EIN: 911175139
UEI: EBWAEFNKUVN5
Audited by: Office of the Washington State Auditor
Oversight agency: 84 [Department of Education]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on April 14, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by October 14, 2026 (44 days from today).
What is a management decision? →FAC accepted this audit on May 21, 2025 — management decision was due November 21, 2025.
FAC accepted this audit on March 25, 2024 — management decision was due September 25, 2024.
FAC accepted this audit on March 26, 2023 — management decision was due September 26, 2023.
FAC accepted this audit on May 4, 2022 — management decision was due November 4, 2022.
Lynden School District No. 504 September 1, 2020 through August 31, 2021 2021-001 The District did not have adequate internal controls for ensuring compliance with Davis-Bacon Act (prevailing wage rate) requirements. CFDA Number and Title: 84.425, COVID-19 ? Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 84.425D-0120148, 84.425D-0120494 Questioned Cost Amount: $0 Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In fiscal year 2021, the District spent a total of $1,105,086 in federal funding under its ESF awards. This included $273,982 of its Elementary and Secondary School Emergency Relief Fund (ESSER) subprogram award funded by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (ESSER I) and $831,104 of its ESSER subprogram award funded by the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act (ESSER II). Federal regulations require award recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. The Davis-Bacon Act requires contractors and subcontractors that work on construction contracts in excess of $2,000 financed with federal financial assistance to pay laborers and mechanics prevailing wages?the wage rates the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. Prevailing wage rate requirements specify that the contract between the District and the prime contractor include specific language to ensure contractors and subcontractors are paid at prevailing wage rates. Additionally, the District is required to collect weekly certified payroll reports from contractors and subcontractors, which include copies of their payroll and signed ?Statement of Compliance.? Description of Condition The District hired seven contractors to install portable classrooms. During the 2020-21 school year, the District paid $782,330.30 from its ESSER II award to contractors for work they performed on the project. The District did not have adequate internal controls to ensure compliance with prevailing wage rate requirements. Specifically, the District did not: ? Ensure the contracts with the seven contractors included all of the required language in the prevailing wage rate clauses of the contracts ? Collect all weekly certified payroll reports from the contractors to confirm they paid laborers proper prevailing wages We consider this deficiency in internal controls to be a material weakness, which led to material noncompliance. The issue was not reported as a finding in the prior audit. Cause of Condition While District officials were aware of state prevailing wage requirements, they were unaware of the federal requirements because this was the District?s first federally funded construction project. Additionally, the District experienced staff turnover in the Business Office, which includes the main position in charge of overseeing the program. Effect of Condition For this project, the District was required to collect a total of 48 weekly certified payroll reports, but did not collect any of them. In response to audit inquiry, the District was able to subsequently collect four weekly certified payrolls. Without adequate internal controls that ensure it includes all required language in the prevailing wage rate clauses of its contracts, the District cannot demonstrate it complied with the Davis-Bacon Act requirements. The District could be liable for paying any additional wages if the contractor did not pay prevailing wage rates to laborers working on the contract. Recommendation We recommend the District develop internal controls to ensure compliance with federal wage rate requirements. This should include inserting in full the prevailing wage clauses into contracts and implementing effective monitoring processes to ensure the District collects and reviews all certified weekly payroll reports from contractors and subcontractors. Additionally, we recommend the District consider the benefit of additional trainings to ensure staff overseeing compliance with federal programs are aware of all applicable requirements. District?s Response The District concurs with the state auditor finding the Davis-Bacon Act Requirements were not met for the capital project using federal funding. Effective immediately the District will implement new internal controls and procedures for future Capital Projects expenditures using federal funding as outlined in our Corrective Action Plan. Auditor?s Remarks We appreciate the District?s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 5.5 ? Contract provisions and related matters establishes the requirements for the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part with federal funds the clauses listed, which includes but is not limited to the minimum wages to be paid and payrolls and basic records to be maintained (submission of weekly certified payrolls).
Show full finding ▾Hide full finding ▴Lynden School District No. 504 September 1, 2020 through August 31, 2021 2021-001 The District did not have adequate internal controls for ensuring compliance with Davis-Bacon Act (prevailing wage rate) requirements. CFDA Number and Title: 84.425, COVID-19 ? Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 84.425D-0120148, 84.425D-0120494 Questioned Cost Amount: $0 Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In fiscal year 2021, the District spent a total of $1,105,086 in federal funding under its ESF awards. This included $273,982 of its Elementary and Secondary School Emergency Relief Fund (ESSER) subprogram award funded by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (ESSER I) and $831,104 of its ESSER subprogram award funded by the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act (ESSER II). Federal regulations require award recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. The Davis-Bacon Act requires contractors and subcontractors that work on construction contracts in excess of $2,000 financed with federal financial assistance to pay laborers and mechanics prevailing wages?the wage rates the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. Prevailing wage rate requirements specify that the contract between the District and the prime contractor include specific language to ensure contractors and subcontractors are paid at prevailing wage rates. Additionally, the District is required to collect weekly certified payroll reports from contractors and subcontractors, which include copies of their payroll and signed ?Statement of Compliance.? Description of Condition The District hired seven contractors to install portable classrooms. During the 2020-21 school year, the District paid $782,330.30 from its ESSER II award to contractors for work they performed on the project. The District did not have adequate internal controls to ensure compliance with prevailing wage rate requirements. Specifically, the District did not: ? Ensure the contracts with the seven contractors included all of the required language in the prevailing wage rate clauses of the contracts ? Collect all weekly certified payroll reports from the contractors to confirm they paid laborers proper prevailing wages We consider this deficiency in internal controls to be a material weakness, which led to material noncompliance. The issue was not reported as a finding in the prior audit. Cause of Condition While District officials were aware of state prevailing wage requirements, they were unaware of the federal requirements because this was the District?s first federally funded construction project. Additionally, the District experienced staff turnover in the Business Office, which includes the main position in charge of overseeing the program. Effect of Condition For this project, the District was required to collect a total of 48 weekly certified payroll reports, but did not collect any of them. In response to audit inquiry, the District was able to subsequently collect four weekly certified payrolls. Without adequate internal controls that ensure it includes all required language in the prevailing wage rate clauses of its contracts, the District cannot demonstrate it complied with the Davis-Bacon Act requirements. The District could be liable for paying any additional wages if the contractor did not pay prevailing wage rates to laborers working on the contract. Recommendation We recommend the District develop internal controls to ensure compliance with federal wage rate requirements. This should include inserting in full the prevailing wage clauses into contracts and implementing effective monitoring processes to ensure the District collects and reviews all certified weekly payroll reports from contractors and subcontractors. Additionally, we recommend the District consider the benefit of additional trainings to ensure staff overseeing compliance with federal programs are aware of all applicable requirements. District?s Response The District concurs with the state auditor finding the Davis-Bacon Act Requirements were not met for the capital project using federal funding. Effective immediately the District will implement new internal controls and procedures for future Capital Projects expenditures using federal funding as outlined in our Corrective Action Plan. Auditor?s Remarks We appreciate the District?s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 5.5 ? Contract provisions and related matters establishes the requirements for the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part with federal funds the clauses listed, which includes but is not limited to the minimum wages to be paid and payrolls and basic records to be maintained (submission of weekly certified payrolls).
CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE Lynden School District No. 504 September 1, 2020 through August 31, 2021 This schedule presents the corrective action the District is planning to take for findings included in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: 2021-001 Finding caption: The District did not have adequate internal controls for ensuring compliance with Davis-Bacon Act (prevailing wage rate) requirements. Name, address, and telephone of District?s contact person: Jody Morgan, Accounting Specialist 516 Main Street Lynden, WA 98264 (350) 354-4442 x 3506 Corrective action the auditee plans to take in response to the finding: (If the auditee does not concur with the finding, the auditee must list the reasons for disagreement). The District will immediately implement the following controls to assure that the District has adequate internal controls in place should any future expenditures of federal funds for Capital Projects be made. 1) The District will review the Federal Procurement and contractor requirements prior to submitting applications to use Federal Funds for Capital Projects. 2) The District will provide training to staff to ensure compliance with all Federal Program Procurement including compliance with the Davis-Bacon Act (prevailing wage rate) requirements. 3) As part of the verification process to ensure adequate internal controls the District has identified The Maintenance Director and The Finance Director as the two staff members who will secure and monitor weekly certified payroll applications from contractors to stay in compliance with the Davis Bacon Act requirements. 4) The District will confirm Federal wage requirements are being met with each Contractor and Sub-Contractor, verifying payroll reports and confirming compliance with the Davis-Bacon Act requirements. Anticipated date to complete the corrective action: Effective immediately, 5/4/2022
FAC accepted this audit on March 17, 2021 — management decision was due September 17, 2021.
FAC accepted this audit on March 31, 2020 — management decision was due October 1, 2020.
FAC accepted this audit on February 18, 2019 — management decision was due August 18, 2019.
FAC accepted this audit on April 25, 2018 — management decision was due October 25, 2018.
FAC accepted this audit on March 19, 2017 — management decision was due September 19, 2017.
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