Finding Text
Condition: There was one Education Stabilization Fund construction project performed by a subcontractor. Grant expenditures for the project paid by the Education Stabilization Fund totaled $366,034. There was not a prevailing wage clause in the contract and certified payrolls were not received during the timeframe of the contract.
Criteria: Wage rate requirements apply to the Education Stabilization Fund when laborers and mechanics employed by contractors or subcontractors work on construction contracts more than $2,000. Laborers must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL).
Nonfederal entities shall include in their contracts subject to wage rate requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly payrolls and a statement of compliance (certified payrolls).
Cause: The District did not obtain the certified payrolls during the construction contract period.
Effect: A reimbursement request was made for expenditures that did not comply with wage rate requirements.
Questioned Costs: $366,034
Recommendation: We recommend that the District establish controls to comply with wage rate requirements related to contracts utilizing federal funds in the future.
Corrective Action Plan: The District will work with their contractors to ensure the prevailing wage clause is included in the contract and certified payrolls will be received in the future.