Office of Inspector General

Fiscal Year 2008 Work Plan

Turning Resources into Results

 Introduction from the Inspector General
I am pleased to provide the U.S. Department of Education (Department) Office of Inspector
General (OIG) Work Plan for fiscal year (FY) 2008. This Work Plan presents the major
initiatives and priorities this office intends to undertake to assist the Department in fulfilling
its mission to the American public.

Our FY 2008 Work Plan details the assignment areas and resources we plan to devote to
evaluations of the efficiency, effectiveness, and integrity of Department programs and
operations, and also to help identify emerging risks and vulnerabilities. It lays out how we
will turn our resources into results. The proposed work reflects our knowledge of the
Department’s initiatives and our understanding of the statutory and regulatory requirements
of federal education programs. It also incorporates suggestions from Department leaders and
staff, the Office of Management and Budget, and members of Congress. The efforts are
focused on helping the Department exercise improved stewardship of the taxpayer dollars
with which it has been entrusted by identifying and proposing actions to eliminate waste,
fraud, and abuse in federal education programs.

While this Work Plan provides a framework for activities we plan to coordinate in FY 2008,
we retain the flexibility to divert resources to other priorities as they arise. Often, the OIG is
assigned tasks from external sources, such as new legislative mandates, Congressional
hearings and inquiries, Department requests, or government-wide reviews. These tasks are
usually nondiscretionary and unplanned. Whether we are examining an issue on our agenda
or a new, unplanned assignment, we will strive to reach our goals and turn our resources into
results.

This Work Plan presents a balanced and challenging blueprint for action that I believe will
enable us to make a significant contribution to the Department and to our nation’s education
system in FY 2008. America’s students and taxpayers deserve nothing less.

John P. Higgins, Jr.

 Fiscal Year 2008 Work Plan
The mission of the U.S. Department of Education (Department) Office of Inspector General
(OIG) is to promote the efficiency, effectiveness, and integrity of the Department’s programs
and operations. We accomplish this mission by providing independent and objective
assistance to the Department in ensuring continuous improvement in program delivery,
effectiveness, and integrity.

To help achieve our mission, we have created a five-year Strategic Plan that establishes three
overarching goals: to improve the Department’s programs and operations; to protect the
integrity of the Department’s programs and operations; and to ensure quality and excellence
in our organization. While our Strategic Plan presents our long-term vision and framework
for action, we produce annual Work Plans that demonstrate how the Strategic Plan will be
implemented. Each Work Plan presents the audit, inspection, and investigative initiatives and
priorities the OIG intends to conduct in a particular fiscal year (FY).

This document presents our Work Plan for FY 2008, where we intend to focus our resources
in six high-priority areas: (1) student financial assistance programs and operations; (2)
information security and management; (3) new programs/programs nearing reauthorization;
(4) grant and contract awards, performance, and monitoring; (5) data integrity; and (6)
human resources. We will also conduct the work we are required to perform annually by
statute and other authority. The chart below projects how OIG resources will be allocated
among these areas in FY 2008, which is followed by a synopsis of the work we plan to
perform in each of these priority areas.

Total Resources by Priority Area

Student Financial Assistance
Program s - 36%
Inform ation Security and
11% Managem ent - 8%
4%
New Program s/Program s
8% 36% Nearing Reauthorization - 7%
Grants and Contracts - 26%

Data Integrity - 8%

26% Hum an Resources - 4%

8%
7%
Required Work - 11%

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FY 2008 Work Plan Priority Areas

1. Student Financial Assistance Programs and Operations

Due in part to OIG findings that disclosed weaknesses and potential conflicts of interest, the
Department’s student financial assistance programs have come under the scrutiny of
Congress, state governments, and the media. With over 6,000 postsecondary institutions,
more than 3,000 lenders, 35 guaranty agencies, $77 billion in awards, and an outstanding
loan portfolio of over $400 billion, the Department must ensure that all entities involved in
the programs are adhering to statutory and regulatory requirements. As the office responsible
for administering the student aid programs, Federal Student Aid office (FSA) must provide
adequate oversight and demand accountability from its staff, program participants, and
contractors to help protect these dollars from waste, fraud, and abuse. Planned work in FY
2008 will focus on:

• Internal controls within FSA;

• Management of information technology (IT) assets and IT security;
• Oversight of the lenders and other participants in the student aid programs;
• Safeguarding student information;
• Selected high-risk recipients - institutions and other entities; and
• Special allowance payments.

2. Information Security and Management

Each federal agency must develop, document, and implement an agency-wide program to
provide security for the information and information systems that support the operations and
assets of the agency, including those provided or managed by another agency, contractor, or
other source. Concerns over several government agencies’ abilities to provide effective
information security and protect critical data have been voiced by Congress, and fueled by
numerous media accounts of security breaches, missing data, or inappropriate access to
government data by outside sources. In recent years, our work has identified weaknesses in
the Department’s information security, and we have noted concerns regarding the
Department’s overall management of its IT systems and resources. During FY 2008, OIG
will continue to look into issues associated with information security and management,
including protecting the data in the Department’s systems from inappropriate use and
intrusion. Planned work includes:

• Compliance with Federal Information Security Management Act requirements;

• IT system security controls at the Department and FSA;
• Integration of information systems; and
• Management of data centers and IT infrastructure.

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3. New Programs/Programs Nearing Reauthorization

In any given year, Congress creates new federal education programs, or is tasked with
reauthorizing a specific education law, including multi-billion dollar legislation such as the
Elementary and Secondary Education Act of 1965 (ESEA), as amended by the No Child Left
Behind Act of 2001 (NCLB), the Higher Education Act of 1965 (HEA), or the Individuals
with Disabilities Education Act (IDEA). As states, schools, students and their families, and
others rely on the numerous programs and funding allotted through these education
programs, it is critical that the Department ensures the programs are operating effectively and
efficiently. By examining new programs, OIG can alert the Department to potential areas of
risk, concern, or mismanagement early in the implementation of the program. This provides
the Department with the opportunity to change its course, or implement safeguards to protect
against waste, fraud, or abuse. Reviewing programs nearing reauthorization also allows OIG
the opportunity to determine if any statutory changes are needed to make the programs more
productive – and to do so in time to recommend that changes be incorporated into the
reauthorization process. In FY 2008, OIG plans to examine several multi-million dollar
education programs to ensure they are operating as Congress intended and that the funds are
reaching the intended recipients, and to determine whether the funds are being used for
allowable purposes. The programs we plan to review include:

• Selected IDEA programs and participants;

• Academic Competitiveness Grants and National Science and Mathematics Access to
Retain Talent (SMART) Grants; and
• Selected Adult Education and Family Literacy Act programs.

4. Grant and Contract Awards, Performance, and Monitoring

The success of an organization’s mission and the achievement of its goals depend on how
well it manages its programs, and it cannot effectively manage its programs without
establishing and maintaining appropriate accountability. Our recent audits, inspections, and
investigations of the Department and its grantees and contractors continue to uncover
problems in this area, including providing oversight and monitoring grantee performance,
identifying and taking corrective action to detect and prevent fraudulent activities by
grantees, ensuring that procurement and contract management processes result in high quality
goods and services, and preventing and correcting improper payments. In FY 2008, OIG will
continue to review issues of grant and contract awards, performance, and overall monitoring
to help ensure that the Department is implementing effective internal controls and holding
grantees and contractors accountable to the Department and ensuring their compliance with
the terms of their agreements. Planned work includes reviews of:

• Selected high-risk grantees;

• Selected contracts and contractors;
• Monitoring of subcontractors, subgrant recipients; and
• Compliance with federal procurement requirements by selected state educational
agencies and local educational agencies.

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5. Data Integrity

Data integrity is both a compliance issue and a performance issue. For example, the ESEA,
which ties funding directly to student achievement and accountability, requires states to
report on performance in many areas. Numerous programs within the HEA and IDEA
require similar reporting. The utility of this reporting, and ultimately funding decisions,
depend on the collection of reliable data. Without reliable data, the Department cannot make
effective decisions on its programs, or know if the funds it disburses are indeed reaching the
intended recipients. For FY 2008, OIG will continue to examine this issue, focusing on
whether the information reported to the Department, as well as the information reported by
the Department, is accurate and reliable. Planned efforts include:

• Determination of improper payments;

• Controls over data quality;
• Implementation of Office of Management and Budget Circular A-123; and
• Program Assessment Rating Tool process.

6. Human Resources

Like most federal agencies, the Department will see a significant percentage of its workforce
eligible for retirement in 2008. The Department is also continuing to see a significant change
in critical skill requirements for many of its staff. Identification of needed action steps and
prompt implementation of action items to adequately address these workforce and succession
planning issues, including recruitment, hiring, and retention, is critically important. The
Department has already committed considerable time and resources to prior human resources
(HR) initiatives – One-ED and the HR Most Efficient Organization – from which significant
results were not achieved. For FY 2008, OIG will continue to review this area, with a
planned focus on:

• Human capital planning;

• Recruitment, hiring, and retention actions; and
• Selected benefits programs.

7. Required Work

The OIG is required to perform specific reviews each year, as well as test the quality of non-
federal audits, and provide guidance to the audit community. Below is a list of the required
reviews and other work we will conduct in FY 2008.

• Financial statement audits – Department and FSA;

• Special purpose financial statement;
• Accounting for drug control funds;
• Department intragovernmental activities and balances;
• Quality reviews of single audits;

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• Preparation and issuance of audit guidance for non-federal auditors; and
• Technical assistance and cognizant agency activities for audit functions.