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Federal Agency: Department of Education Federal Program: Education Stabilization Fund Program Assistance Listing: 84.425U Pass-through Agency: Michigan Department of Education Grant Number(s): 213713 Project 2122 Criteria: Wage Rate Requirements states that for construction contracts in excess of $2,000 non-federal entities notify contractors and subcontractors about the Department of Labor prevailing wage rate requirements. Additionally, non-federal entities are required to obtain copies of certified payrolls for contractors and/or subcontractors. Cause: The window replacement project at the Middle School was originally bid with the intention of using bond funds to pay for all costs. Use of Education Stabilization Funds was made after the construction contract was executed. Effect: The School District is not in compliance with the Wage Rate Requirements. Perspective: Although the prevailing wage clause was not included in the construction contract, the contractor hired is a union contractor and does pay at or above the required wage rates set by the Department of Labor. Recommendation: Prior to using federal dollars to fund any project, all the applicable compliance requirements should be reviewed to ensure the School District remains in compliance with federal standards related to the grant. Management Response: See separate Corrective Action Plan.