Finding Text
U.S. DEPARTMENT OF EDUCATION
PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION
COVID-19 - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425
PASS-THROUGH NUMBER 4605
AUDIT PERIOD - YEAR ENDED JUNE 30, 2023
2023-001.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.
Condition: The District paid $385,755, $336,016, $2,440,820, and $242,812 for the Arkansas Middle School Canopy, Arkansas Middle School Outdoor Classroom, North Heights HVAC, and PreK Restroom Remodel, respectively, from the Education Stabilization Fund without weekly certified payrolls being submitted to the District.
Cause: Lack of internal controls and management oversight.
Effect or potential effect: The District did not comply with Wage Rate Requirements.
Context: A total of four contracts for facility repairs and improvements were paid from the Education Stabilization Fund. All 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 has made several attempts to secure weekly certified payrolls for construction projects on-going since July 2023 once notified of this deficiency for the 2022-2023 audit. We will continue to request certified payrolls for the months prior to April 2024 and will request the payroll information for current and future construction projects from this point forward. Documentation of attempts to collect the information will be maintained. This will be monitored by the Comptroller and Business Manager for the District.