**U.S. Department of Education**

**Semiannual Report to Congress on Audit**

**Follow-up---No. 35**

Semiannual Report to Congress on Audit Follow-up---No. 35

April 1--Sept. 30, 2006

![](media/image2.png)

### 

U. S. Department of Education

Office of the Chief Financial Officer

**U.S. Department of Education**

Margaret Spellings

*Secretary*

**Office of the Chief Financial Officer**

Lawrence A. Warder

*Chief Financial Officer*

**Financial Improvement and Post Audit Operations**

Linda A. Stracke

*Director*

November 2006

This report is in the public domain. Authorization to reproduce it in
whole or in part is granted. While permission to reprint this
publication is not necessary, the citation should be: U.S. Department of
Education, Office of the Chief Financial Officer, Financial Improvement
and Post Audit Operations, *Semiannual Report to Congress on Audit
Follow-up―No. 35,* Washington, D.C., 2006.

**To obtain copies of this report**,

**write** to: U.S. Department of Education, Office of the Chief
Financial Officer, 400 Maryland Ave. S.W. Washington, DC 20202-4450.

This report is also available on the Department's Web site at
www.ed.gov/about/offices/list/ocfo/pubs.html.

On request, this publication is available in alternate formats, such as
Braille, large print, or computer diskette. For more information, please
contact the Department's Alternate Format Center 202- 260-0852 or
202-260-0818.

Dear Secretary Spellings:

I am pleased to submit to you, in accordance with the *Inspector General
Act Amendments of 1988* (P.L. 100-504), Sec. 106(b), the Department's
35th *Semiannual Report to Congress on Audit Follow-up*, which covers
the six-month period ending Sept. 30, 2006.

This report highlights the Department's accomplishments to facilitate
the tracking of and expedite the implementation of recommendations
included in Departmental audits conducted by the Government
Accountability Office, Office of Inspector General, and independent
auditors. The report also provides statistical tables as specified in
Sec. 106(b)(2), (3) and (4) of the *Inspector General Act Amendments of
1988*, and statements with respect to audit reports on which management
decisions have been made but final action has not been taken.

Over the reporting period, Department managers and staff continued their
commitment to implement recommendations designed to correct deficiencies
reported in prior reports. Our efforts in this area and our
determination to effectively oversee the audit resolution process as a
whole will continue to receive top priority.

Sincerely,

Lawrence A. Warder

> Chief Financial Officer

Enclosure

######### CONTENTS

Letter From the Chief Financial Officer iii

[Illustrations vi](#illustrations)

[Tables vi](#__RefHeading___Toc152576505)

[Figures vi](#__RefHeading___Toc152576506)

[Abbreviations vii](#abbreviations)

[Overview 1](#__RefHeading___Toc152576508)

[Audit Resolution Activity Highlights
1](#audit-resolution-activity-highlights)

[Audit Follow-up Responsibilities 1](#audit-follow-up-responsibilities)

[Audit Follow-up System 2](#audit-follow-up-system)

[Semiannual Reporting Requirements
3](#semiannual-reporting-requirements)

[Chapter One: Audit Resolution 5](#the-audit-resolution-process)

[The Audit Resolution Process 5](#the-audit-resolution-process)

[Internal Audit Activity 6](#internal-audit-activity)

[Chapter Two: Audit Activities Related to Disallowed Costs and Better
Use of Funds (BUF) 7](#__RefHeading___Toc152576516)

[Chapter Three: Reports Pending Final Action One Year or More After
Issuance of a Management Decision 9](#__RefHeading___Toc152576517)

## 

#### Illustrations

[]{#__RefHeading___Toc152576505 .anchor}**Tables**

1\. Requirements Governing This Report, by Sections of the

> 1988 Amendments to the *Inspector General Act*
> \...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....3

2\. U. S. Department of Education Audit Recovery Activities Related to

Disallowed Costs, As of Sept. 30,
2006\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....7

3\. U. S. Department of Education Audit Activities Related to Better Use

of Funds, As of Sept. 30,
2006\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...8

4\. Total Disallowed Costs Owed the Department Pending Final Action

One Year After Issuance of a Management Decision, By Various
Dates\...\...\...\...\.....9

5\. OIG-Prepared Internal and Nationwide Audit Reports Pending Final

Action One Year After Issuance of a Management Decision, By

Various Dates and
Status\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....11

[]{#__RefHeading___Toc152576506 .anchor}**Figure**

1\. Status of Recommendations For Internal Audits as of

Sept. 30, 2006
\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
6

####  Abbreviations

  ------------ ----------------------------------------------------------
  **AARTS**    Audit Accountability and Resolution Tracking System

  **BUF**      Better Use of Funds

  **CAM**      Contracts and Acquisitions Management

  **ECMC**     Educational Credit Management Corporation

  **ED**       U. S. Department of Education

  **FSA**      Federal Student Aid

  **GA**       Guaranty Agency

  **GAO**      Government Accountability Office

  **LEA**      Local Education Agency

  **OCFO**     Office of the Chief Financial Officer

  **OCIO**     Office of the Chief Information Officer

  **ODS**      Office of the Deputy Secretary

  **OESE**     Office of Elementary and Secondary Education

  **OGC**      Office of the General Counsel

  **OIG**      Office of Inspector General

  **OII**      Office of Innovation and Improvement

  **OM**       Office of Management

  **OMB**      Office of Management and Budget

  **OSERS**    Office of Special Education and Rehabilitative Services

  **OVAE**     Office of Vocational and Adult Education

  **PDL**      Program Determination Letter

  **PO**       Principal Office

  **SEA**      State Education Agency
  ------------ ----------------------------------------------------------

[]{#__RefHeading___Toc152576508 .anchor}The Department of Education
(Department) submits its 35th *Semiannual Report to the Congress on
Audit Follow-up* in accordance with requirements of Sec. 106(b) of the
*Inspector General Act Amendments of 1988*. This report provides
information on audit resolution activity during the six-month period
from April 1, 2006, through Sept. 30, 2006.

## Audit Resolution Activity Highlights 

-   Of the 323 recommendations from all open audits, 48 percent have
    been completed as of Sept. 30, 2006. Fifty-two percent are open and
    are awaiting implementation of corrective actions.

-   Disallowed costs associated with 72 audit reports totaling \$43
    million (including interest, penalties, and administrative costs)
    remained in the Department's receivables inventory. Of this amount,
    21 reports (\$7.3 million) were over one year old since issuance of
    a management decision, and 15 reports (\$17.2 million) were in
    appeal status. Final action was taken on 110 audit reports pending
    final action during the semiannual period.

-   Additionally, the Department has eight OIG-issued audit reports on
    which final action was not taken within one year after the issuance
    of a management decision. These audits do not contain disallowed
    costs.

## Audit Follow-up Responsibilities

*OMB Circular A-50* provides that agency heads are responsible for
designating a top management official to oversee audit follow-up,
including resolution and corrective actions. The chief financial officer
is the Department\'s designated audit follow-up official, whose duties
and responsibilities are:

-   Ensuring that a system of cooperative audit resolution and follow-up
    is documented and in place;

-   Ensuring that timely responses are made to all audit
    recommendations;

-   Ensuring follow-up on corrective actions; and

-   Resolving disputes regarding audit-related matters.

Senior officers within the Department are charged with the timely
resolution of audit reports and ensuring that appropriate corrective
actions have been taken on agreed-upon audit recommendations.

## Audit Follow-up System

The Audit Accountability and Resolution Tracking System (AARTS) is the
Department's tool to track, monitor, and report on the post-audit status
of single audits, Government Accountability Office (GAO) audits, as well
as the Department's Office of Inspector General (OIG) -issued internal
audits, external audits and alternative products. AARTS has been
designed with the capability of creating a synergy of information in a
single centralized data source, thereby allowing Department staff to
reduce duplication of effort and obtain and share data in a more
efficient and expedient manner. It enables the close coordination of
efforts among various Department principal offices (POs) regarding the
review of activities, the sharing of information, the monitoring of
progress, the generation of reports and the performance of trend
analyses.

Specifically, AARTS:

-   Tracks internal, external, and sensitive audits, as well as
    non-audit product types, from issuance of the final audit to final
    disposition;

-   Notifies users of audit decisions, approaching or expired events and
    transactions;

-   Provides office file compatibility and file attachment capabilities;

-   Provides a personal portal (Digital Dashboard) for user-assigned
    transactions;

-   Features a search function to query application (Audit Report) data;
    and

-   Provides for both a defined as well as an ad hoc report generation
    environment.

## Semiannual Reporting Requirements

Sec. 106(b) of P.L. 100-504, the 1988 amendments to the *Inspector
General Act of 1978*, specifies the requirements governing the
submission of this report. The following table lists these requirements
and where they are referenced (page numbers) in this report.

**Table 1. Requirements Governing This Report, by Sections of the 1988
Amendments to**

> **the *Inspector General Act***

  ---------------- --------------------------------------- --------------
  **Applicable     **Topic**                               **Page(s)**
  Section**                                                

  106(b)(2)        Statistical tables showing the number   7
                   of audit reports and dollar value of    
                   disallowed costs.                       

  106(b)(3)        Statistical tables showing the number   8
                   of audit reports and the dollar value   
                   of recommendations for Better Use of    
                   Funds (BUF).                            

  106(b)(4)        Statement on audit reports where        9 - 12
                   management decisions have been made,    
                   but final action has not been taken     
                   within one year of the management       
                   decision.                               
  ---------------- --------------------------------------- --------------

Source: Section 106(b) of P.L. 100-504, the 1988 amendments to the
*Inspector General Act of 1978*.

**Chapter One:**

**Audit Resolution**

## 

## The Audit Resolution Process

The audit resolution process begins with the issuance of a final audit
report by OIG, GAO, or independent auditors. The Department resolves two
types of audits---external and internal audit reports. ***External
audits*** are reviews of contract-related, grant-related or other
activities of organizations external to, but doing business with, the
Department. ***Internal audits*** are audits conducted by headquarters
or regional OIG staff, or GAO staff, that identify deficiencies and
recommend improvements in Department operations and programs to ensure
that federal education funds are used effectively and efficiently and
that program goals are accomplished. As required by *OMB Circular A-50*,
\"Audit Follow-up,\" all audit recommendations are to be resolved within
six months of issuance of an audit report.

A ***Management Decision*** contains two parts: 1) evaluating the
validity of findings and recommendations cited in the audit report; and
2) deciding what course of action is necessary to correct any
deficiencies. For *external audits*, a management decision is presented
in the form of a program determination letter (PDL) to the recipient.
For *internal audits issued by OIG*, a management decision is made when
the program office responsible for the findings in the audit has
developed a corrective action plan to address all recommendations, and
OIG has agreed with the actions. For *internal audits issued by GAO*, a
management decision is made when the program office responsible for the
findings in the audit has developed a corrective action plan to address
all recommendations, and the Office of the Chief Financial Officer
(OCFO) has agreed with the actions.

For *external audits*, ***Resolution*** occurs when the program office
makes a management decision and issues a PDL to the grantee. For
*internal audits*, resolution occurs when there is agreement between the
program office and OIG or the program office and OCFO on the corrective
actions that will be taken to address all of the recommendations cited
in the audit.

An audit is ***Unresolved*** when: 1) a PDL has not yet been issued for
an external audit; or 2) agreement has not been reached between OIG and
the program office or OCFO and the program office, on the recommended
corrective actions identified in an internal audit.

An internal audit can be considered ***Resolved*** yet ***Open*** when
there is agreement between OIG and management on the corrective actions
that will be taken to implement the recommendations, and management is
currently implementing those corrective actions. An internal audit is
***Resolved*** and ***Completed*** when all corrective actions have been
implemented. An internal audit is ***Closed*** when the principal office
has certified that all corrective actions have been implemented, and
OCFO has verified supporting documentation and issued a closure memo.

An external audit is ***Closed*** when the PO ensures that all
corrective actions have been implemented and funds repaid or settlement
made to the Department.

## Internal Audit Activity

Internal audits include both OIG- and GAO-issued audit reports, in
addition to alternative products issued by the OIG (e.g., alert
memoranda and inspection reports). OCFO monitors audit resolution and
corrective action progress of each program office. An audit
recommendation is resolved when agreement is reached between the PO and
OIG or OCFO, on the corrective actions that will be taken to address the
recommendation. Additionally, when the corrective actions for a
recommendation have been implemented, the recommendation is considered
completed.

Figure 1 shows the status of recommendations for all internal audits as
of Sept. 30, 2006. Of the 323 total recommendations from all open
audits, 48 percent (156 recommendations) are completed, and 52 percent
(167 recommendations) are open, awaiting completion of corrective
actions.

**Figure 1. Status of Recommendations for Internal Audits As of Sept.
30, 2006**

![](media/image3.pct)

> Source: U.S. Department of Education, Office of the Chief Financial
> Officer, Audit Accountability and Resolution Tracking System, Oct. 2,
> 2006.

Chapter Two:

Audit Activities Related to Disallowed Costs and Better Use

of Funds (BUF)

[]{#__RefHeading___Toc152576516 .anchor}Table 2 presents statistical
information on the Department\'s audit recovery activities related to
disallowed costs. *Disallowed costs* are questioned costs that
management, in a management decision, has sustained or agreed should not
be charged to the federal government. This table includes both internal
and external audit reports prepared by both OIG and independent public
auditors for which receivables were established.

**Table 2. U. S. Department of Education Audit Recovery Activities
Related to Disallowed Costs, As of Sept. 30, 2006**

Source: U.S. Department of Education, Office of the Chief Financial
Officer, Financial Management System Software, Oct. 5, 2006.

##   

Table 3 presents data on the Department's activities related to
recommendations pertaining to Better Use of Funds (BUF). This category
includes both external and internal audits. BUF is a recommendation that
funds could be used more efficiently if responsible officials took
actions to implement and complete the recommendations by means
including: 1) reductions in outlays; 2) deobligation of funds from
programs or operations; 3) withdrawal of interest subsidy costs on loans
or loan guarantees, insurance, or bonds; 4) not incurring costs by
implementing recommended improvements related to the operations of the
Department, a contractor or grantee; or 5) any other savings that are
specifically identified.

Table 3. U. S. Department of Education Audit Activities Related to
Better Use of Funds, As of Sept. 30, 2006

Source: Internal and external audit reports prepared by the OIG, Sept.
30, 2006.

Chapter Three:

Reports Pending Final Action One Year or More After Issuance of a
Management Decision

[]{#__RefHeading___Toc152576517 .anchor}Table 4 lists audit reports with
disallowed costs owed the Department on which final action was not taken
within one year of the issuance of a management decision on the report.
This table includes both external and internal audits. Disallowed costs
are questioned costs that management, in a management decision, has
sustained or agreed should not be charged to the federal government. In
this category, the Department has a total of 21 reports with disallowed
costs amounting to \$7.3 million, and 15 reports in appeal status
amounting to \$17.2 million. Table 4 also provides information that
explains why final action has not been taken.

Reasons final actions are not complete:

-   **Billing---**The debtor is actively being billed. The billing
    process may have begun a long time after the management decision due
    to a long appeal process.

-   **In Repayment**---The debtor has negotiated a short-term promissory
    note.

-   **Bankruptcy---**The debtor has filed for bankruptcy and the case is
    pending. The debtor is not billed as long as the bankruptcy case is
    unresolved.

-   **OGC Review---**OGC is negotiating a settlement agreement.

-   **Due Process Notice Sent---**The debtor has been mailed a final
    notice prior to the debt being sent to the U. S. Department of the
    Treasury for additional collection action.

-   **OCFO Review---**OCFO is reviewing the information provided
    subsequent to the management decision to determine any impact on the
    decision.

+--------+---+-----------+---------+------------+-------------------------+
| *      |   |           |         |            |                         |
| *Table |   |           |         |            |                         |
| 4.     |   |           |         |            |                         |
| Total  |   |           |         |            |                         |
| Disa   |   |           |         |            |                         |
| llowed |   |           |         |            |                         |
| Costs  |   |           |         |            |                         |
| Owed   |   |           |         |            |                         |
| the    |   |           |         |            |                         |
| Depa   |   |           |         |            |                         |
| rtment |   |           |         |            |                         |
| P      |   |           |         |            |                         |
| ending |   |           |         |            |                         |
| Final  |   |           |         |            |                         |
| Action |   |           |         |            |                         |
| One    |   |           |         |            |                         |
| Year   |   |           |         |            |                         |
| or     |   |           |         |            |                         |
| More   |   |           |         |            |                         |
| After  |   |           |         |            |                         |
| Is     |   |           |         |            |                         |
| suance |   |           |         |            |                         |
| of a   |   |           |         |            |                         |
| Mana   |   |           |         |            |                         |
| gement |   |           |         |            |                         |
| Dec    |   |           |         |            |                         |
| ision, |   |           |         |            |                         |
| By     |   |           |         |            |                         |
| V      |   |           |         |            |                         |
| arious |   |           |         |            |                         |
| D      |   |           |         |            |                         |
| ates** |   |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| *      | * |           | **Date  | **         | **Reason Final Action   |
| *Audit | * |           | of      | Disallowed | Not Complete After One  |
| C      | D |           | Man     | Costs      | Year**                  |
| ontrol | a |           | agement | Owed**     |                         |
| Nu     | t |           | Dec     |            |                         |
| mber** | e |           | ision** |            |                         |
|        | I |           |         |            |                         |
|        | s |           |         |            |                         |
|        | s |           |         |            |                         |
|        | u |           |         |            |                         |
|        | e |           |         |            |                         |
|        | d |           |         |            |                         |
|        | * |           |         |            |                         |
|        | * |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 029    | 0 |           | 03/     | \$980,122  | Bankruptcy              |
| 806144 | 7 |           | 27/2001 |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 7 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 0      | 0 |           | 10/     | \$995,025  | Billing                 |
| 2c0012 | 9 |           | 06/2004 |            |                         |
|        | / |           |         |            |                         |
|        | 3 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 3 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 0      | 0 |           | 09/     | \$135,821  | Billing                 |
| 4a0015 | 7 |           | 29/2003 |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 5 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 1 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 040    | 1 |           | 06/     | \          | Bankruptcy              |
| 111000 | 2 |           | 12/2002 | $1,523,160 |                         |
|        | / |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | 4 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 1 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 040    |   | 0         | 07/     | \$182,244  | Due Process Notice Sent |
| 126698 |   | 3/31/2002 | 30/2002 |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
|        |   |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| *      |   |           |         |            |                         |
| *Table |   |           |         |            |                         |
| 4.     |   |           |         |            |                         |
| (*Cont |   |           |         |            |                         |
| 'd*)** |   |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| *      | * |           | **Date  | **         | **Reason Final Action   |
| *Audit | * |           | of      | Disallowed | Not Complete After One  |
| C      | D |           | Man     | Costs      | Year**                  |
| ontrol | a |           | agement | Owed**     |                         |
| Nu     | t |           | Dec     |            |                         |
| mber** | e |           | ision** |            |                         |
|        | I |           |         |            |                         |
|        | s |           |         |            |                         |
|        | s |           |         |            |                         |
|        | u |           |         |            |                         |
|        | e |           |         |            |                         |
|        | d |           |         |            |                         |
|        | * |           |         |            |                         |
|        | * |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 049    | 1 |           | 08/     | \          | Bankruptcy              |
| 678335 | 1 |           | 27/1998 | $1,475,292 |                         |
|        | / |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 7 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | 9 |           |         |            |                         |
|        | 9 |           |         |            |                         |
|        | 7 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 0      | 1 |           | 08/     | \$946,117  | OCFO Review             |
| 4D0001 | 1 |           | 23/2005 |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 4 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 3 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 0      | 0 |           | 09/     | \$7,893    | OGC Review              |
| 690011 | 2 |           | 26/2002 |            |                         |
|        | / |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 8 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 020    | 0 |           | 08/     | \$8,539    | In Repayment            |
| 351408 | 8 |           | 19/2005 |            |                         |
|        | / |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | 9 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 5 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 040    | 1 |           | 10/     | \$35,718   | Bankruptcy              |
| 331451 | 0 |           | 21/2003 |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 3 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 060    | 0 |           | 09/     | \$536,688  | Bankruptcy              |
| 221001 | 4 |           | 10/2002 |            |                         |
|        | / |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 4 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 2 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 060    | 0 |           | 08/     | \$214,473  | Bankruptcy              |
| 441916 | 8 |           | 01/2005 |            |                         |
|        | / |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 5 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 060    | 0 |           | 06/     | \$20,355   | Bankruptcy              |
| 026632 | 4 |           | 19/2002 |            |                         |
|        | / |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 4 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 2 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 060    | 1 |           | 04/     | \$11,967   | Bankruptcy              |
| 231356 | 0 |           | 19/2004 |            |                         |
|        | / |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 3 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 060    | 1 |           | 08/     | \$33,000   | Bankruptcy              |
| 349008 | 0 |           | 08/2005 |            |                         |
|        | / |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | 3 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 4 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 069    | 0 |           | 02/     | \$10,979   | Bankruptcy              |
| 916564 | 1 |           | 21/2001 |            |                         |
|        | / |           |         |            |                         |
|        | 3 |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 1 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 0      | 1 |           | 12/     | \$1,286    | Bankruptcy              |
| 478334 | 1 |           | 19/1997 |            |                         |
|        | / |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 7 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | 9 |           |         |            |                         |
|        | 9 |           |         |            |                         |
|        | 7 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 0      | 0 |           | 09/     | \$180,014  | Due Process Notice Sent |
| 6f0001 | 6 |           | 05/2005 |            |                         |
|        | / |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 5 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 099    | 0 |           | 04/     | \$1,474    | Bankruptcy              |
| 919051 | 1 |           | 29/2002 |            |                         |
|        | / |           |         |            |                         |
|        | 3 |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 2 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 090    | 0 |           | 06/     | \$107      | Billing                 |
| 231135 | 6 |           | 29/2004 |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 7 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 3 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| 040    | 0 |           | 03/     | \$9,108    | Bankruptcy              |
| 450728 | 1 |           | 15/2005 |            |                         |
|        | / |           |         |            |                         |
|        | 1 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | / |           |         |            |                         |
|        | 2 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 0 |           |         |            |                         |
|        | 5 |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| **Subt | ― |           | ―       | **\$7      | **(21 reports)**        |
| otal** |   |           |         | ,309,382** |                         |
+--------+---+-----------+---------+------------+-------------------------+
| **     | ― |           | ―       | **\$17     | **(15 reports)**        |
| Audits |   |           |         | ,185,556** |                         |
| in**   |   |           |         |            |                         |
|        |   |           |         |            |                         |
| **Ap   |   |           |         |            |                         |
| peal** |   |           |         |            |                         |
+--------+---+-----------+---------+------------+-------------------------+
| **T    | ― |           | ―       | **\$24     | **(36 reports)**        |
| OTAL** |   |           |         | ,494,938** |                         |
+--------+---+-----------+---------+------------+-------------------------+

Source: U.S. Department of Education, Office of the Chief Financial
Officer, Financial Management System Software and the Audit
Accountability and Resolution Tracking System, Oct. 4, 2006.

Table 5 lists each OIG prepared internal and nationwide audit report on
which final action was not taken within one year after the issuance of a
management decision on the report.

In this category, the Department has a total of eight reports.

**Table 5. OIG-Prepared Internal and Nationwide Audit Reports Pending
Final Action**

> **One Year or More After Issuance of a Management Decision, By Various
> Dates**
>
> **and Status**

+----------+-----------------------------------+--------+---+------------+
| **Audit  | **Report Title**                  | **Date | * |            |
| No.**    |                                   | Is     | * |            |
|          |                                   | sued** | D |            |
|          |                                   |        | a |            |
|          |                                   |        | t |            |
|          |                                   |        | e |            |
|          |                                   |        | o |            |
|          |                                   |        | f |            |
|          |                                   |        | M |            |
|          |                                   |        | g |            |
|          |                                   |        | m |            |
|          |                                   |        | t |            |
|          |                                   |        | . |            |
|          |                                   |        | D |            |
|          |                                   |        | e |            |
|          |                                   |        | c |            |
|          |                                   |        | i |            |
|          |                                   |        | s |            |
|          |                                   |        | i |            |
|          |                                   |        | o |            |
|          |                                   |        | n |            |
|          |                                   |        | * |            |
|          |                                   |        | * |            |
+----------+-----------------------------------+--------+---+------------+
| **03     | ***Audit of Annual Cohort Default | **     | * |            |
| -C0017** | Rates***                          | 12/22/ | * |            |
|          |                                   | 2003** | 0 |            |
|          |                                   |        | 7 |            |
|          |                                   |        | / |            |
|          |                                   |        | 1 |            |
|          |                                   |        | 1 |            |
|          |                                   |        | / |            |
|          |                                   |        | 2 |            |
|          |                                   |        | 0 |            |
|          |                                   |        | 0 |            |
|          |                                   |        | 5 |            |
|          |                                   |        | * |            |
|          |                                   |        | * |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus:** |                                   |        |   |            |
| R        |                                   |        |   |            |
| esolved. |                                   |        |   |            |
| Federal  |                                   |        |   |            |
| Student  |                                   |        |   |            |
| Aid will |                                   |        |   |            |
| develop  |                                   |        |   |            |
| and      |                                   |        |   |            |
| publish  |                                   |        |   |            |
| on the   |                                   |        |   |            |
| Web      |                                   |        |   |            |
| (Inf     |                                   |        |   |            |
| ormation |                                   |        |   |            |
| for      |                                   |        |   |            |
| F        |                                   |        |   |            |
| inancial |                                   |        |   |            |
| Aid      |                                   |        |   |            |
| Profes   |                                   |        |   |            |
| sionals, |                                   |        |   |            |
| http://  |                                   |        |   |            |
| www.ifap |                                   |        |   |            |
| .ed.gov) |                                   |        |   |            |
| a        |                                   |        |   |            |
| national |                                   |        |   |            |
| cu       |                                   |        |   |            |
| mulative |                                   |        |   |            |
| lifetime |                                   |        |   |            |
| default  |                                   |        |   |            |
| rate by  |                                   |        |   |            |
| type and |                                   |        |   |            |
| control  |                                   |        |   |            |
| of       |                                   |        |   |            |
| ins      |                                   |        |   |            |
| titution |                                   |        |   |            |
| and the  |                                   |        |   |            |
| overall  |                                   |        |   |            |
| rate.    |                                   |        |   |            |
|          |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Nov. 30, |                                   |        |   |            |
| 2006.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **04     | ***Case Management and Oversight  | **     | * |            |
| -D0014** | Monitoring of Postsecondary       | 09/30/ | * |            |
|          | Institutions***                   | 2004** | 1 |            |
|          |                                   |        | 2 |            |
|          |                                   |        | / |            |
|          |                                   |        | 2 |            |
|          |                                   |        | 3 |            |
|          |                                   |        | / |            |
|          |                                   |        | 2 |            |
|          |                                   |        | 0 |            |
|          |                                   |        | 0 |            |
|          |                                   |        | 4 |            |
|          |                                   |        | * |            |
|          |                                   |        | * |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus**: |                                   |        |   |            |
| Co       |                                   |        |   |            |
| mpleted. |                                   |        |   |            |
| FSA has  |                                   |        |   |            |
| reported |                                   |        |   |            |
| that all |                                   |        |   |            |
| co       |                                   |        |   |            |
| rrective |                                   |        |   |            |
| actions  |                                   |        |   |            |
| have     |                                   |        |   |            |
| been     |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpleted. |                                   |        |   |            |
| Closure  |                                   |        |   |            |
| of the   |                                   |        |   |            |
| audit is |                                   |        |   |            |
| pending  |                                   |        |   |            |
| review   |                                   |        |   |            |
| of       |                                   |        |   |            |
| su       |                                   |        |   |            |
| pporting |                                   |        |   |            |
| docume   |                                   |        |   |            |
| ntation. |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Nov. 30, |                                   |        |   |            |
| 2006.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **05     | ***Department Issues for          | **     |   | **02       |
| -D0001** | Educational Credit Management     | 03/20/ |   | /27/2004** |
|          | Corporation's (ECMC) Guarantor    | 2003** |   |            |
|          | Agreement***                      |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus:** |                                   |        |   |            |
| R        |                                   |        |   |            |
| esolved. |                                   |        |   |            |
| The ECMC |                                   |        |   |            |
| a        |                                   |        |   |            |
| greement |                                   |        |   |            |
| has been |                                   |        |   |            |
| revised. |                                   |        |   |            |
| Federal  |                                   |        |   |            |
| Student  |                                   |        |   |            |
| Aid is   |                                   |        |   |            |
| now      |                                   |        |   |            |
| r        |                                   |        |   |            |
| eviewing |                                   |        |   |            |
| ECMC's   |                                   |        |   |            |
| tran     |                                   |        |   |            |
| sactions |                                   |        |   |            |
| based on |                                   |        |   |            |
| the      |                                   |        |   |            |
| revised  |                                   |        |   |            |
| ag       |                                   |        |   |            |
| reement. |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Dec. 31, |                                   |        |   |            |
| 2006.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **07     | ***Review of Restricted Indirect  | **     |   | **06       |
| -D0005** | Cost Rates***                     | 04/01/ |   | /30/2004** |
|          |                                   | 2004** |   |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus:** |                                   |        |   |            |
| R        |                                   |        |   |            |
| esolved. |                                   |        |   |            |
| On June  |                                   |        |   |            |
| 15,      |                                   |        |   |            |
| 2006,    |                                   |        |   |            |
| OCFO     |                                   |        |   |            |
| tra      |                                   |        |   |            |
| nsmitted |                                   |        |   |            |
| to POs a |                                   |        |   |            |
| me       |                                   |        |   |            |
| morandum |                                   |        |   |            |
| which    |                                   |        |   |            |
| in       |                                   |        |   |            |
| structed |                                   |        |   |            |
| PO staff |                                   |        |   |            |
| to       |                                   |        |   |            |
| contact  |                                   |        |   |            |
| each     |                                   |        |   |            |
| grantee  |                                   |        |   |            |
| about    |                                   |        |   |            |
| repro    |                                   |        |   |            |
| gramming |                                   |        |   |            |
| to       |                                   |        |   |            |
| direct   |                                   |        |   |            |
| budget   |                                   |        |   |            |
| cat      |                                   |        |   |            |
| egories' |                                   |        |   |            |
| excess   |                                   |        |   |            |
| funds    |                                   |        |   |            |
| claimed  |                                   |        |   |            |
| in the   |                                   |        |   |            |
| "        |                                   |        |   |            |
| indirect |                                   |        |   |            |
| cost"    |                                   |        |   |            |
| budget   |                                   |        |   |            |
| category |                                   |        |   |            |
| as a     |                                   |        |   |            |
| result   |                                   |        |   |            |
| of not   |                                   |        |   |            |
| having   |                                   |        |   |            |
| applied  |                                   |        |   |            |
| the      |                                   |        |   |            |
| correct  |                                   |        |   |            |
| re       |                                   |        |   |            |
| stricted |                                   |        |   |            |
| indirect |                                   |        |   |            |
| cost     |                                   |        |   |            |
| rate.    |                                   |        |   |            |
| The      |                                   |        |   |            |
| Grants   |                                   |        |   |            |
| Policy   |                                   |        |   |            |
| and      |                                   |        |   |            |
| O        |                                   |        |   |            |
| versight |                                   |        |   |            |
| staff is |                                   |        |   |            |
| in the   |                                   |        |   |            |
| process  |                                   |        |   |            |
| of       |                                   |        |   |            |
| p        |                                   |        |   |            |
| reparing |                                   |        |   |            |
| the      |                                   |        |   |            |
| app      |                                   |        |   |            |
| ropriate |                                   |        |   |            |
| closure  |                                   |        |   |            |
| do       |                                   |        |   |            |
| cuments. |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Nov. 30, |                                   |        |   |            |
| 2006.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
|          |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
|          |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **Table  |                                   |        |   |            |
| 5.       |                                   |        |   |            |
| (*Co     |                                   |        |   |            |
| nt'd)*** |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **Audit  | **Report Title**                  | **     |   | **Date of  |
| No.**    |                                   | Date** |   | Mgmt.**    |
|          |                                   |        |   |            |
|          |                                   | **Is   |   | **         |
|          |                                   | sued** |   | Decision** |
+----------+-----------------------------------+--------+---+------------+
| **07     | **Clinger-Cohen Act: *Knowledge,  | **     |   | **09       |
| -E0002** | Skills and Abilities***           | 08/20/ |   | /29/2004** |
|          |                                   | 2004** |   |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus:** |                                   |        |   |            |
| Co       |                                   |        |   |            |
| mpleted. |                                   |        |   |            |
| OCIO has |                                   |        |   |            |
| reported |                                   |        |   |            |
| that all |                                   |        |   |            |
| co       |                                   |        |   |            |
| rrective |                                   |        |   |            |
| actions  |                                   |        |   |            |
| have     |                                   |        |   |            |
| been     |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpleted. |                                   |        |   |            |
| Closure  |                                   |        |   |            |
| of the   |                                   |        |   |            |
| audit is |                                   |        |   |            |
| pending  |                                   |        |   |            |
| review   |                                   |        |   |            |
| of       |                                   |        |   |            |
| su       |                                   |        |   |            |
| pporting |                                   |        |   |            |
| docume   |                                   |        |   |            |
| ntation. |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Dec. 29, |                                   |        |   |            |
| 2006.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **09     | ***CAP Report: Charter Schools    | **     |   | **01       |
| -E0014** | Access to Federal Funds***        | 10/26/ |   | /10/2005** |
|          |                                   | 2004** |   |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus:** |                                   |        |   |            |
| R        |                                   |        |   |            |
| esolved. |                                   |        |   |            |
| The      |                                   |        |   |            |
| Office   |                                   |        |   |            |
| of the   |                                   |        |   |            |
| Deputy   |                                   |        |   |            |
| S        |                                   |        |   |            |
| ecretary |                                   |        |   |            |
| is       |                                   |        |   |            |
| c        |                                   |        |   |            |
| urrently |                                   |        |   |            |
| working  |                                   |        |   |            |
| with the |                                   |        |   |            |
| offices  |                                   |        |   |            |
| of       |                                   |        |   |            |
| Special  |                                   |        |   |            |
| E        |                                   |        |   |            |
| ducation |                                   |        |   |            |
| and      |                                   |        |   |            |
| Rehabi   |                                   |        |   |            |
| litative |                                   |        |   |            |
| S        |                                   |        |   |            |
| ervices, |                                   |        |   |            |
| El       |                                   |        |   |            |
| ementary |                                   |        |   |            |
| and      |                                   |        |   |            |
| S        |                                   |        |   |            |
| econdary |                                   |        |   |            |
| E        |                                   |        |   |            |
| ducation |                                   |        |   |            |
| and      |                                   |        |   |            |
| In       |                                   |        |   |            |
| novation |                                   |        |   |            |
| and      |                                   |        |   |            |
| Imp      |                                   |        |   |            |
| rovement |                                   |        |   |            |
| to       |                                   |        |   |            |
| identify |                                   |        |   |            |
| the      |                                   |        |   |            |
| programs |                                   |        |   |            |
| covered  |                                   |        |   |            |
| under    |                                   |        |   |            |
| Sec.     |                                   |        |   |            |
| 5206 of  |                                   |        |   |            |
| the *No  |                                   |        |   |            |
| Child    |                                   |        |   |            |
| Left     |                                   |        |   |            |
| Behind   |                                   |        |   |            |
| Act*.    |                                   |        |   |            |
| R        |                                   |        |   |            |
| evisions |                                   |        |   |            |
| will be  |                                   |        |   |            |
| made to  |                                   |        |   |            |
| the      |                                   |        |   |            |
| policy   |                                   |        |   |            |
| guidance |                                   |        |   |            |
| to state |                                   |        |   |            |
| e        |                                   |        |   |            |
| ducation |                                   |        |   |            |
| agencies |                                   |        |   |            |
| (SEAs)   |                                   |        |   |            |
| and      |                                   |        |   |            |
| local    |                                   |        |   |            |
| e        |                                   |        |   |            |
| ducation |                                   |        |   |            |
| agencies |                                   |        |   |            |
| (LEAs)   |                                   |        |   |            |
| r        |                                   |        |   |            |
| egarding |                                   |        |   |            |
| the      |                                   |        |   |            |
| de       |                                   |        |   |            |
| finition |                                   |        |   |            |
| of       |                                   |        |   |            |
| \"sig    |                                   |        |   |            |
| nificant |                                   |        |   |            |
| e        |                                   |        |   |            |
| xpansion |                                   |        |   |            |
| of       |                                   |        |   |            |
| en       |                                   |        |   |            |
| rollment |                                   |        |   |            |
| and      |                                   |        |   |            |
| app      |                                   |        |   |            |
| ropriate |                                   |        |   |            |
| ways for |                                   |        |   |            |
| charter  |                                   |        |   |            |
| schools, |                                   |        |   |            |
| charter  |                                   |        |   |            |
| aut      |                                   |        |   |            |
| horizers |                                   |        |   |            |
| and LEAs |                                   |        |   |            |
| to       |                                   |        |   |            |
| receive  |                                   |        |   |            |
| timely   |                                   |        |   |            |
| notice   |                                   |        |   |            |
| of the   |                                   |        |   |            |
| requ     |                                   |        |   |            |
| irements |                                   |        |   |            |
| and      |                                   |        |   |            |
| responsi |                                   |        |   |            |
| bilities |                                   |        |   |            |
| under    |                                   |        |   |            |
| Sec.     |                                   |        |   |            |
| 5206 and |                                   |        |   |            |
| its      |                                   |        |   |            |
| impl     |                                   |        |   |            |
| ementing |                                   |        |   |            |
| regu     |                                   |        |   |            |
| lations. |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Dec. 29, |                                   |        |   |            |
| 2006.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **19     | ***External Audit Follow-up       | **     |   | **08       |
| -D0007** | Process***                        | 03/31/ |   | /08/2005** |
|          |                                   | 2005** |   |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus**: |                                   |        |   |            |
| R        |                                   |        |   |            |
| esolved. |                                   |        |   |            |
| OCFO is  |                                   |        |   |            |
| c        |                                   |        |   |            |
| urrently |                                   |        |   |            |
| impl     |                                   |        |   |            |
| ementing |                                   |        |   |            |
| pr       |                                   |        |   |            |
| ocedures |                                   |        |   |            |
| to       |                                   |        |   |            |
| ensure   |                                   |        |   |            |
| the      |                                   |        |   |            |
| accurate |                                   |        |   |            |
| status   |                                   |        |   |            |
| of       |                                   |        |   |            |
| external |                                   |        |   |            |
| OIG      |                                   |        |   |            |
| audits   |                                   |        |   |            |
| c        |                                   |        |   |            |
| urrently |                                   |        |   |            |
| under    |                                   |        |   |            |
| appeal,  |                                   |        |   |            |
| awaiting |                                   |        |   |            |
| reeva    |                                   |        |   |            |
| luation, |                                   |        |   |            |
| or in    |                                   |        |   |            |
| col      |                                   |        |   |            |
| lection. |                                   |        |   |            |
| Once the |                                   |        |   |            |
| accuracy |                                   |        |   |            |
| of the   |                                   |        |   |            |
| data has |                                   |        |   |            |
| been     |                                   |        |   |            |
| verified |                                   |        |   |            |
| and the  |                                   |        |   |            |
| a        |                                   |        |   |            |
| utomated |                                   |        |   |            |
| system   |                                   |        |   |            |
| updated, |                                   |        |   |            |
| OCFO     |                                   |        |   |            |
| will     |                                   |        |   |            |
| report   |                                   |        |   |            |
| on       |                                   |        |   |            |
| external |                                   |        |   |            |
| OIG      |                                   |        |   |            |
| audits   |                                   |        |   |            |
| which    |                                   |        |   |            |
| have     |                                   |        |   |            |
| been     |                                   |        |   |            |
| resolved |                                   |        |   |            |
| but for  |                                   |        |   |            |
| which    |                                   |        |   |            |
| co       |                                   |        |   |            |
| rrective |                                   |        |   |            |
| actions  |                                   |        |   |            |
| have not |                                   |        |   |            |
| been     |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpleted. |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Nov. 30, |                                   |        |   |            |
| 2007.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+
| **19     | ***Workers Compensation and       | **     |   | **05       |
| -D0008** | Employee Disability Claims***     | 03/30/ |   | /13/2005** |
|          |                                   | 2005** |   |            |
+----------+-----------------------------------+--------+---+------------+
| **S      |                                   |        |   |            |
| tatus:** |                                   |        |   |            |
| R        |                                   |        |   |            |
| esolved. |                                   |        |   |            |
| The      |                                   |        |   |            |
| Office   |                                   |        |   |            |
| of       |                                   |        |   |            |
| Ma       |                                   |        |   |            |
| nagement |                                   |        |   |            |
| is       |                                   |        |   |            |
| s        |                                   |        |   |            |
| cheduled |                                   |        |   |            |
| to       |                                   |        |   |            |
| i        |                                   |        |   |            |
| mplement |                                   |        |   |            |
| the      |                                   |        |   |            |
| Safety   |                                   |        |   |            |
| and      |                                   |        |   |            |
| Health   |                                   |        |   |            |
| Inf      |                                   |        |   |            |
| ormation |                                   |        |   |            |
| Ma       |                                   |        |   |            |
| nagement |                                   |        |   |            |
| System,  |                                   |        |   |            |
| which    |                                   |        |   |            |
| will     |                                   |        |   |            |
| maintain |                                   |        |   |            |
| all      |                                   |        |   |            |
| workers  |                                   |        |   |            |
| comp     |                                   |        |   |            |
| ensation |                                   |        |   |            |
| files    |                                   |        |   |            |
| electr   |                                   |        |   |            |
| onically |                                   |        |   |            |
| and      |                                   |        |   |            |
| track    |                                   |        |   |            |
| the      |                                   |        |   |            |
| progress |                                   |        |   |            |
| of       |                                   |        |   |            |
| claims,  |                                   |        |   |            |
| thereby  |                                   |        |   |            |
| p        |                                   |        |   |            |
| roviding |                                   |        |   |            |
| e        |                                   |        |   |            |
| fficient |                                   |        |   |            |
| case     |                                   |        |   |            |
| man      |                                   |        |   |            |
| agement. |                                   |        |   |            |
| Expected |                                   |        |   |            |
| co       |                                   |        |   |            |
| mpletion |                                   |        |   |            |
| date is  |                                   |        |   |            |
| Dec. 30, |                                   |        |   |            |
| 2006.    |                                   |        |   |            |
+----------+-----------------------------------+--------+---+------------+

Source: The U.S. Department of Education, Office of the Chief Financial
Officer, Audit Accountability and Tracking System, Sept. 30, 2006.

####### If you would like additional copies of this report, please send your request to**:**

####### 

####### 

####### **Semiannual Report to Congress on Audit Follow-up---No. 35**

**U. S. Department of Education**

**Office of the Chief Financial Officer**

**400 Maryland Ave. S.W.**

####### **Washington, DC 20202-4450**

######## This report is available on the Department's Web site at

http://www.ed.gov/about/offices/list/ocfo/pubs.html.

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