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

The U.S. Department of Education (the 

Department) continued to enhance the content 

quality, report layout, and public accessibility 

of the Fiscal Year (FY) 2017 Agency Financial Report 

(AFR) by providing additional graphics and more useful, 

balanced, and easily understood information about 

the Department’s grant and 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.

DISCUSSION OF PERFORMANCE

This section includes an overview of performance 

reporting and a high-level discussion on the Department’s 

focus areas for FY 2017. The results achieved from 

Department expenditures are discussed at a high level 

in the AFR. For more details about performance, please 

refer to the Department’s budget and performance web 

page and performance.gov. 

To view information on all Department programs, visit 

the Department’s website.

FORWARD-LOOKING INFORMATION

The Forward-Looking Information section describes 

the challenges that the Department aims to address to 

achieve progress on Direct Loans, Shared Services, and 

Enterprise Risk Management (ERM).

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 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 3

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 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, 

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.

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 (see the chart on page 5); and 

competitive grant programs to promote innovation 

(see The Department’s Approach to Performance 

Management section). 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 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

OUR ORGANIZATION IN FISCAL YEAR 2017

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

and text versions of the FY 2017 coordinating structure of the Department are available.

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

MANAGEMENT’S DISCUSSION AND ANALYSIS

5

FY 2016 ACTUAL FORMULA GRANT DISTRIBUTION BY REGION AND STATE

The figures in these tables are made up of funding from multiple programs allocated to states 

based on statutory formulas. These do not include discretionary grants, need-based grants, 

or federal loans. For more details, view the Department’s State Budget Tables.

West Grades K–12 Postsec All Other

Alaska $ 258 $ 36 $ 12

Arizona 829 1,044 100

California 4,058 3,791 404

Colorado 440 418 51

Hawaii 165 75 16

Idaho 163 162 21

Montana 170 67 16

Nevada 253 133 24

New Mexico 348 181 30

Oregon 372 342 58

Utah 272 378 34

Washington 662 429 68

Wyoming 112 29 11

TOTAL $ 8,103 $ 7,086 $ 844

South Grades K–12 Postsec All Other

Alabama $ 538 $ 496 $ 74

Arkansas 352 268 53

Delaware 116 60 15

District of 

Columbia 93 132 18

Florida 1,865 1,807 227

Georgia 1,111 942 111

Kentucky 495 379 65

Louisiana 627 383 47

Maryland 535 378 53

Mississippi 401 325 52

North Carolina 986 803 129

Oklahoma 457 295 45

South Carolina 525 379 68

Tennessee 678 529 73

Texas 3,217 2,166 308

Virginia 725 668 92

West Virginia 217 206 37

TOTAL $ 12,936 $ 10,217 $ 1,469

Midwest Grades K–12 Postsec All Other

Illinois $ 1,488 $ 1,140 $ 137

Indiana 660 724 71

Iowa 285 374 35

Kansas 332 237 28

Michigan 1,149 829 124

Minnesota 483 461 59

Missouri 620 532 78

Nebraska 212 132 24

North Dakota 120 46 12

Ohio 1,275 793 129

South Dakota 164 86 12

Wisconsin 564 390 73

TOTAL $ 7,352 $ 5,744 $ 782

Northeast Grades K–12 Postsec All Other

Connecticut $ 330 $ 266 $ 33

Maine 148 107 19

Massachusetts 656 518 71

New Hampshire 128 117 13

New Jersey 898 617 80

New York 2,478 1,923 204

Pennsylvania 1,280 937 166

Rhode Island 131 108 16

Vermont 95 48 14

TOTAL $ 6,144 $ 4,640 $ 616

Other Grades K–12 Postsec All Other

American 

Samoa $ 26 $ 4 $ 1

Freely 

Associated 

States

7 16 0

Guam 43 15 4

Indian setaside 247 - 43

Northern 

Mariana 

Islands

18 4 1

Puerto Rico 682 890 69

Virgin Islands 25 5 3

All Other 329 - 2

TOTAL $ 1,376 $ 934 $ 123

 

NOTES: Dollars in millions. Detail may not add to totals due to 

rounding. Data are current as of September 13, 2017.