Gulf County District School Board

Finding: District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000, resulting in Federal program questioned costs totaling $1,251,947. Criteria: The ESSER Fund provides Federal funds for school facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental health hazards and to support student health needs. Title 29, Section 5.5, Code of Federal Regulations (Davis-Bacon Act), requires the District to include prevailing wage rate clauses in any construction contract exceeding $2,000 that is financed either wholly or in part by Federal funds and to ensure that contractors and subcontractors pay workers the prevailing wage rates established by the United States Department of Labor. The United States Department of Labor established ?prevailing wages? by geographic area and interprets the Davis Bacon Act to apply to construction, alteration, or repair of a public building or public work. Condition: During the 2019-20 fiscal year, the Board entered into a construction contract for heating, ventilation, and air-conditioning repairs and upgrades at all District schools and various administrative and support offices. As of June 2022, the District had expended ESSER funds totaling $1,251,947 on the project. We noted that the contract for the project did not contain clauses that required the contractors and subcontractors to comply with the Davis-Bacon Act provisions. In addition, in response to our inquiry, District personnel indicated that they had not performed direct comparisons of wage rates paid by the contractor and subcontractors for the project with the prevailing wages established by the United States Department of Labor. Cause: District personnel were not aware that the Davis-Bacon Act applied to the project. Effect: Without an appropriate understanding of the Davis-Bacon Act and when to apply the Act requirements, there is an increased risk that that construction contractors and subcontractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Although we requested, the District did not provide the certified payrolls from the contractor demonstrating that the prevailing wage rates were paid for these projects. Consequently, the District incurred questioned costs totaling $1,251,947. Recommendation: The District should establish procedures to comply with all provisions of the Davis-Bacon Act. Such procedures should include appropriate training for staff to understand the Davis-Bacon Act and when the Act requirements should be applied. In addition, the procedures should ensure that Federally funded facility contracts include the required prevailing wage rate clauses and that wage rates paid by the contractor and subcontractors for such projects are directly compared to and determined to be consistent with the prevailing wages established for the geographic area by the United States Department of Labor. Also, the District should document to the Florida Department of Education (FDOE) the allowability of the questioned costs of $1,251,947 or contact the FDOE regarding necessary corrective action. District Response: The District will enhance its procedures to ensure compliance with the Davis Bacon Act.

Finding Number: 2020-001 CFDA Number: 84.010 Program Title: Title I Grants to Local Educational Agencies Compliance Requirement: Eligibility Pass-Through Entity: Florida Department of Education (FDOE) Federal Grant/Contract Number and Grant Year: S010A190009 ? 2020 Statistically Valid Sample: N/A Finding Type: Noncompliance and Significant Deficiency Questioned Costs: $37,190 Prior Year Finding: Not Applicable Finding: The District did not always comply with Federal regulations by properly allocating Title I Program funds to eligible schools. Criteria: Title 34, Section 200.78, Code of Federal Regulations (CFR), requires the District to allocate Title I schoolwide program funds to schools identified as eligible and selected to participate, in rank order, on the basis of the total number of children from low income families in each school. The District is not required to allocate the same per-pupil amount (PPA) to each participating school provided that it allocates higher PPAs to schools with higher concentrations of poverty than to schools with lower concentrations of poverty. Condition: The District annually applies for Title I Program funding and the application includes a budget and an eligibility survey to document the amounts budgeted per school. During the 2019-20 fiscal year, the District operated five elementary, middle, high, and specialized schools and Title I Program funds totaling $599,008 were expended at three of those schools. Although we requested, District records were not provided to demonstrate the allocation of Title I Program funding to the three District schools. Therefore, to evaluate District compliance with the CFR allocation requirement, we examined District expenditure records and found that the Title I Program expenditures at the three schools were not in rank order based on the total number of students from low income families in the schools. Specifically, a school with a lower concentration of poverty (67.9 percent) expended $37,190 more per-pupil funding than a school with a higher concentration of poverty (79.7 percent). Cause: The District had not established effective procedures for documenting the appropriate allocation and use of Title I Program funding at participating schools. Effect: The District did not comply with Federal regulations by appropriately allocating Title I Program resources to participating schools in rank order. As a result, a District school received $37,190 more than another District school with a greater number of students from low income families. As such, educational services were not funded at the required levels. In response to our inquiries, District personnel concurred with the calculated questioned costs. Recommendation: The District should establish procedures for ensuring and documenting that Title I Program resources are properly allocated to schools. In addition, the District should provide documentation to the grantor (FDOE) supporting the allowability of the questioned costs totaling $37,190 or restore this amount to the Title I Program. District Response: The District will establish effective procedures for documenting appropriate allocation and use of Title I Program funding at participating schools. Specifically, the Title I Director will maintain an Excel Spreadsheet to budget and track expenditures for each Title I school ensuring that expenditures are in line with the rank order of schools.