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Education announces management plan to combat waste, fraud

The Education Department on Tuesday outlined a long-term management reform plan to eliminate the waste, fraud and abuse that have dogged the agency for years. Education Secretary Rod Paige pledged to hold all agency employees, including senior managers and contractors, fully accountable for their performance in meeting these departmentwide goals. "There will be no tolerance for any substandard performance on the part of managers," Paige told reporters during a news conference on a report that outlines strategies for improving the agency's financial management, workforce planning, accountability and information technology over the next three years. By the end of this year, senior officers at Education will have a management reform plan listing the program and management results they are responsible for in fiscal 2002, according to the "Blueprint for Management Excellence." By March 2002, the department will begin linking annual performance agreements, bonuses and other awards for managers and employees to the department's strategic plan. Ethics-based training for managers will also begin in 2002. "Ultimately, to achieve success, we must create a culture of accountability within the department that focuses all of our employees, contractors and senior leaders on producing results for American students," said Bill Hansen, Education's deputy secretary. The department also hopes to obtain a clean financial audit by fiscal 2002 and have its student financial aid programs removed from the General Accounting Office's high-risk list by fiscal 2003. Last April, Paige assembled an eight-member management improvement team from Education's senior ranks as part of an initiative to root out waste, fraud and abuse within the department. The senior managers were pulled away from their regular jobs to focus exclusively on improving management and financial accountability within the agency. The team identified more than 600 recommendations from several sources, including internal financial audits and the General Accounting Office, for improving Education's overall management and accountability. Nearly 400 of the recommendations have been implemented so far, including limiting employee access to government credit cards and collecting $135 million in student loan debts since April. The agency has also filled its chief financial officer and assistant secretary for management positions, which have been vacant for two and five years, respectively. Education, which hasn't received a clean financial audit since 1997, has a history of financial management problems compounded by cases of fraud. According to the agency's inspector general, more than $450 million in agency funds has been misused over the past three years. In March 2000, an agency employee embezzled nearly $2 million in federal grant money intended for two school districts. The money was eventually recovered. From January 1997 to December 1999, contractors and Education employees, conspiring together, stole more than $300,000 worth of electronic equipment and collected more than $600,000 in false overtime pay. Patricia McGinnis, president of the Council for Excellence in Government, praised Paige for laying out tangible goals but noted that real improvement would come in the actual execution of the recommendations. The council, a nonprofit group that focuses on good government, worked with Education's team, selecting a panel of experts to advise the department and reviewing the team's recommendations for improving management. Hansen said the department would continue to work with the Council for Excellence in Government on improving management. An executive management team, consisting of political appointees and top career employees, will oversee the implementation of the report's recommendations, according to Hansen. Despite the enormity of the task, Paige was confident that his department would improve its overall accountability and increase the public trust. "Management is already improving, and I think we can arrive at a point where we are in good shape," Paige said.