2 FY 2020 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 (Department) 

continued to enhance the content quality, report 

layout, and public accessibility of the fiscal year 

(FY) 2020 Agency Financial Report (AFR) by refining 

graphics and providing more useful, balanced, and 

easily understood information about the Coronavirus 

Aid, Relief, and Economic Security Act, also known 

as the CARES Act, and 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 A ND ORG A NIZ AT IONA L 

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.

T H E DEPA RT M ENT’S A PPROACH 

TO PERFORMANCE

This section provides a brief summary of the 

Department’s performance goals and results for FY 2020. 

Since the Department has chosen to produce separate 

financial and performance reports, a detailed discussion 

of performance information for FY 2020 will be provided 

in the Department’s FY 2020 Annual Performance Report 

and FY 2022 Annual Performance Plan to be released 

online at the same time as the President’s FY 2022 Budget 

in February 2021. 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 has 

included more high-level details about sources and uses 

of the federal funds received and net costs by program.

A NA LYSIS OF S YS T E MS, CON T ROL S, 

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, Direct Loans, 

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

Data as a Strategic Asset, and Technology Business 

Management Solutions (TBMS).
FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 3

MANAGEMENT’S DISCUSSION AND ANALYSIS

ABOUT THE DEPARTMENT

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 an education, colleges and 

universities, state education agencies, and school districts 

by engaging in four major categories 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.

 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.

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.
4 FY 2020 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

OUR ORGANIZATION IN FISCAL YEAR 2020

This chart reflects the coordinating structure of the U.S. Department of Education. A text version of the FY 2020 

coordinating structure of the Department is available.

 

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 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.