Finding 602828 (2022-002)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2022-11-22
Audit: 18323
Auditor: Forvis LLP

AI Summary

  • Core Issue: The District failed to obtain certified payrolls for contractor and subcontractor work, risking non-compliance with prevailing wage requirements.
  • Impacted Requirements: This finding violates federal wage rate laws, specifically the Davis-Bacon Act, and lacks necessary internal controls for monitoring compliance.
  • Recommended Follow-Up: Implement internal controls to track certified payrolls, ensure compliance with wage rates, and assign staff to monitor ongoing construction work.

Finding Text

2022-002 Finding: Special Tests - Wage Rate Requirements Federal Assistance Listing Number 84.425D - COVID-19 Elementary and Secondary School Emergency Fund (ESSER) Passed-through Colorado Department of Education Award Number - 4420; Award Year 2022 Criteria: All laborers and mechanics employed by contractors or subcontractors to 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 (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal 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. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The District did not obtain certified payrolls for contractor or subcontractor work performed during the fiscal year ended June 30, 2022. In addition, the District did not have internal controls in place to identify that certified payrolls were not obtained. Questioned Costs: Unknown. Context: There was one construction project charged to the grant during the year. We tested the one contractor and six subcontractor assigned to this project and noted the following: - The District did not obtain any certified payrolls for the contractor and subcontractors tested. - One of the subcontractor agreements did not include the required wage requirement clauses within the subcontract. - The District did not have a process in place to track certified payrolls received and to compare them to prevailing wage rates. Effect: Certified Payrolls were not obtained or reviewed for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Cause: The District was unaware of the wage rate requirements as it applied to this grant and as such, there was no assigned department or employee to monitor, review and obtain certified payrolls during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable.Recommendation: We recommend the District implement internal controls over wage rate requirements, including facilities staff on-site weekly where projects are occurring to determine if work was completed towards the project, tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions.

Categories

Special Tests & Provisions Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 26376 2022-001
    Material Weakness
  • 26377 2022-002
    Material Weakness
  • 26378 2022-001
    Material Weakness
  • 26379 2022-002
    Material Weakness
  • 26380 2022-001
    Material Weakness
  • 26381 2022-002
    Material Weakness
  • 26382 2022-001
    Material Weakness
  • 26383 2022-002
    Material Weakness
  • 26384 2022-001
    Material Weakness
  • 26385 2022-001
    Material Weakness
  • 26386 2022-002
    Material Weakness
  • 26387 2022-001
    Material Weakness
  • 602818 2022-001
    Material Weakness
  • 602819 2022-002
    Material Weakness
  • 602820 2022-001
    Material Weakness
  • 602821 2022-002
    Material Weakness
  • 602822 2022-001
    Material Weakness
  • 602823 2022-002
    Material Weakness
  • 602824 2022-001
    Material Weakness
  • 602825 2022-002
    Material Weakness
  • 602826 2022-001
    Material Weakness
  • 602827 2022-001
    Material Weakness
  • 602829 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 Seamless Summer Lunch Program $8.79M
84.010 Title I Grants to Local Educational Agencies $7.95M
84.027 Special Education_grants to States $4.83M
84.425 Covid-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (arp Esser) $3.17M
10.553 Seamless Summer Breakfast Program $2.25M
84.367 Improving Teacher Quality State Grants $1.15M
84.425 Covid-19 Elementary and Secondary School Emergency Relief Fund (esser) $750,222
84.027 Covid-19 Title Vi-B Idea Special Education-Arp $660,434
10.555 National School Lunch Program- Donated Commodities $568,734
84.002 Adult Education - Basic Grants to States $556,566
10.559 Summer Lunch Program $493,119
10.555 Supply Chain Assistance $410,876
93.243 Project Aware Colorado $333,046
84.048 Perkins Grant-Career and Technical Education $310,613
97.036 Disaster Grants - Public Assistance $286,378
84.424 Student Support and Academic Enrichment Program $261,903
84.041 Impact Aid $241,216
84.365 Title III Part A English Language Acquisition $169,663
84.173 Title Vi-B Idea Preschool $117,684
84.425 Covid-19 Elementary and Secondary School Emergency Relief Fund (esser Ii) $91,941
93.556 Crela - Refugee English Language Acquisition-Promoting Safe and Stable Families $59,367
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds (slfrf) $35,887
84.173 Covid-19 Title Vi-B Idea Preschool-Arp $35,659
84.060 Indian Education_grants to Local Educational Agencies $34,269
10.649 Snap Cn Local P-Ebt Administrative $34,029
93.558 Crela - Temporary Assistance for Needy Families $29,006
10.555 National School Lunch Program $28,438
84.323 Special Education - State Personnel Development $17,857
84.425 Covid-19 Elementary and Secondary School Emergency Relief Fund Supplemental (esser Ii) $14,297
10.558 Child & Adult Care Food Program $12,762
84.425 Covid-19 American Rescue Plan Elementary and Secondary School Emergency Relief Homeless $11,380
84.425 Covid-19 Elementary and Secondary School Emergency Relief Fund Supplemental (esser) $7,333
93.600 Community in Partnership of Child Development $7,223
93.323 Covid-19 Cdphe Covid-19 Testing $5,598