Finding Text
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBERS 84.425D and 84.425U PASS-THROUGH NUMBER 2903 AUDIT PERIOD - YEAR ENDED JUNE 30, 2022 2022-001. Equipment and Real Property Management Criteria or specific requirement: The Davis-Bacon Act requires all contractors and subcontractors performing work on construction contracts in excess of $2,000, financed by Federal funds, to pay their laborers and mechanics not less than the prevailing wage rates as determined by the Department of Labor. Non-federal entities are to include in the applicable construction contracts a requirement that the contractor or subcontractor comply with the provisions of the Davis-Bacon Act and the Department of Labor regulations. Such requirements included the submission of weekly certified payrolls, for each week in which any contract work is performed, to the non-federal entities. Also, property records should be maintained for real property and improvements made to real property acquired with federal awards as specified in OMB 2 CFR sections 200.311 and 200.313. Condition: The District paid $335,500 for installation of an HVAC system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate clause. Additionally, weekly certified payrolls were not submitted to the District. Also, neither the HVAC system nor a facility improvement project totaling $397,081 were recorded in the District's capital asset subsidiary records. Cause: Lack of internal controls and management oversight resulted in the Davis-Bacon Act provisions not being properly followed and the capital asset subsidiary records not being accurate. Effect: The District did not comply with the notification requirements regarding compliance with the Davis-Bacon Act and was unable to provide copies of weekly certified payrolls for workers paid on the projects. The District's capital assets subsidiary records were not accurate. Context: Examined all payments/contracts for facility repairs and improvements paid from the Education Stabilization Fund. Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: We will contact DESE for guidance regarding this matter and implement proper controls over program expenditures.