Six months ago, I called a news conference to announce the review of serious management and fraud problems at the Department of Education, which had been identified by the General Accounting Office, the Department's Inspector General, and the Department's financial auditors. They had cited the Department for inadequate financial reporting, bad reconciliation of financial records, and poor control over information systems. I told you that my response to those issues was the Truman response: The buck stops here.

I announced an initiative to restore the confidence of Congress and the public in the Department, and to ensure that we become a responsible steward of taxpayers' funds. I asked some senior managers to turn away from their normal jobs for six months and devote their full attention to this task by joining a Management Improvement Team.

Of the 661 audit recommendations identified by the team, 575 are now subject to corrective action plans, and 383 of those plans have already been completed. 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.

Among the highlights of our progress are the negotiations we completed with the General Accounting Office, the Office of Management and Budget and others to establish the specific actions needed to remove the Department's student financial assistance programs from the GAO High-Risk List. We also collected $153 million—$135 million since April 1, 2001—as a result of locating defaulted borrowers by matching with the U.S. Department of Health and Human Services "National Directory of New Hires" database

We minimized the risk of fraud, waste and abuse by limiting purchase card use by reducing employee access to cards, and reducing spending limits, and by modifying our payment systems to check incoming bills and permit only authorized officials to approve payments.

We have also changed financial management practices so that the Department can now prepare interim financial statements on a quarterly basis, and reconcile all significant accounts and programs to the Department's general ledger accounts within 45 days of the end of each calendar month.

While these and other results are impressive, the team's most important achievement is a roadmap for improving the Department's management in the future, The Blueprint for Management Excellence. Today, I am pleased to report that the Department of Education has a new management direction. The Blueprint contains an action plan for putting the Department's management and financial house in order. It will continue the momentum of the past six months and will ultimately make us a model for other government organizations.

You are all holding copies of the Blueprint, and we will be going over key components of that document shortly.

At our meeting in April, I also asked the Council for Excellence in Government to join our review. The Blueprint reflects many of the Council's recommendations, and it also embraces key features of the President's Management Agenda for Fiscal Year 2002 released earlier this year by the Office of Management and Budget.

Also during this period, the president announced his intention to nominate Bill Leidinger as the first assistant secretary for management in six years, and Jack Martin as the first chief financial officer in three years. These two talented and experienced managers will bring critical skills to the Department and help us move forward with full control of the funds that have been entrusted to us to help America's children.

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

I also thank the Council for Excellence in Government; our deputy secretary, Bill Hansen; the General Accounting Office; and many other internal and external managers for contributing to the reform of our management systems, the Blueprint for Management Excellence, and the continuing improvement of the U.S. Department of Education.

President Bush is asking schools to be accountable to their communities, and it is only fair that the Department of Education should be accountable to Congress and the public.

Thanks to the work of all of these dedicated men and women, we can move forward more vigilantly and more focused on our goal of ensuring that no child in America is left behind.

Pat and Bill will say a few words, and after those presentations we will be happy to take your questions.

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