PADUCAH INDEPENDENT SCHOOL DISTRICT

Section II - Financial Statement Findings The audit disclosed no findings required to be reported. Section III - Federal Award Findings and Questioned Costs Finding 2022-001 Federal Agency: U.S. Department of Education, passed through Texas Education Agency Program Name: COVID-19 Elementary and Secondary School Emergency Relief (ESSER} Assistance Listing Number: 84.425D, 84.425U Federal Award Number: 21521001051901, 21528001051901 Compliance Requirement: Special Tests and Provisions: Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The Davis-Bacon and Related Acts apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating} of public buildings or public works. Davis-Bacon Act and Related Act contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. Condition: The District entered into an HVAC replacement project and roof repair project with federal funds, but did not monitor contractor and subcontractor payroll to ensure prevailing wage rates were paid. Cause: The District had no policy in place to require regular monitoring of contractor and subcontractor payroll for federally-funded construction and renovation projects. Such projects are normally funded out of state and local revenues. Effect: Contractors and subcontractors working on these projects may have been paid less than the local prevailing wage rates. Questioned Costs: None reported. Context/Sampling: Sampling was not performed. The District did not comply with this requirement at any time during the year under audit. Repeat Finding from Prior Year(s}: No Recommendation: We recommend that the District update its operating policies to require review of contractor and subcontractor payroll for all federally-funded projects. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.

Corrective Action Plan Finding 2022-01 Federal Agency Name: U.S. Department of Education Program Name: COVID-19 Elementary and Secondary School Emergency Relief (ESSER) Assistance Listing Number: 84.425D, 84.425U Finding Summary: The Davis-Bacon and Related Acts apply to contractor and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Davis- Bacon Act and Related Act contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for the corresponding work on similar projects in the area. The District entered into an HVAC replacement project and roof repair project with federal funds, but did not monitor contractor and subcontractor payroll to ensure prevailing wage rates were paid. Responsible Individuals: Jenny Smith Corrective Action Plan: Prior to finalizing any construction, alteration, or repair projects utilizing federal funds with a planned expenditure in excess of $2,000, PISD will research the latest local wage determination rates. PISD will share these wage determination rates with the contractor/subcontractor, and will be ensured through the contract that the contractor/subcontractor will comply with the Davis-Bacon and Related Acts. PISD will notify the contractor/subcontractor of the necessity of receiving certified payrolls as needed, so that PISD may monitor requirements throughout the project. Anticipated Completion Date: December 1, 2022