Finding Text
2022-003 Prevailing Wage Rate Internal Control and Compliance CFDA Title: ESSER II CFDA Number: 84.425D Federal Award Number: 036-0648-92-2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not require a contract indicating the requirement of prevailing wage rate and weekly certified payrolls submitted for federal construction project with contractor. Context: During the testing of expenditures for the ESSER projects we noted construction projects with labor in excess of $2,000. Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141--3144, 3146, and 3147. 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). Effect: The District was not in compliance with the prevailing wage rate requirement and the internal control system of the District did not identify the need for the compliance. Cause: Internal control procedures were not in place to ensure a contract was draw up to include the prevailing wage rate clause and to ensure the weekly certified payrolls were submitted to the District. Recommendation: The District should implement internal control procedures for any construction contracts in excess of $2,000 funded with federal monies include a contract with the prevailing wage rate clause and submission of weekly certified payrolls.