Thompson Letter on GPRA - Education
August 17, 1999
The Honorable Richard W. Riley
Secretary
Department of Education
600 Independence Avenue, SW
Washington, DC 20202
Dear Secretary Riley:
As you know, the Congress is focused on ensuring that the federal government delivers better results to its citizens and taxpayers. The Congress has enacted a statutory framework to achieve these results. This statutory framework includes the Government Performance and Results Act (GPRA); financial management statutes, such as the Chief Financial Officers Act; and information resources management statutes, such as the Clinger-Cohen Act. Each of these reforms aims at achieving more efficient and effective performance throughout the federal government.
As part of our oversight agenda, the Committee has developed information on how effectively the Department of Education (Education) is using the above statutory tools to improve its performance in several key areas such as becoming more results-oriented and resolving long-standing problems of fraud, waste, and mismanagement. The purpose of this letter is to share with you the information we have developed and obtain your response to certain questions pertaining to it. With this dialog as a start, we hope to work with you on a continuing basis to ensure that Education delivers the best possible results for the American people.
Performance Plan Assessment
The Congress continues to look closely at how well departments and agencies are implementing GPRA. At the request of this Committee and others, GAO recently completed an assessment of the Education annual performance plan for fiscal year (FY) 2000. According to GAO, Education’s FY 2000 plan shows "moderate improvement" in addressing the weaknesses in its FY 1999 plan.
Among the FY 2000 plan’s major strengths are: (1) its performance objectives and indicators are generally objective and measurable; (2) it includes baseline or trend data for most performance indicators; (3) it discusses the role of external factors on the Department’s ability to achieve its objectives; (4) it describes the limitations of its data and measures to verify the reliability of performance measures; (5) it describes specific validation and verification efforts; and (6) it shows how evaluations will be used to mitigate performance measurement shortcomings.
GAO found that the FY 2000 plan had four key weaknesses: (1) some performance measures do not sufficiently cover key aspects of performance; (2) it does not discuss coordination of specific programs with similar programs in other agencies; (3) it does not include separate discussions of how
capital assets, mission critical management systems, or human capital will support achievement of program results; and (4) it does not indicate how some data limitations will be resolved.
Overall, GAO found your Department’ plan to be among the more useful of the 24 agencies included in the GAO evaluation, for which you and your staff should be commended. For instance, GAO found that the FY 2000 plan provides a general picture of intended performance across the agency, provides a general discussion of strategies and resources to achieve its goals, and provides general confidence that agency performance information will be credible.
Need to implement audit recommendations on major management problems
One area where there have been too few results is solving major management challenges that seem to persist year after year at most agencies, including Education. An area of particular concern at Education is management and oversight of post-secondary student financial aid programs. Education has yet to fully implement GAO recommendations addressed to this high-risk problem area, including 12 recommendations detailed in the enclosure. One example is a GAO recommendation from March 1993 that Education follow up on questioned costs and other amounts owed based on reviews of guaranty agencies and lenders.
According to information provided to the Committee by your Inspector General (IG) and GAO, there are a number of open audit recommendations addressing other major management problems at Education as well. An enclosure describes many such unresolved recommendations by the IG, and another enclosure describes additional open GAO recommendations. Several of the IG recommendations propose ways to improve management of student financial aid.
Need for specific performance goals to address major management problems
It is essential that agency heads and other managers commit themselves to tangible steps that will lead to solutions for major management problems and that agency heads accept accountability for following through on these commitments. One obvious way to do this is to establish specific and measurable goals in your annual GPRA performance plans. In this regard, Office of Management and Budget (OMB) guidance for agencies on the preparation of their performance plans states:
performance goals for management problems should be included particularly for problems whose resolution is mission-critical or which could potentially impede achievement of program goals . . .
GAO recently evaluated the extent to which Education’s FY 2000 performance plan contains specific and measurable performance goals to address the high-risk and other most serious management problems confronting Education that GAO and your IG have identified. According to the GAO evaluation, which is detailed in the enclosures, Education’s plan has no specific goals for 7 of these 12 problem areas. Many of these problem areas relate to different aspects of student financial aid and have persisted for years.
It is disappointing to see so many management problems without specific goals and measures. Without such measures or goals, it is difficult, if not impossible, to assess progress in addressing major management problems and to hold agencies accountable.
Congressional Follow-Up
With so many tax dollars being wasted, this Committee expects agencies to take every opportunity to use the many tools available to them, such as GPRA plans, to resolve major management problems. Furthermore, the GAO and your own IG exist to work in partnership with you to solve longstanding issues of waste, fraud, and abuse.
I hope that the information provided with this letter will stimulate you to make greater use of these tools and resources. In this regard, I ask that you review the enclosed information and respond to the following questions:
C
Do you disagree with any of the GAO or IG recommendations described in the enclosures? If so, what is the basis for your disagreement?
C
Where you agree with the recommendations, what specific actions are you taking to implement each one and how long will it take to complete?
C
Do you disagree with any of the GAO or IG designations of management problems facing Education? If so, which ones and why?
C
Where you agree with the problem designations, are you prepared to establish specific and measurable commitments to address each one of them in your next performance plan?
C
If so, could you outline what approach you plan to take for each problem?
C
If you believe that any of these problems do not lend themselves to specific and measurable performance plan goals, please explain why. Please also explain what alternative steps you are taking to solve the problem.
I would appreciate your early attention to this letter. After receiving your response, I will ask Committee staff to arrange a meeting with your representatives to discuss it. My Governmental Affairs Committee staff contact is Robert Shea.
Sincerely,
Fred Thompson
Chairman
FT/rs
Enclosures
OPEN GAO RECOMMENDATIONS ON "HIGH RISK" AREAS: STUDENT FINANCIAL AID PROGRAMS
| Date | GAO Report | Recommendation |
| March 16, 1993
| AFMD-93-20 | The Secretary of Education should direct the Assistant Secretary Postsecondary Education to test billings from guaranty agencies and lenders as part of its internal reviews. |
| | The Secretary of Education should direct the Assistant Secretary Postsecondary Education to follow up on questioned costs and other amounts owed based on reviews of guaranty agencies and lenders within a designated period of time from the time findings are reported. |
| | The Secretary of Education should direct the Assistant Secretary Postsecondary Education to establish and maintain subsidiary ledgers for GSLP (now the Federal Family Education Loan Program). |
| | The Secretary of Education should direct the Assistant Secretary for Management and Budget/Chief Financial Officer and the Assistant Secretary Postsecondary Education to jointly develop procedures to ensure that the general ledger is periodically reconciled to subsidiary records maintained by Office of Postsecondary Education. |
| | As part of the study of the role of guaranty agencies in GSLP required by the 1992 amendments, the Secretary of Education should direct the Assistant Secretary for Postsecondary Education to develop a comprehensive plan for revising the role of guaranty agencies and the manner in which they are compensated. This plan should provide a clear explanation of the structure of guaranty agencies in relation to Education and recommendations as to where changes or modifications are needed. It should also include clear limitations and restrictions on the terms and conditions of any business activities that the guaranty agencies may undertake. |
| | The plan should also, where possible, include recommendations on: (1) revising the formula for reimbursing guaranty agencies from one that stresses the collection of defaulted loans to one that provides more effective incentives for prevention of defaults; (2) the need and benefits of the current number of guaranty agencies versus the benefits of consolidating the guaranty agencies: (3) the role of guaranty agencies in a direct loan program, if any; and (4) changes to current legislation that will allow Education to implement the plan and oversee the program effectively. |
| Sept. 9, 1993 | AIMD-93-33 | The Secretary of Education should direct the Assistant Secretary of Postsecondary Education and the Chief Financial Officer to coordinate efforts to develop a comprehensive strategy for determining the accuracy of information reported on lenders’ quarterly billings which would include developing objective criteria for selecting and reviewing lenders participating in FFELP. |
| | The Secretary of Education should direct the Assistant Secretary of Postsecondary Education and the Chief Financial Officer to coordinate efforts to monitor and follow up with lenders whose quarterly billings fail to meet Education’s internal automated edit checks and reasonability tests. |
| July 29, 1997 | AIMD-97-122 | Given the importance, cost, and magnitude of student financial aid and the information systems structure needed to support this aid, the Secretary of Education should direct the Department’s chief information officer to develop and enforce a Department wide systems architecture by June 30, 1998, that includes, but is not limited to: (2) a high-level description of the organization’s mission, functional requirements, information requirements, systems, and information flows among systems, and (2) specific information technology and communications standards and approaches that address critical hardware, software, communications, data management, security, and performance characteristics. |
| | Given the importance, cost, and magnitude of student financial aid and the information systems structure needed to support this aid, the Secretary of Education should direct the Department’s chief information officer to ensure that the developed systems architecture addresses the title IV systems integration, common identifiers, and data standards deficiencies. |
| | The Secretary of Education should direct that as of July 1, 1998, the Department’s information technology investments conform to the developed architecture and that funding for all projects be predicated on such conformance, unless careful, thorough, and documented analysis supports an exception. |
| July 11, 1995 | HEHS-95-89 | The Secretary of Education should take actions to improve the accuracy and completeness of student financial aid data, such as continuing to screen data entered into the National Student Loan Data Systems (NSLDS) to ensure that they are in a consistent format, and testing the accuracy and validity of data in NSLDS. Further, the Secretary should analyze student aid data more closely to identify patterns of noncompliance with federal requirements, such as following up on students identified as ineligible in the data matches, and take appropriate corrective actions. |
OPEN GAO RECOMMENDATIONS ON EDUCATION’s MAJOR MANAGEMENT CHALLENGES
Education’s Administrative Effort Is Inadequate to Ensure Access to Postsecondary Institutions While Protecting Federal Financial Interests
The Department of Education has had difficulty implementing and operating its new core financial management system. As a result, the preparation of the fiscal year 1998 financial statement and related audit have been delayed until Education completes reconciling general ledger data and resolves significant differences between the general ledger and other related information. Education did not meet the March 1, 1999, deadline for completing the fiscal year 1998 audit, and may not complete it until October 1999.
In addition to the two recommendations discussed in the following table on credit reform after which Education took a number of steps to improve its capabilities, there are 11 related open recommendations that were discussed in GAO’s earlier report on open recommendations in high-risk areas (GAO/HR-99-2R; Apr. 12, 1999).
| GAO Product | Recommendation |
| AIMD-98-14 March 30, 1998 | The Secretaries of Agriculture, Education, Housing and Urban Development, and Veterans Affairs, and the Administrator of the Small Business Administration, should improve oversight of credit reform implementation, including ensuring that estimates are prepared accurately |
| The Secretaries of Agriculture, Education, Housing and Urban Development, and Veterans Affairs, and the Administrator of the Small Business Administration, should improve oversight of credit reform implementation, including ensuring that documentation supporting subsidy estimates included in the budget and financial statements is prepared and retained. |
Year 2000 Computer Compliance Lacking
Information systems are at the heart of the department's ability to carry out its mission. In many ways, Education's student financial aid delivery system is similar to functions performed in the banking industry, such as making loans, reporting account status, and collecting payments. The department currently maintains 11 major systems for administering student financial aid programs. These systems, developed over time by multiple contractors in response to new programs or mandates, have resulted in a complex, heterogeneous systems environment. Because of systems interdependencies, repercussions from Year 2000-related problems could be felt throughout the student financial aid community. In September 1998, the department faced major risks that Year 2000 failures could seriously disrupt the student financial aid delivery process.
While there are currently no open recommendations related to Education's Year 2000 compliance program, at the request of the Congress, GAO continues to monitor the department's efforts in this area. In May 1999, GAO testified that Education had made progress toward making its programs and supporting systems Year 2000 compliant.
However, work remains to complete Education's planned Year 2000 program so as to ensure that the risk of disruption to student financial aid delivery is minimized, and that the department is prepared to handle emergencies. As of March 31, 1999, Education reported that all of its 14 mission-critical systems_including the 11 student financial aid delivery systems_were Year 2000 compliant and in operation. While much of the work on renovating and validating mission-critical systems has been completed, and the risk of student financial aid delivery system failures has been significantly reduced, the department needs to continue making Year 2000 a top priority. GAO's review of three of these systems found adequate test documentation. But the department has not yet closed out four of its systems as completing the Year 2000 compliance process in accordance with Education-specific guidance; other systems issues also remain outstanding, although they are generally considered low-risk. Testing of data exchanges and end-to-end testing of key business processes are continuing according to the department's schedule as is the refinement of business continuity and contingency plans.
Balancing Oversight of Programs and Program Flexibility
Education faces challenges in administering programs that are a joint responsibility with state and local agencies. Such administration requires striking a balance between program flexibility and program control. Education lacks enough information on program effectiveness to meet the needs of the Congress and other decision makers. GAO's work has also shown that there may be overlap and duplication in federal education programs. Two recommendations related to this management challenge remain open; each related to oversight and management issues.
GAO Products and Recommendations
HEHS-98-84
Apr. 30, 1998
The Secretary of Education should direct states to include in their Title I plans information on the strategies, activities, and resources that the state educational agencies will use to ensure that Title I program resources serve eligible charter school students.
The Secretary of Education should take the steps necessary to direct states to include charter school representation on states' Title I committees of practitioners that advise states on implementing their Title I program responsibilities.
SPECIFIC PERFORMANCE GOALS IN EDUCATION's FY 2000 PERFORMANCE PLAN ADDRESSING
GAO- AND IG-DESIGNATED MAJOR MANAGEMENT CHALLENGES
Major Management Challenge Specific Performance Goal(s) Education's administrative effort is inadequate to ensure access to postsecondary institutions while protecting federal financial interests. For example, the student aid programs provide grants and federally backed loans to a high-risk population, composed largely of low-income students who are not credit worthy. In addition, Education's administration of these programs has contributed to federal exposure to mismanagement and abuses.
Objective 3.3
provides that postsecondary student aid delivery and program management will be efficient, financially sound, and customer-responsive. Three sub-objectives are outlined:(1) improve customer satisfaction, (2) reduce the overall cost of delivering student aid, and (3) transform the Student Financial Assistance office into a performance-based organization.
Education does not have a sound, integrated information technology strategy to manage its portfolio of information systems and, therefore, the Department, guaranty agencies, schools, and lenders often do not have the accurate, complete, and timely information on program participants needed to effectively and efficiently operate and manage the programs.
None.
Lack of adequate financial data hinders management of student financial aid programs, such as Education's ability to prepare financial statements that fairly present the actual financial condition of its student financial aid programs. In addition, although the Department received an unqualified audit opinion on its fiscal year 1997 consolidated financial statements, it continues to lack accurate and reliable data on costs associated with outstanding student loans. (OIG also identified this area as a management challenge.)
None.
Year 2000 computer compliance is lacking. Education faces major risks that Year 2000 failures could seriously disrupt the student financial aid delivery process. Because these systems are interdependent, repercussions from shortcoming related to Year 2000 could be felt throughout the student financial aid community. (OIG also identified this areas as a management challenge.)
Objective 4.4--information technology investments are used to improve impact and efficiency--includes as one of its key strategies fulfilling Year 2000 compliance. The measurement indicator for this states that all major information systems needing repair will be converted to Year 2000 compliance by March 1999 (allowing time for testing during 1999). Education continues to be challenged in balancing oversight of programs and program flexibility. The Congress has eased some federal requirements to reduce paperwork and regulatory burden as it increased state and local responsibilities for managing programs. As a result, the Department does not have enough information on program effectiveness to meet the information needs of the Congress and other decision makers.
Objective 4.2 provides that partners will have the support and flexibility they need without diminishing accountability for results. Five measurement indicators address this challenge. For example, reports from program monitoring teams and audit reports under the Single Audit Act will show a reduction in significant findings that recur from year to year.
Implementation of an effective PBO to operate the student financial aid programs presents the major management challenges.
None. The Department's information technology staff still lacks technical expertise for negotiating and overseeing systems contracts.
None.
The Department continues to experience start-up and data integrity problems with EDCAPS.
This challenge is addressed by indicator 92--that by the year 2000, EDCAPS will be fully implemented and provide Department and program managers with consistent, timely, and reliable financial and program information.
Gatekeeping and institutional monitoring in the student financial aid programs are continuing management challenges.
None.
While the Department now has legislative authority to implement a data match with the Internal Revenue Service to ensure that student financial aid recipients accurately report income to qualify for financial aid, implementation challenges remain.
None.
"Paperless" systems for student financial aid fund delivery create new opportunities for efficiency and require effective controls to ensure accountability, security, and legal enforceability.
None.
Performance reporting under the Results Act will require management attention. The Department now needs to take additional steps, including finalizing and implementing a process for the accurate and timely reporting of Results Act performance indicators, in order to comply with the law.
Within goal 4, objective 4.7 includes among its key strategies ensuring assessment of the quality of data systems.
Indicator 98 provides that by the year 2000, all Education program managers will assert that the data used for their program's performance measurement are reliable, valid, and timely or will have plan for improvement. A separate section of the plan discusses data and information quality improvement in more detail. It includes (1) working with states to develop a benchmarking system for elementary and secondary program data collection, (2) improving postsecondary program data quality, and (3) recognizing challenges the Department faces in implementing these steps.
