Hardee County District School Board

FINDING - The District under allocated Title I Program funding to three schools by a total of $220,333, resulting in questioned costs of that amount. CRITERIA - Title 34, Section 200.78, Code of Federal Regulations, requires the District to allocate Title I schoolwide program funds to schools, identified as eligible and selected to participate, in rank order based on 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 participating school. During the 2024-25 fiscal year, the District expended $1,967,074 from the Title I Program, including $1,784,371 expended for District schools. As part of our audit, we requested for examination District records supporting the budget allocation amounts to the seven Title I Program schools and final budget amounts evidencing the allocations provided. However, District records indicated that the ranking of three District Title I Program schools did not agree with the ranking based on the percent of students from low-income families. Specifically, three schools had poverty concentrations of 74.9, 72.6, and 68.1 percent but were allocated and received $27,352, $82,630, and $110,351 less funding, respectively, than a school with a lower poverty concentration of 67 percent. CAUSE - The District had not established procedures for monitoring Title I Program budget amounts allocated to participating schools. EFFECT - The District did not comply with Federal regulations by appropriately allocating Title I Program funding, resulting in three schools being underfunded by a total of $220,333 and educational services that were not funded at required levels. RECOMMENDATION - The District should establish monitoring procedures for ensuring and documenting that Title I Program funding is properly allocated to schools. In addition, the District should provide documentation to the FDOE supporting the allowability of the questioned costs totaling $220,333 or allocate that amount to the applicable underfunded Title I Program schools. DISTRICT RESPONSE - Title I rank and serve must be established in both the initial and final budgets and consistently maintained throughout the fiscal year. Any adjustments to school allocations must preserve rank order and per-pupil allocations. During the 2024-2025 fiscal year, an allocation to a lower-ranked school resulted in PSES not being fully maintained. While the District has historically monitored Title I budgets, this finding identified a need to strengthen internal controls to ensure continued alignment with Federal requirements. In response, the District will implement monthly monitoring of Title I school budgets to verify that rank and serve requirements and PSES calculations are maintained throughout the year. Additionally, the District will seek technical assistance from the Florida Department of Education Federal Programs Office to ensure full compliance moving forward.

Finding: District controls did not always ensure compliance with the Davis-Bacon Act for Federally funded construction projects exceeding $2,000. Criteria: The ESF 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 ensure that contractors pay workers the prevailing wage rates established by the United States Department of Labor. This includes a requirement for the contractor to submit to the District weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). 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 public buildings or public work. Condition: During the 2021-22 fiscal year, the Board entered into four construction contracts totaling $464,323 for heating, ventilation, and air-conditioning (HVAC) renovation projects at the Bowling Green Elementary, Hardee Junior High, Hilltop Elementary, and Wauchula Elementary Schools. As of June 30, 2022, the District had expended ESF funds totaling $464,323 on the projects. Our examination of the project contracts disclosed that they did not contain prevailing wage rate clauses or require contractors to submit weekly certified payrolls. Also, according to District personnel, District procedures did not require them to verify that the contractors submitted certified payrolls. Subsequent to our inquiry, District personnel obtained certified payrolls for the projects from the HVAC contractors demonstrating that the prevailing wage rates were paid for these projects. Cause: District personnel indicated that the District typically complies with the Davis-Bacon Act for applicable Federally funded construction projects. However, because of oversights, the noncompliance occurred for these HVAC projects. Effect: Absent the required contract clauses and weekly certified payrolls, there is an increased risk that construction contractors paid with Federal moneys will not pay workers the prevailing wage rates established by the United States Department of Labor. Recommendation: The District should enhance procedures to ensure compliance with all Davis-Bacon Act requirements. Such procedures should ensure that applicable Federally funded facility contracts contain the prevailing wage rate clauses and require submittal of weekly certified payrolls and that District personnel verify the payrolls were received. District Response: We agree with the finding. We have implemented new procedures to ensure compliance with Davis-Bacon Act requirements on applicable Federally-funded projects.

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