Report raps Education for 'gross mismanagement' of grants program

The Education Department's failure to properly account for billions of dollars in federal grant money constitutes gross mismanagement at the agency, according to a new report from the Office of Special Counsel. The report, the result of an investigation of allegations by a whistleblower, determined that Education's grant management system--known as the Grants Administration and Payment System (GAPS)--lacks adequate security controls and does not properly track accounting information. The Office of Special Counsel (OSC) investigates whistleblower allegations of waste, fraud and abuse. The OSC requires agencies to investigate such allegations and report back on their findings and any actions they have taken to fix the problem. The OSC then reviews the agency's report and transmits the report to the President and Congress for further action. Although Education acknowledged weaknesses in its financial system, it said the allegations did not constitute "gross mismanagement" because the agency has addressed and tried to remedy accounting problems. John Gard, a systems accountant at Education, originally blew the whistle on the agency, claiming that Education made improper payments to federal grant recipients, wasting and mismanaging billions of taxpayers' dollars as a result of deficiencies in GAPS. Gard said the agency moved ahead with GAPS' implementation in 1998, despite his warnings about the flaws in the system. In the report, Special Counsel Elaine Kaplan substantiated Gard's allegation of gross mismanagement at the agency, disputing the Education Department's definition of the term. "The agency is incorrect that a finding of 'gross mismanagement' requires a conclusion that it acted in deliberate disregard of known deficiencies," said Kaplan. Instead, Kaplan concluded that any management action or inaction that put the agency's ability to fulfill its mission at high risk constituted gross mismanagement. Education's report on the investigation said many of Gard's allegations concerning its accounting system had previously been investigated and documented by the department's inspector general and the General Accounting Office. According to Education, it has implemented all of the IG's recommendations for correcting accounting problems with GAPS as of September 2000. In its report, Education said it "has and will continue to commit appropriate resources to correct conditions that challenge internal controls." Education defended the GAPS system, saying there was no evidence that the agency wasted funds implementing it, and that the system will benefit the agency's financial management capabilities. The agency plans to review grantee accounts from May 1998 to the present and identify discrepancies between the old grant management system, GAPS, and the agency's overall financial management system. Education pledged to work with the Treasury Department to correct any errors. Kaplan pointed to the agency's problems in producing reliable financial statements under the 1990 Chief Financial Officers Act as further evidence of weaknesses in its financial management. In fiscal 1998, Education's financial statements were too unreliable to be audited, and in fiscal 1999, the agency failed to receive a clean opinion. "Notwithstanding these pre-existing weaknesses, the agency's decision to update its financial management systems without first ensuring the stability of its current system security or providing for proper retention of data appears to fall within the legal definition of gross mismanagement," said Kaplan.
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.