Every year, the US Department of Education does a very good job of getting money in the federal budget. Unfortunately, they have not been handling it very well. According to their own inspector general, the department has abused and misused over $450 million since 1998. That, says Education Secretary Rod Paige, has got to change.

After learning of the General Accounting Office's scathing report of financial abuse, mismanagement and overall weakness in the department's accounting systems, Secretary Paige has announced a sweeping new initiative to deal with the problem.

At an April 20 press conference, Paige announced "Blueprint for Management Excellence," a detailed plan to be developed over the next three months to address the management, or lack thereof, problems he inherited at the Education Department. The same problems that were recently the main subject of hearings by the newly formed House Subcommittee on Select Education.

Secretary Paige stated that his "Blueprint for Management Excellence" project had the full support of the White House. "The management challenges facing this department are well known, and President Bush has made me responsible for addressing those challenges swiftly and thoroughly," Paige said. "President Bush wants this department to devote its full attention to providing all American students with access to a quality education. By putting in place a strong management team and management systems, we will be able to return the department to that critical mission."

When GAO auditors swooped down on the Education Department late last year, they not only found a lot of dollars to have gone missing in action, they also identified 639 specific management deficiencies - 343 of which remain unresolved according to Secretary Paige.

In response, Paige has formed a "Management Improvement Team" – a strike team of eight members of the senior staff of the Education Department who will be deployed over the next three months to work exclusively on attacking the problems.

One way or another, the fiscal year 2002 federal budget will allocate around $4.6 billion to the Department of Education. 

According to Paige, the goal of the Management Improvement Team and of the department over the next three months is to:

• Obtain a clean audit opinion from the department’s auditors
• Remove Student Financial Assistance Programs from the GAO High Risk List
• Put in place effective systems of internal controls to protect the department’s assets from waste, fraud, and abuse;
• Continue efforts to modernize student aid delivery and management, continue efforts to reduce student loan default costs and use IRS data for income verification;
• Make accountability for results the primary operating principle for all Education managers, grantees, and contractors.

This management initiative is just the first step in a process of building public confidence in the management and integrity of the Education Department," Paige said. "I look forward to sharing the results of our efforts with Congress and with the public, so that we can focus together on directing Education Department funds to education programs. Every dollar we waste on fraud or mismanagement is a dollar that could be used for teaching our children, and this department cannot and will not continue wasting those precious resources."

• Major Management Challenges and Program Risks: Department of Education
Abstract and link to complete GAO report on problems in the Education Department