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REFERENCE: 2022-101 CFDA NUMBER 84.425d ? COVID 19 ? EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION ? 2022 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 QUESTIONED COSTS N/A CONDITION Weekly certified payroll reports were not obtained from the construction contractor to be reviewed for compliance with Davis-Bacon prevailing wage rate requirements from the start of construction in June 2022 through July 2022. The certified payroll reports were obtained on July 29, 2022 and reviewed by the School?s staff. CRITERIA In accordance with 29 CFR Subtitle A, Part 5, Subpart A Davis-Bacon and Related Acts Provisions and Procedures, ? 5.5(a)(3)(ii)(A), the contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. Instead the payrolls shall only need to include an individually identifying number for each employee (e.g., the last four digits of the employee's social security number). The required weekly payroll information may be submitted in any form desired. In accordance with 29 CFR Subtitle A, Part 5, Subpart A Davis-Bacon and Related Acts Provisions and Procedures, ? 5.5(a)(3)(ii)(B), Each payroll submitted shall be accompanied by a ?Statement of Compliance,? signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following: (1) That the payroll for the payroll period contains the information required to be provided under ? 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under ? 5.5 (a)(3)(i) of Regulations, 29 CFR part 5, and that such information is correct and complete; (2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3; (3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. In accordance with OMB Compliance Supplement, Part 4 ? Wage Requirements Cross-Cutting Section, Nonfederal 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 (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal 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 accordance with OMB Compliance Supplement, Part 6 ? Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. EFFECT Program requirements were not complied with. The School may not complied with prevailing wage requirements. CAUSE Internal controls were not designed appropriately to ensure that documentation was obtained weekly for certified payroll reports to ensure compliance with prevailing wage requirements. RECOMMENDATION AND BENEFIT A process should be developed to obtain and review weekly certified payroll reports for construction services subject to Davis-Bacon. Documentation supporting prevailing wage requirements should be retained. This will help ensure that program and prevailing wage requirements are complied with. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.