ARCHIVED INFORMATION -- Financial Management Status Report & Five-Year Plan - October 1996
Strategic Vision #3 - Strong External Partnerships
The Department of Education's delivery of services to outside customers is marked by strong partnerships with external entities: other Federal agencies, State and local education and rehabilitation agencies, educational institutions, and other key entities. This partnership is particularly evident in the changes in oversight and information sharing.
- Incentives are used in the oversight area to build integrity at all levels of the process with all partners.
- Information is generally electronically transmitted, reasonable in cost, and accessible to all parties.
Cash Management Improvement Act of 1990 (including 1992 Amendments)
The Cash Management Improvement Act of 1990 (CMIA) is intended to ensure efficiency, effectiveness and equity in the exchange of funds between the Federal government and the states. ED participated in the Treasury CMIA90 Task Force for implementation of the Act. ED programs covered by the Act for FY96 are as follows: Adult Education - State Administered Basic Grant Program (Catalogue of Federal Domestic Assistance (CFDA) 84.002); Education of Children with Disabilities in State Operated or Supported Schools (CFDA 84.009); Chapter 1 Programs - Local Educational Agencies (CFDA 84.010); Migrant Education - Basic State Formula Grant Program (CFDA 84.011); Special Education - State Grants (CFDA 84.027); Federal Family Education Loans (CFDA 84.032); Federal Perkins Loan Program - Federal Capital Contributions (CFDA 84.038); Impact Aid - Maintenance and Operations (CFDA 84.041); Vocational Education - Basic Grants to States (CFDA 84.048); Federal Pell Grant Program (CFDA 84.063); Rehabilitation Services - Vocational Rehabilitation of State Grants (CFDA 84.126); Federal, State, and Local Partnerships for Educational Improvement (CFDA 84.151); Eisenhower Mathematics and Science Education - State Grants (CFDA 84.164); Special Education - Preschool Grants (CFDA 84.173); and Drug Free Schools and Communities - State Grants (CFDA 84.186).
Each year, States disclose the amount of interest they owe to Federal agencies because of excess funds held by the States and the States submit claims to Federal agencies for interest owed them because the Federal agency was late in sending funds and, therefore, the States had to use their own funds. This year, the States' liability from excess ED funds was $5,242,788 and the States claimed interest of $2,539,262 as being owed by ED. ED challenged $2,508,520 (99%) of these claims. While the final decision to challenge or pay these claims rests with Treasury, Treasury has notified ED that States have reduced their claims by $2,029,541 as a result of ED's challenges.
Since ED disburses approximately 99% of its grant funds to all sources electronically, no major problems were encountered in the implementation of CMIA90. However, during FY97, ED will continue to monitor all sources of guidance addressing the rules for implementation of CMIA90, to ensure timely awards to recipients and avoidance of interest charges. ED will provide training support as necessary for OCFO, budget and program staff to ensure compliance with Department policy implementing the final rules.
Monthly Electronic Expenditure Reporting System
The Monthly Electronic Expenditure Reporting System (MEERS) was implemented in 1991. Major recipients have been transferred to MEERS and are reporting expenditures monthly. As of September 30, 1996, the number of recipients reporting by MEERS is 2,748.
EDPMS Automated FEDWIRE Request
Automated FEDWIRE was implemented during FY '95. The system allows customers to dial directly into ED's Payment Management System and electronically request funds for deposit on the same day, the next day, or up to 30 days in advance. There are 513 recipients using the automated FEDWIRE process with approximately 1,600 users having access through Internet or PC dial-up into EDPMS. This includes 97 direct loan schools.
Enhancements are in process to further streamline the automated FEDWIRE system to make it more efficient and user friendly. Recipient involvement has been instrumental in identifying needed changes and will continue through testing and implementation.
EDPMS was further enhanced in FY95 to process PELL Administrative Allowances and Campus Based Teacher Cancellations payments electronically. Payments to recipients were previously made by check. These payments are now being made electronically using ACH/EFT. Approximately 8,000 recipients received payments electronically in August and September of 1995 and during 1996, approximately 7,000 recipients received an estimated $41.4 million electronically. These recipients do not request funds. Instead, SFA programs send files to EDPMS which result in the automatic processing of a payment. SFA then advises each school of the payment. This process has eliminated returned checks, cancellation and reissue of these checks. This new process is expected to benefit recipients by providing payments accurately and timely and the Department by reducing the resources required for research and check reissue.
The Department continues to build upon its post audit reinvention activities. Two recent advances include the Cooperative Audit Resolution and Oversight Initiative (CAROI) and Triage Strategy.
CAROI involves the formation of effective partnerships among Department officials, auditors, State and local officials, and program managers to improve education programs and student performance at State and local levels through better use of audits, monitoring, and technical assistance. When fully implemented, this initiative is expected to link audits effectively with Department monitoring and technical assistance efforts, and to address the underlying problems that have given rise to audit findings in order to improve the operation of education programs.
Among a number of CAROI activities and accomplishments to date, the following are noteworthy:
The Triage strategy entails determining the most effective way to use information provided in audit reports. Similar to strategies for handling medical emergencies, the post-audit triage team, comprised of program and support staff, assesses the seriousness of audit disclosures as soon as an audit report is issued to determine the amount of attention needed for resolution. This approach replaces an inefficient process where each audit report is accorded the same attention without respect to the seriousness of the problems disclosed.
- The Department's CAROI team has initiated dialogues and held focus groups with State and local officials in our effort to create and maintain effective communication with those officials.
- With three states--Florida, Mississippi, and Washington--the Department has undertaken pilots of the CAROI concept of cooperative audit resolution with an emphasis on resolving recurring audit problems.
- As part of the Florida pilot, Florida and Department officials jointly designed a substitute time distribution system that helped to resolve long-standing audit issues in Florida relating to keeping time distribution records. The Department anticipates that this substitute system can serve as a model system for other State and local entities seeking a less burdensome way to record staff time spent on a variety of program activities while ensuring proper accountability.
- The section of the OMB Compliance Supplement for Single Audits of State and Local Governments related to elementary and secondary education programs was revised and issued to auditors and State and local education officials (June 21, 1996) in time for auditors to refer to it in the first audits of programs authorized under the Improving America's Schools Act (IASA).
- The Department of Education's CAROI Team was selected to receive the prestigious Hammer Award in July l996. The award, given by Vice President Gore's National Performance Review, recognizes the contribution that CAROI has made to partnerships between the Federal government and State and local agencies. It specifically recognizes how CAROI has reinvented the way the Department's oversight activities are conducted and how the results of those activities are used to correct and prevent future audit problems.
- The CAROI Team is also participating on a White House task force on flexibility and financing issues that is, in part, considering how the CAROI concept could be used by other Federal agencies.
Improvements to the Triage strategy, including instituting program level triages in the individual Principal Offices to supplement the Department level Triage, updating standardized post-audit documents, and updating Triage procedures, are being implemented. The Department will continue to make refinements to the Triage strategy and to look for other opportunities to further streamline the post-audit function.
[Strategic Vision #2 - Strong Internal Financial Management Partnerships]
[Strategic Vision #4 - Well Trained and Accountable Workforce]