Department of Education

OFFICE OF INSPECTOR GENERAL

Fiscal Year 2018 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, $61,143,000.

NOTE

A full-year 2017 appropriation for this account was not enacted at the time the budget was prepared; therefore, 

the budget assumes this account is operating under the Further Continuing Appropriations Act, 2017 (P. L. 114-254). 

The amounts included for 2017 reflect the annualized level provided by the continuing resolution.
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Amounts Available for Obligation

(dollars in thousands)

Appropriation and Adjustments 2016

2017

Annualized CR 2018

Discretionary appropriation:

Discretionar y Appropriation ...................................... $59,256 $59,143 $61,143

Total, appropriation......................... 59,256 59,143 61,143

Unobligated balance expiring.................. -1,538 0 0

Total, direct obligations.................. 57,718 59,143 61,143
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Obligations by Object Classification

(dollars in thousands)

Object Class 2016

2017

Annualized CR 2018

Change 

from 2017

to 2018

11.10 Full-time permanent $25,513 $28,443 $28,803 $360

11.31 Full-time temporary 255 121 123 2

11.32 Part-time 151 121 123 2

11.51 Overtime 1,889 0 0 0

11.52 Awards 316 358 394 36

Subtotal, Personnel Comp. 28,124 29,043 29,443 400

12.00 Benefits 10,652 11,249 11,386 137

13.00 Benefits for former personnel 0 0 0 0

Subtotal, Per. Com. & Ben. 38,776 40,292 40,829 537

21.00 Travel 1,485 1,216 1,121 -95

22.00 Transportation of things 104 0 0 0

23.10 Rental payments to GSA 6,001 6,685 7,090 405

23.31 Communications 149 184 184 0

23.32 Postage/fees 4 12 12 0

Subtotal, 23 6,154 6,881 7,286 405

24.00 Printing and reproduction 2 1 1 0

25.10

Advisory and assistance 

services 778 752 752 0

25.21 Other services 1,951 2,069 3,136 1,067

25.22 Training/tuition contracts 258 426 436 10

25.30

Goods/services from Federal 

sources 1,399 1,409 1,451 42

25.40 Operations/maint of facilities 0 0 0 0

25.70 Operations/maint of equip. 7 3 3 0

25.72 IT services/contracts 5,674 5,422 5,454 32

Subtotal, 25 10,067 10,081 11,232 1,151

26.00 Supplies 118 108 109 1

31.10 IT equipment/software 762 518 519 1

31.30 Other equipment 135 24 24 0

Subtotal, 31 897 542 543 1

32.00 Building alterations

 

115 22 22 0

Total, Obligations 57,718 59,143 61,143 2,000
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Summary of Changes

(dollars in thousands)

2017 Annualized CR ................................................................ $59,143

2018......................................................................................... 61,143

Net change........................................................ +2,000

Increases:

2017

Annualized CR

Change 

from base

Built-in:

Increase in salaries and benefits due to the proposed 

1.9 percent pay raise and increased FERS contribution 

rates.

$40,292 +$537

Increase in GSA rental payments due to anticipated rate 

increases and tax escalations. 6,685 +405

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. 4,776 +32

Net increase in central support non-pay charges. 1,470 +121

Increase in OIG’s cost for the audit of the Department’s 

financial statements. 1,050 +1,000

Net changes in other areas. 3,654 0

Subtotal, increases +2,095

Decreases:

2017

Annualized CR

Change 

from base

Program:

Travel 1,216 -95

Net change +2,000
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Authorizing Legislation

(dollars in thousands)

Activity

2017

Authorized

2017

Annualized CR

2018

Authorized

2018

Request

Inspector General (DEOA, Section 212)........................... Indefinite $59,143 Indefinite $61,143

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

Total appropriation ...................................................... 59,143 61,143
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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate

to Congress

House 

Allowance

Senate 

Allowance Appropriation

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 59,820659,8206

56,691

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 59,25610 59,25610 59,256

2018 61,143

 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.

10 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.
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Activit y:

Office of Inspector General

(Department of Education Organization Act, Section 211)

(dollars in thousands)

FY 2018 Authorization: Indefinite

Budget Authority:

2017 

Annualized CR

2017 

Appropriation 2018

Change from 2017

Annualized CR

Personnel 

compensation 

and benefits $40,292 --- $40,829 +$537

NonPersonnel 

costs 18,851 --- 20,314 +1,463

Total 59,143 59,256 61,143 +2,000

FTE 237 237 237 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.

In addition, 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 or to make suggestions for saving 

Federal funds and for ways Federal education services could be more effective. Each month 

the hotline has approximately 400 telephone contacts and approximately 300 complaints. Since 

the middle of FY16, 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 Feedback 

system.
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Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

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

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

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

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

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

FY 2018 BUDGET REQUEST

For fiscal year (FY) 2018, the Administration requests $61.1 million and 237 full time equivalents 

(FTE) for the Office of Inspector General, an increase of $2.0 million over the 2017 annualized 

Continuing Resolution level of $59.1 million. The Department of Education Appropriations Act, 

2017 provided $59.3 million for this program. The $2 million increase is necessary to maintain 

the 2017 FTE level of 237, to cover the expected increased cost of the OIG financial statement 

audit contract, and to pay for the increased cost of centralized support. A 10-year history of the 

OIG’s staffing is shown in the following chart:

Sixty-seven percent of the requested amount, or $40.8 million, is for personnel compensation 

and benefits to support the requested staffing level of 237 FTE. The remaining $20.3 million is 

for non-personnel costs, of which $13.5 million, or 22 percent of the total OIG request, is for 

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

information technology (IT), and various service contracts. The remainder of the non-personnel 

request, $6.8 million, or 11 percent, is for non-personnel costs that directly support the OIG’s 

mission, such as travel, training, and the financial statement audit contract. The $6.8 million 

0

20

40

60

80

100

120

140

160

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200

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2009201020112012201320142015201620172018

FTE

Year

OIG Full-Time Equivalent Employment (FTE)

OIG ARRA FTE

OIG Regular FTE
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also includes a payment of $122,116 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 OIG planned work in FY 2018 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 high 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 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 (DATA 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 the Office of Management and Budget (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. OIG also 

will continue to work a significant number of cases involving fraud 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 

fraud investigations represent, on average, 31 percent of the cases opened by OIG since 

FY 2012.
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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 of $607,000 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 

(IGCIA), and in the Department’s centralized services, would satisfy all the OIG’s FY 2018 

training requirements.

In FY 2018, 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

$13.5

Other Non-Personnel

$6.8

Personnel

$40.8 

FY 2018 Distribution of Costs

($ in millions)
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FY 2018 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 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 Compensation and Benefits (PC&B) Costs

The FY 2018 budget request of $40.8 million for personnel compensation and benefits is an 

increase of $537,000 from the 2017 annualized CR level. The increase covers a proposed 

1.9 percent Governmentwide pay raise for 2018, as well as increased benefits costs.

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.

Since 2013, the OIG FTE level dropped from 270 to 237, making it increasingly difficult to 

provide adequate audit and investigative coverage. For historical context, prior to FY 2014, the 

OIG had less than 270 FTE only four times and never had less than 262 FTE. Since 2014, the 

OIG has not exceeded 249 FTE. The FY 2018 request holds OIG at the reduced level of 

237 FTE 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 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 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.
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Audit Priorities

In FY 2018, 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.

• Higher Education Data

Federal Student Aid operates the College Scorecard that is intended to make it easier for 

students to search for a college that is a good fit for them. The Scorecard includes five key 

pieces of data about a college: costs, graduation rates, loan default rates, average amount 

borrowed, and employment. Audits may assess controls intended to ensure the accuracy of 

data to be relied upon by students and parents.

• 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 2018, 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, standard, 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 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. OIG will also continue to investigate only the most 

significant fraud rings targeting Tittle 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 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, 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 FY 2018, 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. While these investigations are complex and manpower intensive and may 

take years to bring to final resolution, they can result in significant return on investment, as 

was demonstrated in a $95.5 million civil settlement in November 2015. In FY 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 FY 2012 through FY 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 

FY 2012 to FY 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 OIG cases. The OIG will continue to refer other matters to the 

Department so that future disbursements can be stopped. Since FY 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 OIG totaling an additional $6.7 million in potential fraud.
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• Disability Discharges—In FY 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 FY 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. OIG anticipates it will have a significant number of investigations in this 

area in FY 2018 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 

believes the number of whistleblower retaliation investigations may 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 the Federal Information Security Modernization Act (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 $20.3 million for non-personnel costs, an increase of $1.5 million from 

the 2017 annualized CR level. Of the total, $13.5 million is for departmental centralized 

services (overhead expenses), including the Department’s IT infrastructure and support 

contracts (Department IT contracts), and $6.8 million is for other non-personnel operational 

costs.
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Departmental Centralized Services

The OIG request of $13.5 million for overhead is an increase of $0.6 million over the 

2017 annualized CR level and $2.2 million over the 2016 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. The increased costs over the last 

two years are associated primarily with rent, IT security and the recompetition of the 

Department’s IT contract. Rent and the Department IT contract use approximately 88 percent of 

the centralized services resources.

Centralized Services

(dollars in thousands)

Item

2017Annualized 

CR Level 2018 Request Difference

Rent $6,685 $7,090 +$405

IT and telecommunications services 

and contracts 4,801 4,834 +33

Interagency agreements 881 923 +42

Other 564 642 +78

Non-Pay Centralized Services $12,931 $13,489 +$558

Other Non-Personnel Costs

Travel

The OIG requests $1.1 million in travel funds, $95,000 below the 2017 annualized CR level. 

The requested amount for FY 2018 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, no change from the 2017 annualized CR 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; 
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audits of the Department’s IT contract; reviews of systems development life cycles, enterprise 

architecture, and IT project management; and computer forensic analysis. 

Other Services

The OIG is requesting $2.6 million, an increase of $1 million from the 2017 annualized CR level, 

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

financial statements. In 2018, the contract for the financial statement audits will be recompeted 

and awarded. A significant increase in the contract costs is anticipated since the last award 

5 years ago. In accordance with the IG Act and the CFO Act, 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. 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 $432,000 for car leases, no change from the 2017 annualized CR level.

Training

The OIG is requesting a total of $607,000, an increase of $10,000 from the 2017 annualized CR 

level for the training of auditors, investigators, and business operations staff. The training 

request is divided among three separate sections in the 2018 Budget Request—Other 

Non-Personnel Costs, Departmental Centralized Services, and Interagency Agreements. Under 

the other non-personnel section, the OIG is requesting $319,000 for OIG-specific staff training, 

no change from the 2017 annualized CR level. Also, within the departmental centralized 

services section, the OIG requests $117,000 in support of Department training operations, 

which reflects an increase of $10,000 from the 2017 annualized CR level. In addition, within the 

interagency agreements section, the OIG requests $171,000, no change from the 2017 

annualized CR 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 
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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 

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

community-sponsored training events.

Interagency Agreements

The OIG request includes $122,116 in FY 2018 to cover the OIG’s funding support for the 

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

0.2 percent of the OIG 2018 designated funding level based on a total budget request of 

$61.1 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 $406,000, an increase 

of $63,000 from the 2017 annualized CR level.

Equipment Operations/Maintenance

For FY 2018, the OIG requests $2,900, no change from the 2017 annualized CR level, for 

maintenance of copiers.

IT Services/Contracts

For FY 2018, the OIG requests $646,000, no change from the 2017 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 $493,000, no change from the 2017 annualized CR level, to support noncentralized IT software maintenance agreements, software license renewals, and equipment 

purchases. 

Building Alterations

The OIG’s request includes $22,000, no change from the 2017 annualized CR level, in noncentralized 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 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.

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

or significant importance.

Year Target Percent Actual Percent

2014 85% 100%

2015 85 100

2016 85 100

2017 85

2018 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

2014 80% 87%

2015 80 93

2016 80 90

2017 80

2018 80
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Measure: Recommendations in reports issued during the fiscal year were accepted by the 

Department.

Year Target Percent Actual Percent

2014 90% 96%

2015 90 99

2016 90 99

2017 90

2018 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

2014 70% 97%

2015 70 97

2016 70 95

2017 70

2018 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

2014 70% 78%

2015 75 80

2016 75 79

2017 75

2018 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

2014 74% 79%

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

Information Technology Audits and Computer Crime Investigations (ITACCI) investigations

starting in FY 2015.
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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 82

2017 74

2018 74

Additional information: This metric started in FY 2015.

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 75

2017 65

2018 65

Additional information: This metric started in FY 2015.

Measure: Information technology audits were accepted by management by the agreed upon 

date.

Year Target Percent Actual Percent

2014 75% 100%

2015 75 100

2016 75 100

2017 75

2018 75

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

regulations, or other policies.

Year Target Percent Actual Percent

2014 70% 83%

2015 70 70

2016 70 85

2017 70

2018 70
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Measure: Freedom of Information Act responses are provided in accordance with statutory 

requirements and delivered to requestors within required deadlines.

Year Target Actual

2014 95% 87%

2015 95 90

2016 90 91

2017 90

2018 90

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

the established deadlines.

Year Target Percent Actual Percent

2014 95% 100%

2015 95 100

2016 95 100

2017 95

2018 95