30 FY 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

I

am pleased to present the Department of Education’s 

FY 2017 Agency Financial Report (AFR), which 

is intended to provide useful, easy to understand 

and accessible financial and performance information 

to our government and public stakeholders for 

consideration and evaluation of the Department’s major 

accomplishments, performance, costs, risks, and the value 

we provide to the taxpayer.

Investment in human capital through educational 

attainment is a crucial element of a strong national 

economic and global security strategy. A well-educated 

citizenry enjoys numerous benefits, including greater job 

security, higher wages, and improved health. U.S. colleges 

and universities represent critical centers for research 

and innovation and a well-educated citizenry is better 

prepared to help solve the nation’s most pressing domestic 

and international problems. While states have the greatest 

role to play in achieving and sustaining the provision of 

an excellent and equitably accessible education system for 

American students, the Department supports students by 

working with parents, students, educational institutions, 

school districts and states to foster educational excellence 

and ensure equal access to it in support of the country’s 

global competitiveness.

As a critical mission support organization, the Office 

of the Chief Financial Officer (OCFO) has primary 

responsibility for maintaining financial integrity over 

the federal resources entrusted to the Department and 

for preparing the AFR, such that our stakeholders are 

empowered with reliable information about our financial 

stewardship and achievements relative to the costs of 

executing our mission. With approximately $1.3 trillion 

in total assets, comprised primarily of credit program 

receivables that were funded by $1.2 trillion in Treasury 

borrowings and considering the approximate $340.0 

billion gross outlays made during FY 2017 to support 

education programs from preschool through postdoctoral 

research, effective internal controls over the Department’s 

business processes and financial activities are essential 

to responsibly delivering our mission outcomes and the 

Department’s strategic goals and objectives.
FY 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 31

MESSAGE FROM THE CHIEF FINANCIAL OFFICER | FINANCIAL SECTION

On behalf of the Department of Education, I am proud 

to present our 16th consecutive unmodified or “clean” 

opinion of our financial statements. Our clean opinion, 

along with no material weaknesses, represents the 

dedicated efforts of an exemplary team of business and 

financial management professionals, whose commitment 

to promoting financial integrity and applying effective 

controls ensures high quality, accurate, and reliable 

information for all of our customers. Their work also 

earned the Department its 13th award of the prestigious 

Certificate of Excellence in Accountability Reporting 

by the Association of Government Accountants with 

additional special recognition for Best-in-Class presentation 

of the Management’s Discussion and Analysis section of 

the AFR. This year, the Department accomplished several 

key improvements in our management and stewardship of 

taxpayer funding, including:

 Improved disclosures about the composition of our 

loan portfolio, costs, and associated credit risks.

 Development of the Continuous Controls Monitoring 

System, a robust automated capability to demonstrate 

integrity over Department payments.

 The initiation of a major upgrade to our core financial 

system to modernize its technical infrastructure and 

reduce potential cyber security risks.

 The implementation of a number of reform 

initiatives intended to help maximize employee and 

organizational efficiency.

As we continue to implement initiatives to improve 

OCFO operations, we are also firmly committed to 

supporting the Administration’s focus on reforming 

the federal government by achieving more effective, 

efficient, and accountable financial management 

operations in the Department of Education. Planned 

and ongoing actions include:

 Delivering improved financial management and 

analysis services with reduced staff through increased 

staff performance, more streamlined business 

processes, and better use of technology.

 Obtaining and analyzing data of sufficient quality 

to improve the timeliness and accuracy of financial 

reporting and to reduce improper payment and 

fraud risks, including progression towards proactive, 

preventative control through advanced data analytics. 

 Integrating enterprise risk management concepts into 

our internal control framework and developing a 

more risk aware culture in OCFO.

 Developing innovative tools and practices to expand 

support to mission offices’ effective fiscal monitoring 

of grants concurrent with the realization of staff 

reductions across the Department.

These actions will increase our effectiveness in service 

delivery and enable us to make more efficient and 

effective use of the taxpayer resources entrusted to us. 

We continuously strive to improve the quality and 

usefulness of the information provided in the AFR and 

encourage feedback or suggestions to be sent to us at 

AFRComments@ed.gov.

Tim Soltis

Delegated the Duties of Chief Financial Officer

November 13, 2017