**U.S. Department of Education**

**Office of Inspector General**

**[Semiannual Report To Congress, Number 56]{.underline}**

***October 1, 2007, - March 31, 2008***

**[Table of Contents]{.underline}**

**[Message to Congress]{.underline}**

**[Overview]{.underline}**

**[Student Financial Assistance Programs]{.underline}**

***Special Allowance Payments***

American Education Services/Pennsylvania Higher Education Assistance

Agency

***FSA Operations***

Central Processing System Edit Check

***Title IV Program Participants***

Capella University

Wilberforce University

Herzing College-Madison

Vatterott College-Des Moines

***Investigations***

California

> Former Financial Aid Director of the University of West Los Angeles
> and Two Middlemen Pled Guilty in \$1.3 Million Student Aid Scheme

Former Westwood College Admissions Representatives Pled Guilty to Fraud

Connecticut

> Loan Management Consultant Pled Guilty to Fraud

Illinois

> Co-Founder and Former President of Native American Educational
> Services Sentenced

New York

> Three Teachers and Others Sentenced in Transcript Tampering Scheme at
> Touro College

Oklahoma

DeMarge College Agrees to \$230,000 Civil Settlement

Pennsylvania

> Career Education Corporation, Inc. Agrees to \$2.2 Million Civil
> Settlement

**[Elementary and Secondary Education Programs]{.underline}**

***ESEA/NCLB***

ESEA Perspective Paper

Comparability of Services

***Grantee Accountability***

California: San Diego Unified School District

New Jersey: Elizabeth Public School District

Ohio: Migrant Education Program

High Risk Grantees

Virgin Islands Department of Education

***Investigations***

Alabama

> Former High School Principal Sentenced

District of Columbia

> Former Executive Director of the District of Columbia's Office
>
> of Charter School Oversight Sentenced
>
> Former Internal Audit Director for the District of Columbia Public
>
> Schools Pled Guilty to Theft

Louisiana

Two Former Orleans Parish School System Employees

> Sentenced

Texas

> Former Pharr San Juan Alamo Officials Pled Guilty in Bribery Scheme

Two Pled Guilty in Alien Smuggling Scheme Involving Teachers

**[Financial Management and Internal Operations]{.underline}**

***Financial Management***

Financial Statement Audits

Drug Control Funds

***Internal Operations***

Unimplemented Recommendations

Financial Disclosures

***Investigations***

Texas

> Former Employee of Department Contractor Pled Guilty to Conspiracy

**[Hurricane-Related Efforts]{.underline}**

Temporary Emergency Impact Aid Funds

Georgia

Similar Findings in Other States

Restart Funds

Louisiana

Findings in Other States

**[Other Efforts]{.underline}**

Hotline Posters

> Nonfederal Audits
>
> President's Council on Integrity and Efficiency

OIG Testifies for PCIE before U.S. Senate Subcommittee OIG Receives
Alexander Hamilton Award

OMB Issues Best Practice Guide

> PCIE/GAO 2008 Financial Statement Audit Conference

**[Charts]{.underline}**

> **Table 1:** Recommendations Described in Previous Semiannual Reports
> on Which Corrective Action Has Not Been Completed
>
> **Table 2:** OIG Audit Reports on Department Programs and Activities
> (October 1, 2007, to March 31, 2008)
>
> **Table 3**: Other OIG Reports on Department Programs and Activities
> (October 1, 2007, to March 31, 2008)

**Table 4**: OIG Issued Audit Reports with Questioned Costs

> **Table 5**: OIG Issued Audit Reports with Recommendations for Better
> Use of Funds

**Table 6**: Unresolved Reports Issued Prior to October 1, 2007

**Table 7**: Statistical Profile: October 1, 2007 to March 31, 2008

**MESSAGE TO CONGRESS**

We are pleased to provide this semiannual report on the activities and
accomplishments of the Office of Inspector General (OIG), U.S.
Department of Education (Department) from October 1, 2007, through March
31, 2008. The audits, inspections, investigations, and other activities
highlighted in this report illustrate our on-going commitment to
promoting accountability, efficiency, and effectiveness in federal
education programs and operations.

Over the last six months, OIG issued 31 audit, inspection, and related
reports. We identified over \$45 million in questioned costs and over
\$5 million in unsupported costs. We closed 56 investigations, with over
\$6 million in recoveries, restitutions, fines, settlements, and
forfeitures/seizures, and savings to the Department of over \$10
million. As you will read in the pages of this report, our work
identified a need for the Department to improve its monitoring and
oversight in the programs and operations we reviewed. This conclusion
was echoed in two reports released in March by the Government
Accountability Office (GAO) on the Department's monitoring and oversight
of two unrelated programs. You will find more information on the work we
completed over the last six months in this report, including information
on the third in our series of reports on overpayments made by the
Department to lenders at the 9.5 percent special allowance payment rate.

Our audit report centered on the American Education
Services/Pennsylvania Higher Education Assistance Agency (AES/PHEAA) and
found that AES/PHEAA may have received an estimated \$35 million in
overpayments. Earlier this year, the Department issued its final
determination on our AES/PHEAA audit, agreeing with most but not all of
our findings. On January 25, the Department sent a letter to AES/PHEAA
instructing officials to recalculate the subsidies it claimed on loans
from October 2004 to September 2006 and to repay an estimated \$14
million that it had inappropriately billed. Although we disagree with
the Department's decision not to sustain all of our findings, we are
pleased it is moving ahead to recover a substantial amount of loan
subsidies improperly paid to AES/PHEAA. We currently have additional
work in this area underway to help ensure that taxpayer dollars are
protected.

As you continue to work to reauthorize the *Elementary and Secondary
Education Act of 1965* (ESEA), as amended by the *No Child Left Behind
Act of 2001,* I would once again like to bring to your attention our
significant body of work on a number of key provisions of the law. Over
the last seven years my office released over 130 ESEA-related reports,
providing recommendations for improving the administration of the
programs by the Department and its grantees. During this reporting
period and based on our experience with the administration of the ESEA
programs, we identified the most significant issues and suggestions that
we believe can help improve accountability and integrity in ESEA
programs. This information was presented in a report entitled, *An OIG
Perspective on Improving Accountability and Integrity in ESEA Programs.*
The report was provided to Congress in October 2007. This paper and
other OIG final reports can be accessed via our website at
<http://www.ed.gov/about/offices/list/oig/index.html?src=oc>. Interested
individuals may sign-up to receive email notification when a new report
is issued by completing the information requested at:
<http://www.ed.gov/about/offices/list/oig/areports.html>.

While we have produced a substantial body of work in recent years,
please know that we face significant resource challenges in meeting the
increased demand for our services. At our present funding level,
combined with the Department\'s limited administrative budget, which
impacts its ability to provide adequate monitoring and oversight of its
programs and operations, we cannot assure the Congress or the Department
that these programs and operations are functioning as effectively and
efficiently as they should.

Increases in our budget, while significant and appreciated, have failed
to keep up with increases in the cost of doing business. In FY 1993, our
full time employee (FTE) strength was at its highest in our history --
363 strong -- when the Department had stewardship of over \$190 billion.
In FY 2007, our FTE was down to 287 when the Department had
responsibility for over \$500 billion. Our current resources are spread
so thin that we continue to put on hold a number of planned audits and
other assignments, as staff has been reassigned to a growing number of
statutory requirements and Congressionally-requested efforts.

As we have reported in our Semiannual Reports to Congress, OIG has
historically recovered more on a yearly basis than our annual budget;
thus dedicating additional resources to this office is a good
investment. Such an investment would be one of the best ways to provide
assurance to the Congress and the Department that Department programs
and operations are functioning as effectively and efficiently as
America\'s taxpayers demand and America\'s students deserve.

Finally, after nearly 40 years in federal service, including the last 28
with the OIG, I have made the decision to retire effective July 1, 2008.
It has truly been an honor to have been given the opportunity to serve
America's taxpayers and students in the role of Inspector General.
Throughout my tenure, OIG has made significant contributions that better
enable the Department to meet its mission and promote educational
excellence throughout the nation. I am proud of our accomplishments and
have enjoyed working with Congress in furthering the goals of this
office and achieving our vital mission.

Thank you again for your support and for allowing me to serve this
country in such an important capacity.

John P. Higgins, Jr.

**[OVERVIEW]{.underline}**

We are pleased to provide this semiannual report on the activities and
accomplishments of the Office of Inspector General (OIG), U.S.
Department of Education (Department) from October 1, 2007, through March
31, 2008. The audits, inspections, investigations, and other activities
highlighted in this report illustrate our on-going commitment to
promoting accountability, efficiency, and effectiveness in federal
education programs and operations.

The success of an organization's mission and the achievement of its
goals depend on how well it manages its programs, and it cannot
effectively manage its programs without establishing and maintaining
appropriate internal control. "Internal control" is the plans, methods,
and procedures aimed at helping an agency meet its goals and achieve its
objectives, while minimizing operational problems. In 1999, the
Government Accountability Office (GAO) released *Standards for Internal
Control in the Federal Government* that presents an overall framework to
help federal government agencies establish and maintain internal
control. It established five standards for internal control to help
agencies establish and maintain effective internal control, as well as
identify and address major performance challenges and areas at greatest
risk of fraud, waste, and abuse. One of the five standards is monitoring
-- an activity that the GAO report says should occur in the course of
normal business to assess the quality of performance. Work completed by
OIG over the last six months identified a need for the Department to
improve its monitoring and oversight in the programs and operations we
reviewed. This conclusion was echoed in two reports released in March by
the GAO on the Department's monitoring and oversight of two additional
and unrelated programs.

Our work continues to identify a similar need for improved monitoring
and oversight by the Department's grantees and program participants
reviewed during this reporting period in order to ensure that the
federal education funds they receive are being used as required by law
and regulations, and consistent with Department guidance. You will find
more detailed information on this work in this report, which we have
separated into four sections: work conducted in the area of student
financial assistance; work conducted in the areas of elementary and
secondary education; work specific to the Department's financial
management and internal operations; and the hurricane-related audit work
we conducted in response to recovery efforts in the wake of Hurricanes
Katrina and Rita.

With \$82 billion awarded in fiscal year (FY) 2007 through the student
financial assistance programs and an outstanding loan portfolio of close
to \$500 billion, the Department's Federal Student Aid office (FSA) must
provide adequate monitoring and oversight of its programs, operations,
and participants to help protect these taxpayer dollars from waste,
fraud, and abuse. In the first section of this report, you will find
summaries of our more significant work in this area,

including information on the third in our series of reports on
overpayments made by the Department to lenders at the 9.5 percent
special allowance payment (SAP) rate. This audit report centered on the
American Education Services/Pennsylvania Higher Education Assistance
Agency (AES/PHEAA) and found that AES/PHEAA may have received an
estimated \$35 million in overpayments. We also released an audit that
found that FSA does not have a process in place to effectively monitor
resolution of comment codes from its Central Processing System by
institutions disbursing federal student financial assistance. This audit
found that, with respect to \$1.5 billion in student financial aid
disbursements, FSA did not have a record of whether institutions
resolved certain comment codes. In addition to detailed information on
these findings, you will also find summaries of our more significant
investigative cases involving employees of postsecondary institutions or
corporations involved in higher education.

In the second section of this report, we provide a summary of our recent
work in the area of elementary and secondary education programs. In
recent years, we have focused more of our resources on reviewing
elementary and secondary education programs and program participants.
Over the last seven years, OIG has released over 130 reports related to
the *Elementary and Secondary Education Act of 1965 (*ESEA), providing
recommendations for the Department and, when applicable, Congress, to
improve the Department's administration of the programs or that of its
grantees. During this reporting period, we released a report that
identified the most significant issues and suggestions that we believe
can help improve accountability and integrity in ESEA programs. This
information was presented to Congress in a report entitled *An OIG
Perspective on Improving Accountability and Integrity in ESEA Programs.*
The highlights, along with summaries of our more significant efforts in
the elementary and secondary education area, can be found in this
section of the report. As you will see, our work identified a need for
the Department to improve its oversight and monitoring in the programs
we reviewed. We found much of the same with the grantees we audited,
where ineffective monitoring and oversight can impact a state
educational agency's (SEA) and local educational agency's (LEA) ability
to meet statutory requirements. Also in this section are summaries of
our more significant investigative cases involving misuse of federal
education funds by individuals, including teachers, school
superintendents, and other officials.

In the third section of this report are highlights of the audits and
reviews we completed on the Department's financial management and
internal operations--- areas where effective oversight and monitoring
reduce an agency's vulnerability to waste, fraud, and abuse. In 2007,
the Department received a "clean" audit opinion on its financial
statements for the sixth year in a row. While this accomplishment is
noteworthy, the audits did reveal that a renewed focus is warranted
regarding program monitoring activities, credit reform estimates and
financial reporting, and noted repeat control weaknesses within
information technology (IT) security and systems indicating the need to
address the root causes of security or control weaknesses uniformly
across the organization. In addition, OIG completed work on two
Congressionally-directed requests related to internal operations. The
findings of these efforts can be found in this section of the report,
along with a summary of an investigative case involving a former
employee of a Department contractor.

With regard to Section 845 of the *National Defense Authorization Act
for Fiscal Year 2008*, which requires each OIG to include information in
its Semiannual Reports to Congress on final contract-related audit
reports that contain significant findings, OIG did not issue any such
report over the last six months. In the future, we will include
summaries of such reports in the "Internal Operations" section of our
report.

In the fourth section of our report, we provide summaries of our audit
products related to hurricane-related education funds. As reported in
our previous Semiannual Reports to Congress, OIG conducted a series of
audits to determine whether *Hurricane Education Recovery Act* (HERA)
funds were expended as required by federal law, regulations, and
Department guidance. Congress allotted over \$1.9 billion for the HERA
programs we reviewed. During this reporting period, we released our
final two HERA-related audits. Our findings were consistent with work
conducted and reported on in other states. You will find more details on
our overall work in this section of the report.

OIG constantly strives to improve its operations through our work with
the IG community. In the fifth section of this report, we highlight a
number of our contributions and accomplishments over the last six months
within the IG community, which includes OIG testifying on behalf of the
President's Council on Integrity and Efficiency (PCIE) before a U.S.
Senate Subcommittee on the PCIE's National Single Audit Sampling Project
and OIG's receipt of the prestigious PCIE Alexander Hamilton Award for
Excellence.

In the sixth and final section of this report, there is a compilation of
tables of the audits, inspections, and investigations we concluded
during this reporting period, as required by the *Inspector General Act
of 1978,* as amended.

Copies of the reports discussed in this Semiannual Report may be found
on the OIG website at
<http://www.ed.gov/about/offices/list/oig/index.html?src=oc>. Interested
individuals may sign-up to receive email notification when a new report
is issued by completing the information requested at:
<http://www.ed.gov/about/offices/list/oig/areports.html>.

For more information on the work or activities discussed in this report,
please contact the OIG Congressional Liaison at (202) 245-7023, or visit
our website at
<http://www.ed.gov/about/offices/list/oig/index.html?src=oc>.

**[STUDENT FINANCIAL]{.underline}**

**[ASSISTANCE PROGRAMS]{.underline}**

The federal student financial assistance programs involve over 6,000
postsecondary institutions, more than 3,000 lenders, 35 guaranty
agencies, and many third party servicers. During FY 2007, FSA provided
\$82 billion in awards and managed an outstanding loan portfolio of
close to \$500 billion. As the office responsible for administering
these programs, FSA must conduct effective monitoring and oversight of
programs, operations, and participants to help protect higher education
dollars from waste, fraud, and abuse. Work concluded over the last six
months identified weaknesses in FSA\'s monitoring in the programs we
reviewed and a need for the Title IV program participants we audited to
ensure that the federal education funds they receive are spent in
accordance with applicable law, regulations, and Department guidance.

In addition, OIG investigative staff continues to identify and pursue
cases of theft of student financial assistance, especially by those in
positions of trust in America's schools. Summaries of these reports and
examples of our work in this area are highlighted below.

**[Special Allowance Payments]{.underline}**

**American Education Services/Pennsylvania Higher Education**

**Assistance Agency**

In November, we released our audit of AES/PHEAA, where we sought to
determine whether AES/PHEAA billed for certain special allowance
payments in compliance with the requirements in the *Higher Education
Act of 1965*, as amended (HEA) and regulations, and consistent with
other guidance issued by the Department, for the period July 1, 2003,
through June 30, 2006.

Special allowance payments are made to lenders on certain loans in the
Federal Family Education Loan (FFEL) Program to ensure that lenders
receive an equitable return on their loans. In general, the amount of a
special allowance payment is the difference between the amount of
interest the lender receives from the borrower or the government and the
amount that is provided under requirements in the HEA. The HEA includes
a special allowance calculation for loans that are funded by tax-exempt
obligations issued before October 1, 1993. The quarterly special
allowance payment for these loans may not be less than 9.5 percent,
minus the interest the lender receives, divided by four. We refer to
this calculation as the "9.5 percent floor." When interest rates are
low, the 9.5 percent floor provides a significantly greater return than
lenders receive for other loans.

Our audit found that AES/PHEAA's billing did not comply with
requirements for the 9.5 percent floor. AES/PHEAA's billing under the
9.5 percent floor---

-   Included loans that were refinanced after September 30, 2004, by
    taxable obligations and ineligible tax-exempt obligations. Under
    amendments to the HEA in the Taxpayer-Teacher Protection Act of
    2004, these loans are not eligible for the 9.5 percent floor. We
    estimate that this non-compliance resulted in special allowance
    overpayments of about \$14 million.

-   Included loans that were funded by tax-exempt obligations issued on
    or after October 1, 1993. We determined that, under the HEA, loans
    funded by these obligations are not eligible for the 9.5 percent
    floor. We estimate that this non-compliance resulted in special
    allowance overpayments of about \$21 million. (About \$1.5 million
    of this amount is also in the overpayment listed above.)

-   For the quarter ended March 31, 2006, contained two errors, which
    resulted in special allowance overpayments of about \$134,000.

-   Created a significant risk that loans billed by AES/PHEAA under the
    9.5 percent floor were ineligible for that calculation because they
    were not eligible first-generation or second-generation loans.
    AES/PHEAA had no controls in place to ensure that the loans billed
    under the 9.5 percent floor were funded by the eligible sources of
    funds identified in law and regulation. Since the Department has
    stated that it will not seek repayment of prior improper payments if
    a lender agrees to certain terms---which include a separate
    independent audit---and since a separate independent audit is in
    process to identify AES/PHEAA's eligible first-generation and
    second-generation loans, we did not determine the extent to which
    AES/PHEAA's 9.5 percent floor billings included only eligible
    first-generation and second-generation loans.

In addition, we confirmed with AES/PHEAA that, other than in the change
request forms it used to update its systems, it had no documented
policies and procedures for the processes it used to manage its student
loan portfolio. This lack of written policies and procedures may have
caused its non-compliance and billing errors.

Based on our findings, we recommended that FSA instruct AES/PHEAA to
return the special allowance overpayments we describe in our report,
stop billing under the 9.5 percent floor for ineligible loans, and
document and implement policies and procedures for managing its student
loan portfolio. AES/PHEAA did not concur with our findings and
recommendations.

Earlier this year, the Department issued its final determination on our
AES/PHEAA audit, agreeing with most but not all our findings. On January
25, the Department sent a letter to AES/PHEAA instructing officials to
recalculate the subsidies it claimed on loans from October 2004 to
September 2006 and to repay an estimated \$14 million that it had
inappropriately billed. The Department, however, did not agree with our
finding on loans funded by post-October 1, 1993, tax-exempt obligations
because it concluded that loans refinanced prior to September 30, 2004,
by these tax-exempt obligations remained eligible for the 9.5 percent
floor unless the prior tax-exempt obligation used to acquire the loan
was retired or defeased. Although we disagree with the Department\'s
determination on this finding, we are pleased that the Department is
moving ahead to recover a substantial amount of loan subsidies
improperly paid to AES/PHEAA. We are currently conducting more work in
this area to help ensure that taxpayer dollars are protected. Click here
for a copy of our report:
[[http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a03g0014.pdf]{.underline}](http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a03g0014.pdf).

**[FSA Operations]{.underline}**

**Central Processing System Edit Check**

We conducted an audit to evaluate the effectiveness of the Department\'s
processes for: (1) ensuring that institutions resolve comment codes
generated by the Department\'s system for processing applications for
federal student aid; and (2) monitoring and using data from comment
codes. The Central Processing System (CPS) receives and processes
student financial assistance application and correction information and
initiates the process of determining the applicant\'s eligibility for
aid. CPS generates and sends reports to the student applicant and the
postsecondary institutions that are listed on the student\'s Free
Application for Federal Student Aid (FAFSA). The reports contain comment
codes that point out possible missing or inconsistent data that affect
student aid eligibility such as student aid overpayments, citizenship,
registration for Selective Service, drug convictions, or loan limits.
Institutions are required to resolve these comment codes before
disbursing federal student aid.

Our audit found that FSA does not have a process to effectively monitor
comment codes known as Institution Student Information Report/Student
Aid Report (ISIR/SAR) \"C codes,\" does not use C code data to determine
which institutions should be selected for program reviews based on high
occurrences of these codes, and does not have a tracking mechanism to
monitor institutions with high occurrences of C codes. Because FSA does
not track or monitor whether the institution maintained documentation on
C code resolution, the number of unresolved C codes identified in our
analysis indicates that institutions may not be resolving all C codes.
As a result, we determined that for the time period reviewed, over \$1.5
billion of federal student financial assistance was disbursed to
students whose eligibility may have been affected if C codes related to
citizenship, Selective Service registration, Pell Grant overpayments,
and loan limits were not appropriately resolved.

We made several recommendations aimed at improving the edit check
process, including that FSA periodically obtain reports to track the
frequency of C codes by schools and identify institutions that are not
resolving those codes, and that FSA use the reports to select
institutions for a program review that focuses solely on the resolution
of C codes. We also recommended that FSA develop and implement a policy
that requires follow-up with institutions that have excessively high
rates of unresolved C codes.

FSA did not specifically state whether it concurred with our finding and
related recommendations; however, it did state that its current audit
resolution and program review processes for monitoring the resolution of
C codes are very effective, indicating that it did not concur with our
finding. In addition, FSA stated that the risk to over \$1.5 billion
suggested by our report is overstated, as the occurrence of C code data
alone does not support our contention that institutions may not be
resolving these codes. We did not alter our findings or recommendations
based on FSA's comments, as the absence of findings in the audit or
program review reports reviewed by FSA cannot support a conclusion that
the risk associated with unresolved C codes is overstated. Click here
for a copy of our report:
[[http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a04g0002.pdf]{.underline}](http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a04g0002.pdf).

**[Title IV Program Participants]{.underline}**

> **Capella University**
>
> Capella University (Capella) is a proprietary school headquartered in
> Minneapolis, Minnesota. Capella provides all of its instruction online
> and does not have any "brick and mortar" classroom facilities. Capella
> currently offers more than 700 online courses that are part of
> certificate, undergraduate and graduate degree programs in more than
> 80 specialized areas of study. We conducted an audit to determine
> whether Capella complied with selected provisions of the HEA and
> regulations governing: (1) the return of Title IV program funds; (2)
> FFEL and Pell Grant disbursements; (3) institutional eligibility; (4)
> program eligibility; and (5) student eligibility. For the time period
> reviewed, Capella received over \$328 million in Title IV funding.
>
> Overall, we found that Capella generally complied with the provisions
> of the HEA and regulations governing institutional eligibility,
> program eligibility, and student eligibility; however, it did not
> comply with the provisions of the HEA and regulations governing return
> of Title IV program funds and FFEL and Pell Grant disbursements.
> Capella did not return all funds disbursed on behalf of students who
> dropped before the first day of class of the payment period. Capella
> lacked documentation of the students' attendance for its on-line
> programs, thus it returned about \$588,000 less than it should have.
> Capella also disbursed FFEL and Pell Grants to students who were not
> enrolled in an eligible program at the time of the disbursement. As a
> result, it had the use of about \$3.5 million in federal funds every
> quarter for 2 to 10 days, and the Department may have made unnecessary
> interest and special allowance payments related to these funds.
>
> As a result of our findings, we made a number of recommendations,
> including that FSA require Capella to review its files and return the
> improperly retained Title IV funds, as well as develop and implement
> policies and procedures to provide reasonable assurance that funds are
> not disbursed to students who are not enrolled. Capella officials did
> not concur with all of our findings. Click here for a copy of the
> report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a05g0017.doc>.
>
> **Wilberforce University**
>
> We conducted an audit to determine whether Wilberforce University
> (Wliberforce), located in Ohio, complied with select provisions of the
> HEA and regulations governing the return of Title IV funds, student
> eligibility, disbursements, and award calculations. During the time
> period reviewed, Wilberforce disbursed over \$21 million for these
> programs and we identified significant instances of noncompliance in
> all of these areas.
>
> Among our findings: Wilberforce did not return over \$61,900 in
> unearned Title IV funds; did not administer the Federal Work Study
> program in accordance with the HEA and regulations, resulting in
> payment of over \$2.3 million in wages that lacked adequate supporting
> documentation; and disbursed over \$38,600 in Title IV funds to
> ineligible students. We determined that Wilberforce did not comply
> with the Title IV requirements because it was not administratively
> capable. Wilberforce experienced significant staff turnover and lacked
> sufficient financial aid staff, and failed to develop and implement
> written policies and procedures. It also did not maintain all records
> needed to demonstrate compliance with the HEA and applicable
> regulations and did not ensure sufficient communication between the
> financial aid office and all other institutional offices at the
> school.
>
> We made a number of recommendations, including that FSA place
> Wilberforce on provisional certification and the reimbursement payment
> method, and that it take appropriate action to fine, limit, suspend,
> or terminate Wilberforce's participation in the Title IV programs.
> Wilberforce did not concur with any of our findings and disagreed with
> all of our recommendations, except those involving implementation of
> written policies and procedures. Click here for a copy of the report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a05g0029.doc>.
>
> **Herzing College-Madison**
>
> Herzing College-Madison (HCM) is one of the Herzing Corporation's
> proprietary schools located in Madison, Wisconsin. During this
> reporting period, we reviewed HCM's compliance with the HEA and
> regulations governing: (1) general student eligibility; (2) return of
> Title IV funds; (3) institutional eligibility requirements under the
> 90/10 rule; and (4) Federal Perkins (Perkins) loan collections. For
> the time period reviewed, HCM received over \$12.2 million in Title IV
> funds for these programs.
>
> While we found that HCM generally complied with the HEA and
> regulations for the bulk of these programs, HCM did not always comply
> with the requirements governing Perkins loan collections.
> Specifically, HCM did not always promptly convert Perkins loan
> borrowers to repayment or provide the required exit counseling when
> borrowers ceased attending the school at last half time. Based on our
> finding, we recommended that FSA require HCM to review its files and
> ensure that all impacted students received the required Perkins loan
> notifications, and confirm that it is providing exit counseling in
> accordance with federal regulations. HCM officials concurred with our
> finding and agreed with our recommendations. Click here for a copy of
> our report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a05h0015.doc>.

**Vatterott College-Des Moines**

> Vatterott College, Des Moines (VC-DM) located in Iowa, is one of
> Vatterott Educational Centers Corporation's private career colleges.
> We conducted an audit to determine VC-DM's compliance with the HEA and
> regulations governing student eligibility (high school diplomas and
> General Education Development (GED) certificates only) and return of
> Title IV funds. VC-DM received over \$11.4 million in Title IV program
> funding for the time period we reviewed.
>
> Our work revealed that while VC-DM complied with requirements
> governing student eligibility and generally complied with requirements
> governing the return of Title IV funds, its L'Ecole Culinaire location
> did not include all charges in its return of Title IV calculations,
> and none of VC-DM's locations maintained documentation of students'
> official notice of withdrawal. Specifically, we found that L'Ecole
> Culinaire did not include uniforms, books, and supplies as
> institutional charges in return to Title IV calculations for the
> 2006-2007 award year. Instead, it treated these materials as
> non-institutional charges without substantiating that students were
> provided a real and reasonable opportunity to purchase the materials
> from an alternative source. School officials said they were not fully
> aware of the requirement and believed they were complying with the
> regulations. In addition, VC-DM did not maintain adequate
> documentation of students' official notifications of withdrawal. Not
> maintaining this documentation could have an effect on the withdrawal
> date used in return to Title IV calculations.
>
> We recommended that FSA require VC-DM to either substantiate that
> L'Ecole Culinaire provided students a real and reasonable opportunity
> to purchase materials from an alternative source and maintain
> documentation of students' official notifications of withdrawal or
> return any amounts to the Department or FFEL lenders as appropriate.
> VC-DM officials did not agree with all of our findings or
> recommendations. Click here for a copy of our report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a07h0018.doc>.

**[Investigations]{.underline}**

Identifying and investigating fraud and abuse in the student financial
assistance programs has always been a top OIG priority. The following
are summaries of some of our more significant cases of student financial
assistance fraud conducted over the last six months involving school
officials and student loan servicers.

**California**

> **Former Financial Aid Director of the University of West Los Angeles
> Law School and Two Middlemen Pled Guilty in \$1.3 Million Fraud
> Scheme.** The former financial aid director at the University of West
> Los Angeles (UWLA) Law School and two middlemen pled guilty in U.S.
> District Court, Central District of California, to charges related to
> a \$1.3 million student aid fraud scheme. Our investigation disclosed
> that the former financial aid director entered into an agreement with
> the two middlemen to recruit individuals to participate in the scheme.
> The participants, who were not enrolled in the school and did not plan
> to enroll in the school, were given applications to apply for student
> aid, which they completed and returned to one of the middlemen, which
> were then returned to the former financial aid director. The former
> financial aid director required most of the loan recipients to
> kick-back approximately 50 percent of the loan amount. To date, 19
> individuals have been charged for their roles in this scheme.
>
> **Former Westwood College Admissions Representatives Sentenced for
> Fraud**. Two former Westwood College admission representatives were
> sentenced in U.S. District Court, Central District of California, for
> student financial aid fraud. Our investigation revealed that the two
> fraudulently caused student financial aid funds to be paid to Westwood
> College on behalf of ineligible students. The two representatives
> caused students to state falsely on admissions and financial aid
> applications that they were high school graduates or had completed
> high school equivalency programs, when in truth, they had not. In
> fact, the two officials knew that the students had not graduated from
> high school or completed such a program, and prepared phony high
> school diplomas, GED certifications and other materials to support the
> fraudulent claims. Both were sentenced to six months of home
> detention, 250 hours of community service, and are prohibited from
> being employed in any job in which they would submit documentation to
> a federal agency during the course of that employment. They also
> received fines ranging from \$500 to \$2,000.

**Connecticut**

> **Loan Management Consultant Pled Guilty to Fraud.** A consultant
> employed by a school in Branford, Connecticut, pled guilty in U.S.
> District Court, Northern District of New York, to charges related to
> student financial aid fraud. Our investigation revealed that the
> consultant, who was hired to provide default prevention services to
> the school, forged a signature on an application for deferment of a
> student loan and submitted it to the Direct Loan Servicing Center for
> processing.

**Illinois**

> **Co-Founder and Former President of Native American Educational
> Services Sentenced.** The co-founder and former president of Native
> American Educational Services (NAES) was sentenced in U.S. District
> Court, Northern District of Illinois, to five years of probation and
> 1,000 hours of community service and was ordered to pay over \$91,700
> in restitution for theft from a program receiving federal funds. Our
> investigation revealed that from 2001 through 2004, multiple
> signatures were forged on NAES checks and the funds diverted for this
> individual's personal use. The investigation determined that the
> former official used these funds to pay debts.

**New York**

> **Three Teachers and Others Sentenced in Transcript Tampering Scheme
> at Touro College**. As a result of our joint investigation with the
> New York City Police Department and the Manhattan District Attorney's
> Office, three New York City Public School teachers were sentenced for
> participating in a fraudulent transcript scheme. Each teacher
> confessed to paying \$3,000 in exchange for a fraudulent transcript
> indicating that they had received master's degrees from the school.
> The teachers subsequently submitted the fraudulent transcripts to the
> New York City Department of Education to further their teaching
> careers. The three were each sentenced to serve 8 days of community
> service and ordered to pay \$160 in fees. They were also suspended
> from their teaching positions pending a termination hearing. Two
> additional individuals were also sentenced for bribing Touro College
> officials in order to obtain degrees without ever attending the
> school. Both individuals were sentenced to serve 7 days of community
> service and were ordered to pay \$1,000 in fines and \$160 in fees.

**Oklahoma**

> **DeMarge College Agrees to \$231,000 Civil Settlement.** DeMarge
> College, Inc. (DeMarge), entered into a civil settlement with the U.S.
> Attorney's Office for the Western District of Oklahoma, agreeing to
> pay over \$231,000 to the Department. The settlement is a result of
> our investigation that found that DeMarge falsified student hours of
> attendance and other documentation necessary to increase the amount of
> Title IV funds the institution received/retained. The investigation
> further found that DeMarge falsified various student records to
> deceive the Department and impede a federal audit.

**Pennsylvania**

> **Career Education Corporation Agrees to \$2.2 Million Civil
> Settlement.** Career Education Corporation (CEC) entered into a civil
> settlement agreement with the U.S. Attorney's Office, Western District
> of Pennsylvania, agreeing to repay the Department more than \$2.2
> million. The settlement came about as a result of our investigation
> that found that a former official at the Western School of Health of
> Business Careers (WSHBC) forged approval documents in order to secure
> Title IV funding for several of its programs. Those documents included
> letters purported to be from the Accrediting Commission of Career
> Schools and Colleges of Technology (ACCSCT) stating that the programs
> at the WSHBC were approved. CEC purchased the WSHBC in 2003 and was
> assured that all of the education programs offered by the school were
> fully accredited and approved and provided documentation related
> thereto. In early 2004, after its routine change of ownership review
> at the WSHBC, ACCST sent a letter to the CEC indicating that several
> of the WSHBC programs were not approved, and that several of letters
> in CEC's possession purportedly from the ACCST were forgeries. The
> former official pled guilty to charges related to his role in the
> scheme.

**[ELEMENTARY AND SECONDARY]{.underline}**

**[EDUCATION PROGRAMS]{.underline}**

In our last Semiannual Report to Congress, we discussed a need for the
Department to improve oversight and monitoring of its elementary and
secondary education programs and program participants to ensure that
vital federal education dollars are used as the law and regulations
require. Work concluded during this reporting period shows this area
continues to challenge the Department in the programs we reviewed, as
well as with the SEAs and LEAs we reviewed. Ineffective monitoring and
oversight can have a significant impact on SEAs' and LEAs' ability to
meet statutory requirements and ensure critical education funds reach
the intended recipients. You will find more on our reports and findings
below, as well as summaries of our more significant investigations
involving individuals in a position of trust to educate our children.

**[ESEA/NCLB]{.underline}**

**ESEA Perspective Paper**

> When enacted in January 2002, the NCLB reauthorized the ESEA and
> strengthened the flexibility and accountability that were embodied in
> the *Improving America's School Act of 1994*. The NCLB called for
> stronger accountability for results; greater flexibility for states,
> school districts, and schools in their use of federal funds; more
> choices for parents of children from disadvantaged backgrounds; and an
> emphasis on teaching methods that have been demonstrated to work.
>
> During the last several years, OIG has completed a substantial body of
> work on a variety of the law's programs and topics. We also
> participated in the U.S. Comptroller General's Domestic Working Group
> and ESEA-related conferences; collaborated with the GAO, as well as
> state and local audit agencies on the key topic of state assessments
> and accountability; and worked with the Department on a number of
> oversight and program issues, including grant monitoring, high-risk
> grantees, and the Migrant Education Program (MEP). We have performed
> audits, inspections, and investigations at SEAs, LEAs, schools, and
> contractors' offices in most of the states and insular areas.
>
> In anticipation of the next reauthorization of the ESEA, based on our
> experience with the administration of ESEA/NCLB programs over the last
> seven years, OIG released a report entitled *An OIG Perspective on
> Improving Accountability and Integrity in ESEA Programs*. The paper
> identifies five emerging issue areas that we believe, based on our
> work, the reauthorized ESEA should strive to address to improve
> accountability and integrity in ESEA programs. Those issues are:

-   The need for essential and clear requirements, with an added need
    for consistent requirements across programs;

-   The need for valid and reliable data quality;

-   The need for improved monitoring and oversight;

-   Improprieties in State and local programs; and

-   Program-specific issues.

> The paper provides specific suggestions for the Department and
> Congress to take to help improve accountability and integrity in these
> areas, and also includes a Compendium of OIG products relating to
> ESEA/NCLB, summarizing our findings and recommendations. The paper was
> provided to the Department and Congress for review and consideration
> in October 2007. Click here for a copy of the report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/s09h0007.doc>.
>
> **Comparability of Services**
>
> "Comparability of services" is a provision of the ESEA/NCLB that
> requires LEAs to provide services to Title I schools that are
> essentially "comparable" or "the same" as the services that are
> provided to non-Title I schools. The SEAs are to provide leadership
> and guidance to LEAs in implementing all Title I provisions and the
> Department is responsible for conducting monitoring reviews of the
> SEAs' performance. The Department states it uses clear and consistent
> criteria (monitoring indicators) to determine the degree of
> implementation of SEA programs and activities, consisting of two major
> components: the desk review monitoring process and the on-site review.
>
> As reported in previous Semiannual Reports to Congress, we conducted
> comparability audits at three SEAs: the Ohio Department of Education;
> the Arizona Department of Education; and the Illinois State Board of
> Education. All three audits disclosed that the SEAs and LEAs were
> inconsistent in their policies and procedures for collecting,
> reviewing, and reporting comparability data, and that LEAs were not
> always reporting complete and accurate comparability information. As a
> result, some LEAs improperly classified some schools as comparable
> when they were not, resulting in non-compliant schools receiving Title
> I, Part A, funds in violation of the law.
>
> During this reporting period, we reviewed these audits and reported
> that there are areas where the Department could improve the
> effectiveness and efficiency of its monitoring and guidance concerning
> the comparability requirement. We suggested that the Department revise
> its guidance to include: monitoring suggestions that the SEA should
> complete while at the LEAs; language that prohibits LEAs from using
> inflated, budgeted resources in its comparability calculations; a
> statement that LEAs should maintain source documentation that supports
> the data used to complete the comparability calculations; and language
> that requires SEAs to establish specific deadlines for when LEAs must
> determine their comparability calculations and complete the necessary
> corrective actions. The Department agreed with most of our
> suggestions. Click here for a copy of our report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/x05h0017.doc>.

**[Grantee Accountability]{.underline}**

**California: San Diego Unified School District**

> We conducted an audit of the San Diego Unified School District's
> (SDUSD) use of federal funds for costs of its Supplemental Early
> Retirement Plan (SERP) that sought to determine whether SDUSD's
> charges to federal programs for SERP payments met applicable
> requirements under Office of Management and Budget (OMB) Circular
> A-87, *Cost Principles for State, Local, and Indian Tribal
> Governments*. Our review covered SERP costs charged to federal
> programs.
>
> Our audit found that for the time period reviewed, SDUSD's charges did
> not meet the applicable requirements. Specifically, SDUSD did not
> obtain the required prior Department approval to charge SERP costs to
> federal programs and mistakenly concluded that SERP costs could be
> charged to federal programs as a fringe benefit that did not require
> Department approval. As a result, SDUSD improperly charged over \$3.1
> million of SERP costs to federal programs. Of that amount, about
> \$1.9 million was charged to Department programs. As a result of our
> findings, we recommended that the Department require the California
> Department of Education (CDE) to ensure that SDUSD returns to its
> federal education program accounts or the Department, as appropriate,
> the more than \$1.9 million of SERP costs and related indirect costs
> charged to federal education programs. CDE did not concur with our
> findings or recommendation. Click here for a copy of the report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a09h0014.doc>.

**New Jersey: Elizabeth Public School District**

> During this reporting period, we concluded an audit that sought to
> determine whether the Elizabeth Public School District's (Elizabeth)
> ESEA, Title I, Part A expenditures, distributed through the New Jersey
> Department of Education (NJDOE), were allowable in accordance with
> applicable laws and regulations. For the time period reviewed,
> Elizabeth received \$8.3 million in Title I funding.
>
> Our work revealed that Elizabeth did not fully comply with applicable
> laws and regulations. Specifically, it charged over \$822,000 in
> unsupported salary and non-salary expenditures to Title I and used
> over \$618,000 of its Title I funds for unallowable purposes.
> Elizabeth also used over \$505,000 in Title I funds to supplant
> non-federal funds for its after-school program. In addition, we
> concluded that Elizabeth did not maintain effective internal controls
> over its federal funds. Based on our findings, we made 13
> recommendations, including that the Department instruct the NJDOE to
> require Elizabeth to provide support for the over \$822,000 in salary
> and non-salary expenditures or return the funds, with applicable
> interest, to the Department and implement procedures to provide for
> the proper disbursement of and accounting for Title I expenditures.
> The NJDOE concurred with most of our recommendations. Click here for a
> copy of our report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a02g0020.doc>.

**Ohio: Migrant Education Program**

> The MEP, authorized within the ESEA/NCLB, provides funds to states to
> support high quality education programs for migratory children and
> helps to ensure that migratory children who move among the states are
> not penalized by disparities among states in curriculum, graduation
> requirements, or academic content and student academic achievement
> standards. MEP funds are allocated to SEAs based on each state's per
> pupil expenditure for education and counts of eligible migratory
> children residing within the state. During this reporting period, we
> concluded an audit in Ohio to determine whether the Ohio Department of
> Education (ODE) administered MEP funds in accordance with grant
> requirements and federal laws and regulations specific to the
> allocation of funds to subgrantees, and the monitoring of subgrantees'
> use of those funds.
>
> We found that ODE did not always allocate subgrants to local operating
> agencies (LOAs) in accordance with grant requirements. Specifically,
> the formula outlined in its approved application for MEP funds was not
> always used to determine subgrant allocations for the award years
> reviewed, and ODE did not document how the allocation amount was
> reached. In addition, ODE's monitoring procedures did not ensure the
> proper administration of the MEP. Further, ODE's inadequate oversight
> of contracts resulted in a conflict of interest in the contracts, ODE
> making contract payments for inaccurate re-interviews, and reducing
> the scope of work without adjusting the contract price. Also, one of
> the LOAs we visited was not in compliance with the priority for
> services and parent advisory council requirements. Based on our
> findings, we made a number of recommendations, including that the
> Department require ODE to develop and implement procedures to ensure
> it keeps documentation for its MEP subgrant allocation process. ODE
> did not agree with all of our findings. Click here for a copy of the
> report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a05g0032.doc>.

**High Risk Grantees**

**Virgin Islands Department of Education**

> In 2002, the Department designated the Virgin Islands Department of
> Education (VIDE) as a "high-risk grantee" denoting that the grantee or
> subgrantee has a history of unsatisfactory performance or has not
> conformed to the terms and conditions of previous awards. As a result,
> it entered into a three-year comprehensive Compliance Agreement with
> the Department in order for the two to develop integrated and systemic
> solutions to VIDE's problems with managing federal education funds and
> programs. As VIDE did not comply with the terms and conditions of the
> 2002 Compliance Agreement, it was required to hire a third-party
> fiduciary to manage all grant funds starting with the 2004 awards.
>
> In December 2005, VIDE requested the Department's approval to reopen
> the 2003 Consolidated Grant, which is a single proposal for multiple
> funding sources. The Department responded to VIDE in February 2006 and
> requested that VIDE provide the amount obligated, the amount to be
> drawn, a reason for the need to reopen, an attestation that the
> obligations were valid and that the costs were allowable, and an
> explanation of the failure to liquidate funds in a timely manner. VIDE
> submitted a brief letter stating that it had more than \$4.9 million
> in expenditures that could be charged to the 2003 Consolidated Grant.
> The Department approved the request to reopen the 2003 Consolidated
> Grant on March 24, 2006, and VIDE made three drawdowns totaling over
> \$3.9 million.
>
> During this reporting period, we concluded an audit to determine
> whether VIDE had sufficient evidence of obligations to support its
> request to reopen the 2003 Consolidated Grant. We found that VIDE did
> not have sufficient evidence, as it did not have documentation to
> support over \$1 million of the \$4.9 million requested. In addition,
> VIDE did not include an additional \$1.3 million available for
> liquidation because it did not reconcile the grant balances.
> Therefore, \$2.3 million of the 2003 Consolidated Grant may lapse.
> Based on our findings, we recommended that the Department require VIDE
> to provide additional documentation of the type and amount of
> expenditures when submitting a request to reopen a grant for late
> liquidation and ensure financial data is accurate, verified, and
> reconciled before it is provided to the Department. VIDE concurred
> with our findings and recommendations. Click here for a copy of the
> report:
> <http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a02h0006.doc>.

**[Investigations]{.underline}**

Our investigations into suspected fraudulent activity by SEAs, LEAs, and
other federal education grantees have led to the arrest and conviction
of a number of individuals for theft or misuse of federal education
funds. We will continue to aggressively pursue those who seek to defraud
federal education programs at the expense of our nation\'s students.
Here are a few examples of our work in this area over the last six
months.

**Alabama**

> **Former Alabama Principal Sentenced**. A former high school principal
> was sentenced in U.S. District Court, Southern District of Alabama, to
> five years of probation and was ordered to pay \$1,200 in restitution
> for charges relating to fraud involving Title I funds. Our
> investigation revealed that in 2005, the former principal was
> appointed to oversee the distribution of over \$223,000 in Title I
> funds that were designated for professional development seminars.
> Within three weeks of his employment, the former principal
> fraudulently converted portions of those funds to his own personal use
> by filing reimbursement claims for teachers and others for providing
> services at the seminars -- services that were never provided. After
> reimbursement checks were mailed to those individuals, the former
> principal contacted the individuals and collected a portion of each
> reimbursement check.

**Washington D.C.**

> **Former Executive Director of the District of Columbia's Office of
> Charter School Oversight Sentenced**. The former Executive Director
> for the District of Columbia's Office of Charter School Oversight was
> sentenced to 35 months in prison and was ordered to pay over \$383,000
> in restitution in connection with a scheme to embezzle hundreds of
> thousands of dollars from D.C. public charter schools. Our
> investigation found that from March 2003 through May 2006, the former
> official used her position to direct money belonging to the District
> of Columbia Public Schools to her personal bank accounts and her
> daughter's personal bank account to which she had access. Over three
> years, she wrongfully paid herself more than \$383,000. She also used
> her position to improperly obligate seven no-bid contracts to family
> members and friends totaling more than \$444,000. In addition, the
> former official also used a fictitious business name to fraudulently
> obtain more than \$203,000.
>
> **Former Internal Audit Director for the District of Columbia Public
> Schools Pled Guilty to Theft.** The former Internal Audit Director for
> the District of Columbia Public Schools pled guilty in U.S. District
> Court, District of Columbia, to theft from a program receiving federal
> funds. The investigation disclosed that the former official was
> responsible for closing out the financial accounts of the New Vistas
> Charter School after the school's charter was revoked. The former
> official closed the original account and transferred the balance of
> over \$500,000 into a new account and made himself the sole signator
> on the account. Several months later, the former official was
> terminated from his employment, but did not close the account prior to
> that termination. Instead, the former official made unauthorized
> expenditures of more than \$46,000 in cash.

**Louisiana**

> **Two Former Orleans Parish Employees Sentenced.** A former Orleans
> Parish School System (OPSS) special education teacher and an OPSS
> assistant secretary were convicted after a seven day trial on charges
> relating to a scheme to illegally obtain OPSS funds. Our investigation
> revealed that the scheme involved fraudulently altering class coverage
> sheets of hours worked by teachers, submitting them for payment, and
> receiving a monetary kick-back from the illicit proceeds. The former
> teacher and the former assistant secretary approached others to
> participate in the scheme making it clear to at least one potential
> recruit that if the individual did not participate, the assistant
> secretary could exclude or reduce the assignment of class coverage
> hours. The former assistant secretary was sentenced to 41 months in
> prison and three years of supervised release, and the former teacher
> was sentenced to 30 months in prison and three years of supervised
> release. Both were ordered to pay a proportional share of over
> \$32,000 in restitution to OPSS. To date, eight individuals have been
> charged in this case.

**Texas**

> **Former Pharr San Juan Alamo Independent School District Officials
> Pled Guilty.** A former superintendent and two former school board
> members of the Pharr-San Juan-Alamo Independent School District
> (PSJA-ISD) pled guilty in U.S. District Court, Southern District of
> Texas, to charges related to bribery and/or extortion at the PSJA-ISD.
> Our investigation with the FBI and IRS-CID revealed that the former
> officials received bribes from various contractors in exchange for
> using their official capacities with the PSJA-ISD to influence the
> awarding of district construction contracts. Bribes included a trip to
> Las Vegas, hotel rooms, and tickets to sporting events and concerts.
> To date, 13 individuals have been charged in this case.
>
> **Two Pled Guilty in Alien Smuggling Scheme Involving Teachers.** Two
> individuals pled guilty in U.S. District Court, Western District of
> Texas, to charges relating to a conspiracy scheme involving alien
> smuggling and visa fraud. Our investigation, conducted jointly with a
> number of federal agencies revealed that the scheme involved bringing
> Philippine teachers to the U.S. to teach in Texas public schools. The
> defendants would offer school administrators all expense paid trips to
> the Philippines, Hong Kong, and China to interview and select the
> teacher candidates in exchange for the school districts agreeing to
> petition for 10 teachers to come to the U.S. for every administrator
> who went on the trip. The two lured Philippine teachers into the
> scheme by promising prosperous jobs, permanent residency, and the
> ability to bring their families to the U.S. Based on these false
> promises, the Philippine teachers paid large fees at usurious rates
> and signed what they believed to be legitimate contracts for
> employment. Upon arriving in the U.S., they found out that they did
> not have teaching positions.

**[Financial Management]{.underline}**

**[and Department Operations]{.underline}**

Given the billions of dollars that the Department distributes each year,
Department managers must give top priority to conducting effective
oversight and monitoring of its programs and operations in order to
minimize its vulnerability to waste, fraud, and abuse. Over the last six
months, OIG coordinated the 2007 financial statement audits, where once
again the Department and FSA received "clean" audit opinions. The
audits, however, did reveal that a renewed focus is warranted regarding
program monitoring activities, credit reform estimates and financial
reporting, and noted repeat control weaknesses within IT security and
systems indicating the need to address the root causes of security or
control weaknesses uniformly across the organization. In addition, OIG
completed work on two Congressional requests related to internal
operations, the findings of which are described below, along with a
summary of an investigative case involving a Department subcontractor.

**[Financial Management]{.underline}**

> **Financial Statement Audits**
>
> In November, we transmitted the final audit reports covering the
> Department's and FSA's FY 2007 comparative financial statements and
> the Department's FY 2007 special-purpose financial statements. Ernst &
> Young, LLP, Certified Public Accountants (E&Y), conducted the audits,
> and we performed oversight and monitoring procedures considered
> necessary to provide negative assurance that E&Y conducted the audits
> in accordance with standards.
>
> The Department and FSA each earned an unqualified or "clean" opinion
> on their respective comparative financial statements. The Reports on
> Internal Control for both the Department and FSA noted reportable
> conditions covering credit reform estimation and financial reporting
> processes, program monitoring activities, and controls surrounding
> information systems. Neither audit noted instances of noncompliance,
> exclusive of the *Federal Financial Management Improvement Act of
> 1996* (FFMIA); however, they did note that the Department's and FSA's
> financial management systems did not substantially comply with certain
> systems requirements of the FFMIA due to the control weaknesses
> surrounding IT systems.
>
> The audits covering the Department's and FSA's comparative financial
> statements found that the controls over credit reform estimation and
> financial reporting could be strengthened by: continuing to improve
> the analytical tools used for the loan program cost estimation
> process; continuing efforts to more fully implement cohort reporting
> and analysis; and documenting, in detail, the consideration and
> ultimate resolution of scenarios under which deviation from patterns
> of prior cash flows may be appropriate in developing credit reform
> estimates. The audits also found renewed focus is warranted regarding
> program monitoring activities. These controls could be strengthened by
> continuing to: reassess oversight and monitoring practices to include
> a specific focus on the risks of each program in connection with its
> evaluation and assessment of internal control; and refine efforts
> already underway in the approach to program management. Finally, the
> audits found repeat control weaknesses within IT security and systems
> indicating the need to address the root causes of security or control
> weaknesses uniformly across the organization.
>
> The Department also earned an unqualified opinion on its
> special-purpose financial statements, and the auditor\'s report
> disclosed no material weaknesses in internal control over the
> financial reporting process for these statements and no instances of
> noncompliance with Treasury Financial Manual Chapter 4700
> requirements.
>
> **Drug Control Funds**
>
> As required by Section 1704(d) of Title 21, U.S. Code, and in
> accordance with the Office of National Drug Control Policy Circular
> *Drug Control Accounting,* we authenticated the Department's
> accounting of FY 2007 drug control funds and related performance by
> expressing a conclusion on the reliability of each assertion made in
> the Department's accounting and performance reports. Based upon our
> review, nothing came to our attention that caused us to believe that
> management's assertions contained in the Department's detailed
> accounting and performance reports are not fairly stated in all
> material respects.

**[Internal Operations]{.underline}**

**Unimplemented Recommendations**

> On December 7, 2007, Chairman Henry Waxman of the U.S. House of
> Representatives Committee on Oversight and Government Reform requested
> that OIG compile a list of recommendations that had not yet been
> implemented by the Department or by Congress. The information was
> requested to include recommendations made during the seven-year period
> January 1, 2001, through December 31, 2007. Our report included only
> those recommendations for which the Department is directly responsible
> for implementing corrective actions. We provided the report to the
> Committee on January 31, 2008.
>
> For the time period requested, we identified 241 OIG products that
> included 1,519 recommendations. Of that universe, the Department
> reported that corrective action had been completed for 207 products
> (86 percent) and 1,363 recommendations (90 percent). The remaining 34
> products included 156 recommendations that the Department had not yet
> implemented. We did not identify any recommendations issued prior to
> January 1, 2001, that the Department had not yet implemented. A
> complete list of the 34 audit products with detailed information on
> the 156 recommendations are included in the report. Click here for a
> copy of the report:
> <http://www.ed.gov/about/offices/list/oig/misc/notyetimplemented20012007.pdf>.

**Financial Disclosures**

> In 2007, George Miller, the Chairman of the U.S. House of
> Representatives' Committee on Education and Labor, requested that OIG
> conduct a review to determine whether the Department's existing
> policies, procedures, guidance, and practices are adequate for
> ensuring the absence of financial conflicts of interest among
> Department employees and officers responsible for the oversight of
> FFEL. Specifically, Chairman Miller requested that we review, for the
> six most recent years, the Standard Form 278 Executive Branch
> Personnel Public Financial Disclosure Reports (SF 278) for these
> employees and officers. Chairman Miller also expressed interest in the
> extent to which the Department informs, trains, or counsels existing
> and newly hired or appointed officials on federal conflict of interest
> statutes and standards of ethical conduct.
>
> In response to the Chairman's request, we conducted an inspection to
> determine whether the Department's process for reviewing the SF 278
> was adequate to identify and address financial conflicts of interest
> or the appearance of conflicts of interest among employees responsible
> for oversight of the FFEL program who are required to submit an SF
> 278, and the extent to which the Department informs, trains, or
> counsels existing and newly hired or appointed officials of federal
> conflict of interest statutes and standards of ethical conduct.
>
> Our inspection found that the Department's review process was adequate
> to identify and address financial conflicts of interest or the
> appearance of conflicts of interest among employees responsible for
> oversight of the FFEL program. We also determined that the Department
> informs, trains, and counsels all employees on all federal conflict of
> interest statutes and standards of ethical conduct. We did, however,
> find that the Department's reviewers did not consistently address
> repeated reporting errors made by filers. Examples of these errors
> include assets not appropriately reconciled, required asset
> information not disclosed in a clear and concise manner, and Excepted
> Investment Fund information not consistently and correctly reported
> for assets. Reports containing repeated reporting errors indicate that
> filers did not understand the reporting instructions. The Department
> does not provide formal training to filers on the basics of completing
> a public financial disclosure report. It does encourage filers to ask
> questions and seek advice if they are having any difficulty completing
> the report, but it does not appear that filers always seek that
> advice. Reviewers informed us that they believe the filers would
> benefit from some sort of training related to filing public financial
> disclosure reports.
>
> Based on our findings, we recommended that the Department develop
> policies and procedures to ensure the consistent handling of reporting
> errors and develop a process to ensure that all filers receive
> appropriate training on public financial disclosure reports. The
> Department generally concurred with the findings and recommendations
> of our report. Click here for a copy of the report:
> <http://www.ed.gov/about/offices/list/oig/aireports/i13h0005.pdf>.

**[Investigations]{.underline}**

**Former Employee of a Department Contractor Pled Guilty to
Conspiracy**. A former employee of Electronic Data Systems (EDS), a
Department contractor, pled guilty in U.S. District Court, Middle
District of Alabama, to conspiracy for aiding and assisting others in
the preparation and presentation of fraudulent federal income tax
returns. Our investigation, conducted jointly with the IRS-CID, found
that the former employee provided stolen personal identifying
information from systems maintained by EDS including Department
information on student loan borrowers who had consolidated loans, in
exchange for money. The former employee provided the data to other
individuals who used the information to file fraudulent tax returns.

**[HURRICANE-RELATED EFFORTS]{.underline}**

During this reporting period, OIG concluded the final two audits in our
series of work involving HERA funds. As reported in previous Semiannual
Reports to Congress, OIG conducted audits to determine whether HERA
funds were expended as required by federal law and regulations, and
consistent with Department guidance. HERA authorized new grant programs
to assist school districts and schools in meeting the educational needs
of students displaced by Hurricanes Katrina and Rita and to help schools
closed as a result of the hurricanes to re-open as quickly and
effectively as possible. These programs included the Immediate Aid to
Restart School Operations program (Restart), the Temporary Emergency
Impact Aid for Displaced Students (EIA) program, Assistance for Homeless
Youth (HY) program, funding for students and institutions of
postsecondary education affected by the hurricanes, and funding for
recruiting, retaining, and compensating new and current educators in
Alabama, Louisiana, and Mississippi. Congress authorized more than \$1.9
billion for these hurricane-related programs. With such a large amount
of funding distributed in a short amount of time, establishing effective
procedures, processes, and accountability measures for these programs
was vital.

As reported in previous Semiannual Reports to Congress, we determined
that the Department's procedures and processes for allotting
HERA-related funds were consistent with legislative requirements, and it
allocated funding using methodologies that were appropriate. For HERA
funds allocated to states for higher education, we found the Mississippi
Institutions of Higher Learning allocated funds in compliance with law
and regulations, and consistent with Department guidance, but our work
did identify weaknesses in monitoring controls of HERA higher education
funds by the Louisiana Board of Regents. Our audits of HERA HY funds in
Alabama, Georgia, Louisiana, Mississippi, and Texas found that the SEAs
had adequate policies, procedures and controls over the administration
of the program; however, at the time of our audits, most had not yet
drawn down sufficient funding, so any testing would not have provided an
accurate representation of whether or not the expenditures associated
with the program were allowable and allocable.

During this reporting period, we released our final two reports of SEA
allocations of EIA and Restart funding. We examined EIA funding at the
Georgia Department of Education, as we had done in Alabama, Louisiana,
Mississippi, and Texas; and reviewed Restart funding at the Louisiana
Department of Education, as we had done in Alabama and Mississippi. As
you will read in the summaries below, the findings in these states were
generally consistent with our findings in the other states.

**[Temporary Emergency Impact Aid Funds]{.underline}**

**Georgia**

The EIA program provided funds to SEAs to cover the cost of educating
displaced students. To receive aid, eligible SEAs were required to
provide quarterly enrollment counts of displaced students, and received
up to \$1,875 per quarter for each displaced student with disabilities
and up to \$1,500 per quarter for each displaced student without
disabilities. Congress appropriated \$880 million in EIA funds, of which
the Department obligated over \$55 million to Georgia. We conducted an
audit to determine if the Georgia Department of Education (GDOE) and
three selected LEAs established adequate systems of internal control to
provide accurate displaced student count data, if the GDOE established
an adequate system of internal control to make accurate allocations of
EIA funds, and if the LEAs used EIA funds only for expenditures within
the cost categories allowed by the terms of the grant and applicable
laws and regulations. The three LEAs selected were the Dekalb County
School District, Gwinnett County Public Schools, and the Cobb County
School District. We selected these LEAs because they had the highest
quarterly displaced student counts, comprising between 40 and 43 percent
of Georgia's initial total number of displaced students.

Our audit found that all three of the LEAs reported inaccurate or
unsupportable displaced student counts to GDOE, which submitted those
numbers to the Department. As a result, GDOE may have received
approximately \$8 million in excess of its entitlement for EIA funds.
The errors occurred because GDOE and the LEAs had weak internal controls
over displaced student counts, and GDOE had no mechanism in place to
test the reliability of the information received from LEAs prior to
submitting the counts to the Department. Although GDOE established an
adequate internal control system to make accurate EIA funding
allocations, the allocations were based on inaccurate student counts. In
addition, all three of the LEAs reviewed commingled EIA funds with
general ledger funds, which prevented the audit team from validating
that the funds were used for allowable expenditures as required by the
terms of the grant and applicable laws and regulations.

Based on our findings, we made a number of recommendations, including
that the Department require GDOE and/or its LEAs to provide support or
repay close to \$8 million in projected questionable EIA funding, as
well as review their final lists of displaced students, report necessary
adjustments, and return any ineligible funds identified as a result of
those adjustments. GDOE did not state whether it concurred with the
findings and did not agree with two of our nine recommendations. Click
here for a copy of the report:
<http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a04g0015.pdf>.

**Similar Findings in Other States**

As stated above, our findings with EIA funds in Georgia mirrored the
findings of our audits in Alabama, Louisiana, Mississippi, and Texas,
where incorrect displaced student counts may have resulted in
approximately \$30 million in EIA overpayments.

**[Restart Funds]{.underline}**

**Louisiana**

The Restart program provided funding to SEAs in Alabama, Louisiana,
Mississippi, and Texas to provide assistance or services to LEAs and
non-public schools to help defray expenses related to the restart of
operations in the reopening of, and the re-enrollment of students in,
elementary and secondary schools. Congress appropriated \$750 million
for the Restart program, with the Department allotting more than \$445
million in Restart funds to Louisiana. The Louisiana Department of
Education (LDE) allocated the funds based on reviewing Restart
applications from LEAs and non-public schools. We conducted an audit to
determine if the LDE established an adequate system of internal control
to make accurate allocations of Restart funds to the LEAs, and if the
LDE and selected LEAs and non-public schools used Restart funds only for
expenditures that were allowable under the terms of the grant and
applicable laws and regulations. We found that for the time period
examined, September 1, 2005, through June 30, 2007, the LDE and selected
LEAs appropriately allocated and expended the Restart funds. Click here
for a copy of the report:
<http://www.ed.gov/about/offices/list/oig/auditreports/fy2008/a06h0018.pdf>.

**Findings in Other States**

As stated previously, the findings at the LDE were consistent with our
findings for Restart expenditures in Alabama; however, our audit of
Restart funding at the Mississippi Department of Education (MDE), while
similar to the other states, identified additional issues. As reported
in our last Semiannual Report to Congress, MDE awarded a Restart
contract to monitor non-public schools to a contractor with an apparent
conflict of interest; initially disbursed Restart funds directly to
non-public schools in violation of the HERA; and did not maintain public
control of the equipment purchased with that disbursement. We made a
number of recommendations to address these weaknesses. MDE concurred
with our findings and stated it was taking corrective action to address
our recommendations.

**[OTHER NOTEWORTHY EFFORTS]{.underline}**

**[Hotline Posters]{.underline}**

On December 24, 2007, two new Federal Acquisition Regulations went into
effect: the first requiring government contractors to prepare a Code of
Business Ethics and Conduct; and the second requiring contractors that
meet specific criteria to display an OIG hotline poster informing their
employees and subcontractors on how to report waste, fraud, or abuse to
the federal agency.

This requirement (FAR 52.203-14) mandates that impacted contractors
prominently display hotline posters at contract work sites. In addition,
if the contractor maintains a company website as a method of providing
information to employees, the contractor is required to display an
electronic version of the poster(s) on that website. OIG, with creative
and design assistance from the Department's Graphics staff, created two
hotline posters that are now available on our website via this link:
<http://www.ed.gov/about/offices/list/oig/hotlineposters.html>. We
encouraged the Department to share this link with any contractor that
may meet the criteria for this requirement, as well as display the
posters in its offices and make them available to grantees.

**[Non-Federal Audits]{.underline}**

Participants in Department programs are required to submit annual audits
performed by independent public accountants (IPAs). We perform quality
control reviews (QCRs) of these audits to assess their quality. We
completed 43 QCRs of audits conducted by 41 different IPAs, or offices
of firms with multiple offices. We concluded that 14 (32.6 percent) were
acceptable or acceptable with minor issues, 24 (55.8 percent) were
technically deficient, and 5 (11.6 percent) were substandard.

**[President's Council on Integrity and Efficiency]{.underline}**

Inspector General Higgins continues to chair the Audit Committee of the
President's Council on Integrity and Efficiency (PCIE). Highlights from
this reporting period include:

**OIG Testifies for PCIE before U.S. Senate Subcommittee**

In response to the findings of the PCIE's National Single Audit Sampling
Project report *(*discussed in the last Semiannual Report to Congress,
No. 55), the Senate Committee on Homeland Security and Governmental
Affairs' Subcommittee on Federal Financial Management held a hearing on
October 25 to discuss the study and what can be done to improve the
quality of single audits. Participants included representatives from the
OMB, GAO, the American Institute of Certified Public Accountants, and,
representing the PCIE, Hugh Monaghan, the OIG Director for Non-Federal
Audits, who led the PCIE's effort. Mr. Monaghan provided the
Subcommittee with a summary of the report, its findings, and
recommendations for changes to applicable requirements, standards, and
procedures to improve the quality of single audits. The panelists
commented on the report's recommendations aimed at improving the quality
of single audits, and several provided updates on their organization's
efforts to address those recommendations. The Senators participating in
the hearing demonstrated a keen interest in the single audits and their
quality and expressed the importance that the recommendations listed in
the PCIE's report are acted upon.

**OIG Receives PCIE Alexander Hamilton Award**

In October 2007, the PCIE held its annual awards ceremony, acknowledging
IG staffers and teams for their achievement, exceptional work, and
service to the American taxpayer. For the first time in our history, our
office received the PCIE Alexander Hamilton Award. The Hamilton Award is
the highest honor the PCIE can bestow, recognizing outstanding
achievements in improving the integrity, efficiency and effectiveness of
Executive Branch agency operations. The award was presented to our
office for our 2006 audit of 9.5 percent special allowance payments made
to the student lender Nelnet. As reported in previous Semiannual Reports
to Congress, the audit estimated that the Department improperly paid
Nelnet more than \$278 million and could improperly pay approximately
\$882 million more if Nelnet's billings were not corrected.

**OMB Issues Best Practice Guide**

In October 2007, OMB, in conjunction with the PCIE and Chief Financial
Officers Council (CFOC), issued the revised PCIE/CFOC's *Best Practices
Guide for Coordinating the Preparation and Audit of Federal Financial
Statements*. The document, which was originally published in 2001, is
intended to foster constructive working relationships between the OCFOs
and OIGs in preparing and auditing agency's financial statements. The
guide is built on the fundamental concept that effective relationships
are cultivated when expectations are defined clearly, early, and often;
communication is continuous; and parties share a commitment to improving
financial management. The guide establishes 12 best practices for
preparing and auditing federal financial statements.

**PCIE/GAO 2008 Financial Statement Audit Conference**

The 2008 PCIE/GAO Financial Statement Audit Conference was held on
Tuesday, March 4. The conference, which was free to participants,
included presentations on the Performance and Accountability Report
pilot, international accounting and auditing standards, Federal
accounting standards, PCIE/GAO Financial Audit Manual, and the Federal
Information System Controls Audit Manual. Participants earned 6.5 hours
of continuing professional education.

+-----------+---------------------------------------------+-----------+
| **        |                                             |           |
| Reporting |                                             |           |
| Req       |                                             |           |
| uirements |                                             |           |
| of the    |                                             |           |
| Inspector |                                             |           |
| General   |                                             |           |
| Act, as   |                                             |           |
| Amended** |                                             |           |
+-----------+---------------------------------------------+-----------+
| Section   | Requirement                                 | Table     |
|           |                                             | Number    |
+-----------+---------------------------------------------+-----------+
| **5(a)(1) | **Significant Problems, Abuses, and         | NA        |
| and**     | Deficiencies**                              |           |
|           |                                             |           |
| **5       | Activities and Accomplishments              |           |
| (a)(2)**  |                                             |           |
+-----------+---------------------------------------------+-----------+
| **        | **Uncompleted Corrective Actions**          | 1         |
| 5(a)(3)** |                                             |           |
|           | Recommendations Described in Previous       |           |
|           | Semiannual Reports to Congress (SARs) on    |           |
|           | which Corrective Action Has Not Been Taken  |           |
+-----------+---------------------------------------------+-----------+
| **        | **Matters Referred to Prosecutive           | 7         |
| 5(a)(4)** | Authorities**                               |           |
|           |                                             |           |
|           | Statistical Profile                         |           |
+-----------+---------------------------------------------+-----------+
| **5(a)(5) | **Summary of Instances where Information**  | NA        |
| and       |                                             |           |
| 6(b)(2)** | **was Refused or Not Provided**             |           |
+-----------+---------------------------------------------+-----------+
| **        | **Listing of Reports**                      | 2         |
| 5(a)(6)** |                                             |           |
|           | OIG Audit Services Reports on Department    | 3         |
|           | Programs and Activities                     |           |
|           |                                             |           |
|           | Other OIG Reports on Department Programs    |           |
|           | and Activities                              |           |
+-----------+---------------------------------------------+-----------+
| **        | **Summary of Significant Audits**           | NA        |
| 5(a)(7)** |                                             |           |
|           | Activities and Accomplishments              |           |
+-----------+---------------------------------------------+-----------+
| **        | **Audit Reports Containing Questioned       | 4         |
| 5(a)(8)** | Costs**                                     |           |
|           |                                             |           |
|           | OIG Issued Audit Reports with Questioned    |           |
|           | Costs                                       |           |
+-----------+---------------------------------------------+-----------+
| **        | **Audit Reports Containing Recommendations  | 5         |
| 5(a)(9)** | for**                                       |           |
|           |                                             |           |
|           | **Better Use of Funds**                     |           |
|           |                                             |           |
|           | OIG Issued Audit Reports with               |           |
|           | Recommendations for Better Use of Funds     |           |
+-----------+---------------------------------------------+-----------+
| **5       | **Summary of Unresolved Audit Reports       | 6         |
| (a)(10)** | Issued Prior to the**                       |           |
|           |                                             |           |
|           | **Beginning of the Reporting Period**       |           |
|           |                                             |           |
|           | Unresolved Reports Issued Prior to October  |           |
|           | 1, 2007                                     |           |
+-----------+---------------------------------------------+-----------+
| **5       | **Significant Revised Management            | NA        |
| (a)(11)** | Decisions**                                 |           |
+-----------+---------------------------------------------+-----------+
| **5       | **Significant Management Decisions with**   | NA        |
| (a)(12)** |                                             |           |
|           | **which OIG Disagreed**                     |           |
+-----------+---------------------------------------------+-----------+
| **5       | **Unmet Intermediate Target Dates           | NA        |
| (a)(13)** | Established by the Department**             |           |
|           |                                             |           |
|           | Under the *Federal Financial Management     |           |
|           | Improvement Act of 1996*                    |           |
+-----------+---------------------------------------------+-----------+

<table>
<colgroup>
<col style="width: 1%" />
<col style="width: 12%" />
<col style="width: 28%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 1%" />
</colgroup>
<tbody>
<tr class="odd">
<td></td>
<td colspan="8"><strong>Table 1: Recommendations Described in Previous
Semiannual Reports to Congress on which Corrective Action Has Not Been
Completed</strong></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td colspan="8"><em>Section 5(a)(3) of the Inspector General Act (IG
Act) as amended requires a listing of each report resolved before the
commencement of the reporting period for which management has not
completed corrective action. The reports listed below are OIG internal
and nationwide audit reports.</em></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td rowspan="2"><p>*Report</p>
<p>Number</p></td>
<td rowspan="2"><p>Report Title</p>
<p>(Prior SAR Number and Page)</p></td>
<td rowspan="2"><p>Date</p>
<p>Issued</p></td>
<td rowspan="2">Date Resolved</td>
<td rowspan="2"><p>Total</p>
<p>Monetary</p>
<p>Findings</p></td>
<td colspan="2">Number of Recommendations</td>
<td rowspan="2"><p>Latest</p>
<p>Target</p>
<p>Date</p>
<p>(Per Corrective Action Plan)</p></td>
<td><mark></mark></td>
</tr>
<tr class="even">
<td></td>
<td>Open</td>
<td>Completed</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td colspan="8"><strong><u>Federal Student Aid (FSA)</u></strong></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td><p>A04E0006</p>
<p><mark></mark></p></td>
<td>Death and Total and Permanent Disability Discharges of FFEL and
Direct Loan Program Loans (SAR 52, page 27)</td>
<td>11/14/05</td>
<td>2/24/06</td>
<td></td>
<td>1</td>
<td>3</td>
<td>8/30/08</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td>A17G0004</td>
<td>Financial Statement Audits FY 2006 and FY 2005 - FSA <em>(Office of
the Chief Financial Officer (OCFO) also designated as action
official)</em> (SAR 54, page 30)</td>
<td>11/15/06</td>
<td>12/20/06</td>
<td></td>
<td>0</td>
<td>5</td>
<td>*</td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td colspan="8"><strong><u>Office of the Chief Information Officer
(OCIO)</u></strong></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>A11F0002</p>
<p><mark></mark></p></td>
<td>Review of the Department’s Incident Handling Program and EDNet
Security Controls <em>(OCIO is designated as lead action official and
OCFO and FSA as the other action officials.)</em> (SAR 52, page 28)</td>
<td>10/6/05</td>
<td>11/16/05</td>
<td></td>
<td>7</td>
<td>2</td>
<td>6/30/08</td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td><p>A11F0006</p>
<p><mark></mark></p></td>
<td>Audit of the Department’s IT Contingency Planning Program – Asset
Classification (SAR 52, page 28)</td>
<td>1/31/06</td>
<td>5/25/06</td>
<td></td>
<td>4</td>
<td>0</td>
<td>6/30/08</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>A11G0001</p>
<p><mark></mark></p></td>
<td>Review of the Department’s Incident Handling Program and Intrusion
Detection System <em>(FSA, and the Office of the Under Secretary (OUS)
also designated as action official)</em> (SAR 53, page 24)</td>
<td>9/28/06</td>
<td>11/17/06</td>
<td></td>
<td>5</td>
<td>5</td>
<td>6/30/08</td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td>A11G0004</td>
<td>Department of Education’s Online Privacy Policy and Protection of
Sensitive Information <em>Review (OUS also designated as action
official)</em> (SAR 53, page 25)</td>
<td>9/29/06</td>
<td>11/17/06</td>
<td></td>
<td>1</td>
<td>1</td>
<td>6/30/08</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>A19F0009</p>
<p><mark></mark></p></td>
<td>Telecommunications Billing Accuracy (SAR 52, page 28)</td>
<td>2/1/06</td>
<td>3/22/06</td>
<td></td>
<td>4</td>
<td>3</td>
<td>9/30/08</td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td>Report Number</td>
<td><p>Report Title</p>
<p>(Prior SAR Number and Page)</p></td>
<td><p>Date</p>
<p>Issued</p></td>
<td><p>Date</p>
<p>Resolved</p></td>
<td><p>Total</p>
<p>Monetary Findings</p></td>
<td colspan="2"><p>Number of Recommendations</p>
<p>Open Closed</p></td>
<td>Latest Target Date (Per Corrective Action Plan</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td colspan="8"><strong><u>Office of Management (OM)</u></strong></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td>A19G0007</td>
<td>Audit of the Department of Education FY 2005 IT Equipment Inventory
<em>(OCFO also designated as an action official)</em> (SAR 54, page
32)</td>
<td>11/29/06</td>
<td>1/8/07</td>
<td></td>
<td>1</td>
<td>7</td>
<td>12/31/08</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td colspan="8"><strong><u>Office of the Deputy Secretary
(ODS)</u></strong></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td>A09E0014</td>
<td>Departmental Actions to Ensure Charter Schools’ Access to Title I
and the Individuals With Disabilities Education Act Part B Funds
<em>(Office of Elementary and Secondary Education (OESE) and the Office
of Special Education and Rehabilitative Services (OSERS) also designated
as action officials)</em> (SAR 50, page 22)</td>
<td>10/26/04</td>
<td>1/10/05</td>
<td></td>
<td>1</td>
<td>5</td>
<td>3/30/08</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td colspan="8"><strong><u>Office of Planning, Evaluation &amp; Policy
Development (OPEPD)</u></strong></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td>A11E0003</td>
<td>Audit of the Department’s Performance Based Data Management
Initiative (SAR 51, page 28)</td>
<td>9/29/2005</td>
<td>3/28/2006</td>
<td></td>
<td>0</td>
<td>14</td>
<td>*</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td colspan="8"><blockquote>
<p>* <em>Closure of audit was not completed in the Department’s audit
tracking system (AARTS) by the end of reporting period
3/31/2008).</em></p>
</blockquote></td>
<td></td>
</tr>
<tr class="even">
<td colspan="10"><table>
<colgroup>
<col style="width: 12%" />
<col style="width: 0%" />
<col style="width: 36%" />
<col style="width: 0%" />
<col style="width: 12%" />
<col style="width: 12%" />
<col style="width: 12%" />
<col style="width: 12%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="8"><p><strong>Table 2: OIG Audit Reports on Department
Programs and Activities</strong></p>
<p><strong>(October 1, 2007, through March 31, 2008)</strong></p></td>
</tr>
<tr class="even">
<td colspan="8"><em>Section 5(a)(6) of the IG Act as amended, requires a
listing of each report completed by OIG during the reporting
period.</em></td>
</tr>
<tr class="odd">
<td colspan="2"><p>Report</p>
<p>Number</p></td>
<td colspan="2"><h2 id="report-title">Report Title</h2></td>
<td><p>Date</p>
<h5 id="issued">Issued</h5></td>
<td><p>Questioned</p>
<p>Costs *</p></td>
<td><p>Unsupported</p>
<p>Costs</p></td>
<td><p>No. of</p>
<p>Recomm-endations</p></td>
</tr>
<tr class="even">
<td colspan="8"><h1 id="audit-reports">AUDIT REPORTS</h1></td>
</tr>
<tr class="odd">
<td colspan="8"><strong><u>FSA</u></strong></td>
</tr>
<tr class="even">
<td colspan="2">A03G0014</td>
<td><h1
id="special-allowance-payments-to-the-aespheaa-for-loans-funded-by-tax-exempt-obligations">Special
Allowance Payments to the AES/PHEAA for Loans Funded by Tax-Exempt
Obligations</h1></td>
<td colspan="2">11/19/07</td>
<td>$34,002,449</td>
<td></td>
<td>11</td>
</tr>
<tr class="odd">
<td colspan="2">A03H0008</td>
<td><h1
id="gallaudet-universitys-compliance-with-selected-aspects-of-title-iv-of-the-hea">Gallaudet
University’s Compliance with Selected Aspects of Title IV of the
HEA</h1></td>
<td colspan="2">2/22/08</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="even">
<td colspan="2">A04G0002</td>
<td><h1
id="resolution-of-institutional-student-information-report-sar-c-codes-generated-by-the-cps-edit-check-process">Resolution
of Institutional Student Information Report SAR C Codes Generated by the
CPS Edit Check Process</h1></td>
<td colspan="2">1/9/08</td>
<td></td>
<td></td>
<td>3</td>
</tr>
<tr class="odd">
<td colspan="2">A05G0017</td>
<td><h1
id="capella-universitys-compliance-with-selected-provisions-of-the-hea-and-corresponding-regulations">Capella
University’s Compliance with Selected Provisions of the HEA and
Corresponding Regulations </h1></td>
<td colspan="2">3/7/08</td>
<td>$589,892</td>
<td></td>
<td>9</td>
</tr>
<tr class="even">
<td colspan="2">A05G0029</td>
<td><h1
id="wilberforce-universitys-administration-of-hea-title-iv-programs">Wilberforce
University’s Administration of HEA Title IV Programs </h1></td>
<td colspan="2">3/21/08</td>
<td>$116,403</td>
<td>$2,356,378</td>
<td>25</td>
</tr>
<tr class="odd">
<td colspan="2">A05H0015</td>
<td><h1
id="herzing-college-madisons-compliance-with-selected-provisions-of-the-hea-and-corresponding-regulations">Herzing
College-Madison’s Compliance with Selected Provisions of the HEA and
Corresponding Regulations</h1></td>
<td colspan="2">1/18/08</td>
<td></td>
<td></td>
<td>3</td>
</tr>
<tr class="even">
<td colspan="2">A07H0009</td>
<td>Bellevue University’s Compliance with Selected Regulations and
Department Guidance</td>
<td colspan="2">10/30/07</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="odd">
<td colspan="2">A07H0018</td>
<td><h1
id="vatterott-college-des-moines-compliance-with-selected-provisions-of-the-hea-and-corresponding-regulations">Vatterott
College – Des Moines’ Compliance with Selected Provisions of the HEA and
Corresponding Regulations </h1></td>
<td colspan="2">2/21/08</td>
<td></td>
<td>$151</td>
<td>2</td>
</tr>
<tr class="even">
<td colspan="2">A17H0004</td>
<td>Final Audit Reports Financial Statement Audits for FY 2007 and FY
2006 for FSA and the Department <em>(OCFO is also designated an action
official)</em></td>
<td colspan="2">11/15/07</td>
<td></td>
<td></td>
<td>5</td>
</tr>
<tr class="odd">
<td colspan="8"><strong><u>OCFO</u></strong></td>
</tr>
<tr class="even">
<td colspan="2">A05H0009</td>
<td colspan="2">Zane State College’s Administration and Oversight of Its
Title III Grant <em>(Office of Postsecondary Education (OPE) is also
designated an action official)</em></td>
<td>11/20/07</td>
<td>$3,727</td>
<td></td>
<td>4</td>
</tr>
<tr class="odd">
<td colspan="2">A09H0014</td>
<td colspan="2">San Diego Unified School District’s Use of Federal Funds
for Costs of Its Supplemental Early Retirement Plan</td>
<td>12/18/07</td>
<td>$1,904,918</td>
<td></td>
<td>1</td>
</tr>
<tr class="even">
<td colspan="2">A17H0003</td>
<td colspan="2">Final Audit Reports <strong>-</strong> Financial
Statement Audits for FY 2007 and FY 2006 for the Department and FSA
<em>(FSA is also designated an action official)</em></td>
<td>11/15/07</td>
<td></td>
<td></td>
<td>5</td>
</tr>
<tr class="odd">
<td colspan="2">Report Number</td>
<td colspan="2">Report Title</td>
<td>Date Issued</td>
<td>Questioned Costs</td>
<td>Unsupported Costs</td>
<td>Number of Recommen-dations</td>
</tr>
<tr class="even">
<td colspan="2">A17H0005</td>
<td colspan="2">Final Audit Reports - Financial Statement Audits for FY
2007 and FY 2006 for the Department - Special Purpose Financial
Statements <em>(The reports were also provided to the Secretary for her
information)</em></td>
<td>11/16/07</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="odd">
<td colspan="8"><strong><u>OESE</u></strong></td>
</tr>
<tr class="even">
<td colspan="2">A02G0020</td>
<td colspan="2">Elizabeth Public School District Allowability of Title
I, Part A Expenditures</td>
<td>10/9/07</td>
<td>$618,392</td>
<td>$1,328,533</td>
<td>14</td>
</tr>
<tr class="odd">
<td colspan="2">A02H0006</td>
<td colspan="2">Audit of the Virgin Islands Department of Education’s
2003 Reopened Consolidated Grants</td>
<td>1/29/08</td>
<td></td>
<td></td>
<td>2</td>
</tr>
<tr class="even">
<td colspan="2">A04G0015</td>
<td colspan="2">Audit of Georgia Department of Education’s Emergency
Impact Aid Program Controls and Compliance</td>
<td>10/30/07</td>
<td>$8,209,117</td>
<td>$1,768,125</td>
<td>9</td>
</tr>
<tr class="odd">
<td colspan="2">A05G0032</td>
<td colspan="2">Ohio Department of Education’s Administration of its
Migrant Education Program</td>
<td>1/8/08</td>
<td></td>
<td>$30,000</td>
<td>6</td>
</tr>
<tr class="even">
<td colspan="2">A06H0018</td>
<td colspan="2">Louisiana Department of Education’s Compliance with
Selected Hurricane Education Recovery Act-Immediate Aid to Restart
School Operations Program Requirements</td>
<td>1/31/08</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="odd">
<td colspan="8"><strong>ALTERNATIVE PRODUCTS</strong></td>
</tr>
<tr class="even">
<td colspan="8"><strong><u>OCFO</u></strong></td>
</tr>
<tr class="odd">
<td>X17H0007</td>
<td colspan="2">Final Management Letter FY 2007 and FY 2006 Financial
Statement Audits for the Department and FSA <em>(Management Information
Report addressed to OCFO, OCIO, and FSA)</em></td>
<td colspan="2">12/18/07</td>
<td></td>
<td></td>
<td>**</td>
</tr>
<tr class="even">
<td colspan="8"><strong><u>OESE</u></strong></td>
</tr>
<tr class="odd">
<td>A05H0024</td>
<td colspan="2">Audit of selected operations of Academia.net in Indiana
<em>(Audit Closeout Letter)</em></td>
<td colspan="2">10/29/07</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="even">
<td>X05H0017</td>
<td colspan="2">Monitoring of the Title I, Part A, Comparability of
Services Requirement <em>(Management Information Report – State and
Local No. 08-01)</em></td>
<td colspan="2">10/31/07</td>
<td></td>
<td></td>
<td>**</td>
</tr>
<tr class="odd">
<td>A06G0007</td>
<td colspan="2">Closure of our Audit of the Review of the Migrant
Education Program <em>(Audit Closeout Memorandum)</em></td>
<td colspan="2">12/4/07</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="even">
<td><strong><u>OPEPD</u></strong></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>B19I0001 ***</td>
<td colspan="2">OIG Report on the Department’s Detailed Accounting of FY
2007 Drug Control Funds <em>(Attestation Report)</em></td>
<td colspan="2">2/1/08</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="even">
<td>Report Nuimber</td>
<td colspan="2">Report Title</td>
<td colspan="2">Date Issued</td>
<td>Questioned Costs</td>
<td>Unsupported Costs</td>
<td>Number of Recommendations</td>
</tr>
<tr class="odd">
<td colspan="8"><strong><u>Office of Safe and Drug-Free Schools
(OSDFS)</u></strong></td>
</tr>
<tr class="even">
<td>B19I0001 ***</td>
<td colspan="2">OIG Independent Report on the Department’s Performance
Summary Report for FY 2007 <em>(Attestation Report)</em></td>
<td colspan="2">2/1/08</td>
<td></td>
<td></td>
<td>None</td>
</tr>
<tr class="odd">
<td></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td colspan="8"><p>* For purposes of this schedule, questioned costs may
include other recommended recoveries. Please see footnotes 2 and 3 under
Table 4 for additional information regarding questioned and unsupported
costs.</p>
<p>** Management Information Reports may make “suggestions” rather than
“recommendations.” Suggestions made in management information reports
are not tracked for audit resolution purposes. <em>Management
Information Report X17H0007</em> conveyed 11 suggestions. <em>Management
Information Report X05H0017</em> made 2 suggestions.</p>
<p>*** Two attestation reports were generated from work performed by AS
staff tracked in the OIG’s Audit Tracking System (ATS) under control
number <em>B19I0001</em> – <em>“Office of Inspector General’s
Independent Report on the U.S. Department of Education’s Detailed
Accounting of Fiscal Year 2007 Drug Control Funds, dated January 25,
2008”</em> issued to OPEPD on 2/1/08 and <em>“Office of Inspector
General’s Independent Report on the U.S. Department of Education’s
Performance Summary Report for Fiscal Year 2007, dated January 30,
2008”</em> issued to OSDFS on 2/1/08.</p>
<p><strong>DESCRIPTION OF ALTERNATIVE PRODUCTS</strong></p>
<p><em>Attestation reports</em> convey the results of attestation
engagements performed within the context of their stated scope and
objective(s). Attestation engagements can cover a broad range of
financial and non-financial subjects and can be part of a financial
audit or a performance audit. They include the examination, review, or
performance of agreed-upon procedures on a subject matter, or an
assertion about a subject matter and reporting on the results.
<em>Attestation reports</em> are coded “B” in the OIG’s Audit Tracking
System.</p>
<p><em>Audit closeout memoranda/letters</em> are used to provide written
notification to auditees of audit closure when the decision is made to
close an assignment without issuing an audit report. The <em>audit
closeout memorandum/letter</em> retains the audit’s control number,
coded “A” in the OIG’s Tracking System.</p>
<p><em>Management information reports</em> provide Department management
with information derived from audits (when the issuance of an audit
report is not appropriate) or special projects that may be useful in its
program administration or conduct of program activities. <em>Management
information reports</em> are coded “X” in the OIG’s Audit Tracking
System.</p></td>
</tr>
</tbody>
</table></td>
</tr>
</tbody>
</table>

+----------+----------------------------------------------------+-----+
| **Table  |                                                    |     |
| 3: Other |                                                    |     |
| OIG      |                                                    |     |
| Reports  |                                                    |     |
| on       |                                                    |     |
| De       |                                                    |     |
| partment |                                                    |     |
| Programs |                                                    |     |
| and      |                                                    |     |
| Acti     |                                                    |     |
| vities** |                                                    |     |
|          |                                                    |     |
| **       |                                                    |     |
| (October |                                                    |     |
| 1, 2007, |                                                    |     |
| through  |                                                    |     |
| March    |                                                    |     |
| 31,      |                                                    |     |
| 2008)**  |                                                    |     |
+----------+----------------------------------------------------+-----+
| *Section |                                                    |     |
| 5(a)(6)  |                                                    |     |
| of the   |                                                    |     |
| IG Act   |                                                    |     |
| as       |                                                    |     |
| amended, |                                                    |     |
| requires |                                                    |     |
| a        |                                                    |     |
| listing  |                                                    |     |
| of each  |                                                    |     |
| report   |                                                    |     |
| c        |                                                    |     |
| ompleted |                                                    |     |
| by OIG   |                                                    |     |
| during   |                                                    |     |
| the      |                                                    |     |
| r        |                                                    |     |
| eporting |                                                    |     |
| period.* |                                                    |     |
+----------+----------------------------------------------------+-----+
| Report   | Report Title                                       | D   |
| Number   |                                                    | ate |
|          |                                                    |     |
|          |                                                    | Iss |
|          |                                                    | ued |
+----------+----------------------------------------------------+-----+
| **[OCF   |                                                    |     |
| O]{.unde |                                                    |     |
| rline}** |                                                    |     |
+----------+----------------------------------------------------+-----+
| L02I0028 | Educational Testing Service's Improper Billings to | 3   |
|          | the Department for the National Assessment of      | /11 |
|          | Educational Progress Contract No. ED-02-CO-0023    | /08 |
|          | *^1^\[(Alert Memorandum -- State and Local No.     |     |
|          | 08-03) Institute for Education Science is also     |     |
|          | designated an action official\]*                   |     |
+----------+----------------------------------------------------+-----+
| L09H0005 | CDE Guidance to LEAs on Administrative Costs and   | 11  |
|          | Monitoring of LAUSD Corrective Actions on Single   | /16 |
|          | Audit Findings *^1^* *(Alert Memorandum -- State   | /07 |
|          | and Local No. 08-02)*                              |     |
+----------+----------------------------------------------------+-----+
| L09H0024 | LEAs May Be Charging Retirement Incentive Payments | 3   |
|          | to Federal Programs Without Required Prior         | /20 |
|          | Approval From Cognizant Federal Agency *^1^(Alert  | /08 |
|          | Memorandum -- State and Local No. 08-04)*          |     |
+----------+----------------------------------------------------+-----+
| **[OD    |                                                    |     |
| S]{.unde |                                                    |     |
| rline}** |                                                    |     |
+----------+----------------------------------------------------+-----+
| S09H0007 | An OIG Perspective on Improving Accountability and | 10  |
|          | Integrity in ESEA Programs*^2^*                    | /16 |
|          |                                                    | /07 |
|          | *(Special Project)*                                |     |
+----------+----------------------------------------------------+-----+
| *        |                                                    |     |
| *[Office |                                                    |     |
| of the   |                                                    |     |
| General  |                                                    |     |
| Counsel  |                                                    |     |
| (OGC     |                                                    |     |
| )]{.unde |                                                    |     |
| rline}** |                                                    |     |
+----------+----------------------------------------------------+-----+
| I13H0005 | Review of the Department's Public Financial        | 3   |
|          | Disclosure Reports for Employees Responsible for   | /12 |
|          | Oversight of the FFEL Program*^3^ (Inspection      | /08 |
|          | Report)*                                           |     |
+----------+----------------------------------------------------+-----+
| *        |                                                    |     |
| *[Office |                                                    |     |
| of       |                                                    |     |
| In       |                                                    |     |
| novation |                                                    |     |
| and      |                                                    |     |
| Imp      |                                                    |     |
| rovement |                                                    |     |
| (OII     |                                                    |     |
| )]{.unde |                                                    |     |
| rline}** |                                                    |     |
+----------+----------------------------------------------------+-----+
| L02H0018 | Teach For America, Inc. Should be Considered a     | 12  |
|          | "High-Risk" Grantee with Special Conditions Placed | /12 |
|          | on its Future Grants *^1^ (Alert Memorandum --     | /07 |
|          | State and Local No. 08-01)*                        |     |
+----------+----------------------------------------------------+-----+
| **[Congr |                                                    |     |
| essional |                                                    |     |
| Reques   |                                                    |     |
| t]{.unde |                                                    |     |
| rline}** |                                                    |     |
+----------+----------------------------------------------------+-----+
| S20I0003 | Office of Inspector General Recommendations Not    | 1   |
|          | Yet Implemented by the Department -- January 2001  | /31 |
|          | through December 2007 *^2^ (Special Project)*      | /08 |
+----------+----------------------------------------------------+-----+
| **[DES   |                                                    |     |
| CRIPTION |                                                    |     |
| OF TABLE |                                                    |     |
| 3        |                                                    |     |
| PRODUCT  |                                                    |     |
| S]{.unde |                                                    |     |
| rline}** |                                                    |     |
|          |                                                    |     |
| *^1^*    |                                                    |     |
| L02I0028 |                                                    |     |
| made     |                                                    |     |
| five     |                                                    |     |
| non-     |                                                    |     |
| monetary |                                                    |     |
| sug      |                                                    |     |
| gestions |                                                    |     |
| and one  |                                                    |     |
| sug      |                                                    |     |
| gestion, |                                                    |     |
| taking   |                                                    |     |
| issue as |                                                    |     |
| to the   |                                                    |     |
| p        |                                                    |     |
| ropriety |                                                    |     |
| of an    |                                                    |     |
| e        |                                                    |     |
| stimated |                                                    |     |
| \$1.98   |                                                    |     |
| million  |                                                    |     |
| in       |                                                    |     |
| contract |                                                    |     |
| b        |                                                    |     |
| illings; |                                                    |     |
| L09H0005 |                                                    |     |
| made     |                                                    |     |
| four     |                                                    |     |
| non-     |                                                    |     |
| monetary |                                                    |     |
| sugg     |                                                    |     |
| estions; |                                                    |     |
| L09H0024 |                                                    |     |
| made     |                                                    |     |
| five     |                                                    |     |
| non-     |                                                    |     |
| monetary |                                                    |     |
| sugg     |                                                    |     |
| estions; |                                                    |     |
| and      |                                                    |     |
| L02H0018 |                                                    |     |
| made one |                                                    |     |
| non-     |                                                    |     |
| monetary |                                                    |     |
| sug      |                                                    |     |
| gestion. |                                                    |     |
|          |                                                    |     |
| *^2^*    |                                                    |     |
| S09H0007 |                                                    |     |
| made     |                                                    |     |
| fourteen |                                                    |     |
| non-     |                                                    |     |
| monetary |                                                    |     |
| sugg     |                                                    |     |
| estions; |                                                    |     |
| and      |                                                    |     |
| S20I0003 |                                                    |     |
| was      |                                                    |     |
| prepared |                                                    |     |
| in       |                                                    |     |
| response |                                                    |     |
| to a     |                                                    |     |
| December |                                                    |     |
| 7, 2007  |                                                    |     |
| request  |                                                    |     |
| made to  |                                                    |     |
| the OIG  |                                                    |     |
| by Henry |                                                    |     |
| Waxman,  |                                                    |     |
| Chairman |                                                    |     |
| of the   |                                                    |     |
| House of |                                                    |     |
| Represen |                                                    |     |
| tatives' |                                                    |     |
| C        |                                                    |     |
| ommittee |                                                    |     |
| on       |                                                    |     |
| O        |                                                    |     |
| versight |                                                    |     |
| and      |                                                    |     |
| Go       |                                                    |     |
| vernment |                                                    |     |
| Reform.  |                                                    |     |
| Chairman |                                                    |     |
| Waxman   |                                                    |     |
| r        |                                                    |     |
| equested |                                                    |     |
| the OIG  |                                                    |     |
| to       |                                                    |     |
| compile  |                                                    |     |
| a list   |                                                    |     |
| of our   |                                                    |     |
| recomme  |                                                    |     |
| ndations |                                                    |     |
| made     |                                                    |     |
| from     |                                                    |     |
| January  |                                                    |     |
| 1, 2001  |                                                    |     |
| to the   |                                                    |     |
| present  |                                                    |     |
| that had |                                                    |     |
| not yet  |                                                    |     |
| been     |                                                    |     |
| imp      |                                                    |     |
| lemented |                                                    |     |
| by the   |                                                    |     |
| De       |                                                    |     |
| partment |                                                    |     |
| or by    |                                                    |     |
| C        |                                                    |     |
| ongress. |                                                    |     |
|          |                                                    |     |
| *^3^*    |                                                    |     |
| I13H0005 |                                                    |     |
| made two |                                                    |     |
| non-     |                                                    |     |
| monetary |                                                    |     |
| recommen |                                                    |     |
| dations. |                                                    |     |
|          |                                                    |     |
| *Alert   |                                                    |     |
| me       |                                                    |     |
| moranda* |                                                    |     |
| are      |                                                    |     |
| prepared |                                                    |     |
| when a   |                                                    |     |
| serious  |                                                    |     |
| c        |                                                    |     |
| ondition |                                                    |     |
| is       |                                                    |     |
| id       |                                                    |     |
| entified |                                                    |     |
| that     |                                                    |     |
| requires |                                                    |     |
| i        |                                                    |     |
| mmediate |                                                    |     |
| De       |                                                    |     |
| partment |                                                    |     |
| ma       |                                                    |     |
| nagement |                                                    |     |
| action   |                                                    |     |
| that is  |                                                    |     |
| either   |                                                    |     |
| outside  |                                                    |     |
| the      |                                                    |     |
| agr      |                                                    |     |
| eed-upon |                                                    |     |
| ob       |                                                    |     |
| jectives |                                                    |     |
| of an    |                                                    |     |
| on-going |                                                    |     |
| audit or |                                                    |     |
| in       |                                                    |     |
| spection |                                                    |     |
| as       |                                                    |     |
| signment |                                                    |     |
| or is    |                                                    |     |
| id       |                                                    |     |
| entified |                                                    |     |
| while    |                                                    |     |
| engaged  |                                                    |     |
| in work  |                                                    |     |
| not      |                                                    |     |
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+---+------------------------------------+--------+----------+----------+
|   |                                    | Number | Quest    | Uns      |
|   |                                    |        | ioned^2^ | upported |
|   |                                    |        |          | ^3^      |
|   |                                    |        | Costs    |          |
|   |                                    |        |          | Costs    |
+---+------------------------------------+--------+----------+----------+
| A | For which no management decision   | 49     | \$1,010  | \$230    |
| . | has been made before the           |        | ,548,489 | ,718,174 |
|   | commencement of the reporting      |        |          |          |
|   | period (as adjusted)               |        |          |          |
+---+------------------------------------+--------+----------+----------+
| B | Which were issued during the       | 9      | \$50     | \$5      |
| . | reporting period                   |        | ,928,085 | ,483,187 |
+---+------------------------------------+--------+----------+----------+
| [ | Subtotals (A + B)                  | 58     | \$1,061  | \$236    |
| ] |                                    |        | ,476,574 | ,201,361 |
| { |                                    |        |          |          |
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| } |                                    |        |          |          |
+---+------------------------------------+--------+----------+----------+
| C | For which a management decision    | 11     | \$306    | \$23     |
| . | was made during the reporting      |        | ,589,944 | ,056,577 |
|   | period                             |        |          |          |
+---+------------------------------------+--------+----------+----------+
| [ | \(i\) Dollar value of disallowed   |        | \$306    | \$23     |
| ] | costs                              |        | ,589,944 | ,056,577 |
| { |                                    |        |          |          |
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| } |                                    |        |          |          |
+---+------------------------------------+--------+----------+----------+
| [ | \(ii\) Dollar value of costs not   |        | \$0      | \$0      |
| ] | disallowed                         |        |          |          |
| { |                                    |        |          |          |
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+---+------------------------------------+--------+----------+----------+
| D | For which no management decision   | 47     | \$754    | \$213    |
| . | was made by the end of the         |        | ,886,630 | ,144,784 |
|   | reporting period                   |        |          |          |
+---+------------------------------------+--------+----------+----------+
| E | For which no management decision   | 39     | \$703    | \$207    |
| . | was made within six months of      |        | ,962,272 | ,661,597 |
|   | issuance                           |        |          |          |
+---+------------------------------------+--------+----------+----------+
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+---+------------------------------------+--------+----------+----------+

+-------+-----------------------------------------+--------+-----------+
| **    |                                         |        |           |
| Table |                                         |        |           |
| 5:    |                                         |        |           |
| OIG   |                                         |        |           |
| I     |                                         |        |           |
| ssued |                                         |        |           |
| Audit |                                         |        |           |
| Re    |                                         |        |           |
| ports |                                         |        |           |
| with  |                                         |        |           |
| Recom |                                         |        |           |
| menda |                                         |        |           |
| tions |                                         |        |           |
| for   |                                         |        |           |
| B     |                                         |        |           |
| etter |                                         |        |           |
| Use   |                                         |        |           |
| of    |                                         |        |           |
| Funds |                                         |        |           |
| ^1^** |                                         |        |           |
+-------+-----------------------------------------+--------+-----------+
| *Se   |                                         |        |           |
| ction |                                         |        |           |
| 5(    |                                         |        |           |
| a)(9) |                                         |        |           |
| of    |                                         |        |           |
| the   |                                         |        |           |
| IG    |                                         |        |           |
| Act   |                                         |        |           |
| as    |                                         |        |           |
| ame   |                                         |        |           |
| nded, |                                         |        |           |
| req   |                                         |        |           |
| uires |                                         |        |           |
| for   |                                         |        |           |
| each  |                                         |        |           |
| repo  |                                         |        |           |
| rting |                                         |        |           |
| p     |                                         |        |           |
| eriod |                                         |        |           |
| a     |                                         |        |           |
| s     |                                         |        |           |
| tatis |                                         |        |           |
| tical |                                         |        |           |
| table |                                         |        |           |
| sh    |                                         |        |           |
| owing |                                         |        |           |
| the   |                                         |        |           |
| total |                                         |        |           |
| n     |                                         |        |           |
| umber |                                         |        |           |
| of    |                                         |        |           |
| audit |                                         |        |           |
| re    |                                         |        |           |
| ports |                                         |        |           |
| and   |                                         |        |           |
| the   |                                         |        |           |
| total |                                         |        |           |
| d     |                                         |        |           |
| ollar |                                         |        |           |
| value |                                         |        |           |
| of    |                                         |        |           |
| recom |                                         |        |           |
| menda |                                         |        |           |
| tions |                                         |        |           |
| that  |                                         |        |           |
| funds |                                         |        |           |
| be    |                                         |        |           |
| put   |                                         |        |           |
| to    |                                         |        |           |
| b     |                                         |        |           |
| etter |                                         |        |           |
| use   |                                         |        |           |
| by    |                                         |        |           |
| ma    |                                         |        |           |
| nagem |                                         |        |           |
| ent.* |                                         |        |           |
+-------+-----------------------------------------+--------+-----------+
| []{.  |                                         | #      | # Dol     |
| mark} |                                         | Number | lar Value |
+-------+-----------------------------------------+--------+-----------+
| A.    | For which no management decision has    | ## 3   | \$89      |
|       | been made before the commencement of    |        | 2,327,577 |
|       | the reporting period (as adjusted)      | ###    |           |
|       |                                         |        | ##        |
+-------+-----------------------------------------+--------+-----------+
| B.    | Which were issued during the reporting  | ##  0  | ###  \$0  |
|       | period                                  |        |           |
|       |                                         | #      |           |
|       |                                         | ## []{ |           |
|       |                                         | .mark} |           |
+-------+-----------------------------------------+--------+-----------+
|       | Subtotals (A + B)                       | ## 3   | \$89      |
|       |                                         |        | 2,327,577 |
|       |                                         | ###    |           |
|       |                                         |        | ##        |
+-------+-----------------------------------------+--------+-----------+
| C.    | For which a management decision was     | ##     | \$89      |
|       | made during the reporting period        |        | 2,000,000 |
|       |                                         | 2      |           |
|       | > \(i\) Dollar value of recommendations |        | \$0       |
|       | > that were agreed to by management     | ###    |           |
|       | >                                       |        | ###       |
|       | > \(ii\) Dollar value of                | 0      |           |
|       | > recommendations that were not agreed  |        |           |
|       | > to by management                      | ###    |           |
+-------+-----------------------------------------+--------+-----------+
| D.    | For which no management decision has    | ## 1   | ##        |
|       | been made by the end of the reporting   |        | \$327,577 |
|       | period                                  | ###    |           |
+-------+-----------------------------------------+--------+-----------+
| E.    | For which no management decision was    | ##  1  | \$327,577 |
|       | made within six months of issuance      |        |           |
|       |                                         | ###    | ##        |
+-------+-----------------------------------------+--------+-----------+
| *^1   |                                         |        |           |
| ^None |                                         |        |           |
| of    |                                         |        |           |
| the   |                                         |        |           |
| a     |                                         |        |           |
| udits |                                         |        |           |
| rep   |                                         |        |           |
| orted |                                         |        |           |
| in    |                                         |        |           |
| this  |                                         |        |           |
| table |                                         |        |           |
| were  |                                         |        |           |
| perf  |                                         |        |           |
| ormed |                                         |        |           |
| by    |                                         |        |           |
| the   |                                         |        |           |
| De    |                                         |        |           |
| fense |                                         |        |           |
| Con   |                                         |        |           |
| tract |                                         |        |           |
| Audit |                                         |        |           |
| Age   |                                         |        |           |
| ncy.* |                                         |        |           |
+-------+-----------------------------------------+--------+-----------+

+----------+-------------------------------+-------+---------+---------+
| >        |                               |       |         |         |
|  **Table |                               |       |         |         |
| > 6:     |                               |       |         |         |
| > Un     |                               |       |         |         |
| resolved |                               |       |         |         |
| >        |                               |       |         |         |
|  Reports |                               |       |         |         |
| > Issued |                               |       |         |         |
| > Prior  |                               |       |         |         |
| > to     |                               |       |         |         |
| > April  |                               |       |         |         |
| > 1,     |                               |       |         |         |
| > 2007** |                               |       |         |         |
| >        |                               |       |         |         |
| > *      |                               |       |         |         |
| Section* |                               |       |         |         |
| > *      |                               |       |         |         |
| 5(a)(10) |                               |       |         |         |
| > of the |                               |       |         |         |
| > IG Act |                               |       |         |         |
| > as     |                               |       |         |         |
| >        |                               |       |         |         |
| amended, |                               |       |         |         |
| >        |                               |       |         |         |
| requires |                               |       |         |         |
| > a      |                               |       |         |         |
| >        |                               |       |         |         |
|  listing |                               |       |         |         |
| > of     |                               |       |         |         |
| > each   |                               |       |         |         |
| > report |                               |       |         |         |
| > issued |                               |       |         |         |
| > before |                               |       |         |         |
| > the    |                               |       |         |         |
| > comm   |                               |       |         |         |
| encement |                               |       |         |         |
| > of the |                               |       |         |         |
| > r      |                               |       |         |         |
| eporting |                               |       |         |         |
| > period |                               |       |         |         |
| > for    |                               |       |         |         |
| > which  |                               |       |         |         |
| > no     |                               |       |         |         |
| > ma     |                               |       |         |         |
| nagement |                               |       |         |         |
| > d      |                               |       |         |         |
| ecisions |                               |       |         |         |
| > had    |                               |       |         |         |
| > been   |                               |       |         |         |
| > made   |                               |       |         |         |
| > by the |                               |       |         |         |
| > end of |                               |       |         |         |
| > the    |                               |       |         |         |
| > r      |                               |       |         |         |
| eporting |                               |       |         |         |
| >        |                               |       |         |         |
|  period. |                               |       |         |         |
| >        |                               |       |         |         |
|  (Status |                               |       |         |         |
| > below  |                               |       |         |         |
| > re     |                               |       |         |         |
| presents |                               |       |         |         |
| >        |                               |       |         |         |
| comments |                               |       |         |         |
| >        |                               |       |         |         |
| provided |                               |       |         |         |
| > by the |                               |       |         |         |
| > Dep    |                               |       |         |         |
| artment, |                               |       |         |         |
| >        |                               |       |         |         |
| comments |                               |       |         |         |
| > agreed |                               |       |         |         |
| > to, or |                               |       |         |         |
| > d      |                               |       |         |         |
| ocuments |                               |       |         |         |
| >        |                               |       |         |         |
| obtained |                               |       |         |         |
| > from   |                               |       |         |         |
| >        |                               |       |         |         |
| AARTS.)* |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| Report   | # R                           | Date  | Total   | Number  |
|          | eport Title {#report-title-1} |       | M       | of      |
| Number   |                               | I     | onetary | Re      |
|          | (Prior SAR Number and Page)   | ssued | F       | commen- |
|          |                               |       | indings | dations |
+----------+-------------------------------+-------+---------+---------+
| **[FS    |                               |       |         |         |
| A]{.unde |                               |       |         |         |
| rline}** |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A02H0005 | # EDUTEC's Adminis            | 9/    | \       | 5       |
|          | tration of the Federal Pell G | 27/07 | $83,000 |         |
|          | rant Program (SAR 55, pg 27)  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | # *Status: FSA                |       |         |         |
|          |  informed us it is currently  |       |         |         |
|          | working on this audit. AARTS  |       |         |         |
|          | shows FSA administrative stay |       |         |         |
|          |  was approved on 3/12/2008.*  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06H0009 | # Career                      | 9/    | \$4,178 | 2       |
|          |  Point Institute's Administra | 28/07 |         |         |
|          | tion of Title IV HEA Programs |       |         |         |
|          |                               |       |         |         |
|          | # (SAR 55, pg 27)             |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | # *Status: The Program Dete   |       |         |         |
|          | rmination Letter (PDL) was is |       |         |         |
|          | sued on 2/14/2007. OIG concur |       |         |         |
|          | red with draft Audit Clearanc |       |         |         |
|          | e Document (ACD)/PDL on 3/20/ |       |         |         |
|          | 08; however, the verified ame |       |         |         |
|          | nded ACD is needed in AARTS f |       |         |         |
|          | or resolution of this audit.* |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06H0010 | # Ea                          | 9/    | \$2,630 | 6       |
|          | gle Gate College's Administra | 28/07 |         |         |
|          | tion of Title IV HEA Programs |       |         |         |
|          |                               |       |         |         |
|          | # (SAR 55, pg 27)             |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | # *Status: FSA                |       |         |         |
|          |  informed us that it is curre |       |         |         |
|          | ntly working on this audit.*  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A07G0012 | # Vatterott Colle             | 8     | \       | 7       |
|          | ge-Omaha's Compliance with Se | /1/07 | $37,964 |         |
|          | lected Provisions of the HEA  |       |         |         |
|          | and Corresponding Regulations |       |         |         |
|          |                               |       |         |         |
|          | # (SAR 55, pg 27)             |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | # *Status:* *A                |       |         |         |
|          | ARTS shows FSA administrative |       |         |         |
|          |  stay was approved on 12/18/2 |       |         |         |
|          | 007. FSA informed us that on  |       |         |         |
|          | 3/31/2008 FSA requested an ad |       |         |         |
|          | ditional administrative stay  |       |         |         |
|          | as it is currently working on |       |         |         |
|          |  this audit. On 4/3/2008 OCFO |       |         |         |
|          |  approved the additional admi |       |         |         |
|          | nistrative stay. FSA is curre |       |         |         |
|          | ntly working on this audit.*  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| **[OCF   |                               |       |         |         |
| O]{.unde |                               |       |         |         |
| rline}** |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06G0011 | Louisiana Hurricane Relief    | 4/    |         | 2       |
|          | Funding (SAR 55, pg 29)       | 18/07 |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows      |       |         |         |
|          | OCFO-Post Audit Group (PAG)   |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 1/11/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+

+----------+-------------------------------+-------+---------+---------+
| Report   | Report Title                  | Date  | Total   | Number  |
|          |                               |       | M       | of      |
| Number   | (Prior SAR Number and Page)   | I     | onetary | Re      |
|          |                               | ssued | F       | commen- |
|          |                               |       | indings | dations |
+----------+-------------------------------+-------+---------+---------+
| A11F0005 | Effectiveness of the          | 6/    |         | 9       |
|          | Department's Financial        | 26/07 |         |         |
|          | Management Support System     |       |         |         |
|          | Oracle 11i Re-Implementation  |       |         |         |
|          | *(Report recommends Chief of  |       |         |         |
|          | Staff/Office of the Secretary |       |         |         |
|          | direct the Investment Review  |       |         |         |
|          | Board Chair, Chief Financial  |       |         |         |
|          | Officer and the Chief         |       |         |         |
|          | Information Officer to take   |       |         |         |
|          | recommended actions)* (SAR    |       |         |         |
|          | 55, pg 28)                    |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** The resolution   | ##    | ##      | ##      |
|          | of the audit is pending an    | ####  | ######  | ######  |
|          | administrative action by      |       |         |         |
|          | OCFO.*                        |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ###      |                               |       |         |         |
| ##### [O |                               |       |         |         |
| ESE]{.un |                               |       |         |         |
| derline} |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A02G0007 | Hempstead Union Free School   | 4/    | \$      | 11      |
|          | District's ESEA, Title I,     | 10/07 | 121,260 |         |
|          | Part A Non-Salary             |       |         |         |
|          | Expenditures (SAR 55, pg 28)  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** The PDL was      |       |         |         |
|          | dated 3/31/2008; however, the |       |         |         |
|          | required documentation for    |       |         |         |
|          | resolution of this audit was  |       |         |         |
|          | not in AARTS on 3/31/2008.    |       |         |         |
|          | This audit should be removed  |       |         |         |
|          | from this list by the next    |       |         |         |
|          | SAR.*                         |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A04G0012 | Audit of Mississippi          | 8     | \$3,    | 4       |
|          | Department of Education's     | /8/07 | 192,395 |         |
|          | Emergency Impact Aid Program  |       |         |         |
|          | Controls and Compliance (SAR  |       |         |         |
|          | 55, pg 28)                    |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 3/12/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A05G0020 | Audit of the Alabama State    | 9/    | \$4,    | 5       |
|          | Department of Education's and | 27/07 | 579,375 |         |
|          | Two Selected LEAs' Compliance |       |         |         |
|          | with Temporary Emergency      |       |         |         |
|          | Impact Aid Program            |       |         |         |
|          | Requirements (SAR 55, pg 28)  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 3/12/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A05G0031 | Columbus City School          | 6/    | \       | 8       |
|          | District's Compliance with    | 20/07 | $48,158 |         |
|          | Financial Accountability      |       |         |         |
|          | Requirements for Expenditures |       |         |         |
|          | Under Selected NCLB Programs  |       |         |         |
|          | (SAR 55, pg 29)               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 3/5/2008;         |       |         |         |
|          | however, the anticipated      |       |         |         |
|          | resolution date was           |       |         |         |
|          | 12/21/2007.*                  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A05G0033 | Illinois State Board of       | 6     | \$16,   | 8       |
|          | Education's Compliance with   | /7/07 | 809,020 |         |
|          | the Title I, Part A,          |       |         |         |
|          | Comparability of Services     |       |         |         |
|          | Requirements (SAR 55, pg 29)  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 3/5/2008;         |       |         |         |
|          | however, the anticipated      |       |         |         |
|          | resolution date was           |       |         |         |
|          | 12/07/2007.*                  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| #####    | Report Title                  | Date  | Total   | Number  |
| # Report |                               |       | M       | of      |
|          | (Prior SAR Number and Page)   | I     | onetary | Re      |
| Number   |                               | ssued |         | commen- |
|          |                               |       | Finding |         |
|          |                               |       |         | Dations |
+----------+-------------------------------+-------+---------+---------+
| ######   | Audit of the Temporary        | 9/    | \$10,   | 4       |
| A06G0009 | Emergency Impact Aid for      | 18/07 | 270,000 |         |
|          | Displaced Students            |       |         |         |
|          | Requirements at the Texas     |       |         |         |
|          | Education Agency and          |       |         |         |
|          | Applicable LEAs               |       |         |         |
|          |                               |       |         |         |
|          | (SAR 55, pg 29)               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 3/12/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | Louisiana Department of       | 9/    | \$6,    | 4       |
| A06G0010 | Education's Compliance with   | 21/07 | 303,000 |         |
|          | HERA, Temporary Emergency     |       |         |         |
|          | Impact Aid for Displaced      |       |         |         |
|          | Students Requirements         |       |         |         |
|          |                               |       |         |         |
|          | (SAR 55, pg 29)               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 3/12/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| **[      |                               |       |         |         |
| Reported |                               |       |         |         |
| in       |                               |       |         |         |
| Previous |                               |       |         |         |
| SAR      |                               |       |         |         |
| s]{.unde |                               |       |         |         |
| rline}** |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| **[FS    |                               |       |         |         |
| A]{.unde |                               |       |         |         |
| rline}** |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A04B0015 | Review of Cash Management and | 9/    | \$      | 7       |
|          | Student Financial Assistance  | 26/02 | 997,313 |         |
| ##       | Refund Procedures at Bennett  |       |         |         |
| #######  | College                       | ##### |         |         |
|          |                               | ####  |         |         |
|          | *(OPE designated as           |       |         |         |
|          | collateral action office for  |       |         |         |
|          | this report)* (SAR 45, pg.    |       |         |         |
|          | 16)                           |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA informed us  |       |         |         |
|          | that it will work on getting  |       |         |         |
|          | this audit closed in AARTS by |       |         |         |
|          | 4/30/2008.*                   |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A04B0019 | Advanced Career Training      | 9/    | \$7,    | 14      |
|          | Institute's Administration of | 25/03 | 472,583 |         |
| ##       | the Title IV HEA Programs     |       |         |         |
| #######  |                               |       |         |         |
|          | (SAR 47, pg. 13)              |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA informed us  |       |         |         |
|          | that it will work on getting  |       |         |         |
|          | this audit closed in AARTS by |       |         |         |
|          | 6/30/2008.*                   |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A04E0001 | Review of Student Enrollment  | 9/    | \$2,    | 7       |
|          | and Professional Judgment     | 23/04 | 458,347 |         |
| ##       | Actions at Tennessee          |       |         |         |
| #######  | Technology Center at          |       |         |         |
|          | Morristown, TN                |       |         |         |
|          |                               |       |         |         |
|          | (SAR 49, pg. 14)              |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA informed us  |       |         |         |
|          | that it is still waiting on   |       |         |         |
|          | policy decision to address    |       |         |         |
|          | and resolve this audit.*      |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A05E0013 | Audit of the Administration   | 2/    | \$1,    | 3       |
|          | of the Student Financial      | 25/05 | 645,160 |         |
| #        | Assistance Programs at the    |       |         | ##      |
| #######  | Ivy Tech State College Campus | ####  | ###     | ######  |
|          | in Gary, Indiana, During the  | ####  | ######  |         |
|          | Period July 1, 2002, through  |       |         |         |
|          | June 30, 2003.                |       |         |         |
|          |                               |       |         |         |
|          | (SAR 50, pg. 21)              |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** FSA informed us  |       |         |         |
|          | that the audit was closed on  |       |         |         |
|          | 1/22/2007; audit will be      |       |         |         |
|          | closed by 4/30/2008 in AARTS. |       |         |         |
|          | The audit is not considered   |       |         |         |
|          | resolved or closed until it   |       |         |         |
|          | is certified through AARTS.*  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| #        | # Philander Smith Colle       | # 11  | \$      | 20      |
| A06F0018 | ge's Administration of Title  | /2/06 | 476,167 |         |
|          | IV Student Financial Assistan |       |         |         |
|          | ce Programs Needs Improvement |       |         |         |
|          |                               |       |         |         |
|          | # (SAR 54, pg 29)             |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA informed us  |       |         |         |
|          | that it is currently working  |       |         |         |
|          | on this audit.*               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| Report   | Report Title                  | Date  | Total   | Number  |
|          |                               |       | M       | of      |
| Number   | (Prior SAR Number and Page)   | I     | onetary | Re      |
|          |                               | ssued |         | commen- |
|          |                               |       | F       | dations |
|          |                               |       | indings |         |
+----------+-------------------------------+-------+---------+---------+
| A0670005 | Professional Judgment at Yale | 3/    | \$5,469 | 3       |
|          | University (SAR 36, pg.18)    | 13/98 |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:*** *FSA informed   |       |         |         |
|          | us it is waiting on policy    |       |         |         |
|          | decision to address and       |       |         |         |
|          | resolve this finding in the   |       |         |         |
|          | final audit determination     |       |         |         |
|          | letter.*                      |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A0670009 | Professional Judgment at      | 7/    | \       | 4       |
|          | University of Colorado (SAR   | 17/98 | $15,082 |         |
| ##       | 37, pg.17)                    |       |         | ##      |
| #######  |                               | ##### | ###     | ######  |
|          |                               | ####  | ######  |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** FSA informed us  |       |         |         |
|          | it is waiting on policy       |       |         |         |
|          | decision to address and       |       |         |         |
|          | resolve this finding in the   |       |         |         |
|          | final audit determination     |       |         |         |
|          | letter.*                      |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06D0018 | Audit of Saint Louis          | 2/    | \$1,    | 6       |
|          | University's Use of           | 10/05 | 458,584 |         |
| #        | Professional Judgment for the |       |         | ##      |
| #######  | Two-Year Period from July     | ##### | ##      | ######  |
|          | 2000                          | ####  | ######  |         |
|          |                               |       |         |         |
|          | Through June 2002 (SAR 50,    |       |         |         |
|          | pg. 21)                       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA informed us  |       |         |         |
|          | it is waiting on policy       |       |         |         |
|          | decision to address and       |       |         |         |
|          | resolve this finding in the   |       |         |         |
|          | final audit determination     |       |         |         |
|          | letter.*                      |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A0723545 | State of Missouri, Single     | 4     | \$1,    | 18      |
|          | Audit Two Years Ended June    | /1/93 | 048,768 |         |
| ######   | 30, 1991                      |       |         | ##      |
|          |                               | ##### | ##      | ######  |
|          |                               | ####  | ######  |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA previously   |       |         |         |
|          | informed us it is currently   |       |         |         |
|          | researching options to        |       |         |         |
|          | resolve this issue.*          |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A0733123 | State of Missouri, Single     | 3     | \$      | 18      |
|          | Audit Year Ended June 30,     | /7/94 | 187,530 |         |
| ######   | 1992                          |       |         | ##      |
|          |                               | ####  | ##      | ######  |
|          |                               | ####  | ######  |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA previously   |       |         |         |
|          | informed us it is currently   |       |         |         |
|          | researching options to        |       |         |         |
|          | resolve this issue.*          |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A09D0024 | American River College's      | 12    | \$3,    | 3       |
|          | Compliance with Student       | /1/04 | 024,665 |         |
| #        | Eligibility Requirements for  |       |         |         |
| #######  | Title IV Student Financial    | ####  | ##      |         |
|          | Assistance Programs (SAR 50,  | ####  | ######  |         |
|          | pg. 21)                       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** FSA informed us  |       |         |         |
|          | that it will work on getting  |       |         |         |
|          | this audit closed in AARTS by |       |         |         |
|          | 4/30/2008*                    |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| N0690010 | Inspection of Parks           | 2     | \$      | 1       |
|          | College\'s Compliance with    | /9/00 | 169,390 |         |
| ##       | Student Financial Assistance  |       |         | ##      |
| #######  | Requirements (SAR 40, pg. 18) | ####  | ##      | ######  |
|          |                               | ####  | ######  |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** FSA informed us  |       |         |         |
|          | that the inspection report    |       |         |         |
|          | was previously not in AARTS   |       |         |         |
|          | when SAR 55 was done so that  |       |         |         |
|          | FSA ALO could close out the   |       |         |         |
|          | inspection report. The        |       |         |         |
|          | inspection report has been    |       |         |         |
|          | added into AARTS. FSA will    |       |         |         |
|          | work on getting this          |       |         |         |
|          | inspection report closed in   |       |         |         |
|          | AARTS by 6/30/2008. Required  |       |         |         |
|          | documents for resolution of   |       |         |         |
|          | this report are needed in     |       |         |         |
|          | AARTS.*                       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| **[OCF   |                               |       |         |         |
| O]{.unde |                               |       |         |         |
| rline}** |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A03F0010 | The Education Leaders         | 1/    | \$      | ####    |
|          | Council's Drawdown and        | 31/06 | 760,570 | #### 12 |
| [        | Expenditure of Federal Funds  |       |         |         |
| ]{.mark} | *(OII also designated as      | ##    | ##      | ##      |
|          | action official)* (SAR 52, pg | ####  | ######  | ######  |
|          | 8)                            |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OCFO informed us |       |         | ##      |
|          | that all resolution           |       |         | ######  |
|          | activities have been          |       |         |         |
|          | suspended until further       |       |         |         |
|          | notice.*                      |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| Report   | Report Title                  | Date  | Total   | Number  |
|          |                               |       | M       | of      |
| Number   | (Prior SAR Number and Page)   | I     | onetary | Re      |
|          |                               | ssued | Finding | commen- |
|          |                               |       |         | dations |
+----------+-------------------------------+-------+---------+---------+
| A05D0041 | University of Illinois at     | 12/   | \$      | 8       |
|          | Chicago's Upward Bound        | 20/04 | 223,057 |         |
| #        | Project *(OPE also designated |       |         | ##      |
| #######  | as action official* ) (SAR    | ####  | ##      | ######  |
|          | 50, pg. 22)                   | ####  | ######  |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** OCFO informed us |       |         |         |
|          | that it needs to review and   |       |         |         |
|          | analyze recent information.*  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A05E0002 | Audit of the University of    | 12/   | \$      | 6       |
|          | Illinois at Chicago's Student | 15/04 | 260,050 |         |
| ##       | Support Services Program      |       |         | ##      |
| #######  | *(OPE also designated as      | ####  | ##      | ######  |
|          | action official)*             | ####  | ######  |         |
|          |                               |       |         |         |
|          | (SAR 50, pg. 22)              |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** OCFO informed us |       |         |         |
|          | that it needs to review and   |       |         |         |
|          | analyze recent information.*  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A05E0018 | University of Illinois at     | 12/   | \$      | 7       |
|          | Chicago's Upward Bound Math   | 17/04 | 274,493 |         |
| ##       | and Science Project *(OPE     |       |         | ##      |
| ###### [ | also designated as action     | ####  | ##      | ######  |
| ]{.mark} | official)*                    | ####  | ######  |         |
|          |                               |       |         |         |
|          | (SAR 50, pg. 22)              |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OCFO informed us |       |         |         |
|          | that it needs to review and   |       |         |         |
|          | analyze recent information.*  |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A07D0002 | Audit of the Talent Search    | 7/    | \$      | 5       |
|          | Program at Case Western       | 11/03 | 212,428 |         |
| ##       | Reserve University            |       |         | ##      |
| #######  |                               | ####  | ##      | ######  |
|          | (SAR 47, pg. 14)              | ####  | ######  |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OCFO informed us |       |         |         |
|          | that information submitted by |       |         |         |
|          | the auditee needs to be       |       |         |         |
|          | reviewed and analyzed.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A09F0010 | Pittsburg Pre-School and      | 3/    | ####    | ####    |
|          | Community Council, Inc.'s Use | 17/06 | #### \$ | #### 21 |
|          | of Early Reading First and    |       | 910,217 |         |
|          | Migrant Education Even Start  |       |         |         |
|          | Grant Funds *(OESE also       |       | ##      |         |
|          | designated as action          |       | ######  |         |
|          | official)*                    |       |         |         |
|          |                               |       |         |         |
|          | (SAR 52, pg 9)                |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OCFO informed us |       |         |         |
|          | that additional information   |       |         |         |
|          | has been requested from the   |       |         |         |
|          | auditee*.                     |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| #        | KIPP Foundation's             | # 12  | \$4,391 | 6       |
| A09G0010 | Administration of the Fund    | /6/06 |         |         |
|          | for the Improvement of        |       |         |         |
|          | Education Grants *(OII also   |       |         |         |
|          | designated as an action       |       |         |         |
|          | official* (SAR 54, pg 30)     |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** OCFO informed us | ##    | ##      | ##      |
|          | that information submitted by | ####  | ######  | ######  |
|          | the auditee needs to be       |       |         |         |
|          | reviewed and analyzed.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| #        | Financial Statement Audits    | # 11/ |         | ###     |
| A17G0003 | for FY 2006 and FY 2005 *(FSA | 15/06 |         | ##### 5 |
|          | also designated as an action  |       |         |         |
|          | official)* (SAR 54, pg 30)    |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** The resolution   | ##    | ##      | ##      |
|          | of the audit is pending an    | ####  | ######  | ######  |
|          | administrative action by      |       |         |         |
|          | OCFO*.                        |       |         |         |
+----------+-------------------------------+-------+---------+---------+

+----------+-------------------------------+-------+---------+---------+
| #        | # R                           | #     | Total   | Number  |
|  Report  | eport Title {#report-title-2} |  Date | M       | of      |
|          |                               |       | onetary | Re      |
| # Number | (Prior SAR Number and Page)   | I     |         | commen- |
|          |                               | ssued | F       | dations |
|          |                               |       | indings |         |
+----------+-------------------------------+-------+---------+---------+
| ###      |                               |       |         |         |
| ##### [O |                               |       |         |         |
| ESE]{.un |                               |       |         |         |
| derline} |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A02F0005 | New Haven School District's   | 4/    | \$3,    | 4       |
|          | Administration of Title I,    | 11/06 | 780,000 |         |
|          | Part A Summer and After       |       |         |         |
|          | School Programs (SAR 53, pg   |       |         |         |
|          | 25)                           |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** The PDL was      |       |         |         |
|          | dated 3/31/2008; however, the |       |         |         |
|          | required documentation for    |       |         |         |
|          | resolution of this audit was  |       |         |         |
|          | not in AARTS on 3/31/2008.    |       |         |         |
|          | This audit will be removed    |       |         |         |
|          | from this list by the next    |       |         |         |
|          | SAR.*                         |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A02G0002 | Audit of New York State       | 11    | \$215,  | 8       |
|          | Education Department's        | /3/06 | 832,254 |         |
|          | Reading First Program (SAR    |       |         |         |
|          | 54, pg 31)                    |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OESE informed us |       |         |         |
|          | this audit is pending         |       |         |         |
|          | continued discussions with    |       |         |         |
|          | OIG on resolution.*           |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A03G0006 | The Department's              | 2/    |         | 3       |
|          | Administration of Selected    | 22/07 |         |         |
|          | Aspects of the Reading First  |       |         |         |
|          | Program *(OCFO also           |       |         |         |
|          | designated as an action       |       |         |         |
|          | official)* (SAR 54, pg 31)    |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OESE informed us |       |         |         |
|          | this audit has ongoing        |       |         |         |
|          | corrective action.*           |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A04F0011 | Audit of the Georgia          | 1/    |         | 7       |
|          | Department of Education's     | 12/06 |         |         |
|          | Migrant Education Program     |       |         |         |
|          | (SAR 52, pg 4)                |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 1/11/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A05C0012 | Audit of East Cleveland City  | 9/    | \$      | 9       |
|          | Schools\' Administration of   | 18/02 | 349,637 |         |
| #        | the 21st Century Community    |       |         | ##      |
| #######  | Learning Centers Grant at     | ####  | ##      | ######  |
|          | Kirk Middle School (SAR 45,   | ####  | ######  |         |
|          | pg. 18)                       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** The PDL was      |       |         |         |
|          | dated 10/3/2007. However the  |       |         |         |
|          | required documentation for    |       |         |         |
|          | resolution of this audit was  |       |         |         |
|          | not in AARTS by 3/31/2008.*   |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06E0008 | Audit of the Title I Funds    | 2/    | \$73,   | 7       |
|          | Administered by the Orleans   | 16/05 | 936,273 |         |
|          | Parish School Board for the   |       |         | ##      |
|          | Period July1, 2001, through   | ##### | ##      | ######  |
|          | December 31, 2003 (SAR 50, pg | ####  | ######  |         |
|          | 23)                           |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| ######   | ***Status:** OESE informed us |       |         |         |
|          | that it is discussing         |       |         |         |
|          | resolution of audit with      |       |         |         |
|          | OGC.*                         |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06F0013 | Oklahoma State Department of  | 3/    | \$      | 3       |
|          | Education's Migrant Education | 21/06 | 509,000 |         |
|          | Program (SAR 52, pg 4)        |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 1/11/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06F0016 | Arkansas Department of        | 8/    | \$      | 2       |
|          | Education's Migrant Education | 22/06 | 877,000 |         |
|          | Program (SAR 53, pg 25)       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 1/11/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A09F0024 | California Department of      | 12    | See     | 6       |
|          | Education's Migrant Education | /1/06 | Note    |         |
|          | Program (SAR 54, pg 31)       |       | 1\*     |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** AARTS shows OESE |       |         |         |
|          | administrative stay was       |       |         |         |
|          | approved on 1/11/2008.*       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| Report   | Report Title                  | Date  | Total   | Number  |
|          |                               |       | M       | of      |
| Number   | (Prior SAR Number and Page)   | I     | onetary | Re      |
|          |                               | ssued | Finding | commend |
|          |                               |       |         | -ations |
+----------+-------------------------------+-------+---------+---------+
| **[OP    |                               |       |         |         |
| E]{.unde |                               |       |         |         |
| rline}** |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A07B0011 | Audit of Valencia Community   | 5     | \$1,    | 5       |
|          | College's Gaining Early       | /8/03 | 822,864 |         |
| #        | Awareness and Readiness for   |       |         |         |
| #######  | Undergraduate Programs        | ####  |         |         |
|          | Matching Requirement (SAR 47, | ####  |         |         |
|          | pg. 15)                       |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OPE informed us  |       |         |         |
|          | that OPE and OGC are          |       |         |         |
|          | reviewing additional          |       |         |         |
|          | documentation provided by     |       |         |         |
|          | Valencia.*                    |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| **[OSER  |                               |       |         |         |
| S]{.unde |                               |       |         |         |
| rline}** |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A02B0014 | Audit of the Puerto Rico      | 6/    | \$15,   | 5       |
|          | Vocational Rehabilitation     | 26/02 | 800,000 |         |
| ##       | Administration (SAR 45, pg.   |       |         | ##      |
| #######  | 18)                           | ####  | ##      | ######  |
|          |                               | ####  | ######  |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OSERS agrees     |       |         |         |
|          | that the audit is open and    |       |         |         |
|          | continues to work diligently  |       |         |         |
|          | towards completion.*          |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A02E0020 | The Virgin Islands Department | 9/    |         | 17      |
|          | of Health's Administration of | 28/05 |         |         |
| #        | the Infants and Toddlers      |       |         |         |
| #######  | Program *(see note 2)* (SAR   | ####  |         |         |
|          | 51, pg 28)                    | ####  |         |         |
+----------+-------------------------------+-------+---------+---------+
| #        | ***Status:** OSERS informed   |       |         |         |
| #######  | us that it intends to address |       |         |         |
|          | this during the VIDE's visit  |       |         |         |
|          | to DC in April 2008.*         |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| A06F0019 | Results of five audits of the | 3/    | \$328,  | 6       |
|          | IDEA, Part B requirements at  | 28/07 | 000,000 |         |
|          | schools under the supervision |       |         |         |
|          | of the Department of          |       |         |         |
|          | Interior's Bureau of Indian   |       |         |         |
|          | Affairs *(Report was          |       |         |         |
|          | addressed to the Bureau of    |       |         |         |
|          | Indian Education, Department  |       |         |         |
|          | of the Interior)* (SAR 54, pg |       |         |         |
|          | 32)                           |       |         |         |
+----------+-------------------------------+-------+---------+---------+
|          | ***Status:** OSERS informed   |       |         |         |
|          | us that a meeting was held on |       |         |         |
|          | 1/23/08 with the auditee to   |       |         |         |
|          | discuss outstanding issues to |       |         |         |
|          | be resolved prior to closure  |       |         |         |
|          | of audit. OSERS is awaiting   |       |         |         |
|          | the letter and attachments    |       |         |         |
|          | from the auditee needed to    |       |         |         |
|          | verify the issues that have   |       |         |         |
|          | been addressed.*              |       |         |         |
+----------+-------------------------------+-------+---------+---------+
| Note 1 - |                               |       |         |         |
| We       |                               |       |         |         |
| id       |                               |       |         |         |
| entified |                               |       |         |         |
| sig      |                               |       |         |         |
| nificant |                               |       |         |         |
| numbers  |                               |       |         |         |
| of       |                               |       |         |         |
| in       |                               |       |         |         |
| eligible |                               |       |         |         |
| children |                               |       |         |         |
| in this  |                               |       |         |         |
| report,  |                               |       |         |         |
| but did  |                               |       |         |         |
| not      |                               |       |         |         |
| project  |                               |       |         |         |
| e        |                               |       |         |         |
| stimated |                               |       |         |         |
| qu       |                               |       |         |         |
| estioned |                               |       |         |         |
| costs.   |                               |       |         |         |
| We       |                               |       |         |         |
| rec      |                               |       |         |         |
| ommended |                               |       |         |         |
| that     |                               |       |         |         |
| more     |                               |       |         |         |
| thorough |                               |       |         |         |
| reviews  |                               |       |         |         |
| be       |                               |       |         |         |
| c        |                               |       |         |         |
| onducted |                               |       |         |         |
| to       |                               |       |         |         |
| d        |                               |       |         |         |
| etermine |                               |       |         |         |
| the      |                               |       |         |         |
| total    |                               |       |         |         |
| numbers  |                               |       |         |         |
| of       |                               |       |         |         |
| in       |                               |       |         |         |
| eligible |                               |       |         |         |
| children |                               |       |         |         |
| and the  |                               |       |         |         |
| return   |                               |       |         |         |
| of funds |                               |       |         |         |
| expended |                               |       |         |         |
| for the  |                               |       |         |         |
| in       |                               |       |         |         |
| eligible |                               |       |         |         |
| children |                               |       |         |         |
| found.   |                               |       |         |         |
|          |                               |       |         |         |
| Note 2   |                               |       |         |         |
| We       |                               |       |         |         |
| id       |                               |       |         |         |
| entified |                               |       |         |         |
| \        |                               |       |         |         |
| $327,577 |                               |       |         |         |
| in       |                               |       |         |         |
| one-time |                               |       |         |         |
| better   |                               |       |         |         |
| use of   |                               |       |         |         |
| funds in |                               |       |         |         |
| audit    |                               |       |         |         |
| number   |                               |       |         |         |
| A02E0020 |                               |       |         |         |
+----------+-------------------------------+-------+---------+---------+

+---------------------------------------------------------+------------+
| # Table 7:                                              | Six-Month  |
| Statistical Profile: October 1, 2007, to March 31, 2008 | Period     |
|                                                         | Ending     |
|                                                         | 3/31/2008  |
+---------------------------------------------------------+------------+
| **OIG Audit Reports Issued**                            | 18         |
+---------------------------------------------------------+------------+
| # Questioned Costs                                      | \$         |
|                                                         | 45,444,898 |
+---------------------------------------------------------+------------+
| # Unsupported Costs                                     | \          |
|                                                         | $5,483,187 |
+---------------------------------------------------------+------------+
| # Recommendations for Better Use of Funds               |            |
+---------------------------------------------------------+------------+
| **Other OIG Products Issued**                           | 13         |
|                                                         |            |
| *(4 Alert Memoranda, 2 Attestation Reports, 2 Audit     |            |
| Closeout Documents (1 Letter, 1 Memorandum), 1          |            |
| Inspection Report, 2 Management Information Reports, 2  |            |
| Special Projects)*                                      |            |
+---------------------------------------------------------+------------+
| **OIG Audit Reports Resolved By Program Managers**      | 24         |
+---------------------------------------------------------+------------+
| Questioned Costs Sustained                              | \$2        |
|                                                         | 83,533,367 |
+---------------------------------------------------------+------------+
| Unsupported Costs Sustained                             | \$         |
|                                                         | 23,056,577 |
+---------------------------------------------------------+------------+
| Additional Disallowances Identified by Program Managers | \          |
|                                                         | $6,230,017 |
+---------------------------------------------------------+------------+
| Management Commitment to the Better Use of Funds        | \$8        |
|                                                         | 92,000,000 |
+---------------------------------------------------------+------------+
| **Investigative Case Activity**                         |            |
+---------------------------------------------------------+------------+
| Cases Opened                                            | 74         |
+---------------------------------------------------------+------------+
| Cases Closed                                            | 56         |
+---------------------------------------------------------+------------+
| Cases Active at the End of the Reporting Period         | 399        |
+---------------------------------------------------------+------------+
| Prosecutorial Decisions                                 | 128        |
|                                                         |            |
| -   Accepted                                            | 53         |
|                                                         |            |
| -   Declined                                            | 75         |
+---------------------------------------------------------+------------+
| **Investigative Results**                               |            |
+---------------------------------------------------------+------------+
| Indictments/Informations                                | 38         |
+---------------------------------------------------------+------------+
| Convictions/Pleas                                       | 37         |
+---------------------------------------------------------+------------+
| Fines Ordered                                           | \$14,094   |
+---------------------------------------------------------+------------+
| Restitution Payments Ordered                            | \          |
|                                                         | $1,164,766 |
+---------------------------------------------------------+------------+
| Civil Settlements/Judgments (number)                    | 9          |
+---------------------------------------------------------+------------+
| Civil Settlements/Judgments (amount)                    | \          |
|                                                         | $2,495,593 |
+---------------------------------------------------------+------------+
| Recoveries                                              | \          |
|                                                         | $2,053,474 |
+---------------------------------------------------------+------------+
| Forfeitures/Seizures                                    | 0          |
+---------------------------------------------------------+------------+
| Savings                                                 | \$         |
|                                                         | 10,684,069 |
+---------------------------------------------------------+------------+