Finding No.: 2025-016 Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund 84.425A Education Stabilization Fund – State Educational Agency (Outlying Areas) Federal Award No.: S425A210003 Area: Special Tests and Provisions – Wage Rate Requirements Questioned Costs: $4,255,458 Views of Auditee and Corrective Actions GDOE concurs with the recommendation that controls over compliance with applicable Wage Rate Requirements should be strengthened. GDOE was not aware of the broader factors that would trigger the Davis-Bacon requirement. All the training and webinars GDOE program personnel attended iterated the requirement when federal funds are used for construction projects. However, GDOE does not concur with the determination that the entire $4,255,458 associated with the identified construction project constitutes questioned costs. GDOE acknowledges that the required certified payroll documentation was not maintained for the transactions identified in the finding. GDOE further acknowledges the need to strengthen its procurement and contract administration procedures to ensure that federally funded construction activities subject to applicable Wage Rate Requirements contain the required contractual provisions and that certified payroll documentation is obtained, reviewed, and retained. However, the absence of an executed construction contract and certified payroll documentation does not, by itself, establish that the entire amount paid to the vendor was unallowable or that workers performing the work were compensated below applicable wage requirements. Accordingly, GDOE believes that the questioned-cost determination should distinguish between the identified compliance and documentation deficiency and evidence demonstrating that the underlying expenditures were unallowable. GDOE will continue its efforts to obtain available certified payrolls, payroll records, and other supporting documentation from the contractor and will provide such documentation for consideration during audit resolution. Plan of action and completion date: GDOE will strengthen controls over federally funded construction projects subject to applicable Wage Rate Requirements. GDOE will: 1. Establish a documented determination of the applicability of Wage Rate Requirements for federally funded construction activities prior to solicitation, award, purchase order issuance, or commencement of work. 2. Ensure that solicitations, contracts, purchase orders, and other applicable procurement documents contain all required federal labor standards and Wage Rate Requirements provisions when applicable. 3. Require contractors and subcontractors subject to Wage Rate Requirements to submit required certified payroll documentation within the applicable timeframe during contract performance. 4. Designate responsible personnel to review certified payroll submissions for completeness and compliance and document evidence of the review. 5. Develop and implement a standardized compliance checklist for federally funded construction projects addressing Wage Rate Requirements, required contract provisions, certified payroll submissions, and related documentation. 6. Maintain certified payrolls, applicable wage determinations, contract provisions, compliance reviews, and other supporting documentation within the applicable procurement or contract file. 7. Provide guidance and training to Procurement, Federal Programs, project managers, contract administrators, and other personnel involved in federally funded construction activities regarding Wage Rate Requirements and documentation responsibilities. 8. Continue efforts to obtain the outstanding certified payrolls, payroll records, and other supporting documentation for the project identified in the finding and document the final resolution of the matter. Corrective actions will begin with immediate implementation for new federally funded construction activities subject to Wage Rate Requirements. Remediation of the transactions identified in the finding remains ongoing pending receipt and review of available contractor payroll documentation. Plan to monitor and responsible officials: Procurement Division, Federal Programs Division, applicable project/program managers and contract administrators, and Financial Affairs as applicable will be responsible for corrective action implementations and monitoring.