More Resources Secretary's Statement

U.S. Secretary of Education Rod Paige today issued a detailed plan for transforming the Education Department into a high-performance organization and restoring public trust in the agency. The plan marks the end of a six-month process that began with a thorough review of historic management issues at the Department and included an intensive effort to create action plans to address those issues and to develop a long-term management plan—the Blueprint for Management Excellence.

"Today I am pleased to report that the Department of Education has a new management direction," Paige said. "The Blueprint contains an action plan for putting the Department's management and financial house in order that will continue the momentum we have created over the past six months and will ultimately make us a model for other government organizations."

The Blueprint for Management Excellence was prepared by a team of senior career managers within the Department whom Paige drafted in April to take part in a management improvement initiative to address areas within the Department, which according to independent and government audits, are susceptible to fraud and abuse. Paige created the Management Improvement Team and charged its members with: identifying and reviewing a multitude of weaknesses and corresponding recommendations identified over the past several years by the Government Accounting Office (GAO), the Department's Office of Inspector General and the Department's financial auditors; strengthening the Department's management performance by addressing those items; and creating recommendations for establishing accountability for results and performance-based management within the Department.

The Management Improvement Team identified 661 recommendations within those audits related to financial, management and information system weaknesses. During the past six months, the Management Improvement Team has created corrective action plans to address 575 of those audit recommendations and has completed 383 of those plans to close out the recommendations. Of the 242 items identified by the team as high priority items, each one has been closed or is subject to a corrective action plan. The following are some highlights from the steps taken by the Department and the Management Improvement Team:

• Completed negotiations with GAO and Office of Management and Budget representatives and other partners to establish the specific actions needed to have GAO remove the Department's student financial assistance programs from its High-Risk List.

• Collected $153 million—$135 million since April 1, 2001—as a result of locating defaulted borrowers by matching records with the U.S. Department of Health and Human Services "National Directory of New Hires" database.

• Limited purchase card use by reducing employee access to cards, and reduced spending limits—in some cases by more than 90 percent.

• Implemented a payment system that checks incoming bills and permits only authorized officials to approve payments in order to minimize risk of fraud, waste and abuse, including but not limited to duplicate payments.

• Terminated use of third-party drafts to eliminate the potential for abuse.

• Began preparing interim financial statements on a quarterly basis.

• Established a practice of reconciling all significant accounts and programs to the Department's general ledger accounts within 45 days of the end of each calendar month.

• Launched a yearlong leadership development program with the Council for Excellence in Government and selected 24 professional staff as participants.

The Blueprint is the next step in the Management Improvement Team's mission. The Blueprint sets goals for management improvements that will reduce possible fraud, waste and abuse of taxpayer dollars, reduce the risk of errors and permit effective monitoring of Department programs. In the area of financial management, the goal is to make improvements that will provide managers and stakeholders with timely and accurate financial information and reports.

Throughout the past six months, the Management Improvement Team has worked with the Council for Excellence in Government, a nonpartisan, nonprofit group that works to improve the performance of government at all levels. The council has provided an independent review of the team's progress and of the Blueprint, and its president and CEO, Patricia McGinnis, joined Paige and Deputy Secretary of Education Bill Hansen to unveil the Blueprint at a press conference at the Department.

"We are taking important steps to ensure that all Department employees, including our most senior managers, are indeed held accountable for results," Paige said. "I want to thank the Management Improvement Team for their hard work and also to announce that a new team will be put in place immediately to monitor and measure implementation of the action items in the Blueprint."

In addition to the goals discussed above, the following are goals set forth in the Blueprint for the senior leadership of the Department and the new monitoring and measurement team:

• achieve an accountability for results culture within the Department;
• develop and maintain financial integrity, with management and internal controls;
• modernize the student financial assistance programs and reduce the risk of fraud, waste, error and mismanagement;
• expand strategies for using human capital, with attention to recruiting, training and management issues; and
• manage information technology systems to improve business and communications processes.

"Ultimately, to achieve success, we must create a culture of accountability within the Department that focuses all of our employees, contractors and senior leaders on producing results for American students," said Hansen. "We will measure our progress and monitor our results, and all employees and contractors will be held appropriately responsible for their performance in relation to our goals and objectives."

The Blueprint embraces key features of the government-wide initiatives in the President's Management Agenda for Fiscal Year 2002 (the "Agenda") released earlier this year by the Office of Management and Budget, and it incorporates the one program initiative from the Agenda that applies to the Department: eliminate fraud and error in student aid programs and deficiencies in financial management.

Finally, Paige said the Blueprint establishes the solid management foundation from which the Department can build programs to help every American student receive a quality education at all levels.

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