Department of Education

OFFICE OF INSPECTOR GENERAL

Fiscal Year 2014 Budget Request

CONTENTS

Page

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Appropriations Language................................................................................................... CC-1

Amounts Available for Obligation....................................................................................... CC-2

Obligations by Object Classification................................................................................... CC-3

Summary of Changes........................................................................................................ CC-4

Authorizing Legislation....................................................................................................... CC-6

Appropriations History ....................................................................................................... CC-7

Activity:.............................................................................................................................. CC-8

Inspector General.......................................................................................................... CC-8
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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, $62,347,000.

NOTE

A full-year 2013 appropriation for this account was not enacted at the time the budget was prepared; 

therefore, this account is operating under a continuing resolution (P.L. 112-175).
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Amounts Available for Obligation

(dollars in thousands)

Appropriation and Adjustments 2012 2013 2014

Discretionary appropriation:

Discretionar y Appropriation $59,933 $59,820 $62,347

Discretionar y Across-the-board reduction (P.L. 112-74) -113 0 0

Across-the-board increase (P.L. 112-175) 0 +366 0

Subtotal, appropriation 59,820 60,186 62,347

Recovery Act unobligated balance, start of year 4,711 0 0

Recovery of Recovery Act prior-year obligations 21 0 0

Unobligated balance expiring -466 0 0

Subtotal, direct obligations 59,642 60,186 62,347

Subtotal, Recovery Act direct obligations 4,444 0 0

Total, direct obligations 64,086 60,186 62,347
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Obligations by Object Classification

(dollars in thousands)

Object Class 2012 2013 1 2014

11.10 Full-time permanent 26,013 27,747 28,812

11.10 Full-time permanent, Recovery 2,372 0 0

11.31 Full-time temporary 505 638 643

11.31 Full-time temporary, Recovery 646 0 0

11.32 Part-time 292 213 214

11.32 Part-time, Recovery 60 0 0

11.51 Overtime 1,849 0 0

11.51 Overtime, Recovery 170 0 0

11.52 Awards 348 340 342

11.52 Awards, Recovery 7 0 0

Compensation subtotal 32,262 28,938 30,011

12.00 Benefits 9,998 10,109 10,668

12.00 Benefits, Recovery 951 0 0

13.00 Benefits for former personnel 350 0 0

Comp/benefits subtotal 43,561 39,047 40,679

21.00 Travel 1,252 2,122 1,931

21.00 Travel, Recovery 209 0 0

22.00 Transportation of things 5 75 75

23.10 Rental payments to GSA 5,251 5,236 5,819

23.31 Communications 182 184 192

23.32 Postage/fees 4 6 6

Subtotal 23 5,437 5,426 6,017

24.00 Printing and reproduction 2 1 1

25.10 Advisory and assistance services 817 735 760

25.21 Other services 3,184 3,270 3,417

25.21 Other services, Recovery 27 0 0

25.22 Training/tuition contracts 390 675 644

25.22 Training/tuition contracts, Recovery 2 0 0

25.23 Field readers 0 0 0

25.30 Goods/services from Federal sources 1,662 2,163 2,125

25.40 Operations/maint of facilities 0 0 0

25.70 Operations/maint of equipment 108 54 114

25.72 IT services/contracts 6,056 5,240 4,947

Subtotal 25 12,246 12,137 12,007

26.00 Supplies 177 176 173

31.10 IT equipment/software 760 630 537

31.30 Other equipment 139 32 33

Subtotal 31 899 662 570

32.00 Building alterations 298 540 894

43.10 Prompt payment interest 0 0 0

Total, Obligations 64,086 60,186 62,347

1 Includes 0.612 percent across-the-board increase provided in P.L. 112-175. 
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Summary of Changes

(dollars in thousands)

2013............................................................................................. $59,820 1

2014............................................................................................. 62,347

Net change ........................................................... +2,597

1 Excludes 0.612 percent across-the board increase of $366 in FY 2013 provided in 

P.L. 12-175.

Increases: 2013 base

Change 

from base

Built-in:

Increase in salaries due to the proposed 1 percent pay raise. $28,598 +$214

Increase in benefits for OIG’s share of health, retirement, and 

other benefits.

10,109 +261

Increase in GSA rental payments due to anticipated rate 

increases and tax escalations.

5,236 +583

Program:

Increase in personnel compensation and benefits for 8 FTE staff. 0 +1,155

Increase in building alterations. 540 +354

Increase in cost for audit of the Department’s financial 

statements.

2,076 +104

Increase in travel. 1,756 +175

Increase in car leases for auditor and criminal investigator travel. 483 +24

Increase in advisory and assistance services for FISMA audits. 735 +25

Net changes in other areas. 2,154 43

Subtotal, increases +2,938
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Summary of Changes

(dollars in thousands)

Decreases: 2012 base

Change 

from base

Built-in:

Net decrease in central information technology (IT). $4,925 -$239

Net decrease in central support non-pay charges. 1,965 -24

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.

637 -51

Decrease in non-centralized IT purchases. 606 -97

Subtotal, decreases -411

Net change +2,527
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Authorizing Legislation

(dollars in thousands)

Activity

2013

Authorized

2013

Estimate

2014

Authorized

2014

Request

Inspector General (DEOA, Section 212) Indefinite $59,820 Indefinite $62,347

Total definite authorization 0 0

Total appropriation 59,820 62,347

Total appropriation including 0.612 percent ATB 60,186
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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate to

Congress

House 

Allowance

Senate 

Allowance Appropriation

2005 $50,576 $47,790 $50,576 $47,327

2006 49,408 49,000 49,408 48,510

2007 53,145 N/A 1N/A 148,802

Transfer (P.L. 10-05) 0 0 0 1,464

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

2009 54,539 54,539 254,539 254,539

Recovery Act Supplemental 

(P.L. 111-5)

0 0 4,000 14,000

2010 60,053 60,053 60,053 360,053

2011 65,238 60,053 465,238 359,933 5

2012 67,187 59,933 659,933 659,820

2013 62,401 59,820 759,820 760,186

8

2014 62,347

1 This account operated under a full-year continuing resolution (P.L. 110-5). House and Senate Allowance 

amounts are shown as N/A (Not Available) because neither body passed a separate appropriations bill. 2 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. 3 The level for the Senate allowance reflects Committee action only. 4 The level for the House allowance reflects the House-passed full-year continuing resolution. 5 The level for appropriation reflects the Department of Defense and Full-Year Continuing Appropriations Act, 2011 

(P.L. 112-10). 6 The level for the House allowance reflects an introduced bill and the level for the Senate allowance reflects 

Senate Committee action only. 7 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. 8 The amount shown includes the 0.612 percent across-the-board increase provided by P.L. 12-175, in effect 

through March 27, 2013.
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Activity

Inspector General

(DEOA, section 212)

(dollars in thousands)

FY 2014 Authorization: Indefinite

Budget Authority:

Annual Fund

2012 2013 2014

Change

from 2012

Personnel costs $39,355 $39,047 $40,679 +$1,632

Non-Personnel costs 20,465 20,773 21,668 +895

Total 59,820 59,820 162,347 +2,527

FTE2 265 269 277 +8

1 Excludes 0.612 percent across-the-board increase provided in P.L. 112-175. 2 In addition to the FTE included here, 33 FTE in 2012 were funded by the American Recovery and Reinvestment 

Act (Recovery Act).

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 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.
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Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

2009.................................................................. $54,539

Recovery Act....................................................... 14,000

2010.................................................................... 60,053

2011 CR.............................................................. 59,933

2012.................................................................... 59,820

2013.................................................................... 59,820 1

1 Excludes 0.612 percent across-the-board increase provided in P.L. 112-175.

FY 2014 BUDGET REQUEST

For the Office of Inspector General in 2014, $62.347 million and 277 FTE are requested, an 

increase of $2.527 million, or over 4.2 percent, over the 2013 level. Over 65 percent of this 

amount, or $40.679 million, is for personnel compensation and benefits to support the requested 

staffing level of 277 FTE. $21.668 million is for non-personnel costs, of which $12.446 million, 

or 20 percent of the total Office of Inspector General request, is for administrative and overhead 

services, such as rent, postage/fees, telecommunications, payroll processing, and information 

technology services contracts. The remainder of the non-personnel request, $9.222 million, or 

15 percent, is for non-personnel costs that directly support OIG’s mission, such as travel, 

training, and the financial statement audit contract. This amount includes $468,000 to support 

the Council of Inspectors General on Integrity and Efficiency (CIGIE). In its request to the 

Department, OIG requested $62.759 million and 277 FTE.

The scope of OIG planned work in FY 2014 will cover multiple, diverse, and evolving programs. 

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

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

example, continuing oversight of Federal student assistance programs, which involve hundreds 

of billions of taxpayer dollars, is a high priority. OIG will focus on issues such as the rising rate

of loan delinquencies and defaults, the accuracy and reliability of consumer information 

provided to students and borrowers, the ability of the Department to make and service student 

loans, and the challenges presented by the introduction of new loan program requirements. 

OIG anticipates conducting reviews of Federal Student Aid’s (FSA) oversight of contractors 

involved in such activities as servicing direct loans, collecting on defaulted loans, and operating 

FSA computer systems. For the State and local programs, the OIG will focus resources on 

potential issues that may result from the reauthorization of the Individuals with Disabilities 

Education Act (IDEA) and Elementary and Secondary Education Act (ESEA) programs, 

oversight of Charter Schools, and adequacy of sub-recipient monitoring by States. OIG also 

plans to direct resources to assess the Department’s administration of discretionary grants.

In addition, OIG investigative work will continue to expand, evidenced by the dramatically 

increasing number of fraud cases involving charter schools and local school districts. The large 

number of these complex and resource-intensive investigations often involve dozens of subjects 

who are geographically dispersed, which results in greater travel and associated costs for our 

investigators. Although OIG made an effort to stem the occurrence of distance education fraud 

by issuing a report recommending program improvements to reduce vulnerabilities, the number 
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of these cases still represents about 20 percent of all OIG cases. Investigations of 

postsecondary schools currently represent approximately 21 percent of OIG investigations; 

charter schools, approximately 13 percent; and public school officials, approximately 14 percent.

OIG also must devote 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 Departmental 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 anticipated reauthorization of the 

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

and Budget (OMB) to develop new audit guidance to update the A-133 Single Audit Compliance 

Supplement to address changes to the laws, such as risks identified with IDEA maintenance of 

effort and State assessment scoring. The OIG will also continue to work with OMB and the 

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

OIG’s budget has been essentially “flat lined” since FY 2010, and most likely will be in FY 2013 

as well. Given the anticipated limited resources available for OIG operations in FY 2014 and 

future years, the OIG faces significant challenges to performing the work necessary to provide 

required assurances of the Department’s compliance with multiple statutory requirements and to 

prevent waste, fraud, and abuse. However, in recognizing the economic challenges and the 

continuing long-term effects of the fiscal crisis that the Government faces, OIG has critically 

evaluated its needs and determined what efforts it can make to limit its budget. In order to 

reduce staffing after the expiration of American Recovery and Reinvestment Act (Recovery Act) 

funding, OIG refrained from backfilling certain vacated positions and offered early retirement 

and buyout options to reduce staff numbers in FY 2012. Because a small staff size means 

fewer audits and investigations, which would limit OIG’s ability to respond to departmental and 

congressional requests for OIG to perform work, the OIG requests a modest increase of 8 FTEs 

from the FY 2013 level in order to focus needed resources on high risk areas, work that would 

have great potential to result in significant savings to the Government. In fact, as of March 31, 

2012, OIG identified for recovery $5 for each dollar it spent, in terms of questioned and 

unsupported costs, fines and restitutions ordered, recoveries, civil settlements/judgments, 

forfeitures/seizures, and estimated savings.
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Personnel

$40.7

Overhead

$12.4

Other Non-Personnel

$9.2

FY 2014 Distribution of Costs

($ in millions)

Overhead includes: Rent, telecommunications, interagency agreements and IT services.

Other Non-Personnel includes: Travel, advisory and assistance services, and training, and

CIGIE support..

In accordance with Public Law 110-409, the Inspector General certifies that the amount of 

$644,000 requested for required training of our staff, including the amount designated in the 

Department’s centralized services and the statutorily required training provided by the Federal 

Law Enforcement Training Center (FLETC) would satisfy all the OIG’s 2014 training 

requirements.

________________________

Kathleen Tighe

Inspector General

OIG operates from 19 regional and field offices, as well as headquarters. 185 FTE, or 

67 percent of OIG’s staff, will be assigned to 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, Pittsburgh, Phoenix, and Pembroke Pines, Florida. The remaining 92 employees will be

located in the Washington, DC headquarters office.
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Boston

New York City

Philadelphia

Washington, D.C.

Regional Offices

Field Offices

Location of the Department of Education 

Regional and Field Offices

Seattle

Denver Kansas

City

Chicago

Atlanta

Dallas

Sacramento

Long Beach

Puerto Rico Pembroke 

Pines

Pittsburgh

St. Paul

Austin

Phoenix

Nashville

Ann Arbor

FY 2014 Priorities and Goals

The OIG’s strategic goals are:

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

programs to promote educational excellence and opportunity for all students.

• 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 by detecting 

and preventing vulnerabilities to fraud, waste, and abuse.

• 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 and 

assistance necessary to achieve OIG’s mission with excellence, accountability, and 

integrity.
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OIG will meet these goals by selecting and examining the most important areas on which to 

focus its resources, through audits, investigations, inspections, 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 budget request of $40.679 million for personnel compensation and benefits is an increase 

of $1.632 million over the 2013 estimate. The requested level provides funding for the current 

staff level, a 1 percent pay raise, and funding for increased costs for benefits, as well as 8 

additional FTE staff. The request also covers the special law enforcement availability pay rates 

(required by the Treasury, Postal Service and General Government Appropriations Act, 1995) to 

be paid to investigators who are required to be accessible during hours that are not part of the 

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

regular personal compensation amount.

Staffing – Full-Time Equivalent Employment (FTE)

FTE Funding Source 2012 2013 2014

OIG 265 269 277

ARRA - Recovery Act 33 0 0

Total FTE 298 269 277

The OIG’s request for 277 FTE in FY 2014 is an increase of 8 FTE from the 2013 level, but a 

decrease of 21 FTE from the OIG and ARRA combined 2012. A 10-year history of OIG staffing 

is shown in the following chart.

The 277 FTE for 2014 will be used to support audit, investigation, and inspection activities, as 

well as information technology (IT) audits and computer crime investigations (cyber security) for 

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

2005200620072008200920102011201220132014

FTE

Year

OIG Full-Time Equivalent Employment (FTE)

OIG ARRA FTE

OIG Regular FTE
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all Department programs. This is a minimal staff to oversee the Department’s proposed budget 

for 2014 of $85 billion that is distributed to 55 State and territorial agents; more than 16,000 

school districts and 100,000 elementary, middle, and secondary schools; and more than 6,000 

institutions of higher education. This limited staff will also oversee Department management of

a student loan portfolio estimated at almost $795 billion in outstanding loans through fiscal year 

2012. In fiscal year 2014 alone, it is estimated that $140 billion in student loans will be made to 

to more than 11.4 million borrowers.

Audit Priorities

In FY 2014, OIG will focus its audit efforts on Federal student assistance programs, 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

o 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 is 

estimated to exceed $1 trillion in 2014. Areas of potential audit coverage are 

provided below:

 Loan delinquencies and defaults — Rising tuitions and other costs and 

fees will result in increased borrowing and increased defaults. OIG will 

continue to examine increased defaults, questionable debt collection 

practices, wage garnishment, reporting to credit bureaus, and loan 

rehabilitation practices.

 Consumer information — Without adequate and accurate consumer 

information, students cannot make informed decisions when selecting 

schools, taking out loans, and accepting debit cards. Areas of audit coverage 

may include information such as graduation rates and crime statistics 

reported by schools, disclosure and notification requirements for schools, 

loan servicers, debit cards, and financial literacy programs.

o 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 will assess the Department’s diligence in making and 

consolidating loans, addressing borrower complaints, and managing Title IV Additional 

Servicers (TIVAS) and the increasing number of non-profit servicers.

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

Act of 1965 (HEA) and its regulations have been amended numerous times, 

implementing new programs and requirements that have never been audited by OIG. 

OIG oversight may focus on TEACH grants; new deferment, forbearance, and 

forgiveness provisions; PLUS loans for graduate students; 3-year cohort default rates; 

maximum lifetime limits for receipt of Pell grants; and direct assessment programs.
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o Contractors — FSA relies on contractors to service Direct Loans, collect on defaulted 

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

OIG plans to assess FSA’s oversight of contractors that are paid hundreds of millions 

of dollars each year.

o School Compliance Issues:

 Schools — 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. OIG will also conduct audits of not-for-profit and public 

schools.

 Distance Education — OIG plans to continue audits of risks identified in 

distance education. The delivery of education through the Internet has grown 

tremendously over the past few years, and its expense and frequent 

incompatibility with the familiar models of traditional education make it a 

continuing high risk area.

 Oversight and Monitoring of SFA Program Participants — OIG’s audits of 

FSA’s oversight of program participants, schools, lenders, and servicers, 

have consistently identified weaknesses. OIG may conduct follow-up audits 

on past work or emerging areas.

State and Local Programs

o Individuals with Disabilities Education Act (IDEA) — The IDEA may be 

reauthorized in 2013. OIG plans to conduct audits on emerging issues that arise out 

of ongoing work related to IDEA Maintenance of Effort (MOE).

o Elementary and Secondary Education Act (ESEA) — The ESEA may be 

reauthorized in 2013. OIG plans to review issues that will still be relevant during and 

after reauthorization such as Department-issued ESEA waivers, charter schools, and 

schoolwide flexibility, particularly issues around the blending and braiding of Federal, 

State, and local funds by local education agencies (LEAs)/schools.

o Compliance Requirements and Monitoring at SEAs and 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, OIG will continue to review 

selected SEAs and LEAs for compliance.
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Departmental Operations

o Contracts — The Department contracts with external entities for a variety of reasons, 

and it is critical that the Department executes its contracts appropriately to ensure 

receipt of quality goods and services. OIG plans to conduct multiple audits where the 

Department requires grantees to contract with external entities for goods or services, 

and it is important that appropriate controls are in place and that grantees get the 

value they pay for in their contracts.

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

grants through such program offices as the Office of Innovation and Improvement and 

the Office of Postsecondary Education. The Race to the Top (RTT) and Investing in 

Innovation Fund (i3) proposed legislation may mean the Department will have more 

discretionary grants to administer in the future. OIG will continue to review and ensure 

that there are strong processes and controls in place over these competitions and 

grant funds.

Investigation Priorities

At the planned staffing level, OIG will continue to conduct investigations of institutions (lenders, 

guaranty agencies, servicers, and schools, including for-profit schools) participating in the 

student financial assistance programs. In addition, OIG will investigate allegations of fraud and 

corruption in State agencies and local school districts, including charter schools.

Additionally, investigations of State and local programs are on the rise due in part to increased 

awareness and outreach that was completed as part of Recovery Act work. For example, over 

20 Supplemental Educational Services complaints have been received since FY 2011. These 

crimes involve 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.

OIG will have to continue to conduct investigations of allegations of whistleblower reprisals as 

mandated by the Recovery Act, even though Recovery Act funds are no longer available to the 

OIG after September 30, 2012. ED’s OIG has received almost four times more Recovery Act 

whistleblower reprisal complaints than any other OIG. 

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

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

OIG’s investigations are often based on complex regulatory schemes, involve persons and 

entities that are geographically dispersed, and take a period of years to develop fully.

In FY 2014, OIG anticipates focusing on the following areas:

Postsecondary Institutions

Continue to conduct criminal and civil investigations of postsecondary schools (i.e., forprofit, public, and private non-profit institutions), as well as other entities that participate 

in Federal student assistance programs. As of June 2012, OIG had 87 ongoing 

investigations of postsecondary institutions, representing about 21 percent of OIG’s 
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investigative inventory. OIG also had 54 unresolved additional allegations against 

postsecondary schools that require further evaluation.

Charter Schools

Continue to conduct criminal and civil investigations of fraud in charter schools. Since 

FY 2008, OIG has opened 51 charter school investigations. During the same time 

period, OIG received an additional 52 allegations that did not result in full investigations 

being opened but still required investigative resources to resolve.

State and Local School Corruption

Continue to focus significant resources on allegations of bribery and theft involving 

State and local public school officials. From FY 2008 to June 2012, OIG’s 

investigations involving State or local education agencies have resulted in 116 

indictments.

Distance Education

Continue to conduct criminal investigations involving fraud resulting from the 

vulnerabilities associated with the delivery of distance education. Investigations in this 

area represent about 20 percent of all OIG investigations.

Whistleblower and Recovery Act Fraud

Continue to conduct statutorily mandated administrative investigations of whistleblower 

reprisal complaints, as well as criminal and civil investigations of theft and corruption 

involving Recovery Act funds that would still be within the statute of limitations.

IT Audits and Cyber Crime Priorities

OIG’s planned 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 data mining. OIG’s data mining efforts will focus on the 

detection of illegal electronic financial transactions, including unauthorized repayment requests, 

ineligible program participants, and program abuse or fraud. This critical work requires OIG to 

continue to maintain its data risk assessment systems — E-Fraud Student Fraud Ring System, 

State and Local Education Agencies Risk Model, and Title IV Risk Model. These analytical 

modules will allow the OIG to discern hidden patterns to highlight fraud, waste, and abuse, as 

well as allow for dynamic audit and investigative planning using risk-based analysis. OIG will 

also investigate network intrusions, and look for systemic IT problems as new computer threats 

occur.

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

information security provisions and related information security standards in accordance with 

OMB reporting guidelines. OIG will also evaluate the effectiveness of general and technical IT 

security controls of the Department’s mission-critical and support systems. OIG will continue to 

evaluate the Department’s overall information security plans, programs, and practices.
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In addition, OIG will continue to play a primary role in the Department’s computer incident 

response capability by responding to and investigating destructive network intrusion incidents, 

securing and preserving electronic evidence, performing forensic analysis on attacked systems, 

and determining the extent of damage to the Department’s systems, users’ identity, or data.

Non-Personnel Costs

The OIG request includes $21.668 million for non-personnel costs, an increase of $895,000 

over the 2013 level. Of the total, $12.446 million is for departmental centralized services 

(overhead expenses), including the Department’s contractor-owned, contractor-operated IT 

contract, and $9.222 million is for other non-personnel operational costs

Departmental Centralized Services

OIG’s request of $12.446 million for overhead is an increase of $320,000 over the 2013

estimate, 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, and 

background security investigations; communications; and IT services and contracts. The 

communications and IT amounts will be used primarily for the EDUCATE contract, which covers 

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

and improvements. Rent and the EDUCATE contract use 75 percent of the centralized services 

resources.

Centralized Services

(dollars in thousands)

Item 2013 2014 Difference

Rent $5,236 $5,819 +$583

IT and telecommunications services 

and contracts 4,627 4,389 -238

Interagency agreements 1,473 1,440 -33

Other 790 798 +8

Non-Pay Centralized Services 12,126 12,446 +320

Other Non-Personnel Costs

Travel

OIG is requesting $1.931 million in travel funds, $175,000 more than 2013. The 

requested amount for FY 2014 covers travel expenses for the requested staff of 

auditors, investigators, and other specialists, as well as anticipated increases in the 

overall costs of traveling, such as increases for fuel surcharges and airline fees. Travel 

is necessary to perform the OIG audit and investigative mission. Most OIG audit and 

investigative work involves travel to SEAs, LEAs, schools, guaranty agencies, other 

grantees, or single beneficiaries that are recipients of Federal education funds. Since 

many of these entities are not located in the cities where OIG has staff, it is necessary 

for OIG staff to travel to the work site to review records, interview personnel, and 
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otherwise conduct oversight work. 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 internal and external meetings. At 

the requested funding level, OIG will be able to conduct essential nationwide audits 

and investigations, inspections, and other related work.

Advisory and Assistance Services

OIG is requesting $760,000, an increase of $25,000 from the FY 2013 level, to contract 

for audit services in support of OIG work under the FISMA. This level of funding 

provides for IT security reviews of systems; audits of contractor-owned, contractoroperated systems; reviews of systems development life cycles, enterprise architecture, 

and IT project management; and computer forensic analysis.

Other Services

In order to fulfill its statutory audit responsibilities, OIG is requesting $2.180 million, an 

increase of $105,000 over 2013, to contract for the audit of the Departmentwide 

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

Aid Administration budget request for additional work under the contract. In 

accordance with various statutory requirements, OIG will oversee the conduct of the 

audit of financial statements, including FSA statements, by an independent certified 

public accounting firm. The audit will result in reports on the mandatory 

Departmentwide financial statements, including FSA and its financial statements, the 

special purpose financial statements, and Federal intergovernmental balances. The 

scope of the audits will include the examination and analysis of account balances, 

review of applicable financial systems, and evaluation of internal controls and 

compliance with significant laws and regulations. Audit results will include an 

assessment of the fair presentation of the financial statements, recommendations for 

improving financial accountability and stewardship, and identification of areas requiring 

further review.

Training

Training for OIG auditors, investigators, inspectors, and business operations staff is 

divided among three separate sections in the FY 2014 budget request — Other NonPersonnel Costs, Departmental Centralized Services, and Interagency Agreements. 

Under the other non-personnel section, OIG is requesting $493,000 for OIG-specific 

staff training, a decrease of $16,000 from 2013. Also, within the departmental 

centralized services section, OIG requests $151,000 in support of Department training 

operations, which reflects a decrease of $15,000 from 2013. In addition, within the 

interagency agreements section, OIG requests $165,000 to cover Federal Law 

Enforcement Training Center (FLETC) costs for OIG investigations staff, which is the 

same as the FY 2013 level. The total training request for FY 2014 is $809,000, a 

decrease of $31,000 from 2013.

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

OIG auditors and investigators. As required by the Government Accountability Office, 
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auditors performing work under generally accepted government auditing standards 

shall 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. OIG investigators must also complete 

periodic statutory and Attorney General regulatory law enforcement training 

requirements to maintain professional competency. 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 OIG investigators to FLETC; and obtain advanced IT skills to combat 

new computer threats and weaknesses.

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

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

training courses to accomplish OIG continuing education requirements. OIG will also 

continue to reduce training costs by having staff attend CIGIE-supported or IG 

community-sponsored training events that are being developed.

Interagency Agreements

OIG’s request includes $468,000 in FY 2014 to cover OIG’s designated funding 

support for CIGIE. Other interagency agreements covering a variety of services 

provided by other Federal agencies, including access to the Department of Justice 

National Crime Information Center system, FLETC training, and occupational mental 

and health services at the Department of Health and Human Services, total $217,000, 

a decrease of $5,000 from the 2013 level.

Equipment Operations/Maintenance

For FY 2014, OIG requests $114,000, an increase of $60,000 from FY 2013, primarily 

for software leases.

IT Services/Contracts 

For FY 2014, OIG is requesting $586,000 for contracts for system support and 

expertise, of which $212,000 is for a Senior Programmer, $157,000 for software

licenses, $187,000 for servers and software programmer maintenance support to 

house the OIG investigations case management system, $16,000 for OIG unique items 

under the EDUCATE contract, and $14,000 for an Oracle services contract to support 

IT security operations, computer forensics, and data mining experts. None of these 

purchases is covered by centralized IT funding.

IT Equipment/Software 

OIG is requesting $509,000, a decrease of $97,000 from 2013, 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 $4.686 million from OIG in centralized IT services, a decrease of 
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$239,000 from the 2013 level, for centralized IT and telecommunications contracts. 

The combined central and non-central IT request for FY 2014 is $5.781 million.

Building Alterations

OIG’s request includes $894,000, an increase of $354,000 over 2013, in noncentralized building alterations costs. This amount will provide funding for pending 

lease renewals and possible office moves for headquarters, Dallas, and Pembroke 

Pines, as well as for miscellaneous facilities projects, such as maintenance of air 

conditioning units, space reconfigurations, furniture repair and/or replacement, and 

other costs associated with maintaining the work environment.

Other Items

There are also increases from the 2013 estimate in the following items:

• Communications - $192,000, an increase of $8,000

• Contracts for other services - $604,000, an increase of $16,000

• Supplies - $165,000, an increase of $1,000

• Other equipment - $33,000, an increase of $1,000

PROGRAM PERFORMANCE INFORMATION

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

OIG Semiannual Report to Congress. All OIG reports, including full audit, inspection, and 

investigation reports, are available on OIG’s website,

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

OIG performance measures:

In 2011, OIG established the strategic goals and objectives shown below. Performance 

measures are reviewed annually and revised as necessary. The performance measurement 

data shown below are from the 2012 Budget Service Program Performance Report, and data 

quality validation is performed internally.

Objective 1 of 2: (a) Conduct audits, inspections/evaluations, investigations, and other reviews 

and provide services in order to evaluate program results; examine allegations of waste, fraud, 

and abuse; review internal controls; provide technical assistance; identify systemic weaknesses; 

highlight best practices; and make recommendations for improvement in programs and 

operations; (b) continuously assess risk in order to concentrate OIG resources and efforts on 

issues that have the greatest impact and usefulness to the stakeholders with emphasis on 

maximizing the recovery of public resources and deterring future wrongdoing; (c) develop 

analytical tools to proactively identify vulnerabilities, propose protective actions, and measure 

the effectiveness of such actions; (d) provide 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; and 

(e) communicate the results of our work to stakeholders by providing timely, relevant, and high 

impact OIG products that result in improvements in program performance and enforcement.
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Measure: Audits, inspections, and investigations initiated each year by Audit Services (AS), 

Investigation Services (IS), Information Technology and Computer Crime Investigations 

(ITACCI) (investigations only), and Evaluation, Inspection and Management Services (EIMS) 

that focus on areas of high risk, or significant importance.

Year Target Percent Actual Percent

2011 70 87

Additional Information: Separate measures and targets have been developed for each 

operational area for the years 2012, 2013 and 2014.

Measure: Audits initiated each year by AS that focus on areas of high risk or significant 

importance.

Year Target Percent Actual Percent

2012 85 100

2013 85

2014 85

Measure: Inspections initiated each year by EIMS that focus on areas of high risk or significant 

importance.

Year Target Percent Actual Percent

2012 70 100

2013 70

2014 70

Measure: Investigations initiated each year by IS and ITACCI (IS) that focus on areas of high 

risk or significant importance.

Year Target Percent Actual Percent

2012 75 85

2013 75

2014 75

Measure: Audits initiated each year by ITACCI that focus on areas of high risk or significant 

importance.

Year Target Percent Actual Percent

2011 85 100

2012 85

2013 85

2014 85
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Measure: Recommendations accepted by the Department during the fiscal year.

Year Target Percent Actual Percent

2011 85 93

Additional Information: Separate measures and targets have been developed for each 

operational area for the years 2012, 2013 and 2014.

Measure: EIMS and ITACCI recommendations accepted by the Department during the fiscal 

year.

Year Target Percent Actual Percent

2012 85 96

2013 85

2014 85

Measure: AS recommendations accepted by the Department during the fiscal year.

Year Target Percent Actual Percent

2012 90 92

2013 90

2014 90

Measure: Audit initial results determined by AS by the agreed-upon date.

Year Target Percent Actual Percent

2011 70 100

2012 75 95

2013 75

2014 75

Measure: Inspections initial results determined by EIMS by the agreed-upon date.

Year Target Percent Actual Percent

2011 80 100

2012 80 100

2013 80

2014 80

Measure: Audit initial results determined by ITACCI by the agreed-upon date.

Year Target Percent Actual Percent

2011 70 88

2012 70 100

2013 70

2014 70
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Measure: Audit field work completed and draft report submitted by AS for review by the 

agreed-upon date.

Year Target Percent Actual Percent

2011 70 93

2012 80

2013 80

2014 80

Measure: Inspection field work completed and draft report submitted by EIMS for review by the 

agreed-upon date.

Year Target Percent Actual Percent

2011 80 0

2012 80 75

2013 80

2014 80

Additional Information: Two draft inspection reports were submitted for review in FY 2011. 

Neither was submitted by the agreed upon date.

Measure: Audit field work completed and draft report submitted by ITACCI for review by the 

agreed-upon date.

Year Target Percent Actual Percent

2011 70 75

2012 70 100

2013 70

2014 70

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

Year Target Percent Actual Percent

2011 70 75

Additional information: Separate measures have been developed for AS and EIMS, and 

ITACCI, in 2012, 2013, and 2014.
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Measure: AS and EIMS draft and final audit and inspection reports issued by the agreed-upon 

date.

Year Target Percent Actual Percent

2012 70 90

2013 70

2014 70

Measure: ITACCI draft and final audit issued by the agreed-upon date.

Year Target Percent Actual Percent

2012 65 100

2013 65

2014 65

Measure: Case closing Reports of Investigations submitted within 90 days of last reportable 

investigative action for 2011, or within 150 days for 2012, 2013, and 2014.

Year Target Percent Actual Percent

2011 75 54

2012 70

2013 70

2014 70

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

within 90 days.

Year Target Percent Actual Percent

2011 70 78

2012 70 82

2013 70

2014 70

Measure: Closed investigations that resulted in a criminal, civil or administrative action, or 

monetary result.

Year Target Percent Actual Percent

2011 65 71

2012 68 84

2013 68

2014 68
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Measure: Proactive analytical projects that resulted in a criminal or other referral or 

identification of a vulnerability.

Year Target Percent Actual Percent

2011 65 100

Additional information: This measure has been revised (see the next measure) for 2012, 

2013, and 2014.

Measure: Development milestones are met by agreed-upon dates for proactive analytical 

projects developed to identify adverse trends and / or possible fraud, waste, and abuse if 

Department programs and operations.

Year Target Percent Actual Percent

2012 70 97

2013 70

2014 70

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

Year Target Percent Actual Percent

2011 60 72

2012 60 90

2013 60

2014 60

Objective 2 of 2: (a) Hire, develop, and retain a highly qualified, diverse workforce with the 

skills to meet current and emerging mission requirements; (b) provide employees with the 

physical work space, technology, equipment, and other resources necessary to support 

accomplishment of the goals of the OIG; (c) foster an environment of open communication, 

respect for ideals, and understanding of the value of each individual's contribution to promote 

employee satisfaction and motivation; and (d) support the integrity of OIG operations by 

maintaining an effective quality assurance and internal review program.

Measure: Counsel work products meeting required or agreed-upon deadlines.

Year Target Percent Actual Percent

2011 80 91

2012 80 97

2013 80

2014 80
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Measure: Freedom of Information Act responses meeting required deadlines.

Year Target Actual

2011 97 98

2012 97 99

2013 97

2014 97

Measure: Requests for forensic or analytical assistance completed within 75 days.

Year Target Actual

2011 65 87

2012 65 86

2013 65

2014 65

Measure: Computer-assisted assessment technology products delivered to the requestor 

within agreed-upon dates.

Year Target Actual

2011 90 98

2012 90 100

2013 90

2014 90

Measure: Budget products developed and delivered to OMB, Department, OIG leadership, and 

other applicable stakeholders within agreed upon timeframes.

Year Target Actual

2011 80 100

2012 80 87

2013 80

2014 80

Measure: Report to appropriate stakeholders on Recovery Act activities and funding within 

established timeframes.

Year Target Percent Actual Percent

2011 90 100

2012 90 92

2013

2014
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Measure: Quality Assurance Reviews and Internal Control Review recommendations are 

accepted by the OIG.

Year Target Percent Actual Percent

2012 70 91

2013 70

2014 70

Additional Information: This is a new measure in 2012.

Measure: OIG Data Analytics Systems are operational during normal work hours.

Year Target Percent Actual Percent

2011 90 100

2012 90 100

2013 90

2014 90

Measure: Operational staff takes at least one work-related training.

Year Target Percent Actual Percent

2011 70 100

2012 70 90

2013 70

2014 70

Measure: Increase professional certifications/advanced degrees held by staff.

Year Target Percent Actual Percent

2011 5 6

Additional information: This measure has been revised (see next measure) for 2012, 2013, 

and 2014.

Measure: Measure percent of staff that have at least one professional certification or advanced 

degree.

Year Target Percent Actual Percent

2012 60 68

2013 60

2014 60