Fiscal Year 2006 Budget Summary February 7, 2005
Section IV. Departmental Management
(BA in millions)
Full-time equivalent employment (FTE)4
The 2006 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 $111 billion in grants and loans each year to over 10 million postsecondary students.
The Department is requesting $1.32 billion for its discretionary S&E budget in 2005, an increase of $29 million over the 2005 level. Included in the request is $489 million for payroll costs, which reflects the 2.3 percent proposed government-wide pay raise in 2006 as well as employee benefit increases based on historical experience.
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 2006 is $828 million.
Department administrative costs continue to constitute a small fraction of the total education budget. For example, even with the increase requested for 2006, the discretionary administrative budget would be approximately 2 percent of the Department's total discretionary budget.The 2006 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 successfully implement the No Child Left Behind Act signed into law in January 2002.
To carry out the President's Management Agenda, the Department's S&E budget request places a heavy emphasis on the following high priority items:
The 2006 staffing request of 4,394 FTE, a decrease 60 FTE from the planned 2005 level, is 42 percent below the level of 7,528 FTE when the Department was created in 1980. The 2006 decrease is primarily due to a net reduction of 66 FTE resulting from the consolidation of the regional office functions of the Rehabilitation Services Administration (RSA) into the central office and the reallocation of staff to reflect program workload. In addition to reducing FTE, these changes will result in improvements in the administration of the Vocational Rehabilitation program through greater program effectiveness, consistent program implementation, and integrated program planning.
Despite regular FTE reductions, the Department has maintained and even improved its operational performance 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 almost 10 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 example of this management approach is the effective 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 73 percent of the employees are assigned to headquarters, and 27 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. Regional and field office 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.
The 2006 request includes $419 million, a slight decrease of $300,000 from the 2005 level, for the Program Administration account, which funds administrative support for most programs and offices in the Department. The request includes $254.2 million for the 2,242 FTE, and $164.8 million for non-pay costs. The non-pay request includes $4.1 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.
In fiscal year 2006 the Department of Education will administer $111 billion in Federal student aid grants and loans to more than 10 million students and parents. In awarding this aid, the Department and its contractors will interact on a daily basis with over 6,000 schools; 3,300 lenders; 35 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 and participants involved in the student financial aid programs-and safeguarding the interests of both students and Federal taxpayersis 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 2 separate accounts: the discretionary Student Aid Administration account and the mandatory Federal Direct Student Loan Program (HEA Section 458). For 2006, the Administration is renewing its proposal to consolidate these separate funding streams into a discretionary Student Aid Administration account that would represent more than 56 percent of the Department's total administrative budget. The request would provide $744.3 million to administer student aid programs in 2006, an increase of $25.2 million over the 2005 level, primarily for information technology contracts.
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 2006 request for OCR is $91.5 million, an increase of $2.1 million over the 2005 level. About $65.2 million of the OCR budget is for staff pay and benefits for its 638 FTE; the remaining $26.3 million covers overhead costs as well as computer equipment, data analysis and reporting activities, travel, staff training, and other contractual services.
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.
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 2006 request for the OIG is $49.4 million, an increase of $2.1 million over the 2005 level. Approximately two-thirds of this amount, or $33 million, is for personnel compensation and benefits to support a staffing level of 285 FTE.
The non-personnel request of $16.4 million includes $2.6 million to contract for the mandated annual audit of the Department's financial statements. The scope of the audit will include the examination and analysis of account balances, review of applicable financial systems, and evaluation of internal controls and compliance with significant laws and regulations.
To carry out the President's Management Agenda and to achieve its Strategic Plan goal of achieving management excellence, the Department is focusing on the following high priority items:
For further information contact the ED Budget Service.
This page last modifiedFebruary 7, 2005 (mjj).