Finding Text
K-12 Emergency Relief Funds Assistance Listing Number 84.425D. Pass-through: N.C. Department of Public Instruction. Program Report Code 171 and 181. Grant Period - Year Ended June 30, 2023. Criteria: In accordance with 2 CFR Appendix II, certain provisions are required to be included with all construction contracts which are funded with federal awards, to include Equal Employment Opportunity (Part 200(C)) Davis-Bacon Act, (Part 200 (D)); Contract Work Hours and Safety Standards Act, (Part 200(F)); Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment, (2 CFR 200.16; and Domestic Preferences for Procurements (2 CFR 200.322). Condition: Per review of the contract for the renovations to C.M. Eppes Middle School, the required provisions were not included in the contract. Cause: Internal controls over compliance with all direct and material compliance requirements were not adequately implemented to ensure that all construction contracts funded with federal awards include the provisions required by 2 CFR Appendix II. Effect: The grantor agency could disallow expenditures related to the construction contract. Questioned Costs: None. Recommendation: Internal controls over compliance with federal contstruction contract provisions should be designed and implemented so that a member of senior management monitors construction contracts to ensure that those contracts funded by federal awards contain the provisions required by 2 CFR Appendix II, 2 CFR 200.216, and 2 CFR 200.322. Views of responsible officials: Per discussion with Michael Hardy, Chief Finance Officer, on December 19, 2023, management agrees with the finding and will implement corrective action immediately.