2 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

ABOUT THE MANAGEMENT’S DISCUSSION AND ANALYSIS

The U.S. Department of Education (the 

Department) continued to enhance the content 

quality, report layout, and public accessibility 

of the Fiscal Year (FY) 2019 Agency Financial Report

(AFR) by refining graphics and providing more useful, 

balanced, and easily understood information about the 

Department’s loan programs, including additional cost 

and risk information. Additionally, we chose relevant 

web content to provide users with additional information 

about the Department’s operations and performance. To 

take advantage of the hyperlinks embedded in the report, 

the Department recommends reading it on the Internet. 

To help us continue to improve the quality and usefulness 

of information provided in our AFR, we encourage our 

public and other stakeholders to provide feedback and 

suggestions at AFRComments@ed.gov.

This section highlights information on the Department’s 

performance, financial statements, systems and controls, 

compliance with laws and regulations, and actions taken 

or planned to address select challenges.

MISSION AND ORGANIZATIONAL STRUCTURE

This section provides information about the Department’s 

mission, an overview of its history, and its structure. The 

active links include the organization chart and principal 

offices and a link to the full list of Department offices

with a description of selected offices by function.

THE DEPARTMENT’S APPROACH 

TO PERFORMANCE

This section provides a brief summary of the 

Department’s performance goals and results for FY 

2019. Since the Department has chosen to produce 

separate financial and performance reports, a detailed 

discussion of performance information for FY 2019 will 

be provided in the Department’s Annual Performance 

Report to be released online at the same time as the 

President’s FY 2021 Budget in February 2020. For 

more information, prior year performance reports can 

be found on the Department’s website. We also urge 

readers to seek programmatic data as it is reported in 

the Congressional Budget Justification, as well as on 

the web pages of individual programs. Any questions or 

comments about the Department’s performance reporting 

should be e-mailed to PIO@ed.gov. For more details on 

performance, please refer to the Department’s budget and 

performance web page at www.Performance.gov.

FINANCIAL HIGHLIGHTS

The Department expends a substantial portion of its 

budgetary resources and cash on multiple loan and grant 

programs intended to support state and local efforts to 

improve learning outcomes for all prekindergarten through 

12th grade (P–12) students in every community and to 

expand postsecondary education options and improve 

outcomes to foster economic opportunity and informed, 

thoughtful, and productive citizens. Accordingly, the 

Department included more high-level details about 

sources and uses of the federal funds received and net costs 

by program.

ANALYSIS OF SYSTEMS, CONTROLS, AND 

LEGAL COMPLIANCE

The Department’s internal control framework and 

its assessment of controls, in accordance with Office 

of Management and Budget (OMB) Circular A-123, 

Management’s Responsibility for Enterprise Risk 

Management and Internal Control, provide assurance 

to Department leadership and external stakeholders that 

financial data produced by the Department’s business 

and financial processes and systems are complete, 

accurate, and reliable.

FORWARD-LOOKING INFORMATION

The Forward-Looking Information section describes the 

challenges that the Department aims to address to achieve 

progress on Enterprise Risk Management (ERM), Direct 

Loans, Next Gen Federal Student Aid (FSA), Leveraging 

Data as a Strategic Asset, and Technology Business 

Management Solutions (TBMS).
FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 3

MANAGEMENT’S DISCUSSION AND ANALYSIS

ABOUT THE DEPARTMENT

OUR MISSION

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

preparation for global competitiveness by fostering educational excellence and 

ensuring equal access.

Who We Are. In 1867, the federal government recognized 

that furthering education was a national priority and 

created a federal education agency to collect and report 

statistical data. The Department was established as a 

cabinet-level agency in 1980. Today, the Department 

supports programs in every area and level of education 

from preschool through postdoctoral research.

The Department makes funds and information 

available to individuals pursuing education, colleges and 

universities, state education agencies, and school districts 

by engaging in four major types of activities:

 Establishing policies related to federal education 

funding, including distributing funds, collecting on 

student loans, and using data to monitor the 

use of funds;

 Supporting data collection and research on 

America’s schools;

 Identifying major issues in education and focusing 

national attention on them; and

 Enforcing federal laws promoting equal access and 

prohibiting discrimination in programs that receive 

federal funds.

Our Public Benefit. The Department executes the 

laws passed by Congress to promote student academic 

achievement and preparation for global competitiveness. 

The Department works with students, parents, educational 

institutions, school districts, and states to foster 

educational excellence and to ensure equal access to a high 

quality education for all students. While recognizing the 

primary role of states and school districts in providing 

high quality education, the Department is committed to 

helping ensure students throughout the nation develop 

skills to succeed in school, pursue postsecondary options, 

and transition to the workforce. The Department’s vision 

is to improve educational outcomes for all students.

Many of the Department’s programs involve awarding 

grants to state and local educational agencies and 

providing grants and loans to postsecondary students. The 

Department’s largest outlays are for its portfolio of student 

loans (see the Financial Highlights and Notes sections). 

Grant programs constitute the second-largest driver of 

outlays. The grant programs include: student aid to help 

pay for college through Pell Grants, Work Study, and 

other campus-based programs; grants awarded based on 

statutory formulas mostly for elementary and secondary 

education; and competitive grant programs to promote 

innovation. The Department also supports research, 

collects education statistics, and enforces civil rights 

statutes. We manage and spend financial resources on 

programs designed to support parents, teachers, principals, 

school leadership, institutions, and states in the pursuit of 

instilling knowledge and transferring skills to students.
4 FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

OUR ORGANIZATION IN FISCAL YEAR 2019

This chart reflects the coordinating structure of the U.S. Department of Education. A text 

version of the FY 2019 coordinating structure of the Department is available.

 

*

 The White House Initiatives are Center for Faith and Opportunity Initiatives, White House Initiative on American Indian and Alaska Native Education, White 

House Initiative on Educational Excellence for Hispanics, and White House Initiative on Educational Excellence for African Americans.