Finding Text
U.S DEPARTMENT OF EDUCATION
PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION
COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U
PASS THROUGH NUMBER 4401
AUDIT PERIOD - YEAR ENDED JUNE 30, 2023
2023-002 Equipment and Real Property Management / Special Tests and Provisions
Criteria or specific requirement (including statutory, regulatory, or other citation): 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract.
Condition: The District paid $1,064,887 for installation of an HVAC system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not obtain a performance bond from the contractor, as required by Ark. Code Ann. § 18-44-503.
Cause: Lack of internal controls and management oversight.
Effect: The District did not comply with Wage Rate Requirements or Bonding Requirements.
Context: A total of two payments/contracts for facility repairs and improvements were paid from the Education Stabilization Fund. Both were examined.
Identification as a repeat finding: No
Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures.
Views of responsible officials: The District supplied the bidding groups with all the federal guidelines and requirements. However, we did not request or receive documentation regarding the adherence to those requirements. The District will contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding the matter and implement proper controls over program expenditures.