INDEPENDENT SCHOOL DISTRICT 545

Material Weakness in Internal Control and Compliance Federal Program Education Stabilization Fund (AL 84.425U) Special Tests Criteria Uniform Guidance states “the contractor or subcontractor to 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)”. Condition We noted during inquiry and testing that contractors were not required to submit their certified payrolls on a weekly basis to the construction manager that oversaw the HVAC project. Questioned Costs None. Context During testing of the wage rate requirements, the Project Manual from the construction manager contained the Wage Rate Requirements, however, it didn’t specify the requirement for weekly certified payrolls; only certified payrolls needing to be submitted. Also, we inquired who reviews the submitted certified payrolls to ensure the rates are paid according to federal pay rates. We noted that the firm who the District hired to oversee the project was supposed to be in charge of this. However, during the inquiry of the firm, we noted that they do not review or sign off on these for accuracy. Cause Management oversight. Effect There is an increased risk of not paying appropriate wages to contractors working on the project. Repeat Finding No. Recommendation The District should ensure the construction manager includes the weekly certified payroll submission requirement in their Project Manual. Also, the District should implement policies and procedures to ensure all certified payrolls are reviewed to ensure wages are paid according to federal wage rates. Views of Responsible Officials The District agrees with the recommendation.