Department of Education

OFFICE OF INSPECTOR GENERAL

Fiscal Year 2019 Budget Request

CONTENTS

Page

Appropriations Language ......................................................................................................AA-1

Amounts Available for Obligation ..........................................................................................AA-2

Obligations by Object Classification ......................................................................................AA-3

Summary of Changes ...........................................................................................................AA-4

Authorizing Legislation..........................................................................................................AA-5

Appropriations History...........................................................................................................AA-6

Activity: .................................................................................................................................AA-7

Office of Inspector General...............................................................................................AA-7
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Appropriations Language

For expenses necessary for the Office of Inspector General, as authorized by section 212 of 

the Department of Education Organization Act, $63,418,000, of which $2,000,000 is available 

until expended.

NOTE

A full-year 2018 appropriation for this account was not enacted at the time the fiscal year 2019 Budget was 

prepared; therefore, the Budget assumes this account is operating under the Continuing Appropriations Act, 2018 

(Division D of P. L. 115-56, as amended). The amounts included for 2018 reflect the annualized level provided by the 

continuing resolution.
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Amounts Available for Obligation

(dollars in thousands)

Appropriation and Adjustments 2017 

2018

Annualized CR 2019

Discretionary appropriation:

 Appropriation.................................. $59,256 $59,256 $63,418

Across-the-board reduction (P.L.115-56) .. 0 -402 0

 Subtotal, appropriation .................... 59,256 58,854 63,418

Unobligated balance expiring.................... -321 0 0

Total, direct obligations.................... 58,935 58,854 63,418
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Obligations by Object Classification

(dollars in thousands)

Object Class 2017

2018

Annualized CR 2019

Change 

from 2018

to 2019

11.10 Full-time permanent $26,203 $28,174 $29,773 $1,599

11.31 Full-time temporary 179 123 123 0

11.32 Part-time 25 123 123 0

11.51 Overtime 1,992 0 0 0

11.52 Awards 358 501 501 0

Subtotal, Personnel Comp. 28,757 28,921 30,520 1,599

12.00 Benefits 10,840 11,126 11,834 708

13.00 Benefits for former personnel 0 0 0 0

Subtotal, Per. Com. & Ben. 39,597 40,047 42,354 2,307

21.00 Travel 1,179 1,178 1,486 308

22.00 Transportation of things 0 0 0 0

23.10 Rental payments to GSA 5,820 6,839 6,438 -401

23.31 Communications 190 198 191 -7

23.32 Postage/fees 0 2 2 0

Subtotal, 23 6,010 7,039 6,631 -408

24.00 Printing and reproduction 4 1 1 0

25.10

Advisory and assistance 

services 733 326 752 426

25.21 Other services 1,936 2,311 2,331 20

25.22 Training/tuition contracts 295 456 415 -41

25.30

Goods/services from Federal 

sources 1,380 1,323 2,084 761

25.40 Operations/maint of facilities 0 0 0 0

25.70 Operations/maint of equip. 9 3 6 3

25.72 IT services/contracts 6,116 5,456 6,471 1,015

Subtotal, 25 10,469 9,875 12,059 2,184

26.00 Supplies 100 111 122 11

31.10 IT equipment/software 564 557 690 133

31.30 Other equipment 62 24 35 11

Subtotal, 31 626 581 725 144

32.00 Building alterations 950 22 40 18

Total, Obligations 58,935 58,854 63,418 4,564
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Summary of Changes

(dollars in thousands)

2018......................................................................................... $58,854

2019......................................................................................... 63,418

Net change........................................................ +4,564

Increases:

2018

Annualized CR

Change 

from base

Built-in:

Increase of 13 FTE and increased benefits. $40,047 +$2,307

Program:

Increase in travel. 1,178 +308

Increase in OIG’s cost for IT Services and Contracts. 701 +1,107

Increase in OIG’s cost for IT Equipment/Software. 539 +133

Increase in OIG’s share of the Department’s Central Support 

non-pay costs.

1,566 +105

Increase in Goods/services from Federal Sources. 1,323 +761

Net changes in other areas. 1,070 +520

Subtotal, increases +5,241

Decreases:

Built-in:

Decrease in GSA rent payments. 6,839 -401

Program:

Decrease in central information technology. 4,839 -133

Decrease in other contracts due to a decrease in the cost of 

the Federal Information Security Modernization Act (FISMA) 

contract. 752 -143

Subtotal, decreases -677

 Net Change +4,564
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Authorizing Legislation

(dollars in thousands)

Activity

2018

Authorized

2018 

Annualized CR

2019

Authorized

2019

Request

Inspector General (DEOA, Section 212)........................... Indefinite 58,854 Indefinite $63,418

Total definite authorization .......................................... 0 0

Total appropriation ...................................................... 58,854 63,418
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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate 

to Congress

House 

Allowance

Senate 

Allowance Appropriation

2010 60,053 60,053 60,053160,053

2011 65,238 60,053265,238159,9333

2012 67,187 59,933459,933459,820

2013 62,401 59,820559,8205

56,691

Transfer (P.L. 113-6) 0 0 0 1,100

2014 62,347 N/A659,700157,791

2015 59,181 N/A658,791757,791

2016 59,256 59,256857,791859,256

2017 61,941 59,256959,256959,256

2018

2019

58,854

63,418

59,25610 59,25610 58,85410

 1 The level for the Senate allowance reflects Committee action only. 2 The level for the House allowance reflects the House-passed full-year continuing resolution. 3 The level for appropriation reflects the Department of Defense and Full-Year Continuing Appropriations 

Act, 2011 (P.L. 112-10). 4 The level for the House allowance reflects an introduced bill and the level for the Senate allowance 

reflects Senate Committee action only.

5 The level for the House and Senate allowances reflect action on the regular 2013 appropriations bill, 

which proceeded in the 112th Congress only through the House Subcommittee and the Senate 

Committee.

6 The House allowance is shown as N/A because there was no Subcommittee action.

7 The level for the Senate allowance reflects Senate Subcommittee action only.

8 The levels for House and Senate allowances reflect action on the regular annual 2016 appropriations 

bill, which proceeded in the 114th Congress only through the House Committee and Senate Committee.

9 The levels for the House and Senate allowances reflect Committee action on the regular 2017 

appropriations bill; the Appropriation reflects the Consolidated Appropriations Act, 2017.

10 The levels for the House reflect floor action on an Omnibus appropriation bill; Senate allowances reflect 

Committee action on the regular annual 2018 appropriations bill; the Appropriation reflects the Annualized 

Continuing Resolution level.
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Activit y:

Office of Inspector General

(Department of Education Organization Act, Section 212)

(dollars in thousands)

FY 2019 Authorization: Indefinite

Budget Authority:

2018

Annualized CR

2019

Request

Change from 

Annualized CR

Personnel 

Compensation and 

Benefits Costs $40,047 $42,354 +$2,307

Non-Personnel Costs

18,807 21,064 +2,257

Total 58,854 63,418 +4,564

FTE 231 244 13

PROGRAM DESCRIPTION

The Office of Inspector General’s (OIG) mission is to promote efficiency, effectiveness, and 

integrity in the Department of Education's programs and operations through independent and 

objective audits, investigations, inspections and other activities. The role of the OIG is to 

monitor the Department's performance and report to the Congress and to the Secretary on 

opportunities for improvement and any problems or deficiencies.

The OIG has authority to inquire about all program and administrative activities of the 

Department and related activities of all parties working under contracts, grants, or other 

arrangements with the Department. OIG staff and contracted auditors both in headquarters and 

the regional offices make these inquiries.

To carry out its responsibilities, the OIG audits and inspects Department programs and 

operations to determine compliance with applicable laws and regulations, economy and 

efficiency of operations, and effectiveness in achieving program goals. The Office also 

investigates allegations of fraud by recipients of program funds and of employee misconduct 

involving the Department’s programs and operations.

In addition, the OIG operates a hotline website in five languages (https://oighotline.ed.gov) and 

monitors a hotline phone number (1-800-MISUSED) where anyone may report fraud, waste, or 

abuse involving Department of Education funds or programs. Each month the hotline has 

approximately 400 telephone contacts and approximately 300 complaints. Since the middle of 
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fiscal year (FY) 2016, the OIG hotline has had to evaluate over 100 additional complaints per 

month that were received as suspicious activity reports through Federal Student Aid’s (FSA) 

Feedback system.

Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

2014.............................................................. ..................57,791

2015.............................................................. ..................57,791

2016.............................................................. ..................59,256

2017.............................................................. ..................59,256

2018.............................................................. ..................58,854

FY 2019 BUDGET REQUEST

For fiscal year 2019, the Budget request includes $63.4 million and 244 full-time equivalents 

(FTE) employment for the Office of Inspector General, an increase of $4.6 million over the fiscal 

year 2018 Annualized Continuing Resolution level of $58.9 million. The $4.6 million increase is 

necessary to begin to restore the OIG FTE level to its historical FTE level. With the additional 

funding, the estimated FTE level for fiscal year 2019 is 244. A 10-year history of the OIG’s 

staffing is shown in the following chart:

Sixty-seven percent of the requested amount, or $42.4 million, is for Personnel Compensation 

and Benefits (PC&B) to support the requested staffing level of 244 FTE. The remaining 

$21.0 million is for Non-Personnel costs, of which $12.8 million, or 20 percent of the total OIG 

request, is for Departmental Centralized Services such as rent, telecommunications, payroll 

processing, information technology (IT), and various service contracts. The remainder of the 

Non-Personnel request, $8.2 million, or 13 percent, is for Non-Personnel costs that directly 

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2010201120122013201420152016201720182019

FTE

Year

OIG Full-Time Equivalent Employment (FTE)

OIG ARRA FTE

OIG Regular FTE
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support the OIG’s mission, such as travel, training, and the financial statement audit contract. 

The $8.2 million also includes a payment of $139,077 to help fund the Council of the Inspectors 

General on Integrity and Efficiency (CIGIE), in accordance with 5 U.S.C. app 3 § 11(c)(3)(A).

The scope of the OIG planned work in fiscal year 2019 will cover multiple, diverse, and evolving 

programs. The OIG’s limited resources will be significantly stretched in order to conduct work 

that focuses on high-risk programs and operations, while also meeting statutory obligations. For 

example, audits of Federal student assistance programs, which involve over $1 trillion of 

taxpayer dollars, are a priority. The OIG will focus on issues such as the administration of loan 

forgiveness programs, management of the student loan portfolio, schools accountability, system 

implementation, and controls over higher education data.

The OIG anticipates conducting reviews of FSA’s oversight of the Public Service Loan and 

Teacher Loan Forgiveness Programs, Income-Driven Repayment plans, and contractors 

operating FSA computer systems. The OIG also plans to look at issues concerning FSA’s 

oversight of program participants, schools, and servicers.

For State and local education programs, the OIG will focus resources on areas related to the 

implementation of the Every Student Succeeds Act (ESSA), programs subject to reauthorization 

such as the individuals with Disabilities Education Act (IDEA), school choice, technical 

assistance grants and contracts, and high-risk grantees. The OIG further plans to evaluate the 

Department of Education’s business operations in areas such as Human Resources, the 

implementation of the Federal Information Technology Acquisition Reform Act (FITARA), and 

the establishment of an Enterprise Risk Management framework as required by Office of 

Management and Budget (OMB) Circular A-123.

The OIG also must devote significant resources to mandated work, including annual audits of 

the Department, FSA, and Special Purpose financial statements, and annual audits and other 

reviews under the Federal Information Security Modernization Act of 2014 (FISMA), the

Improper Payments Elimination and Recovery Act, and the Digital Accountability and 

Transparency Act. The OIG will continue to assess and report the Department’s efforts to 

identify, address, and mitigate improper payments and provide oversight of work performed by 

non-Federal auditors, including single audits and proprietary school compliance and financial 

statement audits of the recipients of Department funds. Further, the OIG will continue to work 

with the Department and OMB as they update the Single Audit Compliance Supplement to 

address risk and statutory changes. The OIG will also continue to work with OMB and the audit 

community to evaluate and improve the quality of single audits including providing training to 

non-Federal auditors.

On the investigative side, the OIG must devote considerable resources to combat an increase in 

the number of fraud and corruption cases involving charter schools and local school districts. A

large number of these complex and resource-intensive investigations involve subjects who are 

geographically dispersed, which results in greater travel costs for OIG investigators. The OIG 

also will continue to work a significant number of cases involving fraud rings in post-secondary 

distance education programs, despite the fact that the OIG issued a report recommending that 

the Department implement program improvements to reduce this fraud. The distance education 
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fraud ring investigations represent, on average, 31 percent of the cases opened by the OIG

since fiscal year 2012.

The OIG faces significant challenges to performing the work necessary to assess the 

Department’s compliance with multiple statutory requirements and to prevent and detect waste, 

fraud, and abuse. The OIG will continue to focus resources on high-risk areas and work that will 

result in improved oversight by the Department of its programs and operations. Over the past 

5 years, the OIG identified for recovery, in terms of questioned and unsupported costs, fines 

and restitutions ordered, recoveries, civil settlements/judgments, forfeitures/seizures, and 

estimated savings, over two dollars for each dollar it spent.

In accordance with the Inspector General Act, 5 U.S.C. app 3 § 6, the Inspector General has 

certified that the amount requested for required training of our staff, including amounts 

designated for the statutorily required training provided by the Federal Law Enforcement 

Training Center (FLETC), the Inspector General Criminal Investigator Academy (IGCIA), and in 

the Department’s centralized services, would satisfy all the OIG’s fiscal year 2019 training 

requirements.

In fiscal year 2019, the OIG will continue to operate from various locations throughout the 

country. Approximately 67 percent of the OIG’s staff will be assigned to 16 regional and field 

office locations in New York, Boston, San Juan (Puerto Rico), Philadelphia, Atlanta, Chicago, 

Ann Arbor, Nashville, Dallas, Denver, Kansas City, Sacramento, Long Beach, Pittsburgh, 

Phoenix, and Pembroke Pines. The remaining 33 percent will be located in the Washington, 

D.C., headquarters office.

Overhead includes: Rent, telecommunications, interagency agreements 

and IT services. Other Non-Personnel includes: Travel, advisory and 

assistance services, training, and CIGIE support.

Overhead

20%, $12.8

Other Non-Personnel

13%, $8.2

Personnel 

Compensation & 

Benefits

67%, $42.4

FY 2019 Distribution of Costs

($ in millions)
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FY 2019 Priorities and Goals

The OIG’s strategic goals are the following:

• Goal 1: Improve the Department’s ability to effectively and efficiently implement its 

programs.

• Goal 2: Strengthen the Department’s efforts to improve the delivery of student financial 

assistance.

• Goal 3: Protect the integrity of the Department’s programs and operations.

• Goal 4: Contribute to improvements in the Department’s business operations.

• Goal 5: Strive for a diverse and skilled workforce that is provided with the means necessary 

to achieve the OIG’s mission.

The OIG will meet these goals through audits, investigations, human capital planning, and other 

activities. These activities will identify problems, deficiencies, or opportunities for improvement 

and will communicate the results to the people who need the information and who will monitor 

the results of the work to ensure issues are addressed.

No-Year Funding

Of the amount appropriated, the OIG is requesting $2 million in no year funding. The need for 

the additional flexibility is for two main reasons: (1) due to historical delays in hiring, multiyear 

funds provide additional flexibility to allow the OIG to restore its FTE level; and (2) since 20% of 

the OIG budget is associated with common support provided by the Department, multiyear 

funds allow for flexibility when funds are returned to the OIG at the end of the fiscal year or if 

costs come in higher than expected.

Personnel Compensation and Benefits (PC&B) Costs

The fiscal year 2019 budget request of $42.4 million for Personnel Compensation and Benefits 

is an increase of $2.3 million over the fiscal year 2018 Annualized level. The increase covers an 

increase of 13 FTE and increased benefits costs.

Prior to fiscal year 2014, the OIG dropped below 270 FTE only 4 times in its history: 1982 (269 

FTE); 2000 (262 FTE); 2004 (268 FTE); and 2008 (264 FTE). Since fiscal year 2014, the OIG 

has had fewer than 250 FTE each year, with the low point being 228 FTE in fiscal year 2016. 

Having adequate FTE is essential for the OIG to fulfil its mission. The fiscal year 2019 request 

increases the OIG FTE level to 244 FTE to support audit and investigation activities, as well as 

IT audits and computer crime investigations (cyber security) for all Department programs. This

staff level is responsible for providing oversight of the Department, which administers over 

100 programs that involve 55 State and territorial educational agencies, nearly 18,200 school 

districts, 132,000 schools, over 6,000 institutions of higher education, and numerous other 
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grantees and subgrantees. In addition, the Department has an annual discretionary budget of 

approximately $69 billion and manages an outstanding loan portfolio of $1.3 trillion.

The request also covers law enforcement availability pay (required by 5 U.S.C. § 5545) paid to 

investigators who are required to be available during hours that are not part of the regular work 

week. For the budget request, law enforcement availability pay is included in the regular 

personnel compensation amount.

Audit Priorities

In fiscal year 2019, the OIG will focus its audit efforts on Federal student assistance programs 

and State and local programs, as well as high priority departmental operations. Specifically, 

audit coverage will include the following high risk areas:

Student Financial Assistance Programs

• William D. Ford Federal Direct Loan Program

As the Direct Loan portfolio continues to increase every year, so does the risk and costs to 

provide the credit and manage and service the loan portfolio. Audits may assess the 

Department’s oversight of Income-Driven Repayment plans, student loan forgiveness 

programs, and the servicing and collection of delinquent and defaulted loans.

• Contractors

FSA relies on contractors to operate its computer systems and perform many of the

functions necessary to process, award, service, and account for student aid. The OIG has 

consistently identified problems with FSA’s contract oversight. In fiscal year 2019, the OIG 

work on FSA’s contractor oversight will concentrate on FSA’s ability to effectively oversee IT 

development and security and compliance with contractual requirements.

• School Compliance Issues:

o Postsecondary Institutions—The OIG plans to continue to conduct audits of

proprietary schools. The need for profit growth by these schools is often counter to the 

purposes of the Federal student financial assistance programs which could harm 

students and lead to the misuse of Federal funds. The OIG also plans to review not-forprofit and public schools

o Issues Concerning Title IV and the Delivery of Education—In addition to traditional 

semester, trimester, and quarter programs, institutions use modules and non-standard 

terms. There are two modes of education delivery—on ground and distance education. 

The progress of the student in an educational program can be measured in credit hours 

earned or through competency-based programs (including direct assessment). The 

diversity of education delivery complicates the Title IV programs. The areas that the 

OIG plans to audit include student eligibility, institutional eligibility, disbursement of Title 

IV financial aid, and adequacy of accreditation reviews.
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o Oversight and Monitoring of Student Financial Assistance Program Participants—

The OIG’s audits of FSA’s oversight of program participants, schools, lenders, and 

servicers have consistently identified weaknesses. The OIG plans to conduct follow-up 

audits on past work or audits of emerging areas.

State and Local Programs

• ESSA—ESSA reauthorized the Elementary and Secondary Education Act. ESSA was a 

departure from its predecessor, as it provides States with significant flexibility in a wide 

range of areas while lessening the Department’s role in testing, standards setting, and 

school turnaround. Effective dates are October 1, 2016, for competitive grants, and 

July 1, 2017 for changes to formula grant programs. States are still developing their 

accountability plans, which should be submitted for Department review by September 2017. 

The Department must establish a process for peer review of the state plans and develop 

oversight processes to assure the plans are being followed.

• IDEA—IDEA ensures services to children with disabilities and governs how states and 

public agencies provide early intervention, special education and related services. IDEA is 

scheduled for reauthorization and the OIG will need to review the implementation of

statutory changes. 

• Compliance Requirements and Monitoring at State Educational Agencies (SEAs) and 

Local Educational Agencies (LEAs)—Each State and local program comes with its own 

set of compliance requirements that takes time and resources to administer. SEAs and 

LEAs must conduct sub-recipient monitoring for each program; however, States may lack 

sufficient resources for monitoring or designing an effective monitoring program. Prior 

audits have identified numerous instances of noncompliance and deficiencies; therefore, the 

OIG plans to review selected SEAs and LEAs for compliance and general administrative 

capability.

Departmental Operations

• Discretionary Grants—The Department awards a significant number of discretionary 

grants through its program offices. Effective monitoring and oversight are essential for 

ensuring that grantees meet grant requirements and achieve program goals and objectives. 

The OIG plans to continue to review processes and controls in place over competitions and 

grant funds and determine whether the Department’s monitoring of grants is sufficient to 

ensure that grantees are performing the work as stated in their grant agreements.

• FITARA—The Department contracts for many Information Technology (IT) systems that are 

critical to its operations. These services include systems development, operation, and 

maintenance; loan servicing and debt collection; technical assistance for grantees; 

administrative and logistical support; and education research and program evaluations. 

Responsibility for procurement and oversight and monitoring of IT systems and contractor 

performance at the Department has been shared by the Office of the Chief Information 

Officer (OCIO), and the Department’s Contracts and Acquisition Management, a component 

of the Office of the Chief Financial Officer. The FSA program office has delegated authority 
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for its own procurement function as a Performance Based Organization (PBO). OMB 

Management and Oversight of Federal Information Technology memorandum (M-15-14) to 

agency heads of executive departments requires each agency to conduct a self-assessment

that identifies current conformity or gaps with the Common Baseline outlined in the

memorandum. The Common Baseline establishes the roles, responsibilities, and authorities 

of the Chief Information Officer and applicable senior agency officials in managing IT as a 

strategic resource. The OIG plans to review the Department’s implementation of FITARA.

• Business Operations—The OIG plans to devote resources to reviews that impact the 

Department’s business operations. This includes planned work to assess selected aspects 

of the Department’s Human Resources functions, implementation of potential 

reorganizations, and required assessments of the Department’s purchase card and travel 

card programs.

Investigation Priorities

At the requested staffing level, the OIG will conduct investigations of institutions (lenders, 

guaranty agencies, servicers, collection agencies, and schools) that participate in the Title IV 

student financial assistance programs. In addition, the OIG will continue to investigate 

allegations of corruption and fraud in State agencies and local school districts, including charter 

schools, and other ESSA-funded programs. The OIG will also continue to investigate only the 

most significant fraud rings targeting Title IV through distance education.

Investigations of State and local programs are on the rise due in part to an increased ability to 

identify fraud and reporting by State and local officials resulting from the OIG outreach efforts. 

For example, the OIG continues to investigate providers of Supplemental Educational Services 

(SES) despite significant changes in the program. Fraud by SES providers involves falsified 

student rosters and fictitious billing for student tutoring services, which often go undetected due 

to weak internal controls and in some cases, corrupt public officials. Based on current 

investigative activity and reporting, the OIG anticipates an increase in the number of 

investigations involving another non-school-hours program, 21st Century Community Learning 

Centers. Although this program may not continue to be funded by the Congress, funds have 

already been disbursed.

Another area of concern requiring further investigation is related to total and permanent 

discharges of federal student loans. Due to information uncovered during a recent, successful 

case involving disability discharges, coupled with a rapid increase in discharges and apparent 

weaknesses in the program, we anticipated that there is significant fraud in this program. 

However, due to reduced staffing, The OIG will be limited in how aggressively it can proactively 

address this area.

Investigation Services established a nationwide initiative of stakeholder outreach and fraud 

awareness training, which is in the final year of a 3-year cycle. The OIG’s mission is to promote 

the efficiency, effectiveness, and integrity of the Department’s programs and operations. To 

achieve this mission, Investigation Services conducts investigations and provides other 

assistance, including outreach and fraud awareness training, to help ensure integrity in the 

Department’s operations and programs and identify opportunities for improvement. 
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Investigation Services staff provides outreach to increase awareness of the role of the OIG and 

educate both Department employees and external customers on how to recognize fraud, waste, 

and abuse, and the mechanisms available for reporting concerns. The experience and 

expertise of the Special Agents who provide these outreach activities is critical to the successful 

achievement of the OIG’s mission. However, the OIG’s outreach efforts are being reduced in 

this area to ensure sufficient funds are available for essential investigative travel, and it is

developing an updated external outreach plan to maximize our efforts with limited resources.

The OIG strives to investigate matters with the highest priority (established by the OIG

investigative priority matrix) that would have the most significant impact on the Department’s 

programs and operations. OIG investigations are often based on complex regulatory schemes, 

involve persons and entities that are geographically dispersed, and can take several years to 

fully develop and resolve but can result in significant recoveries for the Federal government.

In fiscal year 2019, the OIG anticipates focusing on the following areas:

• Postsecondary Institutions—The OIG will continue to devote significant resources to 

conducting criminal and civil investigations of postsecondary schools (i.e., for-profit, public, 

and private nonprofit institutions), as well as other entities that participate in these programs. 

Federal student aid programs represent the largest concentration of education program 

dollars at risk. In fiscal year 2016, our postsecondary investigations resulted in the recovery 

of approximately $136.9 million, more than double the OIG’s budget for the fiscal year.

These investigations currently represent approximately 22 percent of OIG’s investigative

inventory.

• Charter Schools—The OIG will continue to conduct criminal investigations of fraud in 

charter schools. From fiscal year 2012 through fiscal year 2016, the OIG completed 

48 charter school investigations which resulted in 32 indictments, 21 convictions, and the 

recovery of over $10.2 million.

• State and Local School Corruption—The OIG will continue to focus significant resources 

on allegations of bribery and theft involving State and local public school officials. From 

fiscal year 2012 to fiscal year 2016, the OIG investigated 72 cases involving State and Local 

Educational Agencies (SEAs and LEAs). To date, these investigations have resulted in 84 

indictments and 92 convictions securing more than $27.3 million in restitution, fines, and civil 

recoveries.

• Distance Education Fraud—The OIG will continue to conduct criminal investigations 

involving fraud resulting from the vulnerabilities associated with the delivery of distance 

education; however, due to limited investigative resources, the OIG will generally focus on

only cases involving a significant financial loss. Currently these investigations represent 

about 27 percent of all open OIG cases. The OIG will continue to refer other matters to the 

Department so that future disbursements can be stopped. Since fiscal year 2012, 

investigations in this area resulted in 325 indictments, 289 convictions, and recoveries of 

approximately $16.6 million and the OIG referred to the Department distance education 

matters not investigated by the OIG totaling an additional $6.7 million in potential fraud.
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• Disability Discharges—In fiscal year 2016, the Department discharged approximately 

$3.7 billion in student loans due to total and permanent disability. This figure has increased 

steadily from $2.3 billion since fiscal year 2013. Based on recent investigative activity, the 

OIG believes there is significant fraud in this area, and the OIG has initiated a proactive 

investigative project to identify it. The OIG anticipates it will have a significant number of 

investigations in this area in fiscal year 2019 but may be limited in the resources it can 

dedicate to these investigations.

• Whistleblower and Retaliation Investigations—The OIG will continue to conduct

administrative investigations of whistleblower reprisal complaints, as well as evaluating the 

underlying allegation to determine if criminal or civil investigations are warranted. OIG has 

seen the number of whistleblower retaliation investigations increase due to legislative 

changes that now incorporate sub-grantees.

IT Audits and Cybercrime Priorities

The OIG requested staffing level includes staff with expertise necessary to conduct audits of the 

Department’s IT systems and operations, investigate cybercrime, and provide technical support 

for investigative activities, including digital forensics and data analytics.

The OIG data analytics efforts will focus on the detection of illegal electronic financial 

transactions, including unauthorized payment requests, ineligible program participants, and 

program abuse and fraud. This data analytics activity requires the OIG to continue to maintain 

its data risk assessment systems: E-Fraud Student Fraud Ring System, SEA and LEA Ranking 

Model, and Purchase Card Risk Model. These systems allow the OIG staff to discern patterns 

indicating fraud, waste, and abuse and allow dynamic audit and investigative planning using 

risk-based analysis. The OIG will also conduct data analytics projects to proactively identify 

criminal activity impacting the Department’s programs.

The OIG cybercrime investigations include the investigation of intrusions into the Department’s 

systems and criminal misuse of the Department’s systems and electronic data. These 

investigations also include the investigations of intrusions into higher education computer 

systems used to administer student financial aid. While conducting these investigations, the 

OIG will identify systemic IT security problems as new threats emerge.

The OIG IT audit efforts will include assessing the effectiveness of the Department’s information 

security program as mandated by FISMA. As part of that review, the OIG will also continue to 

evaluate the effectiveness of general and technical IT security controls of the Department’s 

mission-critical and support systems and the Department’s overall information security plans, 

programs, and practices.

Non-Personnel Costs

The OIG request includes $21.0 million for Non-Personnel costs, an increase of $2.3 million

over the fiscal year 2018 Annualized CR level. Of the total, $12.8 million is for Departmental 

Centralized Services (overhead expenses), including the Department’s IT infrastructure and 
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support contracts (Department IT contracts), and $8.2 million is for other non-personnel 

operational costs.

Departmental Centralized Services

The OIG request of $12.8 million for non-pay overhead is a decrease of $462,000 below the 

fiscal year 2018 Annualized CR level. The major items included in overhead costs are: rent, 

interagency agreements for services such as payroll processing, guard services, background 

security investigations, communications, and IT services and contracts. The communications 

and IT amounts will be used primarily for the Department IT contracts, which cover IT 

equipment, telecommunications, IT processing services, network support, end-user support, 

maintenance, and improvements. Rent and the Department IT contract use approximately 86

percent of the centralized services resources.

Departmental Centralized Services

(dollars in thousands)

Item

2018 

Annualized CR 2019 Request Difference

Rent $6,839 $6,438 -$401

Central IT 4,839 4,706 -133

Other Central Support 1,599 1,671 72

Centralized Services $13,277 $12,815 -$462

Other Non-Personnel Costs

Travel

The OIG requests $1.486 million in travel funds, $308,000 over the fiscal year 2018 Annualized 

CR level. The requested amount for fiscal year 2019 covers travel expenses for the requested 

staff of auditors, investigators, and other specialists and is necessary to perform the OIG audit 

and investigative mission. 

Most OIG work involves travel to SEAs, LEAs, schools, other grantees, loan servicers, 

contractors, and other recipients of Federal education funds, to conduct audits and 

investigations, interview witnesses and subjects, and gather evidence. Many of these entities 

and people are not located in the cities where the OIG has staff, thus necessitating travel.

Advisory and Assistance Services

The OIG is requesting $752,000, a $426,000 increase over the fiscal year 2018 Annualized CR 

level, to contract for audit services that support mandated OIG FISMA work. The requested 

funding level would provide contractor support for IT security reviews of systems; audits of the 
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Department’s IT contracts; reviews of systems development life cycles, enterprise architecture, 

and IT project management; and computer forensic analysis. 

Other Services

The OIG is requesting $1.807 million, same as the fiscal year 2018 Annualized CR level. This 

amount is primarily to contract with an independent certified public accounting firm to audit the 

Department wide financial statements. In accordance with the IG Act and the CFO Act, the OIG

oversees the financial statement audits. The audits will result in reports on the Department wide 

financial statements, FSA’s financial statements, and the Closing Package. Audits will examine 

and analyze account balances, review applicable financial systems, and evaluate internal 

controls and compliance with significant laws, regulations, contracts, and grant agreements. 

Audit results will assess the fair presentation of the financial statements, make 

recommendations for improving financial management, accountability and stewardship, and 

identify areas requiring further review by management.

The amount also includes $432,000 for car leases, same as the fiscal year 2018 Annualized CR 

level.

Training

The OIG is requesting a total of $298,000, a decrease of $41,000 from the fiscal year 2018

Annualized CR level for the OIG-specific training of auditors, investigators, and business 

operations staff. Within the Departmental Centralized Services section, the OIG requests 

$117,000 in support of Department training operations, which reflects no change from the fiscal 

year 2018 Annualized CR level.

Training funds are needed to provide professional and statutorily mandated training for the 

OIG’s auditors and investigators. As required by the Government Accountability Office, auditors 

performing work under generally accepted Government auditing standards must maintain 

professional competencies through continuing professional education (CPE) by completing, 

every 2 years, 80 hours of governmental auditing training with at least 20 hours of CPEs in each 

2-year period. The OIG’s criminal investigators must also complete periodic statutory and 

Attorney General-mandated law enforcement training requirements to maintain their statutory 

law enforcement authorities. The OIG maintains a staff of accredited trainers to deliver firearms

and other mandated training to the OIG investigators, and the trainers require specific refresher 

courses to maintain their accreditation. In addition, the requested amount will cover the costs of 

review courses and examinations to obtain professional certifications, such as Certified Public 

Accountant and Certified Information Systems Auditor; send the OIG investigators to 

FLETC/IGCIA; and obtain advanced IT skills to address ever increasing computer requirements 

and processes, as well as combat new threats and weaknesses.

To control the costs associated with mandatory training requirements, the OIG plans to continue 

to use such technologies as WebEx, video conferencing, and web-enabled training courses to 

accomplish continuing education requirements, as well as using qualified OIG staff to deliver 

required training while attending only essential/critical vendor-offered courses. The OIG will 
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also continue to minimize training costs by having staff attend CIGIE-supported or OIG 

community-sponsored training events.

Goods/Services from Federal Sources

The OIG is requesting $1.086 million, an increase of $716,000 over the fiscal year 2018 

Annualized CR level. Within this request, $787,000 is for anticipated services from the General 

Services Administration (GSA); $139,077 will cover the OIG’s funding support for the Council of 

the Inspectors General on Integrity and Efficiency (CIGIE). This contribution is 0.22 percent of 

the OIG 2019 designated funding level based on a total budget request of $63.4 million, 

including the CIGIE amount; and $159,727 in miscellaneous interagency agreements covering a 

variety of services provided by other Federal agencies, of which $95,000 is designated for 

FLETC/IGCIA training cost for the OIG Investigations staff.

Equipment Operations/Maintenance

For fiscal year 2019, the OIG requests $5,500, an increase of $2,600 over the fiscal year 2018

Annualized CR level, for equipment repair and maintenance of copiers.

IT Services/Contracts

For fiscal year 2019, the OIG requests $1.764 million, an increase of $1.1 million over the fiscal 

year 2018 Annualized CR level, for contracts for system support and expertise. This request 

includes programmer services and maintenance for various OIG systems and applications, and 

services and support for IT security operations, computer forensics, and data analytics experts. 

None of these costs are covered by centralized IT funding.

IT Equipment/Software 

The OIG requests $666,000, an increase of $127,000 over the fiscal year 2018 Annualized CR 

level, to support non-centralized IT software maintenance agreements, software license 

renewals, and equipment purchases. 

Building Alterations

The OIG’s request includes $40,000, an increase of $18,000 over the fiscal year 2018

Annualized CR level, in non-centralized building alterations costs. This amount will provide 

funding for miscellaneous facilities projects, such as space reconfigurations, furniture repair 

and/or replacement, and other costs associated with maintaining the work environment.
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PROGRAM PERFORMANCE INFORMATION

Specific results from audits and investigations are summarized twice yearly in the OIG 

Semiannual Report to Congress. All OIG reports are available on OIG’s website, 

http://www2.ed.gov/about/offices/list/oig/reports.html.

Performance Measures:

In 2014, OIG developed its “Five-Year Strategic Plan” covering fiscal years 2014-2018. The 

Plan established the strategic goals and strategies shown below.

Goals: (1) improve the Department’s ability to effectively and efficiently implement its 

programs; (2) strengthen the Department’s efforts to improve the delivery of student financial 

assistance; (3) protect the integrity of the Department’s programs and operations; (4) contribute 

to improvements in the Department’s business operations; and (5) strive for a diverse and 

skilled workforce that is provided with the means necessary to achieve the OIG’s mission.

Strategies: (a) provide value-added audit, investigative, and other services; (b) allocate 

resources based on risk assessments; (c) use proactive analytical tools; (d) conduct effective 

outreach; (e) cultivate workforce excellence; (f) provide necessary resources; and (g) promote 

an inclusive workplace environment.

Performance measures are reviewed annually and revised as necessary. Several key 

performance measures are shown below.

Measure: Audits initiated each year in accordance with policy and focused on areas of high risk 

or significant importance.

Year Target Percent Actual Percent

2015 85% 100%

2016 85 100

2017 85 100

2018 85

2019 85

Measure: Investigations initiated each year in accordance with policy and focused on areas of 

high risk or significant importance.

Year Target Percent Actual Percent

2015 80% 93%

2016 80 90

2017 80 89

2018 80

2019 80
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Measure: Recommendations in reports issued during the fiscal year were accepted by the 

Department and corrective action plans agreed to by OIG management.

Year Target Percent Actual Percent

2015 90% 99%

2016 90 99

2017 90 98

2018 90

2019 90

Measure: Draft and final audit reports issued in accordance with policy, including applicable 

standards, and by the agreed-upon date.

Year Target Percent Actual Percent

2015 70% 97%

2016 70 95

2017 70 93

2018 70

2019 70

Measure: Complaints of fraud, waste, and abuse were processed for case initiation 

(investigation) or complaint closed to a final disposition in accordance with policy, including 

applicable standards, within 120 days.

Year Target Percent Actual Percent

2015 75% 80%

2016 75 79

2017 75 76

2018 75

2019 75
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Measure: Preliminary inquiries converted to full investigations by ITACCI that resulted in a 

criminal, civil or administrative action, or monetary result.

Year Target Percent Actual Percent

2015 65% 56%

2016 65 75

2017 50 63

2018 50

2019 50

Measure: Information technology audits issued in accordance with policy and accepted by 

management by the agreed upon date.

Year Target Percent Actual Percent

2015 75% 100%

2016 75 100

2017 75 100

2018 75

2019 75

Measure: Substantive comments provided by OIG resulted in changes in legislation, 

regulations, or other policies.

Year Target Percent Actual Percent

2015 70% 70%

2016 70 85

2017 70 77

2018 70

2019 70
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Measure: Freedom of Information Act responses processed in accordance with statutory 

requirements and delivered to requestors within required deadlines.

Year Target Actual

2015 95% 90%

2016 90 91

2017 90 77

2018 90

2019 90

Measure: Hotline controlled correspondence processed in accordance with policy and within 

the established deadlines.

Year Target Percent Actual Percent

2015 95% 100%

2016 95 100

2017 95 100

2018 95

2019 95