Finding Text
Finding 2022-001: Wage Rate Requirements Program Name: Education Stabilization Fund ? Assistance Listing 84.425D & 84.425U Awarding Agency: U.S. Department of Education, passed through Louisiana Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material instance of Non-compliance Questioned Costs: $288,517 for 84.425D and $56,627 for 84.425U. Total questioned cost is $345,144 for the program. Context / Criteria: 2 CFR 200.303(a) requires non-federal entities to establish and maintain internal controls over compliance with federal statutes, laws, and the terms and conditions of grant agreements. 2CFR Part 176, Subpart C requires all laborers and mechanics employed by contractors and subcontractors on projects funded with federal awards to 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. This includes a requirement for the contractor to submit to the non-federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition: The School District did not have controls in place to ensure construction contracts in excess of $2,000 included provisions for compliance with the Davis-Bacon Act. The School District did not obtain weekly certified payrolls from contractors for each week in which any contract work was performed. Cause / Effect: The School District entered into a contract with a construction manager for a project not funded by federal funds. Subsequent to the effective date of the contract, the School District began to utilize federal funds for payment of the contract. The contract was not amended to comply with the provisions of the Davis-Bacon Act. As a result, the School District was not in compliance with 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. Recommendation: We recommend management implement procedures to ensure construction contracts entered into that utilize federal funding are reviewed for compliance with federal requirements Views of Responsible Officials and Corrective actions: Management is in agreement with the finding. See accompanying Corrective Action Plan.