ERIC ED459528: U.S. Department of Education, Office of the Inspector General Semiannual Report to Congress, April 1-September 30, 1999.

41 Pages·1999·0.62 MB·English

by  ERIC

DOCUMENT RESUME
EA 031 478
ED 459 528
U.S. Department of Education, Office of the Inspector
TITLE
General Semiannual Report to Congress, April 1-September 30,
1999.
Office of Inspector General (ED), Washington, DC.
INSTITUTION
REPORT NO
OIG-39
1999-00-00
PUB DATE
47p.; For the previous semiannual report, see ED 432 065.
NOTE
Office of the Inspector General, U.S. Dept. of Education,
AVAILABLE FROM
400 Maryland Ave., S.W., Washington, DC 20202-1510. Web
site: http://www.ed.gov/offices/OIG/.
Descriptive (141)
Reports
PUB TYPE
MF01/PCO2 Plus Postage.
EDRS PRICE
Administration; Administrative Problems; Court Litigation;
DESCRIPTORS
Elementary Secondary Education; Federal Aid; Federal Courts;
Federal Government; Federal Legislation; *Federal
Regulation; Government Publications; *Institutional
Evaluation; Money Management; Postsecondary Education
*Department of Education
IDENTIFIERS
ABSTRACT
The Office of Inspector General (OIG) continues to focus its
energies on some of the significant challenges facing the U.S. Department of
Education. It completed implementation and end-to-end testing of its internal
systems for Y2K compliance, though it could not ensure compliance of its
trading partners. The OIG advised the Department as it developed a sound and
integrated information-technology architecture. The OIG also found that the
Department needed to improve its contract-monitoring oversight and
recommended corrective actions. The Department's new accounting system poses
problems, including its inability to perform a year-end closing process,
resulting in auditors not being able to express an opinion for fiscal year
1998. The OIG is working with the Department to resolve these problems.
Issues regarding student financial assistance were examined, such as
inappropriate discharge of student loans, eligibility, default, and refund
fraud, and cost-study follow-ups. Schoolwide programs now allow schools to
use federal funds for whole-school improvement projects instead of specific
programs. Concluding charts include reporting requirements, Inspector
General's reports with questioned costs and recommendations for better use of
funds, a list of unresolved reports prior to April 1, 1999, cumulative
prosecutive actions, and a statistical profile for April 1-September 30,
1999.
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INSPECTOR GENERAL'S HOTLINE
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Anyone knowing of fraud, waste, or abuse involving Department of Education
funds or programs should call or write the Inspector General's Hotline.
THE TOLL-FREE NUMBER IS:
1-800-MIS-USED (1-800-647-8733)
THE MAILING ADDRESS IS:
Inspector General's Hotline
Office of Inspector General
U.S. Department of Education
330 C Street, SW
Washington, DC 20202-1510
Your report may be made anonymously or in confidence.
YOUR ATTENTION, PLEASE!
The ED/OIG Semiannual Report to Congress
is also available on the ED/OIG Website, at
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Report
Semiannual
to Congress
No. 39
September 30,
1999
April
1
4
UNITED STATES DEPARTMENT OF EDUCATION
OFFICE OF INSPECTOR GENERAL
StATES
THE INSPECTOR GENERAL
October 29, 1999
Honorable Richard W. Riley
Secretary of Education
Washington, DC 20202
Dear Mr. Secretary:
I am pleased to submit this semiannual report on the activities of the
Department's Office of Inspector General (OIG) for the six-month period
ending September 30, 1999. Submission of this report is in accordance with
section 5 of the Inspector General Act of 1978 (Public Law 95-452, as
amended). The Act requires you to transmit this report within thirty days to
the appropriate Congressional committees and subcommittees, along with
any comments you may wish to make.
As the Department's new Inspector General, I am encouraged by the
willingness of Department managers to work with OIG to resolve issues our
audits, investigations and inspections have raised. My office has closely
monitored the Department's progress toward Year 2000 readiness, advised
the Department in its implementation of the Government Performance and
Results Act, and provided substantial feedback on the Modernization
Blueprint to overhaul the student financial assistance programs. The
Department has offered cooperation and assistance to address the problems
we are identifying.
I look forward to continuing to work with you and Depattment managers in
the year ahead, as we seek to ensure the efficiency, effectiveness and
integrity of Education Department programs and operations.
Sincerely,
Lorraine Lewis
Enclosure
400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-1510
INSPECTOR GENERAL'S
MESSAGE TO CONGRESS
In June of this year, I became the Inspector General of the U.S. Department of
Education and immediately found myself a member of two distinguished
communities: the Department of Education and the President's Council on
Integrity and Efficiency (PCIE). The last several months have been instructive for
me, and I am encouraged by the working relationships I have developed with the
Secretary and other Department officials, Members of Congress and their staff
and other Inspectors General.
I am cognizant of the exceptional character and singular significance of the
mission of the Office of Inspector General. I am committed to that mission. My
office is working cooperatively with both the Secretary and the Congress so that
our audits, investigations, inspections and other work products help the
Department carry out its own mission with the highest levels of efficiency,
effectiveness and integrity. For example, we continue to oversee the critically
important efforts to ensure that the Department, its grantees and contractors are
Year 2000 (Y2K) compliant. In July, we issued our second report to Congress on
the Y2K readiness of the Department's student financial assistance programs.
the Department's
My office is providing Student Financial Assistance
with continual feedback on the Modernization
Performance-Based Organization
Blueprint and recommendations for improving accountability and fraud control. I
am proud to announce that the PCIE recently honored this Office for a successful
long-running investigation to root out fraud in the Pell Grant program.
We previously reported that our audit of the Department's financial statements
would be delayed because the Department's financial records were not ready for
audit. In mid-November we will be transmitting a disclaimer of opinion on the
Department's Fiscal Year 1998 financial statements, primarily because of
financial reporting weaknesses in the Department's automated system. The
Department also did not adequately perform reconciliations and could not
provide sufficient documentation supporting transactions. My office and the
Department are working to address these issues and are committed to achieving
the March 1, 2000 statutory reporting date.
We are focusing on the Department's implementation of the Government
Performance and Results Act. My office has worked with the Department to
develop data quality training for managers and staff to help them prepare the
fiscal year 1999 performance report. We will be reviewing the Department's
processes to ensure that data on its programs are reliable and valid. These
efforts will assist Congress in their review of the Department's first performance
report.
I look forward to continuing our work with the Secretary and other Department
officials and the Congress, helping them ensure that our education programs
serve the nation's students and taxpayers.
Lorraine Lewis
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CONTENTS
Letter to the Secretary
Inspector General's Message
Significant Activities and Accomplishments
1
P.L. 95-452 Reporting Requirements
14
Statistical Tables
0
Recommendations Described in Previous Semiannual Reports on Which
Corrective Action Has Not Been Completed
15
0
EDJOIG Reports on Education Department Programs and Activities
17
0
Inspector General Issued Reports with Questioned Costs
19
0
Inspector General Issued Reports with Recommendations for
Better Use of Funds
20
0
Unresolved Reports Issued Prior to April 1, 1999
21
0
Investigation Services Cumulative Prosecutive Actions
23
0
Collections from Audits and Investigations
28
0
Statistical Profile
29
The Office of Inspector General (OIG) continues to focus its work effort and resources
on some of the most significant challenges facing the U.S. Department of Education
(ED or the Department and Congress). Chief among these challenges are the
preparation for Year 2000 (Y2K), the Department's production of auditable financial
statements, and the Student Financial Assistance Programs (SFA) modernization effort
and management of the SFA programs.
YEAR 2000
Our review of the Department's Y2K compliance for processing, delivery, and
administration of the SFA programs found that the Department substantially
completed implementation and end-to-end testing of its internal systems. Survey
results raise concerns that a significant percentage of postsecondary institutions
might be at risk for Y2K-related failures. The seriousness of this issue warrants
outreach by Congress (page 2).
FINANCIAL STATEMENTS
The Department will receive a disclaimer of opinion on its Fiscal Year (FY) 1998
financial statements, primarily because of financial reporting weaknesses in its
automated system. The Department also did not adequately perform reconciliations
and could not provide sufficient documentation supporting transactions. The
Department is working to address these issues, and the OIG and its independent
public accountant are working closely with the Department on the FY 1999 financial
statements. The Department and the OIG are committed to achieving the March 1,
2000 statutory reporting date (page 4).
STUDENT FINANCIAL ASSISTANCE
The SFA programs continue to constitute one of the Department's greatest
management challenges. Congress authorized creation of a Performance-Based
Organization (PBO) in SFA. This period we identified both systemic weaknesses and
individual instances of fraud that have caused financial losses to the Department and
to taxpayers ranging from a few thousand dollars to millions of dollars. The
Department is working to address many of the recommendations we have made for
improving accountability and fraud control. During the reporting period, OIG provided
comments and technical assistance relating to SFA's drafts of the Customer Service
Task Force Report, the Modernization Blueprint, and the Five Year Performance Plan
(page 6).
ADDITIONAL SIGNIFICANT ACTIVITIES
The OIG also reviewed the Department's contract monitoring oversight and various
initiatives and programs in the elementary and secondary education area, specifically,
school-to-work and schoolwide programs. We continue to advise the Department in
its implementation of the Government Performance and Results Act.
1
The OIG is committed to improving the quality of independent public accountant (IPA)
audits of participants in the Department of Education grant and loan programs. We
provide a high level of technical assistance to IPAs, and we also perform quality control
reviews of their audits.
Descriptions of these and other significant OIG activities and accomplishments of the
reporting period appear below. They are organized under the major headings of
Departmental Operations and Departmental Programs. Tables containing statistical
information pursuant to the requirements of the Inspector General Act of 1978 (Public
Law 95-452, as amended) follow on page 14.
DEPARTMENTAL OPERATIONS
INFORMATION TECHNOLOGY
The OIG continued to focus its efforts on the Department's management of information
technology. During this period, we closely monitored the Department's progress
toward Year 2000 readiness. We also resolved pending recommendations from our
1998 audit of the Department's Clinger-Cohen Act implementation, and reported on
the acquisition process for the SFA information systems. Additionally, the Department
recently hired a new chief information officer (CIO), and SFA filled a CIO position in its
organization. We will work with both CIOs to discuss their priorities and will address
them in our work plans.
YEAR 2000
The Department has made significant progress in preparing for the Year 2000. This
period, the Department reported that its mission-critical systems were renovated,
tested, and implemented by the March 31, 1999 deadline set by the Office of
Management and Budget. The OIG continues to monitor the Department's progress in
preparing for the Year 2000.
made. However, ED cannot ensure that
Y2K Compliance of SFA
Delivery Systems
its trading partners will be Year 2000
compliant.
Our review of the Department's Y2K
compliance for processing, delivery, and
We reported our concerns about the Y2K
administration of the SFA programs
readiness of postsecondary institutions.
(ACN: S11-90016, issued July 16, 1999)
Survey results indicate that a significant
was the second of two reports on Y2K
percentage of postsecondary institutions
required by the Higher Education Act
could be at risk for Y2K-related failures.
Amendments of 1998. We found that ED
Because of the seriousness of this
substantially completed implementation
problem, we recommended that members
and end-to-end testing of its internal
of Congress promote Y2K awareness at
systems. The Department performed
postsecondary institutions in their
extensive outreach efforts with its
districts and states.
trading partners to promote awareness,
provide technical assistance, and learn
ED has made substantial progress in
about the progress these entities had
developing its business continuity and
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