Description: Tags: Mda
Description: Tags: Mda
Discussion
Our Mission
Historically, the Department’s mission has and ensure that every child has the opportunity to
been “to ensure equal access to education and learn and to reap the benefits of a high quality
to promote educational excellence throughout education.
the nation.” Nearly five years after the
Our nation’s schools are the foundation for an
enactment of the No Child Left Behind Act of
economic engine that helps ensure we are a country
2001, this mission requires the Department to
with educated citizenry, full employment, and the
focus on achieving academic proficiency by
ability to be fully competitive in the international
2014, increasing the rigor of mathematics and
marketplace.
science curricula, improving American
competitiveness, and providing access to To maintain our national competitiveness we must
higher education for all. have world-class higher education and continuous
learning systems. These systems derive from a
Of the many services that government
secondary education system that graduates high
provides to its citizens, few are as far-
school students with advanced mathematics and
reaching as education. Every community
science skills. Students with these skills are the
throughout America has schools that provide
product of rigorous mathematics and science
instruction in reading, writing, mathematics,
programs in elementary schools. These programs
and science, as well as immersion in
focus on inclusion of all students in challenging
American history and culture. Most
Our Customers
Every American has a stake in the nation’s education success.
The Department’s customers include child’s test results and whether their child’s school
American taxpayers, students, teachers, is making adequate yearly progress. If a school
parents, postsecondary students, institutions, does not make progress, parents can choose to have
and global citizens. When No Child Left their child transferred to another school. The
Behind took effect, the government following year if the school does not make
intensified its commitment to the students of progress, parents are informed and students are
America’s elementary and secondary schools. provided supplemental education services.
The act benefits children, empowers parents,
Teachers
supports teachers, and strengthens schools.
According to the 2004 School and Staffing Survey,
Elementary and Secondary Students there were 3.3 million public school teachers and
According to the Department’s report, The 87,621 principals working in 15,500 school
Condition of Education 2006, there are signs districts throughout the country. No Child Left
of improved achievement at the elementary Behind includes provisions stating that all teachers
and secondary levels. U.S. fourth-grade in core academic areas must be highly qualified in
students had higher average scores in reading the core academic subjects they teach by the end of
literacy than the international average as the 2005–06 school year. In general, a highly
measured in the 2001 Progress in qualified teacher must have a bachelor’s degree,
Management’s Discussion and Analysis
International Reading Literacy Study. Thirty- full state certification as defined by the state, and
five countries participated, and the U.S. demonstrated competency as defined by the state in
students had a higher average than 23 of the each core academic subject he or she teaches.
other 34 countries that participated.
Postsecondary Students and Institutions
In mathematics and science, the U.S. More students are enrolling in colleges and getting
demonstrated mixed results. U.S. fourth- degrees, and the enrollment increase is projected to
grade students showed no measurable change continue through 2015. The number of bachelor’s
in performance in the 2003 Trends in degrees awarded increased by 33 percent between
International Mathematics and Science Study, 1989–90 and 2003–04, while the number of
while eighth-graders’ performance improved. associate’s degrees increased by 46 percent.
The standings of fourth-graders actually Female college enrollment passed male enrollment
declined in both mathematics and science in 1978, and the gender gap has widened and is
relative to students from the 14 other expected to grow.
countries that participated in both the 1995
and 2003 assessments. To help students who could not otherwise afford
postsecondary education, the Department provides
Since the inception of the Individuals with assistance through various programs such as the
Disabilities Education Act, the number and Federal Family Education Loan Program, the
percentage of youth aged 3–21 enrolled in Federal Direct Loan Program, the Pell Grant
public schools who receive special education Program, the Perkins Loan Program, and the
services have steadily increased. In 2004–05, Federal Work-Study Program, authorized under
more than 6.7 million youth aged 3–21 were Title IV of the Higher Education Act. In 2006, the
served under the act. Department’s office of Federal Student Aid
Parents delivered approximately $77 billion in aid to more
than 10 million students attending over
The provisions of No Child Left Behind have
6,100 institutions.
made schools more accountable to parents
and provided parents with information about
their children and what they should expect
from their schools. No Child Left Behind
requires that parents be informed about their
Legend
B. Number of states that have mathematics assessments that align with the state’s
academic content standards for all students in grades 3–8 and in high school. [1202] √ r r
C. Number of states that have science assessments that align with the state’s academic Dec.
NA NA
content standards for all students in grades 3–8 and in high school. [1203] 2007
D. Number of states that have completed field testing of the required assessments in
reading/language arts. [1204]
NA + √T
E. Number of states that have completed field testing of the required assessments in
mathematics. [1205]
NA + √T
F. Number of states that have completed field testing of the required assessments in
science. [1206]
NA NA +
1.2 – Increase flexibility and local control
A. Percentage of eligible school districts utilizing the Rural Education Achievement Program Apr.
flexibility authority. [1473] r r 2007
B. Overall American Customer Satisfaction Index as scored by Department grantees. [2200] NA √ r
1.3 – Increase information and options for parents
A. Number of charter schools in operation around the nation. [1146] r + +
B. Amount of funding program grantees’ leverage for the acquisition, construction or Feb.
renovation of charter school facilities. [1208] r + 2007
B. Percentage of students with disabilities who drop out of school. [1528] Aug.
NA + 2007
C. Number of Advanced Placement tests taken by low-income public school students Jan.
NA NA
nationally. [1149] 2007
2.4 – Improve teacher and principal quality
A. Percentage of core academic classes in high-poverty schools taught by highly qualified Dec.
teachers. [1180]
NA √ 2007
B. Percentage of core academic classes in elementary schools taught by highly qualified Dec.
teachers. [1182] + + 2007
C. Percentage of core academic classes in secondary schools taught by highly qualified Dec.
teachers. [1183] + + 2007
Strategic Goal 5 – Enhance the Quality of and Access to Postsecondary and Adult Education
5.1 – Reduce the gaps in college access and completion among student populations differing
by race or ethnicity, socioeconomic status, and disability while increasing the educational
attainment of all
A. Percentage of TRIO Educational Opportunity Centers participants enrolling in college. Dec.
[1612] + r 2007
In FY 2006, the Department of Education The Hurricane Education Recovery Act also
administered over $77 billion in new grants, loans, authorized the Secretary, under certain
and work-study assistance to help over 10 million circumstances, to waive or modify any statutory or
students and their families pay for college. In regulatory provision applicable to the student
addition to student financial assistance, the financial assistance programs under Title IV of the
Department provides continuing support for Higher Education Act, as amended. The Secretary
institutional development at colleges and determined that institutions in the impacted areas in
universities serving large percentages of minority possession of Title IV funds awarded to students
students and funds opportunities for postsecondary enrolled for the disrupted academic period will,
students to gain international expertise and training generally, not be required to return funds for the
as language and area specialists. students who withdrew or never began attendance.
The aid related to this waiver was approximately
Hurricane Relief $28 million.
On December 30, 2005, President Bush signed into As of September 30, 2006, over $230 million had
law the Hurricane Education Recovery Act. This been expended from the Emergency Impact Aid for
act provided $1.4 billion to help school districts Displaced Students program for restart aid. This
and schools meet the educational needs of students funding was intended by the Congress for expenses
displaced by Hurricanes Katrina and Rita. The related to the restart of school operations, the
funding provided under the act also helped schools reopening of and the re-enrollment of students in
Disability
52%
Other** 11%
Race/
National
Origin 17%
Multiple 13%
Sex 6% Age 1%
Data Quality
Complete, accurate, and reliable data are using well-organized and methodologically
essential for effective decision-making. State rigorous techniques.
and local educational agencies have
• Internal—After the data files have been
historically provided education performance
submitted by the state educational agencies,
data that do not fully meet information
data will be validated through electronic and
quality standards. With the passage of the No
human subject matter expert review processes.
Child Left Behind Act, the accuracy of state
and local educational performance data is These data quality control procedures and
even more crucial. Funding decisions are checkpoints ensure both the quality of the data and
made and management actions are taken on that reports produced by EDFacts will be accurate
the basis of this performance information. and timely.
Reliable information is a prerequisite for
To remedy the challenges faced in the collection of
effective management. However, ensuring
data, EDFacts is undergoing a rigorous assessment
that data are high quality is not solely the
to determine the best course of development for the
responsibility of our grantees.
further enhancement of the data quality control
processes. Once this assessment is completed and
Performance Data the recommended options selected, the data quality
• Access to financial data related to accuracy and reliability of data for No Child Left
program management and monitoring. Behind reporting, integrated performance-based
budgeting and general program management. In
Federal Student Aid. Federal Student Aid is
addition to completeness, accuracy and reliability,
improving systems to yield reliable
the Department acknowledges the need for
performance data to make informed budget
improvements in the timeliness of data. Currently,
and policy decisions. These systems will
data time lags between 12 and 24 months exist for
enhance the budget process and increase the
some performance data. The Department expects
accuracy and reliability of information
that the implementation of EDFacts will help to
received from operating partners.
reduce the reporting burden on state and local
educational agencies, resulting in an improvement
Department Data Quality in the timeliness of data.
The Department itself also develops and uses
data. One of the most visible areas in which The Department also produces financial data for
this occurs is the annual budget development official submission to the Congress, the Office of
process. One goal of the budget process is to Management and Budget, and other federal
use program performance data in the authorities as mandated in the Government
formulation and execution of the Performance and Results Act. The data quality
Department’s budget. One of the five processes for financial data are reflected in our
government-wide elements of the President’s audit report and management’s internal control
Management Agenda is the integration of over financial reporting assessment. The financial
Management’s Discussion and Analysis
budget and performance, which focuses on statements, associated notes, and auditor’s reports
making budget decisions based on results. can be found on pp. 91-155, which include the
required Limitations of the Financial Statements.
The Department recognizes the benefits of Management’s Assurance of internal control can be
and need for improving the completeness, found on p. 24.
Financial Highlights
In order to support state and school districts programs. Postsecondary grants and administration
in providing quality education, the Office of of student financial assistance accounted for
the Chief Financial Officer is responsible for 58 percent, including loan programs costs that
providing accurate, timely, and useful grant, helped more than 10 million students and their
loan, contract, and financial management parents to better afford higher education during
information to all Department stakeholders. FY 2006. An additional 5 percent went toward
other programs and grants encompassing research,
The Department continues to enhance the
development, and dissemination, as well as
model for what constitutes a high-quality
rehabilitation services. Administrative
financial reporting environment. This model
expenditures are less than 2 percent of the
will result in financial reports that reflect the
Department’s appropriations.
underlying economics of the business in a
comparable, consistent fashion. The model Nearly all the Department’s non-administrative
emphasizes transparency as the method to appropriations support three primary lines of
facilitate the free flow of information to business—grants, guaranteed loans, and direct
decision-makers and stakeholders. loans. The original principal balances of the
Federal Family Education Loans and Federal Direct
The Department consistently produces
Student Loans, which compose a large share of
accurate and timely financial information that
$214.4
$250
$186.6
$157.3 $172.6 $167.6
$200 $145.4 $143.7
Billions
$117.8 $128.3
$110.1
$150
$100
$50
$0
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006
Total Assets Total Liabilities
Statement of Net Cost. The Statement of Net The Department considers Strategic Goal 1,
Cost presents the components of the Create a Culture of Achievement, a synopsis of
Department’s net cost, which is the gross cost the four pillars on which educational excellence
incurred less any revenues earned from the is established. Strategic Goal 6, Establishing
Department’s activities. The Statement of Net Management Excellence, emphasizes
Cost is presented to be consistent with the administrative and oversight responsibilities.
Department’s strategic goals and the President’s These two strategic goals support the
Management Agenda. The Department’s total Department’s programmatic mission, and as a
program net costs, as reflected on the Statement result, we do not assign specific program costs
of Net Cost, p. 96, are $96.8 billion, a 29 percent to either of them for presentation in the
increase over FY 2005. The following chart Statement of Net Cost.
provides a detailed crosswalk of the
Department’s Net Cost programs linking them to Net Cost by Fiscal Year
Strategic Plan Goals 2 through 5.
$100
$96.8
$80
Goal $75.2
$60
Billions
Net Cost Program No. Strategic Goal $58.8 $63.6
$49.8
Competitive Sourcing G G G G
Initiatives
Human Capital Y G Y G
E-government Y G G G
Budget-Performance Integration Y G G G
In response to the Office of Management and Improper Payments. Identifying and correcting
Budget’s recent addition of an Improved improper payments remains a challenge for the
Credit Management Scorecard, the Department. It has increased its participation in
Management’s Discussion and Analysis
Department continues to improve its financial performing monthly monitoring site visits for the
management. This fiscal year, the Titles I and III of the Elementary and Secondary
Department has done the following with Education Act programs at various state and local
respect to credit management: educational agencies.
• Defined target borrower segments. The Department also enlists the assistance of
• Improved its lending policies and outside resources to perform risk analysis of its
procedures. programs. Recent analysis indicates that the Title I
programs were not at risk of exceeding the
• Established cost control estimates. 2.5 percent threshold that requires a statistical
review. The student financial assistance program
Management Challenges Identified by initiatives are continuing and the Deparment is
the Inspector General working with other government agencies to
conduct studies and utilize statistical sampling.
Other current and future management
challenges include those identified by the Procurement. The Department’s procurement and
Inspector General in the annual report to contract management processes continues to face
improve departmental efficiencies. These challenges. However, in FY 2006, the Department
recommendations are provided in the Other issued new procedures that required that contract
Accompanying Information section of this monitoring plans be developed for all new and
report (see pp. 175-180). The existing contracts.
recommendations include: improving
oversight and management of programs by Information Security. Information security
establishing and maintaining appropriate continues to be a concern throughout the
internal control accountability, identifying government and in the Department. The
and correcting improper payments, improving Department works to improve security controls to
procurement and monitoring of contracted protect the confidentiality, integrity and availability
services, human capital planning, and of its data and systems as noted in the Management
managing information security and Assurance section of this report (see p. 24). The
technology investments. Department has continued efforts to strengthen
individual business cases and to map proposed
Management’s Assurances
not expect that our disclosure on controls over
Federal Managers’ Financial Integrity financial reporting will prevent all errors and all
Act fraud. A control system, no matter how well
As required under the Federal Managers’ conceived and operated, can provide only
Financial Integrity Act, the Department reasonable, not absolute, assurance that the
reviewed its management control system. objectives of the control system are met. Further,
The objectives of the management control the design of a control system must reflect the fact
system are to provide reasonable assurance that there are resource constraints. The benefits of
that the following occur: the controls must be considered relative to their
• Obligations and costs are in compliance associated cost. Because of the inherent limitations
with applicable laws. in a cost effective control system, misstatements
due to error or fraud may occur and not be
• Assets are safeguarded against waste, detected.
loss, unauthorized use, or
misappropriation. Federal Financial Management Improvement
• The revenues and expenditures applicable Act
to agency operations are properly The Secretary has determined that the Department
Furthermore, the Department fully research, manage, remediate and monitor for
understands the risks inherent in operating vulnerabilities and security exposures. This
information resources in the presence of remediation cycle can be an extended process for
common vulnerabilities and security any particular vulnerability and as a result, at any
exposures. To assist in the management of given time as they await remediation,
the potential risks, the Department has vulnerabilities may be present in any networked
implemented proactive processes to identify, environment, including the Department’s.
Management for the Department of Education is responsible for establishing and maintaining
effective internal control and financial management systems that meet the intent and
objectives of the Federal Managers’ Financial Integrity Act (FMFIA). I am able to provide a
qualified statement of assurance that the Department’s internal control structure and financial
management systems meet the objectives of FMFIA, with the exception of two material
weaknesses. The details of these exceptions are provided in Exhibit 1.
The Department conducted its assessment of internal control in compliance with applicable
laws and regulations, and in accordance with the Office of Management and Budget’s
Management’s Discussion and Analysis
Circular No. A-123, Management’s Responsibility for Internal Control. Based upon the
results of this evaluation, the Department identified two material weaknesses in its internal
control over the effectiveness and efficiency of operations, and compliance with applicable
laws and regulations, as of September 30, 2006. Other than the exceptions noted in Exhibit 1,
the internal controls were operating effectively, and no material weaknesses were found in
the design or operation of the internal controls.
In addition, the Department conducted an assessment of the effectiveness of internal control
over financial reporting, which includes safeguarding of assets and compliance with
applicable laws and regulations, in accordance with the requirements of Appendix A of the
Office of Management and Budget’s Circular No. A-123, Management’s Responsibility for
Internal Control. Based on the results of this evaluation, the Department of Education can
provide reasonable assurance that its internal control over financial reporting as of June 30,
2006, was operating effectively and that no material weaknesses were found in the design or
operation of the internal control over financial reporting.
/s/
November 15, 2006
Material Anticipated
ID Weakness Description Corrective Action Correction Date
1 Information Instances of inadequate security controls, The Office of the Chief Information Officer Corrective actions are
Technology including password protection, encryption, (OCIO) is implementing a number of currently being implemented,
Security and intrusion detection. mitigating actions to correct information and are expected to be
technology security deficiencies found in completed by September 30,
(FISMA)
management, operational and technical 2007.
control controls.
2 Program In two programs, the Reading First and the The Office of Elementary and Secondary
Management Migrant Education programs, the Department Education is implementing compensating
Control identified possible instances of lack of proper controls to correct or mitigate weaknesses
controls and management oversight in in both programs.
several past years in the implementation of
the programs.
With regard to the Migrant Education Corrective actions are
program, the Office of Migrant Education is currently being implemented,
implementing compensating controls to and most actions will be
correct or mitigate weaknesses. States are completed by December 31,
submitting new information related to 2007. Some of the corrective
eligibility based on appropriate controls. actions have been completed,
Corrective actions, including the repayment including the return of
of funds, including the return of $13.6 million from Puerto Rico;
$13.6 million from Puerto Rico, are currently further repayments from other
being implemented. states may take one year or
more to complete.
With regard to the Reading First program, Many corrective actions are
the Department is implementing corrective being implemented currently,
actions to address all of the and will be completed by
recommendations made by the Office of December 31, 2006; all
Inspector General in an inspection report, corrective actions are
and is also making additional expected to be completed by
improvements. December 31, 2007.
Federal Student Aid operates and administers Programs and Direct Loan Program),
the majority of the Higher Education Act of representing 98.7 percent of Federal Student
1965, as amended, Title IV Student Assistance Aid’s FY 2005 outlays.
(Title IV) programs for the Department. In
FY 2006, nearly $77 billion was provided to The following Title IV programs were identified
students and families to help them overcome the as potentially susceptible to risk: Federal
financial barriers that make it difficult to attend Family Education Loan Program, Federal Pell
and complete postsecondary education. Federal Grant Program, Campus-based programs, the
Student Aid administers a variety of grants, William D. Ford Federal Direct Loan Program,
loans, and loan guarantees through its financial Loan Consolidations, and the Academic
assistance programs. The processes developed Competitiveness and SMART Grant program. A
to administer the programs are responsive to detailed discussion of each of these programs
changes in statutes, the reauthorization of can be found in the Improper Payments Details
existing statutes, and the changing needs of section of this Performance and Accountability
educational institutions and their students. Report on pp. 158-171.
Title IV student assistance programs are large The following table provides the outlook for
and complex. Federal Student Aid relies on over three of the primary Federal Student Aid
6,100 eligible postsecondary institutions, 3,200 program estimates.
lenders, 35 loan Guaranty Agencies, and a
Federal Student Aid Improper Payment Reduction Outlook Fiscal Years 2005 – 2009
($ in millions)
Actual Estimated
2005 2006 2007 2008 2009
Federal Student Aid Manager Accountability. mandatory one-day seminar for all Department
Federal Student Aid program managers are managers will provide a framework for
responsible for making recommended administering the improper payment controls
improvements and achieving quantifiable program utilizing applicable regulations,
savings. The Federal Student Aid Executive guidelines, and best practices. Part of this one-
Management Team monitors these efforts. The day training will focus on the utilization of the
Executive Management Team is composed of risk assessment criteria to properly assess the
key managers and is the executive decision- risk of improper payments in the Department’s
making body within Federal Student Aid. programs.
Further, the Office of Inspector General
conducts periodic audits of student aid programs Grant Program
and makes appropriate recommendations to Improper Payment Estimates
management and the Congress. %
Functional Program
2001 2002 2003 2004
Title I Programs
Education Research,
0.00 0.02 0.36 0.0
The Department performed a risk assessment of Statistics & Assessment
the Elementary and Secondary Education Act Elementary & Secondary
0.13 0.12 0.13 0.6
Title I Program, parts A, B, and D, during Education
FY 2006. The Erroneous Payments Risk English Language
0.00 0.02 0.10 0.1
monitoring process, beginning March 2005, to Safe & Drug-Free Schools 0.37 0.33 0.13 1.2
provide technical support regarding fiduciary
compliance. There were no findings in the Special Education 0.09 0.06 0.83 0.1
monitoring reviews with questioned costs that
contradicted the data in the risk assessment. Title I 0.04 0.16 1.19 0.2
Manager Accountability. In FY 2006, the Vocational & Adult
0.20 0.25 0.12 0.2
Department used a database of the Office of Education
Management and Budget Circular A-133 single
Total 0.06 0.04 0.16 0.4
audit findings to provide feedback to program
managers regarding the frequency and
distribution of findings within their programs.
This will assist the managers in tailoring their Remaining Grant Programs
program monitoring efforts to the type of During FY 2006, the Department instituted a
findings that most frequently occur. more detailed risk assessment of all its other
Additionally, a new grants monitoring training grant programs. The Department continued to
course is now offered and a post-audit follow-up work with the Department of Energy’s Oak
overview course is currently being developed to Ridge National Laboratory to perform data-
improve the usefulness of the Office of mining on information available in the Federal
Management and Budget Circular A-133 single Audit Clearinghouse’s Single Audit Database,
audits to the Department. the Department’s Grant Administration and
Payment System, and the Department’s Audit
The Department also plans to develop internal Accountability and Resolution Tracking System.
control training for managers that will focus on The Department is leveraging the results of the
controls to eliminate improper payments. The
thousands of single audits already being has also received repayment from Puerto Rico in
performed by independent auditors on grant the amount of $13.6 million, with further
recipients. repayments from other states anticipated over
the next year.
The Department sought to develop a
methodology to produce statistically valid With respect to the Reading First program, the
improper payment estimates that could be Department is implementing corrective actions
applied uniformly across non-Federal Student to address recommendations contained in the
Aid grant programs. This approach establishes a inspection report released September 29, 2006
level of quality control for all programs while by the Inspector General titled “The Reading
simultaneously producing a cost-effective First Program’s Grant Application Process.”
measure.
In FY 2006, the risk assessments were
Summary
performed at the program level to ensure that The Department of Education continues its
improper payment error rates are not masked by efforts to comply with the Improper Payments
large groupings or scope. The details of this Information Act. While there are still challenges
analysis are available from the Office of the to overcome, the Department has demonstrated
Chief Financial Officer upon request. in FY 2006 that it is committed to ensuring the
integrity of its programs. The Office of
Recovery Auditing Progress Management and Budget recognized our
progress in managing improper payments when
To effectively address the risk of improper
Management’s Discussion and Analysis