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Finding #2022-001: #84.425U COVID-19 ? Education Stabilization Fund ? ESSER III Federal Grantor: U.S. Department of Education Pass-through Award Number: 2022-533612-DPI-ESSERFIII-165 Pass-through Entity: Wisconsin Department of Public Instruction Criteria: Wage rate requirements apply to the Education Stabilization Fund when laborers and mechanics employed by contractors or subcontractors work on construction contracts more than $2,000. Laborers must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL). Nonfederal entities shall include in their contracts subject to wage rate requirements 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 District weekly payrolls and a statement of compliance (certified payrolls). Condition: There was one Education Stabilization Fund construction project performed by a subcontractor. Grant expenditures for the project paid by Education Stabilization Fund totaled $424,000. There was not a prevailing wage clause in the contract and certified payrolls were not received. Cause: The District was not aware that wage rate requirements applied to the construction project until after it was completed. Effect: A reimbursement request was made for expenditures that did not comply with wage rate requirements. Questioned Costs: $424,000. Recommendation: Establish controls to comply with wage rate requirements related to the Education Stabilization Fund. Consider determining if the contractor performing the project in 2021-2022 paid prevailing wage rates for costs reimbursed by the grant. Response: At the time that we committed to doing this project, we informed our referendum construction manager that we would be using federal funds to pay for this additional work. With us informing them of that, we assumed that all required paperwork would be completed to comply with the Davis-Bacon Act. Unfortunately, we thought this was sufficient notification for them to support us with compliance. In our follow-up communications with our primary HV AC subcontractor we learned at the time when referendum work was contracted in 2019, they were paying prevailing wage. We worked with legal counsel to develop a contract that is compliant with the Davis-Bacon Requirements. To make sure the paperwork is in place copies of such contracts will be sent to the business office before work commences as well as the compliance documentation when work is complete. We are also conducting a review of our written procedures to be completed by June 30, 2023.