Department of Education

OFFICE OF INSPECTOR GENERAL

Fiscal Year 2017 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-6

Appropriations History...........................................................................................................AA-7

Activity: .................................................................................................................................AA-8

Office of Inspector General...............................................................................................AA-8
OFFICE OF INSPECTOR GENERAL

Appropriations Language

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

the Department of Education Organization Act, [$59,256,000] $61,941,000. (Department of 

Education Appropriations Act, 2016)

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Amounts Available for Obligation

(dollars in thousands)

Appropriation and Adjustments 2015 2016 2017

Discretionary appropriation:

Discretionar y Appropriation ......................................................... $57,791 $59,256 $61,941

Total, appropriation............................................ 57,791 59,256 61,941

Unobligated balance expiring..................................... -1,424 0 0

Total, direct obligations..................................... 56,367 59,256 61,941

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Obligations by Object Classification

(dollars in thousands)

Object 

Class # Object Class

2015 

Estimate

2016 

Estimate

2017 

Request

Change from 

2016 to 2017

11.10 Full-time permanent $28,071 $27,905 $28,053 $148

11.31 Full-time temporary 221 1,450 1,457 7

11.32 Part-time 148 121 121 0

11.51 Overtime 0 0 0 0

11.52 Awards 294 297 298 1

Compensation subtotal 28,734 29,773 29,929 156

12.00 Benefits 10,814 11,224 11,371 147

13.00 Benefits for former personnel 0 0 0 0

Comp/benefits subtotal 39,548 40,997 41,300 303

21.00 Travel 1,483 1,286 1,286 0

22.00 Transportation of things 978 225 75 -150

23.10 Rental payments to GSA 5,631 6,001 7,357 1,356

23.31 Communications 160 207 213 6

23.32 Postage/fees 13 12 12 0

Subtotal 23 5,804 6,220 7,582 1,362

24.00 Printing and reproduction 0 0 0 0

25.10 Advisory and assistance services 735 665 651 -14

25.21 Other services 2,042 2,174 2,108 -66

25.22 Training/tuition contracts 537 466 444 -22

25.23 Field readers 0 0 0 0

25.30 Goods/services from Federal sources 1,597 1,211 1,260 49

25.40 Operations/maint of facilities 0 0 0 0

25.70 Operations/maint of equipment 4 13 14 1

25.72 IT services/contracts 4,385 5,047 6,344 1,297

Subtotal 25 9,300 9,576 10,821 1,245

26.00 Supplies 118 129 138 9

31.10 IT equipment/software 396 596 513 -83

31.30 Other equipment 23 38 28 -10

Subtotal 31 419 634 541 -93

32.00 Building alterations 141 189 198 9

43.10 Prompt payment interest 0 0 0 0

Total, Obligations 57,791 59,256 61,941 2,685

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Summary of Changes

(dollars in thousands)

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

2017................................................................................................. 61,941

Net change ................................................................ +2,685

Increases: 2016 base

Change 

from base

Built-in:

Built-in: Increase in salaries and benefits due to the proposed 

1.6 percent pay raise and increased FERS contribution rates, 

offset by a decrease of 2 paid days. $40,700 +$302

Built-in: Increase in GSA rental payments due to anticipated rate 

increases and tax escalations. 6,001 +1,356

Program:

Program: Increase in central information technology, primarily for

EDCAPS, the Department’s core financial system, primarily 

associated with transition to a new contract, and security 

authorization. 3,999 +1,401

Program: Net increase in central support non-pay charges. 1,378 +83

Program: Increase in OIG’s cost for the audit of the Department’s financial 

statements. 1,018 +52

Program: Increase in interagency agreement for the Council of Inspectors 

General on Integrity and Efficiency (CIGIE). 161 +24

Program: Net changes in other areas. 3,162 +6

Subtotal, increases +3,224

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Summary of Changes

(dollars in thousands)

Decreases: 2016 base

Change 

from base

Program:

Program: Decrease in other services for car leases due to GSA cost 

reduction.

$532 -$180

Program: Decrease in transportation for permanent changes of station. 225 -150

Program: Decrease in information technology contracts for support for IT 

security operations, computer forensics and data mining 

experts for the Information Technology Audits and Computer 

Crimes (ITACCI) group. 1,048 -104

Program: Decrease in non-centralized IT equipment purchases. 566 -83

Program: Decrease in training, including centralized training. 466 -22

Subtotal, decreases -539

Net change +2,685

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Authorizing Legislation

(dollars in thousands)

Activity 2016 

Authorized

2016 

Estimate

2017 

Authorized

2017

Request

Inspector General (DEOA, Section 212) ......................................... Indefinite $59,256 Indefinite $61,941

Total appropriation ..................................................................... 59,256 61,941

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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate

to Congress

House 

Allowance

Senate 

Allowance Appropriation

2008 $53,239 $53,239 $54,239 $50,849

2009 54,539 54,539154,539154,539

Recovery Act Supplemental 

(P.L. 111-5) 0 0 4,000 14,000

2010 60,053 60,053 60,053260,053

2011 65,238 60,053365,238259,9334

2012 67,187 59,933559,933559,820

2013 62,401 59,820659,820656,691

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

2014 62,347 N/A759,700257,791

2015 59,181 N/A758,791857,791

2016 59,256 59,256957,791959,256

2017 61,941

1 The levels for the House and Senate allowances reflect action on the regular annual 2009 appropriations bill, 

which proceeded in the 110th Congress only through the House Subcommittee and the Senate Committee. 2 The level for the Senate allowance reflects Committee action only. 3 The level for the House allowance reflects the House-passed full-year continuing resolution. 4 The level for appropriation reflects the Department of Defense and Full-Year Continuing Appropriations Act, 

2011 (P.L. 112-10). 5 The level for the House allowance reflects an introduced bill and the level for the Senate allowance reflects 

Senate Committee action only. 6 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. 7 The House allowance is shown as N/A because there was no Subcommittee action. 8 The level for the Senate allowance reflects Senate Subcommittee action only. 9 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.

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Activity:

Office of Inspector General

(Department of Education Organization Act, Section 211)

(dollars in thousands)

FY 2017 Authorization: Indefinite

Budget Authority:

Budget Authority C ategor y

2016 2017 Change

Personnel costs $40,997 $41,300 +$303

Non-Personnel costs 18,259 20,641 +2,382

Total 59,256 61,941 +2,685

FTE 244 244 0

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 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.

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, 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.

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In addition, OIG operates both a website, http://www.ed.gov/misused, and a hotline (1-800-

MISUSED) that anyone may call to report fraud, waste, or abuse involving Department of 

Education funds or programs or to make suggestions for saving Federal funds and for ways 

Federal education services could be more effective.

Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

2012.............................................................. ......... $59,820,000

2013.............................................................. ...........56,691,000

2014.............................................................. ...........57,791,000

2015.............................................................. ...........57,791,000

2016.............................................................. ...........59,256,000

FY 2017 BUDGET REQUEST

The Office of Inspector General (OIG) requests $61.9 million and 244 full time equivalents (FTE) 

for fiscal year (FY) 2017, an increase of $2.7 million over the FY 2016 level. A 10-year history 

of the OIG’s staffing is shown in the following chart:

Sixty-seven percent of the requested amount, or $41.3 million, is for personnel compensation 

and benefits to support the requested staffing level of 244 FTE. The remaining $20.6 million is 

for non-personnel costs, of which $14.3 million, or 23 percent of the total OIG request, is for 

administrative and overhead services, such as rent, telecommunications, payroll processing, 

and information technology (IT), and various service contracts. The remainder of the nonpersonnel request, $6.3 million, or 10 percent, is for non-personnel costs that directly support 

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

$6.3 million also includes a payment of $185,268 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).

0

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2008200920102011201220132014201520162017

FTE

Year

OIG Full-Time Equivalent Employment (FTE)

OIG ARRA FTE

OIG Regular FTE

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The scope of OIG planned work in FY 2017 will cover multiple, diverse, and evolving programs. 

The OIG’s limited resources will be significantly stretched in order to conduct much-needed 

work that focuses on high-risk programs and operations while also meeting statutory 

obligations. For example, audits of Federal student assistance programs, which involve 

hundreds of billions of taxpayer dollars, are a high priority. The OIG will focus on issues such 

as accrediting agencies’ evaluations of direct assessment programs, Federal Student Aid’s 

(FSA) oversight of the development and enhancement of information technology products, 

FSA’s oversight of borrower complaints, and FSA’s application of the financial responsibility 

regulation.

The OIG anticipates conducting reviews of FSA’s oversight of contractors involved in such 

activities as servicing direct loans, collecting on defaulted loans, and 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 

Individuals with Disabilities Education Act (IDEA), Elementary and Secondary Education Act 

(ESEA), data reliability, and high-risk grantees. The OIG plans to expend resources to review 

the calculation and reporting of graduation rates, single audit finding resolution, and protection 

of student data in State Longitudinal Data Systems. The OIG further plans to evaluate the 

Department of Education’s business operations in areas such as personnel security and 

contract monitoring.

The OIG also must devote significant resources to statutory and regulatory 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 Management Act 

(FISMA) and Improper Payments Elimination and Recovery Act. The OIG must 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 

compliance audits of the recipients of Department funds. Further, with the reauthorization of 

ESEA, the OIG will have to work with the Department and the Office of Management and 

Budget (OMB) to develop new audit guidance to update the Single Audit Compliance 

Supplement to address changes to the laws. The OIG will also continue to work with OMB and 

the audit community to evaluate and improve the quality of single audits.

On the investigative side, the OIG must devote considerable resources to combat a dramatic 

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 number of cases involving fraud in higher education distance education 

programs also has skyrocketed. Although the OIG issued a report recommending that the 

Department implement program improvements to reduce distance education fraud, the number 

of these cases still represents about 25 percent of all the OIG investigations.

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

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

abuse. The FY 2017 request funds a staffing level of 244, the same as the 2016 level. The 

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requested funding would provide staff with the tools needed to perform their work. It also 

provides funding for FISMA contractor support. Without contractor support, the OIG would have 

to significantly reduce the scope and coverage of its review of the Department’s IT security

efforts and limit the type of technical testing performed on the Department’s and FSA’s data 

systems and infrastructure. At the FY 2017 requested budget level, the OIG would obtain 

contractor support for the continued development of data analytics modules that assist in 

identifying patterns of fraud and risk, allowing the OIG to better target audit and investigative 

work. The requested budget level would provide adequate training funds to ensure auditors 

comply with mandatory Federal auditing standards for continuing professional education and 

criminal investigators receive training required to maintain their law enforcement authority. 

Requested travel funds would prevent the OIG from having to reduce the number of sites 

covered under nationwide audit projects and from potentially limiting the geographic reach of 

investigations. The requested staffing level will result in fewer audits and investigations than in 

past years when OIG had more staff, and limits the OIG’s ability to respond to Departmental and 

congressional requests for specific reviews. The OIG will continue to focus needed resources 

on high-risk areas and work that would have potential to result in a significant return on 

investment. 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, two dollars for each dollar it spent.

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

certifies that the amount of $648,000 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 

Overhead

$14.3

Other Non-Personnel

$6.3

Personnel

$41.3 

FY 2017 Distribution of Costs

($ in millions)

Overhead includes: Rent, telecommunications, interagency agreements 

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

assistance services, training, and CIGIE support.

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(IGCIA), and in the Department’s centralized services, would satisfy all the OIG’s FY 2017

training requirements.

________________________

Kathleen Tighe

Inspector General

In FY 2017, the OIG will continue to operate from various locations throughout the country. 

Approximately 68 percent of the OIG’s staff will be assigned to 21 regional offices, field offices, 

and flexiplace locations in New York, Boston, San Juan (Puerto Rico), Philadelphia,

Washington, D.C., Atlanta, Chicago, Ann Arbor, Nashville, St. Paul, Dallas, Denver, Austin, 

Kansas City, Sacramento, Long Beach, Lancaster (CA), St. Simons (GA), Pittsburgh, Phoenix, 

and Pembroke Pines. The remaining 32 percent will be located in the Washington, DC 

headquarters office.

FY 2017 Priorities and Goals

The OIG’s strategic goals are:

• 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 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.

Personnel Costs

The FY 2017 budget request of $41.3 million for personnel compensation and benefits is an 

increase of $303,000 from the FY 2016 level. The request covers a proposed 1.6 percent 

Governmentwide pay raise for FY 2017, as well as increased benefits costs, offset by 2 fewer 

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paid days in 2017. The request provides funding for a staffing level of 244 FTE and 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.

The OIG’s request for 244 FTE in FY 2017 is the same as the FY 2016 level. The 244 FTE for 

FY 2017 will be used to support audit and investigation activities, as well as IT audits and 

computer crime investigations (cyber security) for all Department programs. This limited staff

level is responsible for providing oversight of the Department, which administers over 100

educational programs and is responsible for approximately $69 billion in discretionary/formula

grants and a loan portfolio of over $1 trillion. The funding is distributed to 56 State and territorial 

educational agencies, more than 16,000 school districts, and over 6,000 institutions of higher 

education.

The OIG continues to hire personnel to maintain necessary staffing levels.

Audit Priorities

In FY 2017, 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

• Student Loan Debt — The aggregate amount of outstanding Federal and private student 

loan debt has passed the total amount of outstanding credit card debt and exceeds 

$1 trillion. Rising tuitions and fees will result in increased borrowing and defaults. The 

OIG’s work may examine such issues as increased defaults, questionable debt collection 

practices, impact of income-driven repayment plans, wage garnishment, reporting to credit 

bureaus, and loan rehabilitation practices.

• William D. Ford Federal Direct Loan Program — As the Direct Loan portfolio increases 

and all new loans are now originated by the Department, the Department’s resources will 

continue to be stretched and its ability to make and service student loans will be tested. 

Audits may assess the Department’s diligence in making and consolidating loans, 

addressing borrower complaints, the Department’s oversight of the Free Application for 

Student Aid verification process, and managing Title IV Additional Servicers and the 

increasing number of non-profit servicers.

• New programs and requirements — Over the past 6 years, the Higher Education Act and 

its regulations have been amended numerous times, implementing new programs and 

requirements. The OIG oversight may focus on areas such as the Department’s 

Experimental Sites Initiative.

• Contractors — FSA relies on contractors to service Direct Loans, collect on defaulted 

loans, design and operate its computer systems, and perform many other functions. The 

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OIG has consistently identified problems with FSA’s contract oversight. In 2017, the OIG 

work on FSA’s contractor oversight will concentrate not just on individual contractors, but the 

overall contracting process to identify root causes for contract problems. OIG work will also 

examine FSA’s ability to effectively oversee IT development.

• School Compliance Issues:

o Schools — The OIG plans to continue to conduct audits and inspections of proprietary 

schools. These schools are driven by profit, and their need for growth 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 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, adequacy of accreditation 

review, and State authorization.

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

• IDEA — The OIG plans to address a variety of issues related to IDEA funding in traditional 

and online charter schools. Specific areas of focus may include an assessment of State 

performance standards under IDEA and the potential impact of differing standards among 

States.

• ESEA — The OIG plans to audit key areas such as charter schools, school improvement, 

and services for homeless children. 

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

Local Education 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. The OIG also plans to review States’ implementation of complex discretionary 

grant programs.

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• Data Reliability — Many critical decisions in education programs are based on data 

supplied by grantees. To be useful, the data must be accurate, reliable, and complete. The 

OIG plans to examine the accuracy of grantee data, including reviewing performance data 

related to the Vocational Rehabilitation State Grant and Adult Education programs. The 

OIG will also plan to assess systems of internal control over calculating and reporting 

graduation rates and review the Department’s processes to ensure the accuracy and 

reliability of select K-12 data.

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.

• Contracts — The Department contracts for many services 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 oversight and 

monitoring of contracts and contractor performance at the Department is shared by staff in 

the program offices 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 for its own procurement function. The OIG plans to review the 

Department’s monitoring processes and controls to ensure that it receives the quality and 

quantity of products or services for which it is paying.

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

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

contractor personnel security screening process, and required assessments of the 

Department’s purchase card and travel card programs to identify illegal, improper, or 

erroneous purchases and payments.

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 ESEA-funded programs.

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

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

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

Fraud by SES providers involve falsified student rosters and fictitious billing for student tutoring 

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services, which often go undetected due to weak internal controls and in some cases, corrupt 

public officials.

Investigation Services established a nationwide initiative of stakeholder outreach and fraud 

awareness training, which is in the 2nd 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. 

Investigation Service 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.

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. The 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.

In FY 2017, 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. As of September 2015, the OIG had 38 ongoing investigations of 

postsecondary institutions, representing about 15 percent of the OIG investigative inventory. 

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

charter schools. Since FY 2005, the OIG has opened 69 charter school investigations 

resulting in 44 indictments, 34 convictions, and over $12.6 million recovered to date.

• 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 

FY 2008 to FY 2015, the OIG investigations involving State or local education agencies 

have resulted in 175 indictments.

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

fraud resulting from the vulnerabilities associated with the delivery of distance education. 

Investigations in this area represent about 18 percent of all the OIG investigations.

• Whistleblower and Recovery Act Fraud — The OIG will continue to conduct

administrative investigations of whistleblower reprisal complaints, as well as criminal and 

civil investigations of theft and corruption involving Recovery Act funds still within the statute 

of limitations. 

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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 mining. 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, State and Local Education Agencies Risk 

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 systematic IT security problems as new threats emerge.

The OIG IT audit efforts will include assessing the Department’s compliance with FISMA 

information security provisions and related information security standards in accordance with 

OMB and Department of Homeland Security reporting guidelines. 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 $20.6 million for non-personnel costs, an increase of $2.4 million from 

the FY 2016 level. Of the total, $14.3 million is for departmental centralized services (overhead 

expenses), including the Department’s IT infrastructure and support contract (EDUCATE), and 

$6.3 million is for other non-personnel operational costs.

Departmental Centralized Services

The OIG request of $14.3 million for overhead is an increase of $2.8 million over the FY 2016

level and will cover a variety of costs. 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 EDUCATE contract, which covers IT 

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

maintenance, and improvements. Rent and EDUCATE use approximately 89 percent of the 

centralized services resources.

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Centralized Services

(dollars in thousands)

Item 2016 2017 Request Difference

Rent $6,001 $7,357 +$1,356

IT and telecommunications services 

and contracts 3,999 5,400 +1,401

Interagency agreements 838 860 +22

Other 670 736 +66

Non-Pay Centralized Services $11,508 $14,353 +$2,845

Other Non-Personnel Costs

Travel

The OIG is requesting $1.3 million in travel funds, the same as the FY 2016 level. The 

requested amount for FY 2017 covers travel expenses for the requested staff of auditors, 

investigators, and other specialists and is necessary to perform the OIG audit, investigative, and 

outreach mission. The 2017 travel request has been constrained because of the increases in 

rent and central IT costs.

Most OIG work involves travel to SEAs, LEAs, schools, other grantees, guaranty agencies, 

contractors, and other recipients of Federal education funds, to 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. The OIG recognizes the importance of 

reducing or eliminating non-essential travel and using technologies such as video conferencing, 

WebEx, and SharePoint to accomplish training and conduct internal and external meetings. At 

the requested funding level and by using available conference technologies, the OIG will be 

able to conduct essential nationwide audits and investigations, as well as other related work.

Advisory and Assistance Services

The OIG is requesting $651,000, a decrease of $14,000 below the FY 2016 level, to contract for 

audit services that support mandated OIG FISMA work. The requested funding level would 

provide contractor support to expand the coverage needed for IT security reviews of systems; 

audits of EDUCATE; reviews of systems development life cycles, enterprise architecture, and IT 

project management; and computer forensic analysis.

Other Services

The OIG is requesting $1.1 million, an increase of $52,000 over the FY 2016 level, primarily to 

contract with an independent certified public accounting firm to audit the Departmentwide 

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financial statements. In addition to this amount, $725,000 is included in the FSA budget request 

for additional work under the financial statement contract. In accordance with various statutory 

requirements, the OIG will oversee the financial statement audits. The audits will result in 

reports on the Departmentwide financial statements, FSA’s financial statements, and the 

Closing Package financial statements. 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 OIG is requesting $352,000 for car leases, a reduction of $180,000 from the 2016 level. 

The funding is reduced due to GSA cost reductions. Further reductions to car leases could 

cause an increase in travel expenses.

Training

The OIG is requesting a total of $648,000, a decrease of $22,000 from FY 2016 for the training 

of auditors, investigators, inspectors, and business operations staff. The training request is 

divided among three separate sections in the FY 2017 Budget Request—Other Non-Personnel 

Costs, Departmental Centralized Services, and Interagency Agreements. Under the other nonpersonnel section, the OIG is requesting $309,000 for OIG-specific staff training, a decrease of 

$27,000 from the FY 2016 level. Also, within the departmental centralized services section, the 

OIG requests $135,000 in support of Department training operations, which reflects an increase 

of $5,000 from the FY 2016 level. In addition, within the interagency agreements section, the 

OIG requests $204,000, the same as the FY 2016 level, to cover Federal Law Enforcement 

Training Center (FLETC) and Inspector General Criminal Investigator Academy (IGCIA) costs 

for the OIG investigations staff.

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 CPE 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 

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required training while attending only essential/critical vendor-offered courses. The OIG will 

also continue to minimize training costs by having staff attend CIGIE-supported or OIG 

community-sponsored training events.

Interagency Agreements

The OIG request includes $185,268 in FY 2017 to cover the OIG’s funding support for the 

Council of Inspectors General on Integrity and Efficiency (CIGIE). This contribution is 0.3

percent of the OIG FY 2016 designated funding level based on a total budget request of $61.9

million, including the CIGIE amount. Other interagency agreements covering a variety of 

services provided by other Federal agencies, such as FLETC/IGCIA training, mandated 

biannual physicals for investigators, and the use of firearms ranges, total $215,000, an increase 

of $3,000 from the FY 2016 level.

Equipment Operations/Maintenance

For FY 2017, the OIG requests $14,000, an increase of $1,000 from the FY 2016 level, for 

maintenance of copiers and heating, ventilation, and air conditioning units.

IT Services/Contracts

For FY 2017, the OIG is requesting $944,000, a decrease of $104,000 from the FY 2016 level,

for contracts for system support and expertise. These contracts include $690,000 for senior 

programmer services and maintenance for various OIG systems and applications, $158,000 for 

software licenses, $21,000 for Oracle services and support for IT security operations, computer 

forensics, and data mining experts, $16,000 for OIG-specific items under EDUCATE, and 

$59,000 for IT hardware. None of these purchases are covered by centralized IT funding.

IT Equipment/Software 

The OIG is requesting $483,000, a decrease of $83,000 from the FY 2016 level, to support noncentralized IT software maintenance agreements, software license renewals, and equipment 

purchases. In addition, the Department’s Office of the Chief Information Officer is requiring 

$5.4 million from the OIG for centralized IT and telecommunications contract support, an 

increase of $1.4 million from the FY 2016 level. The OIG’s combined central and non-central 

request for IT services, contracts, equipment and software FY 2017 is $6.9 million.

Building Alterations

The OIG’s request includes $198,000, an increase of $9,000 from the FY 2016 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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Other Items

There are also changes from the FY 2016 level in the following items:

• Communications: $23,000 for overnight shipping and $190,000 for other communications, 

an overall increase of $6,000.

• Contracts for other services: $133,000, an increase of $1,000.

• Supplies: $132,000, an increase of $9,000.

• Other equipment: $28,000, a decrease of $10,000.

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 Web site, 

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 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 from the Budget Service Program Performance Report are shown 

below.

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Measure: Audits initiated each year that focus on areas of high risk or significant importance.

Year Target Percent Actual Percent

2013 85% 100%

2014 85 100

2015 85 100

2016 85

2017 85

Measure: Investigations initiated each year that focus on areas of high risk or significant 

importance.

Year Target Percent Actual Percent

2013 80% 93%

2014 80 87

2015 80 93

2016 80

2017 80

Measure: Recommendations accepted by the Department during the fiscal year.

Year Target Percent Actual Percent

2013 90% 95%

2014 90 96

2015 90 99

2016 90

2017 90

Measure: Draft and final audit reports issued by the agreed-upon date.

Year Target Percent Actual Percent

2013 70% 95%

2014 70 97

2015 70 97

2016 70

2017 70

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Measure: Complaints of fraud, waste, and abuse evaluated and closed with a final disposition 

within 120 days.

Year Target Percent Actual Percent

2013 70% 79%

2014 70 78

2015 75 80

2016 75

2017 75

Additional information: This metric changed from 90 to 120 days starting in FY 2015.

Measure: Closed investigations (all investigations) that resulted in a criminal, civil or 

administrative action, or monetary result.

Year Target Percent Actual Percent

2013 74% 87%

2014 74 79

Additional information: This metric was split into Investigation Services investigations and 

ITACCI investigations starting in FY 2015.

Measure: Investigations closed by Investigations Services that resulted in a criminal, civil or 

administrative action, or monetary result.

Year Target Percent Actual Percent

2015 74% 80%

2016 74

2017 74

Additional information: This metric started in FY 2015.

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Measure: Investigations closed by ITACCI that resulted in a criminal, civil or administrative 

action, or monetary result

Year Target Percent Actual Percent

2015 65% 56%

2016 65

2017 65

Additional information: This metric started in FY 2015.

Measure: Agreed-upon milestones for information technology audits are met.

Year Target Percent Actual Percent

2013 75% 75%

2014 75 100

2015 75 100

2016 75

2017 75

Measure: Comments that resulted in changes in legislation, regulations, or other policies.

Year Target Percent Actual Percent

2013 70% 97%

2014 70 83

2015 70 70

2016 70

2017 70

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Measure: Freedom of Information Act responses meeting required deadlines.

Year Target Actual

2013 95% 94%

2014 95 87

2015 95 90

2016 95

2017 95

Measure: Hotline controlled correspondence processed within the established deadlines.

Year Target Percent Actual Percent

2013 95% 100%

2014 95 100

2015 95 100

2016 95

2017 95

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