Finding Text
Material Weakness/Noncompliance Finding Number: 2022-002 Assistance Listing Number and Title: AL #84.425D COVID-19 ? Education Stabilization Fund Federal Award Identification Number / Year: 2022 Federal Agency: US Department of Education Compliance Requirement: Prevailing Wage Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No 2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR part 200, Appendix II(D), states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following. . .the ?Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144 and 3146-3148) as supplemented by Department of Labor regulations (29 CFR ? 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.? In 2022, the School District incurred expenses with a contractor for work done on the new playground area in the total amount of $64,044 paid out of the Elementary and Secondary School Emergency Relief Fund. The School District also had expenses with a company to install air units in the total amount of $113,432 paid out of the Elementary and Secondary School Emergency Relief Fund. Both of these payments included costs for both labor and materials and would have been subject to prevailing wage laws. However, as a result of a lack of proper internal controls, the required clauses concerning prevailing wage rates were not included in the contract for these services. Also, the requirement that the contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the School District were not included in the contract. Without proper controls over prevailing wage rate requirements, there is an increased risk that the School District and its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The School District should ensure contracts for construction in excess of $2,000 paid with federal grant monies include a provision that contractors comply with the prevailing wage rate provisions and ensure certified payroll reports are provided by the contractor weekly. The School District should also maintain the certified payroll reports to document compliance with the program requirements. In addition, the School District should report all suspected violations to the Federal awarding agency. Officials? Response: Going forward any construction contracts that exceed $2,000, the School District Treasurer and Superintendent will ensure that the contractor will meet all the Wage Rate Requirements and certified payroll reports are submitted weekly by the contractor. Also, the School District Treasurer and Superintendent will ensure procurement procedures cover the requirements of the Davis Bacon Act.