FY 2019 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 129

within the existing Customer Engagement Management 

Systems (CEMS) infrastructure. The fraud referral module 

went live in December 2018, and data migration of 

historical referral information was completed in July 2019. 

This module will enable more comprehensive analysis 

across all OIG fraud referrals and provide better tracking 

of referrals and possible recoveries of resultant improper 

payments. This common and interactive case processing 

tool will also reduce fraud review/case processing time and 

provide analytics to allow for better fraud detection and 

prevention. FSA is also exploring ways to leverage data 

analytics to better detect and combat fraud in operations. 

In FY 2019, the Department revised its improper payment 

risk assessment methodology to include a fraud risk factor 

to assist in identifying fraud risk in non-FSA programs. 

This revised methodology was used to assess the improper 

payment risk of 266 grant activities (formula grants and 

discretionary grant competitions) under approximately 

120 program authorities in FY 2019. The Department 

has also catalogued internal controls related to fraud 

prevention and detection, which includes over 150 

detective and preventive controls related to its grant and 

administrative payments.

Finally, to combat improper use of federal funding under 

the Every Student Succeeds Act (ESSA), the Department 

requires that each recipient and subrecipient publicly 

display the contact information of the Department’s OIG 

hotline to facilitate the reporting of suspected improper 

use of ESSA funding. Furthermore, in accordance with 

2 CFR 200 (Uniform Guidance), each recipient and 

subrecipient provides assurances of truthfulness and 

accuracy of the information they provide in applications 

and in response to monitoring and compliance reviews.

FRAUD REDUCTION REPORT

The Department continues to participate actively 

with OMB and other agencies in a governmentwide workgroup that is collaborating on an 

implementation plan for the Fraud Reduction and Data 

Analytics Act (FRDAA) of 2015. The Department will 

continue to work with OMB to implement the FRDAA.

The Department recognizes the challenges that often 

surround fraud risk management and is taking action to 

address each challenge. These challenges include limited 

resources to conduct fraud risk management activities 

and difficulties in definitively separating fraud from other 

negative outcomes.

The Department is exploring ways to refine or enhance 

its business processes to be in a better position to define, 

deter, detect, and take action on fraud. For Title IV 

programs, FSA has established a Fraud Risk Group 

(FRG) within its Enterprise Risk Management Office to 

build capacity and expertise for and to dedicate resources 

to fraud risk identification and mitigation. The FRG 

established an Enterprise Fraud Risk Advisory Group 

to promote the integration of fraud risk management 

practices and processes into the daily operations of FSA 

to assist in achieving FSA’s strategic goals and objectives. 

Its primary responsibility is to provide oversight, 

planning, and coordination of enterprise fraud risk 

management activities. 

In 2018, responsibility for receiving, processing, and 

taking action on fraud referrals from the Department’s 

Office of the Inspector General (OIG) was transferred 

from FSA’s Finance Office to FRG. FRG launched a new 

initiative to implement workflow and case management 

capabilities to perform analysis of all OIG fraud referrals