Compliance Finding 2021-01 Assistance Listing No. 84.425D Elementary and Secondary Education Relief Fund - Education Stability Fund (ESF) ? Special Tests and Provisions ? Wage Rate Requirements Questioned Costs: $766,376 Criteria: In the event the School Board uses ESF funds for construction, they must comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600?75.617. All 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 the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for 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) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The School Board did not comply with the Wage Rate Requirements on a construction project. The construction project had already been bid out and awarded when the ESF funds became available. The School Board did not realize that Wage Rate Requirements were applicable on an existing contract. Since the contract was already in place, the required prevailing wage rate clauses were not included in the construction project contract and documentation related to the contractor providing proof that prevailing wages were paid to employees or subcontractors on the project was not required. Cause: The School Board?s management noted the construction project was already bid out and in process when the ESF grant funds became available. Therefore, the construction contract did not include the Wage Rate Requirements and documentation related to the contractor providing proof that prevailing wages were paid to employees or subcontractors on the project was not required. Effect: The School Board was not able to demonstrate it complied with the Wage Rate Requirements of the grant. Recommendation: We recommend the School Board ensure ESF funded construction project contracts include the required Wage Rate Requirements. Management?s Response: Management concurs with the recommendation and will make sure all ESF funded construction project contracts include the required Wage Rate Requirements.
Finding 2021-01 - Elementary and Secondary Education Relief Fund - Education Stability Fund (ESF)- Wage Rate Requirements Compliance: Management concurs with the recommendation and will make sure all ESF funded construction project contracts include the required Wage Rate Requirements.
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