Finding Text
Education Stabilization Fund Wage Rate Requirements Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund - Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425D Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Entity Identifying Number: 2022-102394-DPI-ESSERFII-163 Award period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or Specific Requirement: Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. Internal controls should be designed and implemented to prevent or detect noncompliance with this requirement. Condition: The District had 2 construction projects funded by ESSER during 2021-22. The District is responsible for ensuring the contractor provides the appropriate certified payrolls and reviewing them to ensure the prevailing wage rates are being met or exceeded. The documented review of the certified payrolls did not occur. When the District had a construction manager for one of the projects, the District did not implement controls to monitor the construction management company to ensure this compliance requirement was met. Questioned Costs: $14,420. Context: For one of the projects, the District did not have a signed contract that included all required prevailing wage components. The District did not obtain the appropriate certified payrolls and did not document any review of the certified payrolls ensuring appropriate wage rates were being charged for the project. It was noted that the District's construction manager for the other project did obtain and review the appropriate certified payrolls; however, the District did not implement controls to monitor the construction manager to ensure this compliance requirement was met. Cause: The District was not aware of the Davis Bacon Act and the compliance requirements surrounding it. Effect: The District could pay vendors that are not in compliance with the wage rate requirements (Davis Bacon Act). Repeat Finding: No Recommendation: We recommended that the District implement controls to ensure construction contracts include the proper wording and implement controls to ensure certified payrolls are received and reviewed. We also recommend the district implement controls for monitoring third-party contractors when the contractors are responsible for compliance requirements. Views of Responsible Officials: There is no disagreement with the audit finding.