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 0203
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 $455,573 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.
Cause: Lack of internal controls and management oversight.
Effect: the District did not comply with the Wage Rate requirements..
Context: Examined all payments/contracts (one contract in total) for facility repairs and improvements paid from the Education Stabilization Fund.
Identification as a repeat finding: No
Recommendation: The District should ensure that all applicable construction contracts contain the Wage Rate Requirements provision and obtain weekly certified payrolls from the contractor or subcontractor. The District should also contact the Arkansas Division of Elementary and Secondary Education (DESE) for further directives regarding this matter.
Views of responsible officials: The District will contact DESE for guidance regarding the failure to comply with the Davis-Bacon Act for contracts written using Federal funds. The District will also implement proper controls over program expenditures.