Finding Text
2023 – 002: Special Tests and Provisions
Federal Agency: U.S Department Education
Federal Program Name: Education Stabilization Funds
Assistance Listing Number: 84.425D, 84.425U
Pass-Through Agency: Indiana Department of Education
Pass-Through Numbers: S425D200013, S425D210013, S425U210013
Award Period: July 1, 2022 – June 30, 2023
Type of Finding:
• Material Weakness in Internal Control over Compliance
• Other Matters
Criteria or specific requirement: Per 2 CFR 200.303, "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements.
Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds.
Questioned costs: $342,069.
Context: 2 of 2 construction projects financed by federal education funds were subject to prevailing wage requirements.
Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements
Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: No.
Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements.
Views of responsible officials: There is no disagreement with the audit finding.