Finding Text
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 3704 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 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 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 include the submission of weekly certified payroll, 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 section 200.311. Condition: The District paid $121,931 and $99,960 for installation of an HVAC system and flooring, respectively, 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 the flooring 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 or potential 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: An examination of four checks (totaling $221,891) from a population of five capital improvement checks (totaling $228,259). 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: District management will attempt to adopt sound accounting policies and establish and maintain internal control that will ensure the Davis-Bacon Act provisions are followed and equipment acquired with federal funds in excess of $1,000 are recorded and maintained in subsidiary ledgers aS specified in OMB 2 CFR section 200.311.