U.S. Department of Education: Promoting Educational Excellence for all Americans
Inside Budget Summary
and Background Information
Summary of the 2004 Education Budget
Elementary and Secondary Education
Special Education and Rehabilitative Services
Vocational and Adult Education
Student Financial Assistance
Higher Education Programs
Institute of Education Sciences
Programs Proposed for Elimination
Departmental Management
Appendix 1
Appendix 2 PDF Icon Excel
Fiscal Year 2004 Education Budget Summary and Background Information
February 3, 2003

Archived  Information

Section IV.  DEPARTMENTAL MANAGEMENT

Overview

Discretionary funds
(B.A. in millions)
2002 2003
Request
2004
Request
 
Program Administration $365.51 $411.8 $434.5
Office for Civil Rights 79.7 86.3 91.3
Office of the Inspector General 38.6 41.0 48.1
Student Aid Administration 105.82 737.03 752.03
Other4 14.0 13.1 16.1
     Total, Discretionary S&E
603.6

1,289.2

1,342.0
 
Mandatory funds
(B.A. in millions)
 
Student Loan Administration:
HEA Section 4585 600.05
     Total Federal Administration
1,203.6

1,289.2

1,342.0
 
Full-time equivalent employment (FTE)6 
 
Program Administration 2,3427 2,462 2,462
Office for Civil Rights 698 714 714
Office of the Inspector General 276 285 285
Student Aid Administration 1,1888 1,115 1,115
Other4 37 44 49
     Total, FTE employment
4,541

4,620

4,625

1 Adjusted for comparability. Excludes $57.001 million in 2002 used to administer student aid programs, which are consolidated with FFEL and FDSL Federal administration costs and requested in fiscal years 2003 and 2004 under the proposed Student Aid Administration account.
2Adjusted for comparability. Includes funds from the Program Administration and FFEL accounts used to administer student aid programs, which are consolidated with the FDSL Federal Administration costs and requested in fiscal years 2003 and 2004 under the proposed Student Aid Administration account.
3Excludes $195 million for payments to guaranty agencies.
4Includes small Federal Credit accounts and S&E activities in program accounts. Excludes Occupational and Employment Information grants and National Education Security Trust Funds grants, scholarships, and fellowships.
5Excludes $180 million in 2002 for payments to guaranty agencies.
6Actual FTE usage in 2002; maximum target for 2002 and 2003.
7Adjusted for comparability. Excludes FTE to administer student aid programs, which are consolidated with FFEL and FDSL Federal administration FTE requested in fiscal year 2003 and 2004 under the proposed Student Aid Administration account.
8Adjusted for comparability. Includes FTE to administer student aid programs, which are consolidated with FFEL and FDSL Federal administration and Program Administration FTE requested in fiscal year 2003 under the proposed Student Aid Administration account.
This pie chart shows the percentage of FY 2004 salaries and expenses costs for the following categories:  Contracts, 49%; Personnel Costs, 34%; Overhead (Rent and Mail), 8%; and Other Non-Personnel, 9%.

The 2004 budget request for Salaries and Expenses (S&E) will pay the costs of the staff, overhead, contracts, and other activities needed to administer and monitor the Department's educational assistance programs and provide over $80 billion in grants and loans each year to more than 8 million postsecondary students.

The Department is requesting $1.34 billion for its discretionary S&E budget in 2004, an increase of $53 million over the 2003 President's request. Included in the request is $459 million for salaries and benefits, which reflects the 2 percent proposed government-wide pay raise and 261 paid days in 2004, and historically based increases for employee benefits.

The non-personnel costs for the administrative accounts cover such items as travel, rent, mail, telephones, utilities, printing, information technology (IT), contractual services, equipment, supplies, and other Departmental services. The total request for non-personnel activities in 2004 is $883 million.

Department administrative costs continue to constitute a small fraction of the total education budget. For example, even with the increase requested for 2004, the discretionary administrative budget would be approximately 2 percent of the Department's total discretionary budget.

The 2004 budget request for salaries and expenses supports Department initiatives designed to improve government performance through the goals outlined in the President's Management Agenda and the implementation of the No Child Left Behind Act signed into law in January 2002.

To carry out the President's Management Agenda, the Department has developed and is currently implementing its Blueprint for Management Excellence (Blueprint), which establishes a roadmap for management improvements related to accountability and performance that will make the Department an example of excellence for other government organizations. The 2004 S&E budget request places a heavy emphasis on the following five high priority items included in the Blueprint:

  • Developing and maintaining financial integrity and management and internal controls;

  • Modernizing the student financial assistance programs and reducing their high-risk status;

  • Expanding strategies for using human capital;

  • Building a culture of accountability within the Department, including performance-based budgeting; and

  • Managing Information technology systems to improve business and communications processes.

Department Employment

This bar chart shows Department staffing levels (Full-time equivalent (FTE)) from 1980 through the 2004 Presidents Request.  The 2004 staffing request of 4,4625 FTE is nearly 40 percent below the level of 7,528 FTE when the Department was created in 1980.

The 2004 staffing request of 4,625 FTE is nearly 40 percent below the level of 7,528 FTE when the Department was created in 1980. The staffing request represents no significant change from the planned 2003 level, although internal staff reorganizations have been implemented to improve the management of the Department and to carry out the President's education reform agenda.

The budget request reflects the creation of two new offices in 2003. The Office of Innovation and Improvement will provide information on the development of promising educational interventions, including reforms that expand parental choice and information. It will oversee competitive grant programs that support the trial of innovations in the education system and will broadly disseminate the lessons learned from these trials. The Office of Safe and Drug-Free Schools is responsible for programs and policies relating to security and prevention of violence, alcohol and drug abuse, and for administering citizenship and civics education programs. It will administer a variety of grant programs dealing with these issues.

The Department has maintained operations in spite of reduced staffing levels in part by relying heavily on automation and private contractors to handle such functions as awarding grants, processing student aid applications, and providing grants and loans to more than 8 million college students. Already the smallest of the Cabinet agencies, the Department minimizes administrative tasks and privatizes functions that can be handled more efficiently by outside contractors. A prime illustration is the use of contracts to operate the Direct Student Loan program.

As shown in the following chart, staff is divided among the Washington, D.C. headquarters, 10 regional offices, and 11 field offices. Approximately 72 percent of the employees are assigned to headquarters, and 28 percent are assigned to the regional and field offices. Most regional and field office employees are in the Federal Student Aid office, the Office of the Inspector General, and the Office for Civil Rights. Activities include review of lenders, institutions, and guaranty agencies participating in the student financial aid programs, as well as collections on defaulted student loans; audits and investigations of Department programs and operations; and civil rights complaint investigations and compliance reviews.

This map shows the location of the Departments 10 regional offices and 11 field offices.  Approximately 28 percent of the Department's staff are assigned to the regional and field offices, and 72 percent are assigned to headquarters.

Program Administration

The 2004 request includes $434.5 million, an increase of $22.7 million from the 2003 President's request, for the Program Administration account, which funds administrative support for most programs and offices in the Department. The request includes $252.3 million for the 2,462 FTE requested, and $182.2 million for non-pay costs. The non-pay request includes $13.6 million to relocate approximately 1,300 people and the Department's Data Center located in Washington, D.C. between office buildings and $10 million to continue implementation of the Performance Based Data Management Initiative, which will collect timely data on student achievement and educational outcomes. Other non-pay costs include rent, travel, data collection, evaluations, computer hardware and software support for the staff, and other administrative activities.

Student Aid Administration

In fiscal year 2004 the Department of Education will provide over $80 billion in Federal student aid grants and loans to over 8 million students and parents. In awarding this aid, the Department and its contractors will interact on a daily basis with over 6,000 schools; 3,500 lenders; 36 guaranty agencies; and dozens of accrediting agencies, participants in the secondary market for student loans, and other organizations. Ensuring the smooth operation of the complex array of financial transactions involving these numerous participants in the student financial aid programs—and safeguarding the interests of both students and Federal taxpayers—is perennially the Department's greatest management challenge and its highest administrative priority. Primary responsibility for administering the Federal student financial assistance programs rests with the Office of Federal Student Aid and the Office of Postsecondary Education.

Funding for student aid management has been provided in previous years through 3 separate accounts: the discretionary Program Administration and Federal Family Education Loan Program (FFEL) accounts and the mandatory Federal Direct Student Loan Program (HEA Section 458). For 2004, the Administration is proposing a continuation of the policy first proposed in 2003 to consolidate these separate funding streams into a new discretionary Student Aid Administration account that would represent more than 55 percent of the Department's total administrative budget. The request would provide $752 million to administer student aid programs in 2004, an increase of $15 million over the 2003 President's request.

Management Improvement and Government Reform

To carry out the President's Management Agenda, the Department has developed and is currently implementing its Blueprint for Management Excellence, which establishes a roadmap for management improvements and mechanisms related to accountability and performance that will make the Department an example of excellence for other government organizations. The Salaries and Expenses (S&E) budget request places a heavy emphasis on the following five high priority items included in the Blueprint.

Improving Financial Integrity/Management and Internal Controls

Financial integrity

Clean audit opinion; provide program managers with financial data needed to manage effectively; earn Certificate of Excellence for Accountability Reporting.

Financial integrity requires accurate and relevant financial reporting systems and processes in order to provide policy makers and managers with timely and accurate financial information. In addition, revenues and expenditures must be properly accounted for and reported on so that reports and data produced by financial management systems will provide reliable information to managers making program and asset-related decisions.

Management and internal controls

Substantially reduce external and internal accountability risks; assess the performance of programs and determine the actions to take to improve performance where indicated.

Management and internal controls will be adopted and enhanced to reduce the risk of errors and permit effective monitoring of programs and processes. Management controls will ensure that programs achieve their intended results and are protected from waste, fraud, and mismanagement. Internal controls will help ensure effective and efficient Department operations as well as reliable financial reporting.

Modernizing and Reducing the High-Risk Status of Student Aid Programs

Minimize defaults and improve collections; integrate student financial aid information systems; reduce vulnerability to fraud, waste, error, and mismanagement.

The Department will improve its financial and management information systems to support the effective management of the student aid programs, following specific criteria provided by the General Accounting Office for reducing student aid risk and removing the programs from the high-risk list. These improvements will ensure that relevant, timely information is available to manage day-to-day operations and provide accountability.

Expanding Strategies for Using Human Capital

Meet or exceed OMB goals for competitive outsourcing; give managers tools and flexibility to hire top-ntch talent; ensure that employees have the skills to do their jobs.

The Department's human capital strategy will achieve the goals of the President's Management Agenda by streamlining operations in order to bring work closer to its customers: taxpayers, States, school districts, and schools. This will be accomplished by increasing competitive sourcing and improving decision-making.

Managing Information Technology to Meet the Needs of ED Customers

Maximize online conduct of business with customers; Perform procurement and program data reporting online.

In order to meet the President's Management Agenda goals of an expanded electronic government, the Department will improve the management of its IT investments, protect the integrity and confidentiality of data, improve data management, and increase the use of technology in serving customers.

Achieving an "Accountability for Results" Culture

ED programs and services will focus on results and meet Administration goals; ED will set the standard for performance accountability among Federal agencies; ED will be the national benchmark for management excellence.

The Department will place a heavy emphasis on monitoring results and measuring progress as it performs its mission. The recipients of Department funds, Department employees, and Department contractors will be held responsible for their performance in relation to achieving the goals and objectives of the Department. The Department will work with grantees and contractors to develop performance standards that will yield results called for in the long-range strategic plan. Internally, measurement of employee performance will be linked to how well goals are being met.

The Performance Based Data Management Initiative is designed to develop a system for measuring student achievement by: 1) providing an integrated, Web-based collection of timely data on student achievement and educational outcomes; 2) eliminating existing reporting burdens that divert State and local school resources from their educational mission; and 3) assisting in analysis of data on educational results to identify performance trends and inform management, budget and policy decisions. Implementation of the system will help lay the groundwork for shifting the Department's emphasis from focusing on compliance with procedural requirements to a focus on actual student achievement. In 2004, $10 million is requested for continuing the development of this project.

Office for Civil Rights

The Department's Office for Civil Rights (OCR) investigates discrimination complaints, conducts compliance reviews, monitors corrective action plans, and provides technical assistance on civil rights issues. The 2004 request for OCR is $91.3 million, an increase of $5 million over the 2003 President's request. About $64.6 million of the OCR budget is for staff pay and benefits for its 714 FTE; the remaining $26.7 million covers overhead costs as well as computer equipment, data analysis and reporting activities, travel, staff training, and other contractual services. The request includes $1 million to increase enforcement of Title IX of the Education Amendments of 1972, and to provide education and technical assistance to help schools comply with Title IX. Title IX protects people from discrimination based on sex in education programs or activities that receive Federal financial assistance.

The requested funds will ensure essential program support to resolve complaints of discrimination filed by the public and to ensure that institutions receiving Federal financial assistance are in compliance with the civil rights laws enforced by OCR. The request also will provide resources for collaboration with educational experts so that the results of scientifically based research in the areas of education and civil rights are incorporated into OCR's enforcement activities, and for technical assistance to recipients, parents and students to informally address civil rights concerns and to prevent problems from arising in the future. OCR provides extensive information on its Internet site, including self-assessment materials for recipients, data on school characteristics, brochures, and other information for the public.

Office of the Inspector General

The Office of the Inspector General (OIG) conducts audits and investigations of the Department's programs and activities to help ensure accountability for taxpayer-provided funds and to identify management improvements. The 2004 request for the OIG is $48.1 million, an increase of $7.1 million over the 2003 President's request. Approximately 61 percent of this amount, or $29.2 million, is for personnel compensation and benefits to support a staffing level of 285 FTE.

The request includes $4.25 million to assess the quality of single audits government-wide, and to provide a baseline for monitoring single audit quality. The Department, and many other agencies, rely on these independent audits of grantees produced under the Single Audit Act. The study would statistically measure audit quality to determine whether Federal agencies can rely on single audits to support Federal program expenditures and identify erroneous payments. These are critical issues for the President's Management Agenda. Results will be shared with the President's Council on Integrity and Efficiency, which is composed of agency Inspectors General. Because the Department is one of the leading users of single audits, funds for this government-wide project are being requested in ED.

Almost half of the remaining $18.9 million in non-personnel costs is for OIG's administrative and overhead services, such as rent, postage/fees, telecommunications, payroll processing, and information technology services contracts. Two other non-personnel costs are travel and contracts. The OIG relies on contract support for review of information technology and to obtain an independent audit of the Department's financial statements.

The requested budgetary resources will allow the OIG to engage in the types of activities that will enable the Office to reach these goals and at the same time provide support to the Department in its mission to ensure equal access to education and promote educational excellence throughout the Nation. The office continues to focus the majority of its efforts and resources on Federal Student Aid.

Section III—Programs Proposed for Elimination Table of contents Appendix 1

For further information contact the ED Budget Service.

This page last modified—September 15, 2006 (jer).

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