U.S. Department of Education

Citizens’ Report: The 

FY 2008 Summary of 

Performance and Financial 

Results
U.S. Department of Education

Office of the Chief Financial Officer

Thomas Skelly

Delegated to Perform Functions of 

Chief Financial Officer

The Department of Education’s mission is to promote student 

achievement and preparation for global competitiveness by 

fostering educational excellence and ensuring equal access.

January 15, 2009

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, U.S. 

Department of Education’s Citizens’ Report: The FY 2008 Summary of Performance and Financial Results, 

Washington D.C., 2009.

About the U.S. Department of Education’s Citizens’ Report:

The FY 2008 Summary of Performance and Financial Results

The Department of Education’s publicly available Citizens’ Report is available on the Department’s Web site 

at http://www.ed.gov/about/reports/annual/index.html?src=ln. A print version of the document, provided in 

limited distribution, contains the exact content provided in the online version.

To request a copy of the Citizens’ Report in print, 

contact http://www.edpubs.org/webstore/Content/search.asp

To provide comments and suggestions on both the content and 

presentation of the report, 

contact PARcomments@ed.gov.
Contents

Our Mission and History........................................................................................................................................................1

Who We Are: Our Organization and Workforce ...................................................................................................................1

Who We Serve: Our Public Benefit......................................................................................................................................3

Continuous Improvement: The Department Reports on a New Strategic Plan....................................................................4

President’s Management Agenda Scorecard Results for the Department of Education.......................................................5

Linking Taxpayer Dollars to Performance Results ..............................................................................................................6

Our Accomplishments for FY 2008 .......................................................................................................................................7

How We Validate Our Data .................................................................................................................................................10

Overview of Performance Results.......................................................................................................................................11

Inspector General’s Discussion of Management Challenges..............................................................................................17

Civil Rights Enforcement.....................................................................................................................................................19

Required Supplementary Stewardship Information.............................................................................................................20

Financial Highlights.............................................................................................................................................................22

Summary of Financial Statement Audit and Management Assurances ..............................................................................25

U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 1

U.S. Department of Education

Promoting educational excellence for all Americans

Our Mission and History

The U.S. Department of Education’s (the Department) mission is to promote student achievement and 

preparation for global competitiveness by fostering educational excellence and ensuring equal access. 

Adopted in May 2007, it retains the Department’s historic role of “providing equal access to a high-quality 

education,” and emphasizes the need for America’s students to succeed in a highly competitive global 

economy. America has a great range of educational environments to meet the diverse needs of its students: 

public schools, public charter schools, specialized schools and nonpublic schools. This report discusses 

how the Department supports these initiatives and activities. The federal government recognized that 

furthering education is a national priority in 1867, when its initial role in education encompassed statistical 

data collection and reporting. For a summary of education legislation since that time, go to: http://nces.

ed.gov/pubs2008/2008022_4.pdf. 

Who We Are: Our Organization and Workforce

Department of Education Profile

The Department has the smallest workforce of 

any cabinet-level agency, with an approximate 

workforce for fiscal year (FY) 2008 of 4,400. The 

Department is committed to recruiting and retaining 

a workforce that is skilled, diverse and committed 

to excellence. In addition to management offices, 

the Department is organized into nine principal 

grant and loan making offices. The Department’s 

full organizational structure can be found at http://

www.ed.gov/about/offices/or/index.html?src=ln.

Federal Student Aid. Federal Student Aid 

administers need-based financial assistance 

programs for students pursuing postsecondary education and makes available federal grants, direct loans, 

guaranteed loans, and work-study funding to eligible undergraduate and graduate students. See more 

detail at: http://www.ed.gov/about/offices/list/fsa/index.html?src=oc.

Office of Elementary and Secondary Education. The Office of Elementary and Secondary Education 

provides leadership, technical assistance, and financial support to state and local educational agencies 

for the maintenance and improvement of preschool, elementary, and secondary education. Financial 

assistance programs support services for children in high-poverty schools, institutions for neglected and 

delinquent children, homeless children, certain Native American children, children of migrant families, and 

children who live on or whose parents work on federal property. Funding is also provided to increase the 

academic achievement of students by ensuring that all teachers are highly qualified to teach. See more 

detail at: http://www.ed.gov/about/offices/list/oese/index.html?src=oc.

Office of Special Education and Rehabilitative Services. The Office of Special Education and 

Rehabilitative Services supports state and local programs that assist in educating children, youth, and 

adults with special needs to increase their level of employment, productivity, independence, and integration 

into the community. Funding is also provided for research to improve the quality of their lives. See more 

detail at: http://www.ed.gov/about/offices/list/osers/index.html?src=oc.
U.S. Department of Education’s Citizens’ Report: 

2 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Office of Safe and Drug-Free Schools. The Office of Safe and Drug-Free Schools supports efforts 

to create safe and violence-free schools, respond to crises, prevent drug and alcohol abuse, ensure the 

health and well-being of students, and teach students good citizenship and character. Grants emphasize 

coordinated, collaborative responses to develop and maintain safe, disciplined, and drug-free learning 

environments. See more detail at: http://www.ed.gov/about/offices/list/osdfs/index.html?src=oc.

Office of Innovation and Improvement. The Office of Innovation and Improvement makes strategic 

investments in educational practices through grants to states, schools, and community and nonprofit 

organizations. The office leads the movement for greater parental options such as charter schools. The 

office also supports special grants designed to raise student achievement by improving teachers’ knowledge 

and understanding of and appreciation for traditional U.S. history. See more detail at: http://www.ed.gov/

about/offices/list/oii/index.html?src=oc.

Institute of Education Sciences. Established by the Education Sciences Reform Act of 2002, the 

Institute of Education Sciences is the research arm of the Department of Education. Its mission is to 

expand knowledge and provide information on the condition of education, practices that improve academic 

achievement, and the effectiveness of federal and other education programs. Its goal is the transformation 

of education into an evidence-based field in which decision makers routinely seek out the best available 

research and data before adopting programs or practices that will affect significant numbers of students.

See more detail at: http://www.ed.gov/about/offices/list/ies/index.html?src=oc.

Office of English Language Acquisition. The Office of English Language Acquisition directs programs 

designed to enable students with limited English proficiency to become proficient in English and meet state 

academic content and student achievement standards. Enhanced instructional opportunities are provided 

to children and youths of Native American, Alaska Native, Native Hawaiian, Pacific Islander, and immigrant 

backgrounds who are limited English proficient. Grants pay the federal share of the cost of model programs 

for the establishment, improvement, or expansion of foreign language study in elementary and secondary 

schools. See more detail at: http://www.ed.gov/about/offices/list/oela/index.html?src=oc.

Office of Vocational and Adult Education. The Office of Vocational and Adult Education provides 

leadership, technical assistance, and funding for adult education and career and technical education to 

state and local agencies to help students improve their literacy skills and prepare them for postsecondary 

education and careers. The office ensures the equal access of minorities, women, individuals with 

disabilities, and disadvantaged persons to career and technical education and adult education and ensures 

that career and technical education students are held to the same challenging academic content and 

academic achievement standards established by the state under the No Child Left Behind Act of 2001. 

Funding is also provided to promote identification and dissemination of effective practices in raising student 

achievement in high schools, community colleges and adult education programs. See more detail at: 

http://www.ed.gov/about/offices/list/ovae/index.html?src=oc.

Office of Postsecondary Education. The Office of Postsecondary Education provides grants to colleges 

and universities to promote reform, innovation, and improvement in postsecondary education, increase 

access to and completion of postsecondary education by disadvantaged students, strengthen the capacity 

of colleges and universities that serve a high percentage of minority and disadvantaged students, and 

improve teacher and student development resources. The international programs promote international 

education and foreign language studies and research. The office administers the accrediting agency 

recognition process and coordinates activities with states that affect institutional participation in federal 

financial assistance programs. See more detail at: http://www.ed.gov/about/offices/list/ope/index.

html?src=oc.
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 3

U.S. Department of Education

Promoting educational excellence for all Americans

Who We Serve: Our Public Benefit

Every American has a stake in the nation’s educational success. The Department’s primary customers are 

students, teachers, parents, state and local educational agencies, school administrators and postsecondary 

institutions. With the No Child Left Behind Act of 2001 (No Child Left Behind), the federal government 

strengthened its commitment to elementary and secondary students. Higher education assistance provides 

access to postsecondary education for a significant number of the nation’s undergraduates.

Elementary and Secondary Students.

According to the Department’s report, The 

Condition of Education 2008, in the 2008–09 

school year public school enrollment is expected 

to approach 50 million students. Total public 

school enrollment is projected to set new records 

each year from 2008 to 2017, at which time it 

is expected to reach 54.1 million. See more on 

Departmental services to students at http://www.

ed.gov/students/landing.jhtml.

Teachers. According to National Center for 

Education Statistics projections, there are more 

than 3.2 million teachers in U.S. public elementary 

and secondary schools in the 2008–09 school year. 

No Child Left Behind requires that all teachers be 

highly qualified in the core academic subjects they 

teach. See more details at http://www.ed.gov/

teachers/landing.jhtml.

Parents. No Child Left Behind has made schools 

more accountable to parents and provided parents 

with information and options for their children’s 

education. If a school in need of improvement 

does not show progress for several years, parents 

of students in that school can transfer their 

children to another school in the district or request 

supplemental educational services. See more 

details at http://www.ed.gov/parents/landing.jhtml.

State and Local Educational Agencies and Administrators. The Department works with state 

educational agencies to provide local educational agencies with the tools they need. See more details 

at: http://www.ed.gov/about/contacts/state/index.html?src=gu. Principals, superintendents and other 

administrators are at the center of school reform and accountability efforts. See more details at http://

www.ed.gov/admins/landing.jhtml.

Postsecondary Students and Institutions. More students are acquiring degrees in colleges. To assist 

students otherwise unable to afford postsecondary education, the Department provides assistance through 

programs such as the Federal Pell Grant Program, the Federal Family Education Loan (FFEL) Program, the 

Federal Direct Loan Program, the Federal Perkins Loan Program and the Federal Work-Study Program, 

authorized under Title IV of the Higher Education Act of 1965. See more details at http://www.ed.gov/

finaid/landing.jhtml?src=rt.
U.S. Department of Education’s Citizens’ Report: 

4 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Continuous Improvement: The Department Reports on a 

New Strategic Plan

In FY 2008, the Department reported on its new strategic plan for the first time. The U.S. Department of 

Education’s Strategic Plan for Fiscal Years 2007–12 sets high expectations for America’s schools, students 

and for the Department. It streamlines Department goals and measures while stressing continuity with 

its previous strategic plan. The new strategic plan continues to report on key indicators of academic 

achievement and adds new measures of performance that focus on high school improvement and human 

capital. To read the full U.S. Department of Education’s Strategic Plan for Fiscal Years 2007-12, please go to 

http://www.ed.gov/about/reports/strat/plan2007-12/2007-plan.pdf.

Goal 1: Improve student achievement and teacher quality and renew troubled schools so that every 

student can read and do math at grade level by 2014, as called for by No Child Left Behind.

Goal 2: Encourage more rigorous and advanced coursework to improve the academic performance of 

middle and high school students.

Goal 3: Work with colleges and universities to improve access, affordability and accountability, to prepare 

students and adults for employment and future learning.

Cross-Goal Strategy on Management: Strengthen strategic management controls, including human 

capital, and link funding to results.

Continuous National Improvement Through Education

Increased

Rigor in

Mathematics

& Science

Improvement

in High School

Competitiveness

Elementary Reading & 

Mathematics Proficiency

More Students 

Accessing 

Postsecondary

Education 

Increased Student and Parent Participation

Improved Teacher Quality

Improved

Academic Achievement 

and Economic

Competitiveness 
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 5

U.S. Department of Education

Promoting educational excellence for all Americans

President’s Management Agenda 

Scorecard Results for the Department of Education

During FY 2008 the Department received a Green status in Financial Performance for the fifth consecutive 

year. The Department maintained Green on progress for six out of eight target initiatives by making 

sufficient progress on its quarterly scorecard deliverables. Significantly, the current status of Improved 

Credit Management was upgraded from Red to Yellow based on improved communications between the 

Department and the Office of Management and Budget (OMB) regarding various issues affecting the 

loan programs. To compare the Department’s scorecard to those of other federal agencies, go to www.

whitehouse.gov/results/agenda/scorecard.html.

President’s Management Agenda

FY 2008 Scorecard

Q4-2008 Q4-2007

Target Area Status Progress Status Progress

Government-wide

Initiatives

Financial Performance G G G G

Commercial Services 

Management Y G G G

Human Capital Y G Y G

e-Government Y Y Y Y

Performance Improvement G G G G

Program

Initiatives

Faith-Based and Community 

Initiatives G G G G

Eliminating Improper Payments Y Y Y G

Improved Credit Management

(New Initiative in FY 2006)

Y G R G

G = Green Y = Yellow R = Red
U.S. Department of Education’s Citizens’ Report: 

6 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Linking Taxpayer Dollars to Performance Results 

The Department’s emphasis on sound financial practices, performance results and program accountability 

reflects a strong desire to use taxpayers’ dollars as effectively as possible. The Department strives to 

tie the performance of its programs with budget requests and to strengthen the link between financial 

investments and program quality. To further the goal of aligning program performance with budget 

requests, the Department combines its annual performance plan and annual budget to create an annual 

performance budget. The Department has identified specific key measures that reflect the Department’s 

four major strategic goals that were identified in its new strategic plan. For more detail on the annual 

performance budget, see http://www.ed.gov/about/reports/annual/2009plan/fy09perfplan.pdf.

Challenges Linking the Program Performance to Funding Expenditures. Linking performance 

results, expenditures, and budget for Department programs is complicated because more than 98 percent 

of the Department’s funding is disbursed through grants and loans in which only a portion of a given fiscal 

year’s appropriation is available to state, school, organization, or student recipients during the fiscal year in 

which the funds are appropriated. The remainder is available at or near the end of the appropriation year 

or in a subsequent year. Funds for competitive grant programs are generally available when appropriations 

are passed by Congress. 

The Program Assessment Rating Tool. Since FY 2002, OMB has required federal agencies to assess 

the quality of government programs using the Program Assessment Rating Tool (PART). OMB uses this 

assessment across federal agencies to gauge the effectiveness of funded programs, ensure that programs 

meet statutory requirements and demonstrate accountability for the taxpayers’ investments in federal 

programs. The Department uses PART assessments to inform priorities for budget requests to Congress. 

The PART helps the Department ensure that resources are targeted toward those programs and activities 

most likely to demonstrate the greatest public benefit. Programs accounting for about 98 percent of the 

Department’s budget authority have now been assessed using the PART. To access PART evaluations of 

Department programs to date, go to: http://www.whitehouse.gov/omb/expectmore/agency/018.html.

Results Not

Demonstrated

47%

Ratings by Agency Programs, 

Department of Education

Effective

6%

Adequate

33%

Moderately

Effective

9%

Ineffective

4%

Results Not

Demonstrated

8%

Ratings by Agency Funding, 

Department of Education

Effective

2%

Adequate

47%

Moderately

Effective

41%

Ineffective

2%

Notes: Percentages of ratings by agency programs may not total 100 percent due to rounding. Total includes PART 

ratings for programs not currently funded.
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 7

U.S. Department of Education

Promoting educational excellence for all Americans

Our Accomplishments for FY 2008

Protecting Student Access and Affordability in Higher Education

During FY 2008, the Department of Education implemented a new 

statutory loan purchase authority to ensure that credit market 

disruptions did not cause eligible students and their parents 

to lose access to FFEL loans for the 2008-2009 academic year. 

The Department also revised agreements with FFEL guaranty 

agencies under the existing Lender of Last Resort (LLR) authority 

to provide further assurance that loans would be available for all 

eligible borrowers. 

Emergency Loan Purchase Authority. In FY 2008, Congress 

enacted the Ensuring Continued Access to Student Loans Act 

of 2008 (ECASLA) that authorizes the Department to buy loans 

from FFEL lenders when the Department determines that there 

is not sufficient loan capital to meet the demand for loans. 

In FY 2008, the Department directly purchased over 20,000 

loans valued at approximately $59 million. In FY 2008, the 

Department purchased more than $5 billion in participation 

interests in FFEL loans. For additional information, please see 

http://federalstudentaid.ed.gov/ffelp/.

Lender of Last Resort and the Teacher Education Assistance for College and Higher Education 

(TEACH) Grant Program. The Higher Education Act of 1965, as amended, requires guaranty agencies 

to make loans as a lender of last resort to those students who are unable to obtain FFEL loans from 

conventional FFEL lending sources. Guaranty agencies may arrange for a conventional FFEL lender to 

make Lender of Last Resort loans or may make loans directly with their own resources. Authorized by the 

College Cost Reduction and Access Act of 2007, the TEACH Grant Program offers grants of up to $4,000 to 

students agreeing to teach mathematics, science or other specialized subjects in a high-poverty school for 

at least 4 years within 8 years of their graduation. In FY 2008, the Department disbursed approximately 

800 grants exceeding $1.4 million under TEACH.

Information Resources for Students and Parents. The Department and the Federal Trade Commission 

have jointly released a consumer guide to help students and their families navigate the maze of offers 

they may face when seeking new student loans or consolidating existing student loans to pay for higher 

education. Student Loans: Avoiding Deceptive Offers provides advice to help consumers detect deceptive 

marketing offers from private companies seeking their student loan business. See more details at http://

ombudsman.ed.gov/CRE43-studentloans3.pdf. Improving college access, affordability and accountability 

are key to giving more Americans a chance at higher education and keeping America economically 

competitive. The FAFSA4caster calculates a student’s eligibility for federal student aid, reduces the time 

it takes to complete the Free Application for Federal Student Aid (FAFSA) and simplifies the financial aid 

process for students and families. For more details, see http://federalstudentaid.ed.gov.
U.S. Department of Education’s Citizens’ Report: 

8 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

The Reauthorization of the Higher Education Act

A college education continues to be the best path to the strengthening the future of the nation. The Higher 

Education Opportunity Act, the latest renewal of the Higher Education Act of 1965, continues the effort 

to make college more affordable and expands college access. The legislation encourages colleges to rein 

in price increases, improves integrity and accountability in student loan programs, simplifies the federal 

student aid application process, expands college access and support for low-income and minority students 

and increases college aid for veterans and military families. 

Indicators To Track the Nation’s Educational Progress

No Child Left Behind is providing parents, educators and the public with historic levels of data about 

how schools in the United States are performing. The five leading education indicators—achievement in 

reading and mathematics, the achievement gap, high school graduation, college readiness and college 

completion—complement No Child Left Behind by providing a snapshot of national trends. The five 

indicators were averaged, with equal weighting, to produce a single summary (composite) indicator. For 

more information and technical notes on how the indicators are calculated, go to http://www.

ed.gov/nclb/accountability/results/trends/index.html.

Education Indicator 2000 2007

Achievement: What percentage of 4th- and 8th-graders are proficient or above in 

reading and mathematics? 25% 33%

Achievement Gap: What percentage of black and Hispanic 4th-and 8th-graders 

are proficient or above in reading and mathematics as compared to the same cohort 

of white students?

23% 35%

High School Graduation: What is the percentage of public high school students 

who earn a regular diploma in four years? 72% 74%

College Readiness: Of the high school students who take a college entrance 

exam, what percentage are ready for a college course? 42% 42%

College Completion: What percentage of our young labor force 

(25-34 years old) have at least a bachelor’s degree? 29% 31%

Composite 38% 43%

Strengthening No Child Left Behind

This year, the Department developed new regulations to strengthen and clarify No Child Left Behind. The 

regulations focus on improved accountability and transparency, uniform and disaggregated graduation 

rates and improved parental notification for supplemental educational services and public school choice. 

These new regulations outline the criteria that states must meet to incorporate individual student progress 

into their definitions of adequate yearly progress. 

The uniform definition of graduation rate identifies that the Department has established a uniform method 

for calculating high school graduation rates that identifies how many incoming freshmen in a high school 

graduate within four years with a regular high school diploma. All states must now use the same formula 

that follows a cohort of first-time ninth grade students and calculates how many of those students graduate 

with a regular high school diploma within four years. 

The Department’s new regulations for Title I of the Elementary and Secondary Education Act of 1965, as 

amended by No Child Left Behind, build on the advancements of state assessments and accountability 

systems, as well as strengthening the public school choice and supplemental educational services provisions 

of No Child Left Behind. The new regulations require states to provide statistically reliable information and 

report state National Assessment of Educational Progress reading and mathematics results on their state 

report cards. See more details at http://www.ed.gov/policy/elsec/reg/title1/index.html. 
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 9

U.S. Department of Education

Promoting educational excellence for all Americans

Progress in Reading, Mathematics and Science Achievement

Every day, schools in the U.S. work to make progress toward the goal of having all students perform 

on grade level or better in reading and mathematics by 2014. Achievement of this goal depends on a 

continued commitment to high standards, annual assessments, accountability for results, a highly qualified 

teacher in every classroom and information and options for parents. See more details at http://www.

ed.gov/nclb/accountability/results/progress/nation.html.

States Report Gains in Reading Achievement. The Reading First Program builds on a solid foundation 

of scientifically based research and provides struggling students in the highest-need schools with the 

resources to make progress in reading achievement. Reading First is designed to help at-risk students 

in grades K-3, while Early Reading First helps preschool age children. Actual student achievement data 

reported by states on their annual performance reports show that Reading First students from nearly every 

grade and subgroup have made impressive gains in reading proficiency. For detailed Reading First stateby-state data, please visit www.ed.gov/programs/readingfirst/performance.html and http://www.ed.gov/

programs/readingfirst/state-data/achievement-data.pdf. For the Reading First Impact Study, please visit 

http://ies.ed.gov/ncee/pubs/20094038.asp.

Improved Proficiency in Mathematics and 

Science. Student achievement in mathematics 

and science continues to show gains since the 

implementation of No Child Left Behind. The latest 

results from the National Science Foundation’s 

Math and Science Partnership Program show 

improved proficiency among all elementary and 

middle school students who participated in the 

program. See more detail at http://www.nsf.gov/

news/news_summ.jsp?cntn_id=111514. The 

2007 National Assessment of Educational Progress 

scores for mathematics showed that there was 

improvement across the board in mathematics 

performance for white, African-American, Hispanic 

and Asian and Pacific Islander students. See more 

details at http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007494. 

Global Competitiveness—A Vital National Interest

Foreign Languages Critical for National Security. With 

the expanding global economy and national security needs, it is 

crucial that large numbers of Americans be able to communicate 

in languages such as Arabic, Chinese, Russian, Korean, Hindi and 

Farsi. To help increase the number of Americans learning foreign 

languages critical to national security and commerce, the National 

Security Language Initiative is intended to address the shortage of 

critical foreign language speakers by supporting new and expanded 

programs in grades K-12. See more details at http://www.ed.gov/

about/inits/ed/competitiveness/nsli/index.html.
U.S. Department of Education’s Citizens’ Report: 

10 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

How We Validate Our Data

Complete, accurate and reliable data are essential for effective decision-making. Given the requirements 

of No Child Left Behind, accuracy of state and local educational agency performance data is even more 

crucial, because funding decisions are made and management actions are taken on the basis of this 

performance information. 

The Department is committed to improving the completeness, accuracy and reliability of data for No Child 

Left Behind reporting, integrated performance-based budgeting and general program management. In 

addition to completeness, accuracy and reliability, the Department has improved the timeliness of data 

reporting to the public by several months. Data time lags have been cut from up to 24 months for some 

performance data in FY 2006 to an average of 8.5 months in FY 2008. The implementation of EDFacts, 

an initiative designed to collect and use K–12 state performance data, will help to reduce the reporting 

burden on state and local educational agencies, resulting in further improvement in the timeliness of data 

submitted to the Department.

Performance Data 

The Department is collaborating with state educational agencies and industry partners to provide a centralized 

tool for collection of, access to and use of timely and accurate performance data in support of No Child Left 

Behind and to minimize burden on state educational agencies. The Department is working with internal 

and external partners to help state educational agencies implement, by 2009, high-quality longitudinal 

data systems that include a state data audit system assessing data quality, validity and reliability. 

External Quality 

In 2008, the Department solicited applications for awards to fund the development or improvement of 

statewide longitudinal data systems, which are already under way in 27 states. In school year 2008–2009, 

state educational agencies are required to fully report educational data through the Department’s EDFacts

collection system. 

The goal of the National Forum on Education Statistics, sponsored by the Department’s National Center for 

Education Statistics, is to improve the quality, comparability and usefulness of elementary and secondary 

education data while remaining sensitive to data burden concerns. See more details at http://nces.ed.gov/

forum/data_quality.asp.

Internal Validity 

Verification and validation of performance data support the accuracy and reliability of performance 

information, reduce the risks of inaccurate performance data and provide a sufficient level of confidence 

to Congress and the public that performance data are credible. OMB Circular A-11, Part 6, section 230.5, 

Assessing the completeness and reliability of performance data, requires each agency to design a procedure 

for verifying and validating data that it makes public in its annual performance plans and reports. In 

response, the Department has developed a protocol to guide principal offices responsible for reporting 

data in performance measures to address issues of data integrity and credibility. The protocol provides 

a framework for validating and verifying the Department’s performance data. For the full protocol, go to 

http://www.ed.gov/about/reports/annual/data-verfication.doc.
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 11

U.S. Department of Education

Promoting educational excellence for all Americans

Overview of Performance Results

The key strategic measures provided in this report represent those measures that provide an overall 

assessment of the Department’s progress in achieving improvements in the educational system, based 

on the Strategic Plan for Fiscal Years 2007–12. There are 81 key performance measures that support the 

Department’s mission and strategic goals. Most data for FY 2008 will be available during FY 2009. For 

the most recent data available, FY 2007, the Department met or exceeded targets for 28 key measures, 

showed improvement for 23, did not meet 12, and is awaiting data for 9 measures. For 5 measures, 

baselines were established. The remaining 4 have no targets or data. 

On the following pages, tables for each goal highlight the Department’s strategic objectives and select key 

performance measures and show whether the result met or exceeded, did not meet but improved over the 

prior years or failed to meet the expected target. The shaded areas indicate that a measure was not in 

place or no data were available during this time period. In some cases, establishing a baseline is the target 

and the target is recognized as met if the data are available and the baseline has been established. For 

measures for which data are not currently available, the date the data are expected has been indicated.

Performance Results for FY 2008 Key Measures

Strategic Goal 1—Improve student achievement, with a focus on bringing all students to grade 

level in reading and mathematics by 2014

e Student Achievement, With a Focus 

udents to Grade Level in Reading and 

Mathematics by 2014 

ent in reading 

ent in 

and drug-free 

ptions for 

letion rate

n evidence

 

ent analyzes 

formance 

ded, not met 

et, or for 

e. Since the 

me data are 

rgets, the FY 

ted here. 

T Ratings by 

ets Met and 

mance 

al. 

$37,446,638 $36,876,345

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

FY 2009 FY 2008 (Requested)

Goal 1 Resources

($ in thousands)

Met/Exceeded

42%

Not Met

24%

Without Data

34%

Goal 1 FY 2007 Percent of Targets 

Effective

9% Moderately 

Effective

7%

Adequate

29%

Ineffective

2%

Results Not 

Demonstrated

53%

Goal 1 PART Ratings by Program 

Improving student proficiency and closing the 

achievement gap are the cornerstones of the 

Department’s work. Performance objectives for 

Goal 1 focus on improving student achievement in 

reading and mathematics, improving teacher quality, 

promoting safe, disciplined and drug-free learning 

environments, increasing information and options for 

parents, increasing the high school completion rate, 

and transforming education into an evidence-based 

field. The selected measures below are representative 

of the 37 key performance measures identified for 

Goal 1. 

Results Not

Demonstrated

53%

Goal 1 PART Ratings by Program

Effective

9%

Adequate

29%

Moderately

Effective

7%

Ineffective

2%

Without Data

34%

Goal 1 FY 2007 Percent of 

Program Measure Targets

Met/Exceeded

42%

Not Met

24%
U.S. Department of Education’s Citizens’ Report: 

12 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Legend

√ = Met or exceeded target

NA = No Measure for period

X = Target not met

* = Baseline established

+ = Target not met but improved over 

prior years

Goal 1 Performance Results Summary FY 2008 FY 2007 FY 2006

1.1. Improve student achievement in reading

Percentage of low-income students who achieve proficiency on state reading 

assessments 

Sept.

2009 + *

Percentage of students with disabilities who achieve proficiency on state reading 

assessments 

Sept.

2009 + *

Percentage of limited English proficient students who achieve proficiency on state 

reading assessments 

Sept.

2009 X *

1.2. Improve student achievement in mathematics

Percentage of low-income students who achieve proficiency on state math 

assessments 

Sept.

2009 + *

Percentage of students with disabilities who achieve proficiency on state math 

assessments 

Sept.

2009 + *

Percentage of limited English proficient students who achieve proficiency on state 

math assessments 

Sept.

2009 + *

1.3. Improve teacher quality

Percentage of core elementary classes in high-poverty schools taught by highly 

qualified teachers 

Sept.

2009 + *

Percentage of total core secondary classes taught by highly qualified teachers Sept.

2009 + +

Percentage of core secondary classes in high-poverty schools taught by highly 

qualified teachers 

Sept.

2009 + *

1.4. Promote safe, disciplined and drug-free learning environments

Percentage of students in grades 9 through 12 who were offered, given, or sold an 

illegal drug by someone on school property in the past year NA √ NA

1.5. Increase information and options for parents 

Percentage of eligible students exercising choice Dec.

2008 * NA

1.6. Increase high school completion rate

Percentage of total 18–24-year-olds who have completed high school Jul.

2010

Jul.

2009 √

1.7. Transform education into an evidence-based field

Number of Department-supported reading or writing programs and practices with 

evidence of efficacy using What Works Clearinghouse standards √ √ *

Number of Department-supported mathematics or science programs and practices 

with evidence of efficacy using What Works Clearinghouse standards √ √ *
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 13

U.S. Department of Education

Promoting educational excellence for all Americans

Strategic Goal 2—Increase the academic achievement of all high school students 

PERFORMANCE DETAILS

ment of Education 69

Academic Achievement of All High 

hool Students 

hool

um

tudents

eign 

s from 

e Goal 2 

program 

t 

een

sulting

ward for 

of the 

cinded

eded to 

udget 

nently 

009. 

rants

 that 

needed. 

 

 

ot yet 

a lag 

et

 

t and 

Goal 2 PART Ratings by Program 

Goal 2 Resources

($ in thousands) 

Effective

0% Moderately 

Effective

20%

Adequate

0%

Ineffective

20%

Results Not 

Demonstrated

60%

$566,978

$1,972,709

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

(Requested)

Met/

Exceeded

25%

Not Met

33%

Without Data

42%

Goal 2 FY 2007 Percent of Targets 

FY 2009 FY 2008

To better equip the nation’s students to compete 

in the global economy, the Department encourages 

states to adopt high school course work and 

programs of study that prepare all students for a 

postsecondary credential and facilitate a seamless 

transition from high school to college or the 

workforce. Strategic objectives for Goal 2 focus on 

increasing the proportion of high school students 

taking a rigorous curriculum, promoting advanced 

proficiency in mathematics and science, and 

increasing proficiency in critical foreign languages. 

The selected key measures below are representative 

of the eleven key performance measures identified 

for Goal 2. 

Results Not

Demonstrated

60%

Goal 2 PART Ratings by Program

Effective

0%

Adequate

0%

Moderately

Effective

20%

Ineffective

20%

Without Data

42%

Goal 2 FY 2007 Percent of 

Program Measure Targets

Met/Exceeded

25%

Not Met

33%

Legend

√ = Met or exceeded target NA = No Measure for period * = Baseline established

Goal 2 Performance Results Summary FY 2008 FY 2007 FY 2006

2.1. Increase the proportion of high school students taking a rigorous curriculum

The number of Advanced Placement tests taken by all public school students Jan.

2009 √ NA

The number of Advanced Placement tests taken by low-income public school students Jan.

2009 √ √

The number of Advanced Placement tests taken by minority (black, Hispanic, Native 

American) public school students 

Jan.

2009 √ √

2.2. Promote advanced proficiency in mathematics and science for all students

The number of Advanced Placement tests in mathematics and science taken nationwide 

by low-income public school students 

Jan.

2009 √ *

The number of Advanced Placement tests in mathematics and science taken nationwide 

by minority (black, Hispanic, Native American) public school students 

Jan.

2009 √ *

2.3. Increase proficiency in critical foreign languages

Combined total number of Advanced Placement and International Baccalaureate tests in 

critical foreign languages passed by public school students 

Jan.

2009 * NA
U.S. Department of Education’s Citizens’ Report: 

14 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Strategic Goal 3—Ensure the accessibility, affordability and accountability of higher education 

and better prepare students and adults for employment and future learning 

Department of Education 81

he Accessibility, Affordability, and 

igher Education and Better Prepare 

ults for Employment and Future 

Learning 

pletion of

on 

o 

ely and 

dividuals 

cation, 

ives 

alyzes 

nce 

not met 

or 

nce the 

a are 

the FY 

re. For 

by 

et and 

Goal 3 Resources

($ in thousands) 

Goal 3 PART Ratings by 

Program*

$26,268,750

$29,173,803

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

FY 2009 (Requested)

Met/Exceeded

23%

Not Met

28%

Without Data

49%

Goal 3 FY 2007 Percent of Targets 

Effective

2% Moderately 

Effective

7%

Adequate

39%

Ineffective

5%

Results Not 

Demonstrated

46%

* Detail may not total to 100% due to rounding. 

FY 2008 

To remain competitive in a dynamic global economy, 

higher education must continue to be innovative, use 

technology effectively, measure student outcomes, 

and conduct rigorous performance evaluations. 

Strategic objectives for Goal 3 focus on increasing 

success in and completion of quality postsecondary 

education, delivering student financial aid 

effectively and efficiently, and preparing adult 

learners and individuals with disabilities for higher 

education and employment. The selected key 

measures below are representative of the 20 key 

performance measures identified for Goal 3.

Results Not

Demonstrated

46%

Goal 3 PART Ratings by Program*

Effective

2%

Adequate

39%

Moderately

Effective

7%

Ineffective

5%

*Detail may not total to 100% due to rounding.

Without Data

49%

Goal 3 FY 2007 Percent of 

Program Measure Targets

Met/Exceeded

23%

Not Met

28%

Legend

√ = Met or exceeded target

* = Baseline established X = Target not met + = Target not met but improved over prior 

years

Goal 3 Performance Results Summary FY 2008 FY 2007 FY 2006

3.1. Increase success in and completion of quality postsecondary education

Percentage of high school graduates aged 16–24 enrolling immediately in college Dec.

2008 X *

Percentage of Upward Bound participants enrolling in college Dec.

2010

Dec.

2009

Dec.

2008

Percentage of career and technical education students who have transitioned to 

postsecondary education or employment by December of the year of graduation 

May

2009 X X

Percentage of freshmen participating in Student Support Services who complete an 

associate’s degree at original institution or transfer to a four-year institution within three 

years 

Dec.

2009

Dec.

2008 +

Percentage of first-time full-time degree-seeking undergraduate students enrolled at 4-year 

Historically Black Colleges and Universities graduating within six years of enrollment 

Dec.

2009

Dec.

2008 √
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 15

U.S. Department of Education

Promoting educational excellence for all Americans

Percentage of students, enrolled at 4-year Hispanic-Serving Institutions graduating within 

six years of enrollment 

Dec.

2009

Dec.

2008 √

3.2. Deliver student financial aid to students and parents effectively and efficiently

Direct administrative unit costs for origination and disbursement of student aid (total cost 

per transaction) √ √ *

Customer service level on the American Customer Satisfaction Index for the Free Application 

for Federal Student Aid (FAFSA) on the Web √ X X

Pell Grant improper payments rate X X *

Direct Loan recovery rate √ √ *

Federal Family Education Loan recovery rate √ √ *

3.3. Prepare adult learners and individuals with disabilities for higher education, employment and productive lives

Percentage of state vocational rehabilitation agencies that meet the employment outcome 

standard for the Vocational Rehabilitation State Grants program 

Apr.

2009 √ √

Percentage of adults served by the Adult Education State Grants program with an 

employment goal who obtain a job by the end of the first quarter after their program exit 

quarter 

Dec.

2008 √ √
U.S. Department of Education’s Citizens’ Report: 

16 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Cross-Goal Strategy on Management 

PERFORMANCE DETAILS

S. Department of Education 103

al Strategy on Management 

ancial integrity 

al controls 

gement of the 

 

ance 

cisions to 

nt 

gram 

met or 

d over 

are not 

ment has 

ed for the 

7 target

 more 

y

ts Met 

ormance 

. 

$600,018

$551,735

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

FY 2009 FY 2008 (Requested)

Cross-Goal Resources

($ in thousands)

Met/Exceeded

100%

Not Met

0%

Without Data

0%

Cross-Goal Strategy on Management 

FY 2007 Percent of Targets 

 

Without Data

0%

Cross-Goal Strategy on Management

FY 2007 Percent of Program Measure Targets

Met/Exceeded

100%

Not Met

0%

The Cross-Goal Strategy on Management supports the achievement of the three program-related goals. 

Management’s role in ensuring proper accounting of federal funds, developing a talented and motivated 

Department workforce, and improving program performance provides a strong framework to promote 

successful classroom outcomes. Strategic objectives for this goal focus on maintaining and strengthening 

financial integrity and management and internal controls, improving the strategic management of the 

Department’s human capital, and achieving budget and performance integration to link funding decisions 

to results. The selected key measures below are representative of the 13 key performance measures 

identified for this cross-goal strategy.

Legend

√ = Met or exceeded target * = Baseline established X = Target not met

Cross-Goal Strategy Performance Results Summary FY 2008 FY 2007 FY 2006

4.1. Maintain and strengthen financial integrity and management and internal controls

Maintain an unqualified (clean) audit opinion √ √ √

Achieve and maintain compliance with the Federal Information Security 

Management Act of 2002 X X *

4.2. Improve the strategic management of the Department’s human capital

Percentage of employees believing that steps are taken to deal with a poor 

performer who cannot or will not improve 

Dec.

2008 √ *

Percentage of employees believing that department policies and programs promote 

diversity in the workplace 

Dec.

2008 X *

Percentage of employees believing that they are held accountable for achieving 

results 

Dec.

2008 √ *

Percentage of employees believing that the workforce has the job-relevant 

knowledge and skills necessary to accomplish organizational goals 

Dec.

2008 √ *

4.3. Achieve budget and performance integration to link funding decisions to results

Percentage of Department program dollars in programs that demonstrate 

effectiveness in terms of outcomes, either on performance indicators or through 

rigorous evaluations 

√ √ √
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 17

U.S. Department of Education

Promoting educational excellence for all Americans

Inspector General’s Discussion of Management Challenges

The Reports Consolidation Act of 2000 requires the Office of Inspector General (OIG) annually to identify 

and summarize the top management and performance challenges facing the Department and provide 

information on the Department’s progress in addressing those challenges. OIG identified six specific 

challenge areas for the Department for 2009: (1) student financial assistance programs and operations; 

(2) information security and management; (3) grantee oversight and monitoring; (4) contract awards, 

performance and monitoring; (5) data integrity; and (6) human resources services. 

Challenge: Student Financial Assistance Programs and Operations

The federal student financial assistance programs involve over 6,200 postsecondary institutions, more than 

3,100 lenders, 35 guaranty agencies and many third party servicers. During FY 2008, Federal Student Aid 

(FSA), provided $96 billion in awards and oversaw an outstanding loan portfolio of over $500 billion. Federal 

Student Aid must conduct effective monitoring and oversight to help protect higher education dollars from 

waste, fraud and abuse.

The Department’s Progress: Federal Student Aid has agreed to improve the management of its programs 

and to develop and implement consistent oversight procedures. FSA is in the process of restructuring and 

improving its Chief Compliance Officer organization for the oversight of the Federal Family Education Loan 

program. 

Challenge: Information Security and Management

The Federal Information Security Management Act (FISMA) requires each federal agency to develop, 

document and implement an agency-wide program to provide information security and develop a 

comprehensive framework to protect the government’s information, operations and assets. With regard 

to information management, the Department’s anticipated information technology (IT) capital investment 

portfolio for FY 2009 is over $540 million, with many resource-intensive projects pending. It is critical that 

the Department have a sound IT investment management control process that can ensure that technology 

investments are appropriately evaluated, selected, justified and supported.

The Department’s Progress: The Department recently established plans to improve its controls relating 

to the protection of personally identifiable information in order to meet the standards and good practice 

requirements established by the Office of Management and Budget. 

Challenge: Grantee Oversight and Monitoring

The Department must ensure that all entities involved in its programs are adhering to statutory and 

regulatory requirements and that the offices responsible for administering these programs are providing 

adequate oversight of program participants. Without effective monitoring and oversight, the Department 

is not able to identify and manage the risks associated with its grant programs.

The Department’s Progress: The Department has initiated steps to improve its performance in this 

area. The Department established a new Grants Policy Team and a Risk Management Service (RMS) office 

that review all policies, including requirements for monitoring, with the objective of developing standards 

that would apply across all formula grant programs. The Grants Policy Team also is completing the process 

of revising the Education Department General Administrative Regulations to incorporate performance 

management requirements for funded applicants. The Department continues to implement an Enterprise 

Risk Management program throughout the Department. 
U.S. Department of Education’s Citizens’ Report: 

18 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Challenge: Contract Awards, Performance and Monitoring

The Department contracts for many services that are critical to its operations at a cost of over $1 billion a 

year. The Department must improve its procurement and contract management processes to ensure that 

it is receiving quality goods and services in accordance with contract terms.

The Department’s Progress: The Department recently revised its Contracting Officer’s Representative 

Training Program to incorporate more stringent certification, training and recordkeeping requirements. 

Also, the Department is working with applicable principal offices to ensure all future performance-based 

contracts include appropriate contractor incentives and disincentives. 

Challenge: Data Integrity

Without valid and reliable data, the Department cannot make effective decisions on its programs or know if 

the funds it disburses are indeed reaching the intended recipients. States must annually collect and report 

various performance data to the Department in the consolidated state performance report. 

The Department’s Progress: The Department recognized the need to improve its data quality and 

data reliability and launched the Performance-Based Data Management Initiative to streamline existing 

data collection efforts and information management processes. The resulting Education Data Exchange 

Network, now called EDFacts, provides state educational agencies and the federal government the capacity 

to transfer and analyze information about education programs. 

Challenge: Human Resources Services

Like most federal agencies, the Department will see a significant percentage of its workforce eligible for 

retirement in 2009. The Department is also continuing to experience a significant change in critical skill 

requirements for many of its staff. Identification and prompt implementation of needed action steps to 

adequately address these succession planning and workforce issues, including recruitment, hiring and 

retention, is critically important. 

The Department’s Progress: In response to the results of a recent Federal Human Capital Survey, the 

Department took a three-pronged approach to address the performance culture concerns identified by 

the survey: (1) senior leadership involvement, (2) principal office action planning training, and (3) the 

development of a Departmentwide Action Planning Team (APT). 
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 19

U.S. Department of Education

Promoting educational excellence for all Americans

Civil Rights Enforcement

The enforcement of civil rights laws 

drives student outcomes by ensuring that 

discrimination does not deny or limit student 

access to education programs and activities 

at any educational level. The Department of 

Education enforces five civil rights laws that 

protect students against discrimination on 

the basis of race, color, national origin, sex, 

disability, and age primarily in educational 

institutions that receive federal funds from 

the Department. In addition, the Department 

enforces laws intended to ensure that the 

Boy Scouts of America and other designated 

youth groups have equal access to meet in 

elementary and secondary schools that receive 

funds through the Department.1 These antidiscrimination laws protect more than 49.8 million students attending elementary and secondary schools2

and more than 18.2 million students attending colleges and universities.3

Age

2% (96)

FY 2008 Complaints by Jurisdiction

6,194 Receipts

Multiple

15% (917)

Race/National

Origin

16% (993)

Other*

11% (695)

Disability

51% (3,165)

Sex

5% (328)

 * No

jurisdiction

In FY 2008, the Department’s Office for 

Civil Rights received 6,194 complaints of 

discrimination and resolved 5,943.4 The goal 

of each investigation is to address the alleged 

discrimination promptly and to determine if 

civil rights laws and regulations have been 

violated. 

In addition to complaint investigations, the 

Department conducts compliance reviews that 

address specific civil rights issues of national 

concern. Forty-two compliance reviews were 

initiated in FY 2008.

For the full range of civil rights information and policy guidance, please visit http://www.ed.gov/about/

offices/list/ocr/index.html?src=oc.

1 The Department enforces Title VI of the Civil Rights Act of 1964 (prohibiting discrimination based on race, color and national origin); Title IX of 

the Education Amendments of 1972 (prohibiting sex discrimination in education programs); Section 504 of the Rehabilitation Act of 1973 (prohibiting 

disability discrimination); the Age Discrimination Act of 1975 (prohibiting age discrimination); and Title II of the Americans with Disabilities Act of 

1990 (prohibiting disability discrimination by public entities, whether or not they receive federal financial assistance). The Department also enforces 

the Boy Scouts of America Equal Access Act, enacted in 2002. This law addresses equal access for the Boy Scouts of America and other designated 

youth groups to meet in public schools receiving funds from the Department. 

2 U.S. Department of Education, National Center for Education Statistics (2007). Projections of Education Statistics to 2015 (NCES-2008-060), 

Washington, D.C.: Table 1.

3 Ibid, Table 10.

4 Data source is the Office for Civil Rights’ Case Management System.
U.S. Department of Education’s Citizens’ Report: 

20 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Required Supplementary Stewardship Information

Stewardship Expenses

In the Department of Education, discretionary spending constitutes approximately 86 percent of the budget 

and includes nearly all programs, the major exceptions being student loans and rehabilitative services. 

Although spending for entitlement programs is usually a function of the authorizing statutes creating the 

programs and is not generally affected by appropriations laws, spending for discretionary programs is 

decided in the annual appropriations process.

Education in the United States is primarily a state and local responsibility. It is estimated that roughly 

$1.1 trillion will be spent nationwide on education at all levels for the school year 2008–2009, with 

Department of Education expenditures, as well as loans and other aid made available as a result of the 

Department’s student financial aid programs. The Department’s FY 2008 appropriations of more than 

$68.6 billion represents about 2.3 percent of the federal government’s $2.9 trillion FY 2008 budget.

Program Inputs

Since the No Child Left Behind Act was signed into law in 2002, the Department’s current staff of approximately 

4,400 has decreased 4 percent below the 4,566 employees who administered federal education programs 

in 2001. These staff reductions, along with a wide range of management improvements, have helped limit 

administrative costs to 2 percent of the Department’s budget, ensuring that the Department delivers about 

98 cents on the dollar in education assistance to states, school districts, postsecondary institutions, and 

students.

Summary of Human Capital Expenses

(Dollars in Millions) 2008 2007 2006 2005 2004

Federal Student Aid Expense

 Direct Loan Subsidy $ 5,236 $ (499) $ 6,655 $ 5,211 $ (543)

 FFEL Program Subsidy (2,852) 4,884 28,062 9,863 8,516

 Grant Programs 17,464 15,092 15,447 15,070 14,943

 Salaries and Administrative 189 173 172 164 186

 Subtotal 20,037 19,650 50,336 30,308 23,102

Other Departmental

 Elementary and Secondary Education 21,583 21,199 21,710 22,940 21,188

 Special Education and Rehabilitative 

Services 15,730 15,402 15,215 13,995 12,687

 Other Departmental Programs 4,911 5,109 5,353 6,067 5,160

 Salaries and Administrative 491 467 467 486 448

 Subtotal 42,715 42,177 42,745 43,488 39,483

Grand Total $ 62,752 $ 61,827 $ 93,081 $ 73,796 $ 62,585
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 21

U.S. Department of Education

Promoting educational excellence for all Americans

Program Outcomes

Education is the stepping stone to higher living standards for American citizens, and it is vital to national 

economic growth. But education’s contribution is more than increased productivity and incomes. Education 

improves health, promotes social change, and opens doors to a better future for children and adults. 

Unemployment Rate by Educational Level

0%

2%

4%

6%

8%

10%

12%

2003 2004 2005 2006 2007 2008

No High

School

Degree

High School

Degree

College

Degree

Services 15,730 15,402 15,215 13,995 12,687

 Other Departmental Programs 4,911 5,109 5,353 6,067 5,160

 Salaries and Administrative 491 467 467 486 448

 Subtotal 42,715 42,177 42,745 43,488 39,483

Grand Total $ 62,752 $ 61,827 $ 93,081 $ 73,796 $ 62,585

Program Outcomes 

Education is the stepping stone to higher living standards for American citizens, and it is vital to 

national economic growth. But education’s contribution is more than increased productivity and 

incomes. Education improves health, promotes social change, and opens doors to a better 

future for children and adults. 

Economic outcomes, such as wage and 

salary levels, historically have been 

determined by the educational attainment 

of individuals and the skills employers 

expect of those entering the labor force. 

Both individuals and society as a whole 

Economic outcomes, such as wage and salary 

levels, historically have been determined by the 

educational attainment of individuals and the skills 

employers expect of those entering the labor force. 

Both individuals and society as a whole have placed 

increased emphasis on educational attainment as the 

workplace has become increasingly technological, 

and employers now seek employees with the highest 

level of skills. For prospective employees, the focus 

on higher-level skills means investing in learning 

or developing skills through education. Like all 

investments, developing higher-level skills involves 

costs and benefits. 

Returns, or benefits, of investing in education come in many forms. While some returns accrue for the 

individual, others benefit society and the nation in general. Returns related to the individual include higher 

earnings, better job opportunities, and jobs that are less sensitive to general economic conditions. Returns 

related to the economy and society include reduced reliance on welfare subsidies, increased participation 

in civic activities, and greater productivity. Statistics illustrate the rewards of completing high school and 

investing in postsecondary education.

Unemployment Rate. Individuals with lower levels of educational attainment are more likely to be 

unemployed than those who had higher levels of educational attainment. The October 2008 unemployment 

rate for adults (25 years old and over) who had not completed high school was 10.3 percent, compared 

with 6.3 percent for those with four years of high school and 3.1 percent for those with a bachelor’s degree 

or higher. Younger people with only high school diplomas tended to have higher unemployment rates than 

adults 25 and over with similar levels of education.

Annual Income. As of July 2008, the annualized 

median income for adults (25 years and over) varied 

considerably by education level. Men with a high school 

diploma earned $37,180, compared with $66,404 for 

men with a college degree. Women with a high school 

diploma earned $27,092, compared with $48,984 for 

women with a college degree. Men and women with 

college degrees earned 77 percent more than men 

and women with high school diplomas. Earnings 

for workers with college degrees have increased 

in the past year by 15.79 percent for women and 

13.14 percent for men. These returns of investing in 

education directly translate into the advancement of 

the American economy as a whole.
U.S. Department of Education’s Citizens’ Report: 

22 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Financial Highlights

The Department consistently produces accurate and timely financial information that is used by management 

to inform decision-making and drive results in key areas of operation. For the seventh consecutive year, 

the Department achieved an unqualified (clean) opinion from independent auditors on the annual financial 

statements. Since FY 2003, the auditors have found no material weaknesses in the Department’s internal 

control over financial reporting. 

% Change

2008/2007 FY 2008 FY 2007 FY 2006 FY 2005

Fund Balance with Treasury -3% $ 94,899 $ 97,532 107,053$ $ 77,569

Credit Program Receivables +16% 134,725 115,904 106,728 107,937

Other +62% 1,949 1,202 640 1,061

 Total Assets 231,573 214,638 214,421 186,567

Debt +23% 128,668 104,287 105,677 104,597

Liabilities for Loan Guarantees -15% 43,322 50,874 52,453 30,611

Other +64% 16,247 9,896 9,481 8,517

Total Liabilities 188,237 165,057 167,611 143,725

Unexpended Appropriations -5% 49,506 52,047 51,812 47,288

Cumulative Results of Operations +150% ( 6,170) (2,466) (5,002) (4,446)

Total Net Position 43,336 49,581 46,810 42,842

Total Liabilities and Net Position 231,573$ 214,638$ 214,421$ 186,567$ 

% Change

2008/2007 FY 2008 FY 2007 FY 2006 FY 2005

Gross Cost +2% 74,034$ $ 72,316 104,699$ $ 82,204

Earned Revenue +15% ( 9,217) (8,032) (7,870) (6,965)

Total Net Cost of Operations $ 64,817 $ 64,284 $ 96,829 $ 75,239

Net Cost Based on the Department's Strategic Plan 2007-2012

Goal 1 $ 37,045

Goal 2 2,112

Goal 3 25,094

Cross-goal 566

Total Net Cost of Operations $ 64,817

Net Cost Based on the Department's Strategic Plan 2002-2007 FY 2007 FY 2006 FY 2005

Goal 2 Improve Student Achievement $ 36,838 $ 37,700 $ 36,415

Goal 3 Develop Safe and Drug-Free Schools 740 849 877

Goal 4 Transform Education into Evidence-Based Field 367 422 442

Goal 5 Enhance Quality of and Access to Postsecondary and 

Adult Education 25,799 57,303 36,940

Goal 6 Management Excellence 540 555 565

Total Net Cost of Operations $ 64,284 $ 96,829 $ 75,239

Financial Summary 

Dollars in Millions

Increase the academic achievement of all high school students

Ensure the accessibility, affordability, and accountability of higher 

education, and better prepare students and adults for employment

and future learning

Strategy on Management

Statement of Net Cost

Balance Sheet

Improve student achievement, with a focus on bringing all students to

grade level in reading and mathematics by 2014

$0

$50 

$100 

$150 

$200 

$250 

FY 2005 FY 2006 FY 2007 FY 2008

$186.6 $214.4 $214.6 

$231.6 

$143.7 

$167.6 $165.1

$188.2

$42.8 $46.8 $49.6 $43.3 

Billions

Assets

Liabilities

Equity

Goal 1

57%

Goal 2

3%

Goal 3

39%

Crossgoal 

1%

FY 2008
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 23

U.S. Department of Education

Promoting educational excellence for all Americans

Sources of Funds

Postsecondary Grants

and Loan

Administration

Program Costs

42%

Administrative

Expenses

2%

Elementary

and

Secondary

Grants

54%

Research,

Improvement,

and

Rehabilitation

Grants

2%

FY 2008 Department of 

Education’s Budget

The Department managed a budget in excess of 

$68 billion during FY 2008, of which 54 percent 

supported elementary and secondary education 

grant programs. 

Postsecondary education grants and administration 

of student financial assistance accounted for 

42 percent, including loan program costs that 

helped more than 11 million students and their 

parents to better afford higher education during 

FY 2008. An additional 2 percent went to 

programs and grants encompassing research and 

improvement, as well as vocational rehabilitation 

services. Administrative expenditures were 

2 percent of the Department’s appropriations.

The Department’s three largest grant programs 

are Title I grants for elementary and secondary 

education, Pell Grants for postsecondary financial 

aid and Special Education Grants to States under the Individuals with Disabilities Education Act. Each of 

these program’s FY 2008 appropriations exceeded $10 billion. In addition, the TEACH Grant Program was 

implemented this year. This program awards annual grants to students who agree to teach in a high-need 

subject area in a public or private elementary or secondary school that serves low-income students.

The FFEL Program helps ensure that the loan capital for approximately 3,100 private lenders is available to 

students and their families. Through 35 active state and private nonprofit guaranty agencies, lenders and 

schools, the Department administers the FFEL Program to help students and families pay for postsecondary 

education by providing grants and low-rate loans. The Department is active in all phases of the loan lifecycle from determining borrower eligibility during the Free Application for Federal Student Aid process to 

processing guarantor claims for reinsurance. As of the end of September 2008, the total principal balance 

of outstanding guaranteed loans held by lenders was approximately $415 billion. The government’s 

estimated maximum exposure for defaulted loans was approximately $405 billion.

The William D. Ford Direct Loan 

Program, added to the Higher 

Education Act of 1965 (HEA) in 1993 

by the Student Loan Reform Act of 

1993, enables the Department to 

make loans directly to eligible 

undergraduate and graduate students 

and their parents through participating 

schools. As of September 30, 2008, 

the value of the Department’s direct 

loan portfolio was $109.9 billion. 
U.S. Department of Education’s Citizens’ Report: 

24 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans

Financial Position

32 FY 2008 Performance and Accountability Report—U.S. Department of Education

pp

g 

pp

portfolio was $109.9 billion. 

Financial Position 

The Department’s financial statements are prepared in accordance with established federal

accounting standards and are audited by the independent accounting firm of Ernst &

Young, LLP. Financial statements and accompanying notes for FY 2008 appear on 

pages 128-169. An analysis of the principal financial statements follows. 

Balance Sheet. The Balance Sheet 

presents, as of a specific point in time, the 

recorded value of assets and liabilities 

retained or managed by the Department. 

The difference between assets and

liabilities represents the net position of the

Department. The Balance Sheet 

displayed on page 128 reflects total 

assets of $231.6 billion, an 8 percent 

increase over FY 2007. The change is

primarily due to the increase in Credit 

Program Receivables. Credit Program 

Receivables increased by $18.8 billion, a 16 percent increase over FY 2007. The majority

of this loan portfolio is principal and interest owed by students on direct loans. The $186.6 $143.7$214.4 $167.6$214.6 $165.1

$231.6

$188.2

$0

$50

$100

$150

$200

$250

FY 2005 FY 2006 FY 2007 FY 2008

Total Assets Total Liabilities

Total Assets vs Total Liabilities

Billions

Balance Sheet. The Balance Sheet presents, as of a 

specific point in time, the recorded value of assets and 

liabilities retained or managed by the Department. The 

difference between assets and liabilities represents the 

net position of the Department. The Balance Sheet 

reflects total assets of $231.6 billion, an 8 percent 

increase over FY 2007. The change is primarily due 

to the increase in Credit Program Receivables. Credit 

Program Receivables increased by $18.8 billion, a 

16 percent increase over FY 2007. The majority of this 

loan portfolio is principal and interest owed by students 

on direct loans. The remaining balance is related to 

defaulted guaranteed loans purchased from lenders 

under terms of the FFEL Program and to loan purchase commitments and loan participation purchases 

under the FFEL Program. The net portfolio for direct loans increased by over $10.8 billion due to increased 

direct loan disbursements and borrower interest collections. FFEL Program loans increased by $7.9 billion 

during FY 2008, due primarily to loan volume and activity related to loan purchase commitments and loan 

participation purchases. Fund Balance with the Treasury decreased by 3 percent from FY 2007. 

Total Liabilities for the Department increased by 14 percent. This change is primarily due to an increase in 

borrowing during FY 2008. Borrowing increased for the Direct Loan Program and to provide funds for the 

loan purchase commitments and loan participation purchases activity under the FFEL Program. Liabilities 

for Loan Guarantees for the FFEL Program decreased $7.6 billion due primarily to FFEL defaulted claims 

payments and the subsidy re-estimate. These liabilities present the estimated costs, on a present-value 

basis, of the net long-term cash outflows due to loan defaults net of offsetting fees. The Department’s Net 

Position as of September 30, 2008 was $43.3 billion, a $6.3 billion decrease versus the $49.6 billion Net 

Position as of September 30, 2007. 

s. Credit Program 

ed by $18.8 billion, a 

over FY 2007. The majority of this loan portfolio is principal and interest 

 direct loans. The remaining balance is related to defaulted guaranteed 

m lenders under terms of the FFEL Program and to loan purchase 

an participation purchases under the FFEL Program. The net portfolio for 

d by over $10.8 billion due to increased direct loan disbursements and 

lections. FFEL Program loans increased by $7.9 billion during FY 2008, 

 volume and activity related to loan purchase commitments and loan 

ses. Fund Balance with the Treasury decreased by 3 percent from 

e Department increased by 14 percent. This change is primarily due to an 

g during FY 2008. Borrowing increased for the Direct Loan Program and to 

 loan purchase commitments and loan participation purchases activity 

gram. Liabilities for Loan Guarantees for the FFEL Program decreased 

arily to FFEL defaulted claims payments and the subsidy re-estimate. 

ent the estimated costs, on a present-value basis, of the net long-term cash 

 defaults net of offsetting fees. 

 Position as of September 30, 2008 was $43.3 billion, a $6.3 billion 

 $49.6 billion Net Position as of September 30, 2007. 

ost. The Statement of Net Cost 

ents of the Department’s net cost, 

ost incurred less any revenues earned 

s activities. The Departmen t’s total 

s reflected on the Statement of Net 

on, a 1 percent increase from 

ase largely occurred for programs in 

ote Academic Achievement in Elementary and Secondary Schools goal, the

oal, and the Transformation of Education goal. 

Cost is presented to be consistent with the Department’s strategic goals 

anagement Agenda . As required by the Government Performance and 

each of the Department’s reporting organizations has been aligned with the 

d in the Department’s Strategic Plan for Fiscal Years 2007–12. 

Total Assets Total Liabilities

$75.2

$96.8

$64.3 $64.8

$0

$25

$50

$75

$100

FY 2005 FY 2006 FY 2007 FY 2008

Total Net Cost of Operation

Billions

Statement of Net Cost. The Statement of Net Cost 

presents the components of the Department’s net cost, 

which is the gross cost incurred less any revenues earned 

from the Department’s activities. The Department’s 

total program net costs, as reflected on the Statement of 

Net Cost, were $64.8 billion, a 1 percent increase from 

FY 2007. The increase largely occurred for programs 

in support of the Promote Academic Achievement in 

Elementary and Secondary Schools goal, the Special 

Education goal, and the Transformation of Education 

goal.

Statement of Budgetary Resources. This statement provides information about the provision of 

budgetary resources and their status as of the end of the reporting period. The statement shows that 

the Department had $193.9 billion in total budgetary resources for the year ended September 30, 2008. 

These budgetary resources were composed of $79.1 billion in appropriated budgetary resources and 

$114.8 billion in non-budgetary credit reform resources, which primarily consist of borrowing authority for 

the loan programs. Of the $31.2 billion that remained unobligated at year end, $29.2 billion represents 

funding provided in advance for activities in future periods that was not available at year end. These funds 

will become available during the next fiscal year or future fiscal years. 
U.S. Department of Education’s Citizens’ Report: 

The FY 2008 Summary of Performance and Financial Results 25

U.S. Department of Education

Promoting educational excellence for all Americans

Summary of Financial Statement Audit and Management Assurances

The following table provides a summary of the Department’s financial statement audit and management 

assurances. 

Summary of Financial Statement Audit

Audit Opinion Unqualified

Restatement No

Material Weaknesses Beginning Balance New Resolved Consolidated Ending Balance

Total Material Weaknesses 0 0 0 0 0

Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting - Federal Managers’ Financial Integrity Act 

(FMFIA) 2

Statement of Assurance Unqualified

Material Weaknesses Beginning Balance New Resolved Reassessed Ending Balance

Total Material Weaknesses 0 0 0 0 0

The Department had no material weaknesses in the design or operation of the internal control over financial reporting.

Effectiveness of Internal Control over Operations - FMFIA 2

Statement of Assurance Qualified

Material Weaknesses Beginning Balance New Resolved Reassessed Ending Balance

Information Technology Security 1 1

Monitoring and Oversight of 

Guaranty Agencies, Lenders 

and Servicers

1 1

Total Material Weaknesses 2 0 1 0 1

Conformance with Financial Management System Requirements - FMFIA 4

Statement of Assurance The Department systems conform to financial management system requirements.

Non-Conformance Beginning Balance New Resolved Reassessed Ending Balance

Total Non-Conformance 0 0 0 0 0

Compliance with Federal Financial Management Improvement Act 

Agency Auditor

Overall Substantial Compliance Yes No

System Requirements Yes No

Federal Accounting Standards Yes Yes

United States Standard General Ledger at 

Transaction Level Yes Yes
U.S. Department of Education’s Citizens’ Report: 

26 The FY 2008 Summary of Performance and Financial Results

U.S. Department of Education

Promoting educational excellence for all Americans
For copies of the U.S. Department of Education’s Citizens’ Report: The FY 2008 Summary of Performance 

and Financial Results, contact ED Pubs, the Department’s Publication Center:

ED Pubs

U.S. Department of Education

P.O. Box 1398

Jessup, MD 20794-1398

Telephone: (877) 4EDPUBS [(877)-433-7827]

or: (800) USALEARN [(800)-872-5327]

Fax: (301) 570-1244

Web http://www.edpubs.org/webstore/Content/search.asp

TDD/TYY: (877) 576-7734

Web : http://www.ed.gov/about/reports/annual/2008report/index.html

The Department’s Strategic Plan is available on the Web at: 

http://www.ed.gov/about/reports/strat/index.html

Department annual plans and annual reports are available on the Web at:

http://www.ed.gov/about/reports/annual/index.html

The Department welcomes all comments and suggestions on both the content and presentation of this report. 

Please forward them to:

Office of the Chief Financial Officer

U.S. Department of Education

Washington, D.C. 20202-0600

E-mail: PARcomments@ed.gov
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