FY 2004

Performance and
Accountability
Report

U. S. Department of Education
November 12, 2004
11/10/04 DRAFT
Contents

U.S. Department of Education

Rod Paige
Secretary

Office of the Under Secretary

Edward R. McPherson
Under Secretary

Strategic Accountability Service Office of the Chief Financial Officer

Hugh Walkup Jack Martin
Director Chief Financial Officer

November 2004
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Department of Education, U.S. Department of Education FY 2004 Performance and Accountability
Report, Washington D.C., 2004.

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FY 2003 Performance and Accountability Report—U.S. Department of Education iii

 MESSAGE FROM THE SECRETARY

FY 2004 Performance and Accountability Report—U.S. Department of Education iii

In our tradition of quality reporting,
the Department of Education
proudly presents this
FY 2004 Performance and
Accountability Report.
 CONTENTS

Page

Message from the Secretary......................................................................................................... ..................iii

MANAGEMENT’S DISCUSSION AND ANALYSIS

The Journey from Access to Excellence................................................................................................. .........2

Department at a Glance......................................................................................................................... ..........5
Our Mission.............................................................................................................. ............................5
Our Customers: Students, Parents, Schools, and Postsecondary Institutions............................... .........5
Organization and History............................................................................................. .........................6
Civil Rights Enforcement........................................................................................................... ...........7
Performance Highlights......................................................................................................................... ..........9
Goal Overviews.................................................................................................................................. ...9
Strategic Planning and Reporting..................................................................................... ...................11
Integration of Performance with Budget and Finance................................................. ........................12
Financial Highlights.......................................................................................................................... .............14
Overview..................................................................................................................................... ........14
Departmental Management....................................................................................... ..........................14
Lines of Business........................................................................................................ ........................14
Financial Position....................................................................................................................... .........15
Future Trends.............................................................................................................. ........................17
Management Challenges............................................................................................. ........................18
Improper Payments Information Act of 2002: Narrative Summary of Implementation Efforts for
FY 2004 and Agency Plans for FY 2005–FY 2007.................................................................... .....19
Management Controls.................................................................................................................................. ..22
Federal Managers’ Financial Integrity Act............................................................... ...........................22
Education’s Scorecard on the President’s Management Agenda...................................... ...........................24

PERFORMANCE DETAILS

Goals and Objectives.................................................................................................................................... ..26

How the Department Reports Performance Results....................................................... ............................27
Goal 1: Create a Culture of Achievement............................................................................................ ........29
Goal 2: Improve Student Achievement.............................................................................................. ..........43
Goal 3: Develop Safe Schools and Strong Character............................................................................ ......65
Goal 4: Transform Education into an Evidence-Based Field.......................................................... ...........75
Goal 5: Enhance the Quality of and Access to Postsecondary and Adult Education................................ 83
Goal 6: Establish Management Excellence.......................................................................................... ......101

FY 2004 Performance and Accountability Report—U.S. Department of Education v

Contents

Page

FINANCIAL DETAILS

Financial Summary....................................................................................................................... ...............110

From the Chief Financial Officer............................................................................................... .................111
Principal Financial Statements................................................................................................................. ...113
Notes to Principal Financial Statements............................................................................................ .........120
Required Supplementary Stewardship Information......................................................... ........................149
Required Supplementary Information................................................................................ .......................157
Report of Independent Auditors........................................................................................ .........................163

OTHER STATUTORILY REQUIRED REPORTS

Report to Congress on Audit Follow-up................................................................................. ....................182

Credit Management and Debt Collection Improvement Act......................................... ...........................182

APPENDIXES

A: Performance Data Tables...................................................................................................................... .185

B: Performance Data Quality and Timeliness ................................................................................... .......225
C: Sample Program Performance Report................................................................................ .................231
D: Improper Payments Act of 2002..................................................................................................... .......233
E: Management Challenges............................................................................................................ ............241

GLOSSARY

Glossary of Acronyms................................................................................................................ ..................249

LIST OF FIGURES

Management’s Discussion and Analysis

Department of Education Organization Chart............................................................................... .....................7
FY 2004 Discrimination Complaints........................................................................................................... .......8
Total Assets vs. Total Liabilities............................................................................................................... ........16
Net Cost by Fiscal Year........................................................................................................................ ............16
E-Government Operations Model............................................................................................ ........................17

Goal 1
Status of States in Meeting Adequate Yearly Progress (AYP) in Title I Schools........................ ......................32
Twelve States Meet 2005–06 Assessment Requirements Two Years Ahead of Schedule.................................33

Goal 2
Approximate FY 2004 Expenditures that Supported Goal 2...................................................... ......................45
Course-Taking Levels Over Time..................................................................................................................... 49
Use of Teacher Quality Grant Funds, District Level, 2002–03................................................................ .........56

vi FY 2004 Performance and Accountability Report—U.S. Department of Education

 Contents

Page
Goal 3
Approximate FY 2004 Expenditures that Supported Goal 3...................................................... ......................67
Rate of Serious Crimes and Victimization Involving Youth Ages 12 to 17, 1991–2002........................... ........67
Trends in Drug Use: Grades 8, 10, and 12: Any Illicit Drug Use in the Last 12 Months..................... ...........68
Students Who Did Not Go to School on One or More of the Last 30 Days
Because They Felt Unsafe at School or on Their Way to or from School........................................ ............71

Goal 4
Approximate FY 2004 Expenditures that Supported Goal 4...................................................... ......................77
Number of Months Before Initial Release of NAEP Results................................................................. ...........79

Goal 5
Approximate FY 2004 Expenditures that Supported Goal 5...................................................... ......................85

FY 2004 Performance and Accountability Report—U.S. Department of Education vii