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, Code of Federal Regulations (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 ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor 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 totaling $1,756,293 for heating, ventilation, and air-conditioning (HVAC) repairs and upgrades at Baker County High School. As of June 30, 2022, the District had expended ESSER funds totaling $121,562. 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 project did not contain clauses that required compliance with the Davis-Bacon Act provisions. Subsequent to our inquiry, District personnel obtained from the HVAC contractor certified payrolls that demonstrated the prevailing wage rates were paid. 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 require District personnel to verify that certified payrolls were received. Effect: Absent the required contract clauses and weekly certified payrolls, there is an increased risk that construction contractors 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 compliance with all Davis-Bacon Act requirements. Such procedures should ensure that applicable Federally funded facility contracts specifically require submittal of weekly certified payrolls and that District personnel verify the payrolls were received. District Response: District Staff procedures have been developed and implemented to ensure weekly payroll records from all contractors paid using Federal funds are requested and reviewed for compliance with Title 29, Section 5.5, Code of Federal Regulations - Davis-Bacon Act. All subsequent construction contracts will include a prevailing wage clause for amounts over $2,000.