Finding Text
Finding: District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000. Criteria: The ESSER Fund provides Federal funds for school facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental health hazards and to support student health needs. Title 29, Section 5.5, CFR (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and to ensure that contractors and subcontractors pay workers the prevailing wage rates established by the United States Department of Labor. 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 (certified payrolls). The United States Department of Labor established ?prevailing wages? by geographic area and interprets the Davis-Bacon Act to apply to construction, alteration, or repair of a public building or public work. Condition: During the 2021-22 fiscal year, the Board entered into a construction contract for heating, ventilation, and air-conditioning (HVAC) repairs and upgrades at Vernon Middle School for $538,000 and another construction contract for a multi-campus project for similar HVAC repairs and upgrades totaling $251,364. As of June 2022, the District had expended ESSER funds totaling $290,761 and $251,364, respectively, on the two projects. In response to our inquiry, District personnel indicated that the contractors did not submit to the District weekly certified payrolls demonstrating prevailing wage rates were paid. In addition, we noted that the purchase orders, requests for proposal, bid specifications, and contracts for the projects did not contain clauses that required compliance with the Davis-Bacon Act provisions. Subsequent to our inquiry, District personnel obtained from the contractors certified payrolls that demonstrated the prevailing wage rates were paid for these projects. Cause: District personnel were not aware that the Davis-Bacon Act applied to these projects and, therefore, did not include the appropriate wage rate clauses in the applicable procurement documents nor required District personnel to verify that payrolls were received. Effect: Without an appropriate understanding of when to apply the Davis-Bacon Act requirements, there is an increased risk that contractors and subcontractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Recommendation: The District should enhance procedures to ensure that prevailing wage rate clauses are included in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and that wage rates paid by contractors and subcontractors for Federally funded facility projects are directly compared to, and determined to be consistent with, the prevailing wage rates established for the geographic area by the United States Department of Labor. Such enhancements should include appropriate training for staff to understand their responsibility for demonstrating compliance with the Davis-Bacon Act. District Response: The District will enhance its procedures to ensure that it complies with the Davis-Bacon Act.