U.S. Department of Education: Promoting Educational Excellence for all Americans

Fiscal Year 2011 Budget Summary — February 1, 2010


Section V. Departmental Management

History and Background

Congress established the Department of Education as a Cabinet level agency in 1980. Today, the Department operates programs that touch on every area and level of education. The Department's elementary and secondary programs annually serve nearly 14,000 school districts and some 57 million students attending more than 98,000 public schools and 29,000 private schools. Department programs also provide grant, loan, and work-study assistance to more than 14 million postsecondary students.

In general, the Department of Education is responsible for administering education programs authorized by Congress and signed into law by the President. This responsibility involves developing regulations and policy guidance that determine exactly how programs are operated, determining how program funds are awarded to recipients, ensuring that programs are operated fairly and in conformance with both authorizing statutes and laws prohibiting discrimination in federally funded activities, collecting data and conducting research on education, and helping to focus attention on education issues of national importance.

Most Federal funds for education are distributed using one of three methods: a statutory formula based on certain eligibility requirements, such as the number of low-income students in a school district; a competitive process aimed at identifying the most promising proposals or projects targeting a particular educational purpose; or an assessment of financial need, such as the ability of a student or family to pay for college.

Key programs administered by the Department include Title I, Part A College- and Career-Ready Students, which under the President's 2011 request would deliver $14.5 billion to help 20 million students in high poverty schools make progress toward State college- and career-ready standards; Individuals with Disabilities Education Act Part B Grants to States, which would provide almost $12 billion to help States and school districts meet the special educational needs of students of all ages with disabilities; Federal Pell Grants, which would make available nearly $35 billion in grant assistance to poor students enrolled in postsecondary institutions; and the postsecondary student loan programs, which would help provide roughly $120 billion a year in new low-interest loans to help students and families pay for college.

While the Department's programs and responsibilities have grown substantially over the years, the agency itself has not. In fact, with a planned fiscal year 2011 level of 4,603 full-time equivalent employees, the Department's staff is 39 percent below the 7,528 employees who administered Federal education programs in several different agencies prior to the creation of the Department in 1980.

The 2011 request for administration, described in detail below, would help the Department continue this record of effective and efficient management of Federal education programs. Under the request, the amount spent by the Department on Federal administration would be only 2 percent of its total discretionary appropriations and less than 1 percent of the grants and loans administered annually by the Department.

Departmental Management
(BA in millions)

  2009   2010   2011
Program Administration $433.5 1 $456.2 1 $492.5 1
Office for Civil Rights 96.8   103.0   105.7  
Office of the Inspector General 54.5   60.1   65.2  
Student Aid Administration 753.4   870.4   1,170.2  
Other 16.2 2 10.1 2 10.1 2
Recovery Act (non-add) (91.0)   (0)   (0)  

Full-time equivalent employment (FTE)

  2009   2010   2011
Program Administration 2,048   2,078   2,194  
Office for Civil Rights 582   609   614  
Office of the Inspector General 272   298   318  
Student Aid Administration 1,058   1,194   1,457  
Other 29 2 20 2 20 2
Recovery Act (non-add) (29)   (69)   (25)  

   1Includes $5.4 million in 2009, $8.2 million in 2010, and $19.3 million in 2011 for Building Modernization.
   2Includes small Federal Credit Administration accounts and S&E activities in program accounts.
   3Actual FTE usage in 2009; target for 2010 and 2011.

Salaries and Expenses Overview

The 2011 budget request for Salaries and Expenses (S&E) will pay the costs of staff, overhead, contracts, and other activities needed to administer and monitor the Department's educational assistance programs. The Department of Education has the smallest staff of the 15 Cabinet agencies, but its program budget and administrative workload have grown in recent years. Its discretionary budget alone is the third largest, behind only the Department of Defense and the Department of Health and Human Services, yet the Department of Education's staff dropped to an all-time low of 3,989 FTE in fiscal year 2009. While the budget proposes to consolidate 38 ESEA authorities into 11 new programs, the workload in the near future will increase if the proposed consolidations are, as planned, run as competitive grant programs and the old programs are phased out over time. There also is a need for better monitoring and technical assistance related to existing programs. In addition, the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) has greatly expanded the postsecondary student loan portfolio that the Department must service, even before the planned switch to Direct Loans in July 2010.

The Department is requesting $1.8 billion for its discretionary S&E budget in 2011, an increase of $344 million over the 2010 level. This includes $637 million for payroll costs, which would rise an estimated $73 million to pay for an additional 404 FTE, the proposed 1.4 percent Government-wide pay raise in 2011, and employee benefit increases.

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 2011 is $1.2 billion.

This pie chart shows that in FY 2011, 55 percent of Department of Education salaries and expenses costs will be for contracts, 35 percent for personnel costs; 4 percent for overhead (rent and mail); and 6 percent for other non-personnel costs.

The additional funds requested for 2010 are targeted to a few key areas, as follows:

Note that the increases for pay raises are "fixed" increases that will be incurred in 2010. Unless the increase is provided in the 2011 appropriation, the Department will have to reduce support for other activities or cut staff to ensure that resources are available to pay these fixed costs. Student aid contracts and additional staff are essential to ensuring that the Department's most important ongoing operations are not jeopardized. Building Modernization funds will provide long-term savings.

Even with the increase requested for 2011, the discretionary administrative budget would be just 2 percent of the Department's total discretionary appropriation and less than 1 percent of all grants and loans made by the Department last year.

Department Employment

This bar graph shows that full time equivalent employment at the Department of Education has gone from 4,566 in 2001 to a target of 4,603 in 2011.

The 2011 request includes funding for 4,603 FTE, a net increase of 404 FTE from the 2010 level of 4,199 FTE.

A total of 263 additional FTE are requested for the Federal Student Aid office, mainly to manage significant increased workload in the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) and Direct Loans programs, as servicing volume managed by the Department has nearly doubled in the past year and is expected to increase significantly in the next few years as well. Also, additional staff are needed to increase the number of program reviews, to perform risk and internal review activities, validate that corrective actions identified in GAO and OIG reports are complete or in-process, monitor performance measures in annual and strategic plans in order to improve overall organization performance, and procure and manage the increasing contract workload.

The Department is requesting 50 FTE to support innovative programs and approaches such as Race to the Top and Investing in Innovation. These FTE will support a new approach to grants management, transitioning the Department from an organization focused on compliance monitoring to an organization adept at both supporting States in achieving their educational goals and holding States accountable for meeting educational goals, financial requirements, and legal obligations. Most of the FTE will serve on State teams to provide dedicated technical assistance based on in-depth knowledge of each State's capacity, assets, and deficits, using all tools available to provide support and incentives for change. Eventually, the role of these State teams may be expanded to include other Department programs.

Of the total FTE increase, 36 FTE will be administering programs in the following American Recovery and Reinvestment Act (ARRA) accounts: State Fiscal Stabilization Fund, Innovation and Improvement, and Impact Aid. In 2009 and 2010, ARRA funds were used for the payroll costs of these FTE and for related administrative expenses related to ARRA implementation. The authority to use ARRA funds at the Federal level ends in 2010, but key activities such as grant monitoring and technical assistance must continue into 2011.

Six additional FTE are requested in the Office of Elementary and Secondary Education to work in the Student Achievement and School Accountability area to develop regulations and guidance, work on accountability issues, and administer Title II and Title III formula grants (3 FTE); and perform grant management activities for the Effective Teaching and Learning for a Complete Education program (3 FTE).

An increase of 20 FTE is requested in the Office of Inspector General to conduct audits and investigations related to high priority areas of the Department, including Student Financial Assistance programs and operations, information technology security and management, new Department programs, programs nearing reauthorization, and grantee and contract awards.

As part of an OMB Government-wide initiative, the Department is requesting 20 FTE in the Office of the Chief Financial Officer to supplement its acquisition workforce activities in order to achieve contract savings and improve acquisition management. The increase in staff will be split between price analysts and contract specialists. The additional price analysts will help ensure the Department is getting the best possible prices when purchasing goods and services. The additional contract specialists will reduce acquisition costs by improving acquisition cycle times and negotiating better deals.

Five additional FTE are requested in the Office for Civil Rights in order to support civil rights outreach and technical assistance activities, which should reduce complaint volume.

A total of 4 additional FTE are requested in 2011 in the Institute for Education Sciences for the National Center for Education Research to conduct new and expanding research programs including the Reading for Understanding Research initiative and research on chronically low-performing schools (2 FTE) and for the National Center for Special Education Research to expand special education research efforts (2 FTE).

As shown in the following chart, staff is divided among the Washington, D.C. headquarters, 10 regional offices, and 10 field offices. Most regional and field office staff are in Federal Student Aid (FSA), the Office of the Inspector General (OIG), and the Office for Civil Rights (OCR). The FSA regional office staff conduct reviews of lenders, institutions, and guaranty agencies participating in the student financial aid programs, and perform debt collection activities on defaulted student loans. OIG staff conduct audits and investigations of Department programs and operations. OCR investigates civil rights complaints and conducts civil rights compliance reviews.

This map of the United States shows the locations of the regional and field offices of the Department of Education.

Program Administration

The Program Administration account provides administrative support for most programs and offices in the Department. The 2011 request totals $492.5 million, an increase of $36.3 million from the 2010 level. The request includes $308.8 million for personnel compensation and benefits to support 2,194 FTE, an increase of $22.8 million and 116 FTE from the 2010 level.

Non-personnel costs cover such items as travel, rent, mail, telephones, utilities, printing, information technology, contractual services, equipment, supplies, and other services. The total request for non-personnel activities in 2011 is $183.7 million, an increase of $13.5 million from 2010. The increase is primarily for rental payments, increased spending for physical security for buildings and IT security, and the Building Modernization activity, which will help complete the renovation of the Mary E. Switzer building in Washington, D.C. and consolidate Department staff in that building.

Student Aid Administration

The Student Aid Administration account provides funds to administer the Federal student financial assistance programs authorized under Title IV of the Higher Education Act (HEA) of 1965, as amended. The Title IV programs, which provide funds to help students and families pay for the cost of education beyond high school, collectively represent the Nation's largest source of financial aid for postsecondary students. In 2011, there will be a focus on administering loan programs authorized by the Ensuring Continued Access to Student Loans Act of 2008, and on ensuring adequate capacity to originate and service all new loans via the William D. Ford Federal Direct Loan Program.

In fiscal year 2009, Federal Student Aid delivered or supported the delivery of approximately $113 billion in grant, work-study, and loan assistance to almost 13 million postsecondary students and their families. These students attended approximately 6,200 active institutions of postsecondary education accredited by dozens of agencies. Students received loans from approximately 2,900 lenders with 35 agencies guaranteeing those loans through the 2009-10 school year.

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 taxpayers—is one of the Department's greatest management challenges and one of its highest administrative priorities. Primary responsibility for administering the Federal student financial assistance programs rests with Federal Student Aid (FSA) and the Office of Postsecondary Education (OPE).

The Student Aid Administration account represents 63 percent of the Department's total administrative budget. The request would provide $1.2 billion to administer student aid programs in 2011, an increase of $300 million from the 2010 level. The increase is mostly attributable to the servicing of ECASLA loans and to higher origination and servicing costs necessary to handle anticipated increases in loan volume.

Of the total request, $200 million is for staff pay and benefits for 1,457 FTE and $971 million for non-personnel items, primarily for contracts for the processing of student aid grant and loan applications; payments to students, schools, guaranty agencies, and lenders; and to collect defaulted loans.

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 2011 request for OCR is $105.7 million, an increase of $2.7 million over the 2010 level. About $79 million of the OCR budget is for staff pay and benefits for its 614 FTE; the remaining $27 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 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 2011 request for the OIG is $65.2 million, an increase of $5.2 million over the 2010 level. Approximately 70 percent of this amount, or $46 million, is for personnel compensation and benefits to support a staffing level of 318 FTE.

The non-personnel request of $19.2 million includes $1.9 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.

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For further information contact the ED Budget Service.

This page last modified—February 1, 2010 (mjj).