Finding Text
Criteria and Condition: The Davis-Bacon Act (the Act) requires contractors to pay federally prescribed prevailing wages to laborers for federally-funded construction projects that exceed $2,000. Grant recipients must include in construction contracts a provision requiring contractors and subcontractors to comply with the Act. Additionally, grant recipients must have controls in place to ensure the contractors and subcontractors are in compliance. We found the School did not have adequate internal controls in place to ensure compliance with the Act. Context: The School entered into two contracts for construction greater than $2,000 that did not include prevailing wage requirements as required, one funded with each grant, ESSER and ARP ESSER. The total construction contract related to the ESSER grant to date totaled $1,433,266 of which $277,174 was funded with the ESSER grant this year. The total construction contract related to the ARP ESSER grant was $1,981,026 of which $757,400 was funded with grant funds this year. Both contracts included costs for labor and materials although the cost of materials ($372,377) on the ESSER grant exceeded the federal funding spent and on the ARP ESSER grant, only $22,400 of the $757,400 was used for labor. The School did not have controls in place to know that the contracts should include provisions for the prevailing wages to be paid. Effect: This could have resulted in an underpayment of wages to laborers working on the project. Cause: The School was not aware of the Act and thus, did not have proper controls in place to ensure all compliance requirements were met. Recommendation: The School should ensure that processes are in place to require contractors and subcontractors to comply with the Act, including proper provisions in any construction contracts over $2,000. The School should also require documentation that the contractors are following the regulations and paying proper wages and the School should review and confirm that the contractors are compliant. Views of responsible officials and planned corrective actions: The School is in the process of reviewing the rules and designing and implementing controls to ensure compliance with the Act.