FINANCIAL SECTION

42 FY 2016 Agency Financial Report—U.S. Department of Education 

Message From the Chief Financial Officer

On behalf of the Department of Education, it is my privilege to 

present to you our Fiscal Year (FY) 2016 Agency Financial Report 

(AFR). I thank the Department’s leadership and staff for their 

commitment to another successful fiscal year, and I hope that you 

find the AFR a useful summary of the Department’s financial picture, 

operating performance, and stewardship. 

Both the short- and long-term economic impacts of the Department’s 

mission to prepare students for college and to support attainment of 

college degrees by those students are immense. At the heart of 

U.S. global competitiveness are students whose creativity, innovative mindsets, and 

entrepreneurial aspirations will sustain the American economy, as well as the U.S. 

contribution to the challenges we face today and in the future. High quality, equitably 

accessible, and affordable education for our country’s students is the foundation for our 

future prosperity. 

With approximately $1.2 trillion in total assets, comprised primarily of credit program 

receivables that are funded by $1.1 trillion in Treasury borrowings, and $285.2 billion in total 

annual spending supporting programs across the full education spectrum, effective controls 

over financial activities are essential to responsibly delivering our mission outcomes. 

Over the past eight years, the Department of Education experienced an unprecedented rate 

of growth in our loan portfolio, primarily due to the Department’s assumption of direct 

student loans. For example, credit program receivables increased from $234.3 billion in 

FY 2009 to $1.1 trillion in FY 2016. During this time period, we also received two large 

supplemental appropriations; $97.4 billion under the American Recovery and Reinvestment 

Act of 2009 and $10 billion under the Education Jobs Fund. 

I am proud of attaining our 15th consecutive unmodified or “clean” opinion of our financial 

statements, the result of our dedicated cadre of financial professionals, their application of 

effective controls, and a continuous improvement approach to promoting responsible 

financial stewardship across all of the Department’s mission offices. With less than 

1 percent of our $285.2 billion in payments each year applied to fund the Department’s 

payroll, the achievement of clean opinions, as well as the receipt of our 12th award of the 

prestigious Certificate of Excellence in Accountability Reporting by the Association of 

Government Accountants, reflects the efforts of the Department’s highly productive team. 

In addition to giving an unmodified opinion of our FY 2016 financial statements, our auditors 

reported that we have no material controls weaknesses, nor material instances of 

noncompliance with laws and regulations. As such, I can provide reasonable assurance 

that the financial data included in this AFR are complete and reliable in accordance with 

federal requirements. Although we have a strong internal control framework, we are 

actively working to address the management challenges and other control and compliance 

issues reported by our auditors and self-reported in various sections of this report. 

Accountability, transparency, and stewardship are core values embraced by the 

Department’s financial management professionals and their work underpins the mission 

achievements described in this report that benefit all American students and families. As 

we move into the future, we have four major priorities to sustain our core values—

upgrading our financial management and related business systems, to include migration to 
FINANCIAL SECTION 

MESSAGE FROM THE CHIEF FINANCIAL OFFICER 

a shared service solution when feasible; enhancing data quality and our capacity to support 

decision making through robust data analytics; incorporating enterprise risk management 

practices into the culture of the Office of the Chief Financial Officer; and reshaping and 

enhancing the competencies of our financial management workforce. 

We look forward to implementing even stronger financial management practices in the 

coming years to provide the American taxpayer with the best possible value for the 

resources entrusted to us. 

Tim Soltis 

Delegated the Duties of Chief Financial Officer 

November 14, 2016 

FY 2016 Agency Financial Report-U .S. Department of Education 43