Finding 976456 (2023-001)

Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). During fiscal year 2023, the Board entered into a construction project contract totaling $2,822,000.00 that did not include the prevailing wage rate clauses. As of September 30, 2023, the Board had expended $2,172,462.65 of Education Stabilization Fund (ESSER) funds on the projects. The Board did not have adequate controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts, therefore, a construction project contract was awarded during the fiscal year that did not include prevailing wage rate clauses, but the contractors did submit weekly certified payrolls to the Board. As a result, the Board is not in compliance with the Davis-Bacon Act as it pertains to including the wage rate requirements clauses in all contracts. Recommendation The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds (ESSER) to fund construction contracts in excess of $2,000.00 with the use of mechanics and laborers. Views of Responsible Officials of the Auditee The Board agreed with the finding.