ARCHIVED INFORMATION -- Annual Accountability Report Fiscal Year 1995

United States Department of Education

Office of Inspector General

Honorable Richard W. Riley
Secretary of Education
Washington, D.C. 20202

Dear Mr. Secretary:

These reports present the results of the audit of the Department's annual financial statement for the fiscal year ended September 30, 1995, to comply with the Chief Financial Officers (CFO) Act of 1990. The Department chose to produce financial statements at the Department level, one year ahead of the implementation date set by the Government Management Reform Act (GMRA) of 1994.

The Office of Inspector General (OIG) contracted with Price Waterhouse, LLP (PW), Certified Public Accountants, to perform the audit. The OIG monitored the progress of the audit, reviewed supporting working papers and performed other procedures deemed necessary to ensure compliance with the CFO Act of 1990.

The results of the audit were discussed with Department officials throughout the audit. The Offices of the Chief Financial Officer and Postsecondary Education responded to the findings and recommendations presented in the draft audit reports. Based on the response, management believes that the reported FFEL Program liability for loan guarantees is reasonable. Management is in general agreement, however, with most of the other issues in the reports. The complete text of the Department's combined response and PW's comments on it are enclosed.

During the course of the audit, PW identified other matters which are not reportable but nevertheless warrant management's attention. These are being communicated in a separate letter tor management's consideration.

In accordance with the Freedom of Information Act (Public Law 90-23), reports issued by the OIG are available, H requested, to members of the press and general public to the extent information contained therein is not subject to exemptions in the Act.

We appreciate the cooperation given us and PW during the audit.

Steven A. McNamara
Assistant Inspector General for Audit

Enclosures
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