Finding Text
Finding: 2022-004 Special Provisions ? Wage Rate Requirements Federal agency: U.S. Department of Education Federal program name: Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D and 84.425U Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425D210045 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per 29 CFR Part 5, 2 CFR Part 176, subpart C, and 2 CFR section 200.326, the District is required to include in their construction contract subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the Department of Labor regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance. Condition: During special provisions testing, it was noted that the District has the correct wording relating to the Wage Rate Requirements in the contracts but does not obtain any documentation from the contractor. Questioned Costs: Not applicable. Context: During our testing of special provisions, it was noted that 2 of 2 contractors selected had the proper wording relating to the Wage Rate Requirements in the contract but the District did not receive any documentation verifying the compliance. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with special provision requirements could result in paying contractors that are not in compliance with the Wage Rate Requirements set by the Department of Labor. This could ultimately result in questioned costs. Repeat Finding: Not applicable. Recommendation: We recommend that the District obtain the weekly payrolls and statement of compliance from contractors that work on construction contracts financed by federal assistance funds. Views of Responsible Officials: There is no disagreement with the audit finding.