2 FY 2018 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

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) 2018 Agency Financial Report 

(AFR) by improving graphics and providing more useful, 

balanced, and easily understood information about 

the Department’s loan programs, including additional 

cost and risk information. Additionally, we augmented 

information provided in the body of the AFR with 

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 2018. 

Since the Department has chosen to produce separate 

financial and performance reports, a detailed discussion 

of performance information for FY 2018 will be provided 

in the Department’s Annual Performance Report to be 

released online at the same time as the President’s 

FY 2020 Budget in February 2019. 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.

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 FSA, Technology Business 

Management Solutions (TBMS), and Shared Services.

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 highlevel 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. 

ABOUT THE MANAGEMENT’S DISCUSSION AND ANALYSIS
FY 2018 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 3

MANAGEMENT’S DISCUSSION AND ANALYSIS

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.

ABOUT THE DEPARTMENT
4 FY 2018 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

OUR ORGANIZATION IN FISCAL YEAR 2018

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

and text versions of the FY 2018 coordinating structure of the Department are available.