Finding Text
2022-002 Department of Education Federal Financial Assistance Listing 84.425D, 84.425U ? COVID-19 Elementary and Secondary School Emergency Relief Fund Special Tests and Provisions ? Wage Rate Requirement Significant Deficiency in Internal Controls over Compliance Criteria: 29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction, sets forth the criteria which requires all laborers and mechanics employed by contractors or subcontractors who work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. Condition: 1 of 3 projects selected for testing did not have the wage rate requirements included in the contract and the School District did not obtain the weekly payroll certifications as required. For the two other projects that were tested, no errors were noted. Cause: The School District misunderstood this project was subject to the requirements based on the number on contractors included on this project being one. Effect: No certified payrolls were received specific to this project for review to determine the prevailing wages were properly paid on this contract. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 6 payrolls of the 27 total payrolls on the two other contracts were tested. Repeat Finding from Prior Year(s): No. Recommendation: We recommend a review of all contracts involving federal grants to ensure the contracts include the wage rate requirements and payrolls be obtained for review to ensure that prevailing wage rates are being paid on federally funded projects. Views of Responsible Officials: Management agrees with the finding.