls, there is an increased risk that construction contractors 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 certified payrolls from seven contractors demonstrating that the prevailing wage rates were paid for some services, resulting in questioned costs totaling $214,559.
Recommendations - The District should enhance procedures to ensure compliance with all Davis‑Bacon Act requirements. Such procedures should ensure that applicable Federally funded facility contracts require submittal of weekly certified payrolls and that District personnel verify the payrolls are received and demonstrate that prevailing wage rates are paid. 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 Districts has developed and implemented procedures to ensure that weekly payroll records related to construction contracts funded via Federal funds are obtained and reviewed with every invoice. This process will ensure compliance with Title 29, Section 5.5, Code of Federal Regulations – Davis-Bacon Act. All subsequent construction contracts will include a prevailing wage clause for amounts over $2,000.00.