Finding Text
2 CFR 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. Appendix II to 2 CFR part 200, Paragraph D states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts 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 wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. Lack of proper internal controls over Federal Grants management led to the Academy expending $200,555 of its Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D, and $287,392 of its Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U, federal grant funds for HVAC upgrades, bathroom renovations, and the remodel of various classrooms without meeting the Davis-Bacon Act requirements. The agreements with the vendor for these updates did not include a provision to ensure the contractor complied with Federal wage rate requirements. Additionally, the Academy did not obtain weekly certified payroll reports from the vendor to verify prevailing wages were paid on a weekly basis. Without proper controls over wage rate requirements, there is an increased risk that the Academy and its contractors and subcontractors are not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The Academy should ensure contracts for construction in excess of $2,000 paid with federal grant monies contain provisions that the contractor comply with the wage rate requirements and ensure certified payroll reports are provided weekly by the contractor. The Academy should review the certified payroll reports and report all suspected or reported violations to the Federal awarding agency.