Finding Text
Title of Finding: Approval and Prevailing Wage Rate Requirements Finding Number: 2022-001 Assistance Listing Number and Title: AL # 84.425D ? Elementary and Secondary School Emergency Relief (ESSER) Fund Federal Award Identification Number / Year: 2021/2022 Federal Agency: U.S. Department of Education Compliance Requirement: N. Special Tests and Provisions ? Wage Rate Requirements Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance/Significant Deficiency 2 CFR Section 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. Section 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 USC. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by nonfederal entities must include a provision for compliance with Davis-Bacon Act (40 USC. 3141-3144 and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provision Applicable to Contract 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 wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. 2 CFR Section 176.190 Award term ? Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance or repair the agency shall use the award term to describe in the following paragraphs: (a) Section 1606 of the Recovery Act requires all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. During fiscal year 2022, the District used a portion of ESSER funds for two projects related to 1) cooling system purchase and installation, and 2) health lab renovations. Both contracts required compliance with Davis-Bacon prevailing wage requirements which was communicated by the District to the related contractors. However, the District did not require weekly certified payroll documents from these contractors to monitor compliance with prevailing wage. As auditors, we are not expected to determine whether prevailing wage rates were paid. We recommend the District ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then the District has an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.