Report to Congressional Committees

United States Government Accountability Office

GAO

October 2004 OFFICE OF FEDERAL 

STUDENT AID 

Better Strategic and 

Human Capital 

Planning Would Help 

Sustain Management 

Progress 

GAO-05-31 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-31.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Conelia Ashby 

at (202) 512-8403 or ashbyc@gao.gov. 

Highlights of GAO-05-31, a report to 

congressional committees 

October 2004

OFFICE OF FEDERAL STUDENT AID

Better Strategic and Human Capital 

Planning Would Help Sustain 

Management Progress 

FSA has made progress addressing its key management issues; however, 

its plans and reports do not contain all the required information needed 

by the Congress and the public to assess FSA’s progress in achieving its 

goals and purposes. FSA’s significant improvements in its financial 

management and internal control are reflected in its receiving an 

unqualified or “clean” opinion on its financial statements for fiscal years 

2002 and 2003. In addition, FSA’s fiscal year 2003 financial audit did not 

identify any material internal control weaknesses. FSA has also made 

progress in other areas, but to a lesser extent. FSA completed several 

critical systems integration tasks, but full systems integration is several 

years away. In addition, FSA has addressed many program integrity 

issues—factors that could affect the vulnerability of student aid 

programs to fraud, waste, and abuse—but has not developed guidance to 

ensure that its comprehensive compliance reviews are being performed 

as expected. Furthermore, FSA has developed a cost model that has the 

potential to identify the full cost of its activities and changes in costs 

over time, but as of July 2004, the model was not fully operational. As a 

result, FSA has not been able to demonstrate that it has reduced the cost 

of administering its programs. Also, FSA issued a 5-year performance 

plan and annual performance reports, but neither included specific 

measures needed to determine whether FSA has made progress toward 

meeting its longer-term strategic objectives. 

FSA has developed a comprehensive human capital strategy and has 

taken steps to increase the accountability of most of its officials, but 

some of the human capital strategy’s components and the accountability 

system have weaknesses. FSA’s human capital plan describes the 

agency’s human capital strategy and the strategy’s components. For 

example, FSA has a draft succession plan to prepare for the retirement of 

key staff. However, this plan has weaknesses. The draft succession plan 

shows that the agency will redistribute the duties of most retiring staff 

but does not discuss how the agency will develop the skills of remaining 

staff to take over new responsibilities. To increase the accountability of 

its officials, FSA changed from a pass-fail to multilevel performance 

appraisal systems for its senior officials and included job-specific goals in 

their performance agreements based on their areas of responsibility. 

FSA also changed the way it awards performance bonuses, but the 

criteria were not clear. 

In 2003, the Department of 

Education’s Office of Federal 

Student Aid (FSA) managed about 

$60 billion in new financial aid. In 

1998, the Congress designated FSA 

as a performance-based 

organization. In so doing, it 

specified purposes for the agency, 

such as to reduce program costs 

and increase accountability of its 

officials, and provided flexibilities 

such as allowing FSA to pay 

bonuses. Also FSA is required to 

annually prepare a performance 

plan and report and have 

performance agreements for its 

senior officials. Past reviews 

revealed serious problems and 

concerns about FSA’s management.

In January 2003, GAO reported that 

FSA had made progress but had not 

sufficiently addressed some key 

management issues. Also, GAO 

noted that FSA, like other agencies 

needed to address human capital 

issues. GAO assessed FSA’s 

progress in (1) addressing key 

management issues and meeting 

requirements for planning and 

reporting, and (2) developing a 

human capital strategy and 

increasing the accountability of its 

officials. 

What GAO Recommends

GAO recommends that FSA 

(1) issue guidance for performing 

comprehensive compliance 

reviews, (2) include measures and 

goals in its performance plans and 

reports, (3) revise its succession 

plan, (4) evaluate human capital 

initiatives, and (5) clarify the 

criteria for awarding bonuses. FSA 

generally agreed with our 

recommendations. 
Page i GAO-05-31 Better Strategic and Human Capital Planning 

Letter 1

Results in Brief 3 

Background 4 

FSA Has Made Progress Addressing Key Issues, but Has Not 

Completely Fulfilled Its Planning and Reporting Responsibilities 8 

FSA Has Developed a Human Capital Strategy and Taken Steps to 

Increase the Accountability of Officials, but Both Efforts Have 

Weaknesses 22 

FSA Has Taken Steps to Increase the Accountability of Officials, 

but Its Criteria for Awarding Bonuses Are Not Clear 30 

Conclusions 35 

Recommendations to the Secretary of Education 36 

Agency Comments and Our Evaluation 36 

Appendix I Scope and Methodology 38 

Overall Approach 38 

Objective I: Key Management Issues 38 

Objective II: Human Capital 40 

Appendix II GAO Recommendations to Education Related to 

Student Financial Aid and Status of Their 

Implementation 42 

Appendix III Definitions of Systems Supporting FSA’s Student 

Aid Programs 45 

Appendix IV Comments from the U.S. Department of Education 48 

Appendix V GAO Contacts and Staff Acknowledgments 52 

GAO Contacts 52 

Staff Acknowledgments 52 

Related GAO Products 53 

Contents 
Page ii GAO-05-31 Better Strategic and Human Capital Planning 

Table 

Table 1: Components of FSA’s Human Capital Strategy 23 

Figures 

Figure 1: Organizational Structure of Federal Student Aid 7 

Figure 2: FSA’s Approach for Integrating Its Information Systems 13 

Figure 3. FSA’s Activity-Based Cost Model 17 

Figure 4: Illustration of a Segment of FSA’s Annual Plan 20 

Figure 5: Selections from FSA’s Skills Catalog: FSA’s Office of the 

Chief Financial Officer 28 

Figure 6: Change in FSA’s Performance Agreements from 

Organizational Goals in Fiscal Year 2002 to Individual 

Goals in Fiscal Year 2003 32 
Page iii GAO-05-31 Better Strategic and Human Capital Planning 

Abbreviations 

ABC activity-based cost 

ASEDS Application, School Eligibility, and Delivery Unit 

CFO Chief Financial Officer 

COD Common Origination and Disbursement 

COO Chief Operating Officer 

FAFSA Free Application for Federal Student Aid 

FFEL Federal Family Education Loan 

FFMIA Federal Financial Management Improvement Act 

FMFIA Federal Managers’ Financial Integrity Act 

FSA Office of Federal Student Aid 

GPRA Government Performance and Results Act 

HEA Higher Education Act 

IRS Internal Revenue Service 

MIT Management Improvement Team 

OIG Office of Inspector General 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

PBO performance-based organization 

SES Senior Executive Service 

SFFAS Statements of Federal Financial Accounting Standards 

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Page 1 GAO-05-31 Better Strategic and Human Capital Planning 

October 6, 2004 

The Honorable Judd Gregg 

Chairman 

The Honorable Edward M. Kennedy 

Ranking Minority Member 

Committee on Health, Education, 

 Labor, and Pensions 

United States Senate 

The Honorable John A. Boehner 

Chairman 

The Honorable George Miller 

Ranking Minority Member 

Committee on Education and the Workforce 

House of Representatives 

The Department of Education’s (Education) Office of Federal Student Aid 

(FSA) administered over $60 billion in new federal student aid to 

approximately 9 million students in 2003. FSA describes its mission as 

helping to put America through school by providing access to higher 

education through effective and efficient delivery of student aid. However, 

past audits and reviews revealed that the agency has encountered some 

problems accomplishing this mission. Consequently, we designated 

student financial aid programs as high-risk in 1990 because of concerns 

about fraud, waste, abuse, and mismanagement of the billions of dollars in 

student financial aid.1

In 1998, when the Congress amended the Higher Education Act (HEA), it 

designated FSA as a performance-based organization (PBO) and 

authorized the agency to operate without the constraints of certain rules 

and regulations for the purpose of achieving specific measurable goals and 

objectives. This flexibility was intended to allow FSA to better address 

long-standing management weaknesses and enhance its delivery of student 

 1

The former Guaranteed Student Loan Program, now called the Federal Family Education 

Loan Program, was included in our 1990 high-risk list; in 1995 we revised this designation 

to include all student financial aid programs included under Title IV of the Higher 

Education Act of 1965. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-31 Better Strategic and Human Capital Planning 

financial aid. The Congress designated several purposes for FSA, including 

reducing costs of administering the program and increasing accountability 

of officials. In addition, the Congress required that FSA annually issue 

(1) a 5-year performance plan that establishes measurable goals and 

objectives for the organization and (2) performance reports showing 

progress toward achieving its measurable goals and objectives in 

accordance with applicable requirements under the Chief Financial Officer 

(CFO) Act and the Government Performance and Results Act (GPRA) 2

. 

While FSA had developed new management strategies and had made some 

progress improving its operations, Education’s Office of Inspector General 

(OIG) and we found that FSA had not sufficiently addressed management 

weaknesses, identified reductions in cost, prepared 5-year performance 

plans, or submitted useful and timely reports. Specifically, we reported in 

January 2003 that FSA needed to take further actions in several key 

management areas, and we identified human capital management as one 

of the key challenges facing FSA and agencies governmentwide.3

Since we completed the work for our January 2003 report, FSA has further 

attempted to address our concerns. We have undertaken this effort to 

examine the extent to which FSA has made progress (1) addressing key 

management issues related to financial management and internal control, 

systems integration, program integrity,4

 the costs of administering its 

programs, and fulfilling its planning and reporting responsibilities, and 

(2) establishing a comprehensive human capital strategy and increasing 

the accountability of its officials. 

To assess FSA’s progress in these areas, we reviewed and analyzed several 

documents such as auditors’ reports on FSA’s financial statements and 

internal control for fiscal years 2002 and 2003, annual performance plans 

and reports, and its 5-year performance plan. We also analyzed FSA’s 

systems plans and related documentation, as well as the performance 

agreements and evaluations of its senior managers. We interviewed 

officials from FSA, Education’s OIG, and Education’s Management 

 2

The Chief Financial Officers Act of 1990 is P.L. 101-576, and the Government Performance 

and Results Act of 1993 is P.L. 103-62. 

3

GAO, High Risk Series—An Update, GAO-03-119 (Washington, D.C.: January 2003). 

4

Program integrity refers to processes to reduce vulnerability to fraud, waste, and abuse. 
Page 3 GAO-05-31 Better Strategic and Human Capital Planning 

Improvement Team (MIT),5 as well as union officials. We conducted our 

work between November 2003 and August 2004 in accordance with 

generally accepted government auditing standards. For more details about 

our scope and methodology, see appendix I. 

FSA has made progress addressing key issues in the areas of financial 

management and internal control, systems integration, program integrity, 

and determining the cost of administering its programs, but FSA’s 5-year 

performance plan and its annual performance reports do not meet all HEA 

and GPRA requirements. The extent of FSA’s progress in addressing key 

management issues varied among the issues. FSA made significant 

progress in addressing its financial management and internal control 

weaknesses as reflected in its receipt of an unqualified, or “clean,” opinion 

on its financial statements for fiscal years 2002 and 2003. In addition, 

FSA’s auditors did not identify any material internal control weaknesses in 

FSA’s fiscal year 2003 audit. FSA also made progress in improving program 

integrity and in implementing an activity-based cost model to assist it in 

identifying the full cost of its activities. Although FSA completed several 

critical systems integration tasks, it remains several years from operating 

in a fully integrated information systems environment. FSA also made 

progress toward fulfilling its planning and reporting responsibilities by 

issuing its first 5-year performance plan in June 2004. However, this plan 

did not include performance measures needed to assess progress over 

time, and its 2003 performance report did not clearly indicate progress 

toward meeting its long-term strategic objectives. 

FSA has developed a comprehensive human capital strategy and taken 

steps to increase the accountability of most officials, but some of the 

human capital strategy’s components and the accountability system have 

weaknesses. According to FSA officials, the agency has collaborated with 

an organization that specializes in government workforce issues to 

complete its human capital plan that summarizes the agency’s human 

capital strategy and its components. Based on our review of its plan, FSA’s 

human capital strategy includes many of the practices of leading 

organizations. For example, the document identifies challenges that FSA 

will likely face in coming years such as addressing the skills of its staff. 

 5

On April 2001, the Secretary of Education assembled a team of senior managers and 

employees—the Management Improvement Team—to focus on many long-standing 

management challenges facing the department. The MIT was tasked with making shortterm management recommendations and developing a plan to address longer-term and 

structural issues. 

Results in Brief 
Page 4 GAO-05-31 Better Strategic and Human Capital Planning 

However, there are also weaknesses in some of the strategy’s components. 

For example, FSA’s succession plan shows that staff in nearly 250 key 

positions are likely to retire and the agency will redistribute the duties to 

existing staff for 140 of these positions, but it does not address how the 

agency will develop the skills of remaining staff to take over these new 

duties. Further, FSA has not fully evaluated the usefulness of its learning 

coupon—a $500 benefit staff can use to pay for external training courses. 

To increase the accountability of its senior officials, FSA changed from a 

pass-fail to multilevel performance appraisal systems and emphasized 

achievement of individual goals in their performance agreements. FSA 

also changed the criteria for awarding bonuses to its senior officials. 

However, none of those we asked could explain the new criteria. 

We are making several recommendations to the Secretary of Education 

and FSA’s Chief Operating Officer that would allow the agency to better 

determine and communicate its progress in achieving its strategic 

objectives, strengthen efforts to improve program integrity, and improve 

the components of its human capital strategy. 

FSA’s Chief Operating Officer provided written comments on a draft of 

this report. In commenting on the draft, FSA generally agreed with our 

findings and recommendations. Copies of the written comments are in 

appendix IV. 

FSA manages and administers student financial aid programs authorized 

under Title IV of the HEA, as amended. These programs include the 

William D. Ford Federal Direct Loan Program (Direct Loans), the Federal 

Family Education Loan Program (FFEL), the Federal Pell Grant Program 

(Pell Grants), and campus-based programs.6

 The student aid environment 

is complex and involves a large number of parties. In 2003, about 6,600 

schools, 3,700 lenders, and 36 guaranty agencies participated in the Title IV 

student aid programs.7

 Additionally, there are numerous information 

 6

FSA and postsecondary institutions jointly administer campus-based programs, which 

include the Federal Work-Study Program, the Federal Perkins Loan Program, and the 

Federal Supplemental Educational Opportunity Grant Program. 

7

State and private nonprofit guaranty agencies provide a variety of services, including 

payment of defaulted loans, collection of some defaulted loans, default avoidance 

activities, and counseling to schools and students. 

Background 
Page 5 GAO-05-31 Better Strategic and Human Capital Planning 

systems, federal financial requirements, programmatic regulations, and 

human capital issues that also affect the delivery of student financial aid. 

For many years, the Department of Education designed technology 

systems and processes to accommodate each financial aid program as it 

was developed. As the demand for the programs grew, so did the number 

of systems needed to support institutional participation, student eligibility 

determination, aid disbursement, operational accounting, and financial 

record keeping for the many disparate programs involved. After 30 years 

of such practices, the department was left with stand-alone information 

systems and separate delivery processes that were not integrated with one 

another. Consequently, student aid delivery became replete with 

redundant data, rising costs, complex rules, and inefficiency for everyone 

involved. The process to gain access to student financial aid programs 

required users, such as an educational institution’s financial aid or 

accounting staff, to continually log in and out of different systems for 

related aid information on students for each program. Accessing the 

student information for each FSA program often required the use of 

different school identifiers and passwords, and users often did not have 

the ability to retrieve necessary information when they did gain access. We 

previously reported that the problem of not having access to current, 

accurate information sometimes led to loans and grants being improperly 

awarded.8

 In 1999 FSA began implementing a strategy to integrate its many 

disparate systems. 

In response to the growing complexity, increasing demand, and the 

likelihood for fraud, waste, and abuse associated with the student aid 

programs, the Congress established FSA as the government’s first PBO in 

October 1998.9

 As defined in the legislation, the specific purposes of the 

PBO are to 

• improve service in the student financial assistance programs; 

• reduce costs of administering the programs; 

• increase accountability of officials; 

• provide greater flexibility in management; 

 8

GAO, Student Financial Aid: Data Not Fully Utilized to Identify Inappropriately 

Awarded Loans and Grants, GAO/HEHS-95-89 (Washington, D.C.: July 1995). 

9

The U.S. Patent and Trademark Office was established as a PBO in March 2000, and the 

Federal Aviation Administration’s Air Traffic Organization was established as PBO in 

December 2000. 
Page 6 GAO-05-31 Better Strategic and Human Capital Planning 

• integrate information systems; 

• implement an open, common, integrated delivery system; and 

• develop and maintain a financial aid system containing complete, 

accurate, and timely data to ensure program integrity. 

FSA’s enabling legislation also established several requirements and 

provided certain flexibilities. These requirements included the 

appointment of a chief operating officer (COO), the establishment of a fair 

and equitable system for measuring staff performance, and the 

development of annual performance agreements for the COO and other 

senior managers. In exchange for increased accountability, the legislation 

allows for the payment of performance bonuses to the COO and senior 

managers hired under the excepted service hiring authority, and the law 

allows FSA to hire an unlimited number of Senior Executive Service (SES) 

personnel and a limited number of excepted service technical/professional 

staff. 

Additionally, the law established several annual reporting requirements to 

inform the Congress and the public of the progress that FSA was making 

toward achieving its intended purposes and goals. Specifically, among 

other things, FSA must (1) develop and publicly release each year a 5-year 

performance plan that includes measurable goals and objectives as well as 

the action steps necessary to achieve a modernized student financial 

assistance delivery system and (2) provide an annual report to the 

Congress that describes the results achieved relative to its goals and 

objectives. The annual performance report must include (1) a copy of the 

current year’s independent financial audit report; (2) a discussion of 

financial and performance requirements applicable to the PBO under the 

CFO Act and GPRA, (3) results achieved in the previous year; (4) 

evaluation ratings of the COO and senior managers, including the amounts 

of bonus compensation awarded to these individuals; (5) 

recommendations for legislative and regulatory changes; and (6) other 

such information required by the Director of the Office of Management 

and Budget (OMB). The planning and reporting requirements are 

consistent with federal reform laws, such as the CFO Act, GPRA, Federal 

Managers’ Financial Integrity Act (FMFIA), Federal Financial Management 

Improvement Act (FFMIA), and others intended to reshape the way 

government conducts its business. 
Page 7 GAO-05-31 Better Strategic and Human Capital Planning 

FSA’s budget supports its staff, contractors, and day-to-day operations. In 

fiscal year 2004, FSA’s operating budget was $621 million.10 FSA worked 

with about 3,800 contractors and employed about 1,100 staff. As of June 

2004, FSA had 10 organizational units at its headquarters in Washington, 

D.C., and some of these units also have regional offices in 10 states 

nationwide. Figure 1 illustrates the organizational structure of its 

headquarters office. 

Figure 1: Organizational Structure of Federal Student Aid 

a

The FSA Ombudsman informally resolves complaints from student loan borrowers and makes 

recommendations for improving service within FSA. 

b

Responsibilities of Financial Partners Services include providing business services, support, and 

oversight to lenders and guaranty agencies. 

c

Workforce Support Services is referred to hereafter as human capital. 

Federal agencies, including FSA, face human capital challenges. 

Recognizing this, in 2001 GAO designated strategic human capital 

management as a governmentwide high-risk area. With respect to FSA, we 

reported in 2002 that almost 40 percent of the agency’s workforce was 

 10 While FSA’s operating budget was $621 million in 2004, its total program and operating 

budget, which includes $195 million in account maintenance fees for guaranty agencies and 

$226 million for loan consolidations and default collections, was approximately $1 billion. 

Chief 

Operating

Officer

Ombudsmana

Policy Liaison

and

Implementation

Application,

School Eligibility,

and

Delivery Services

Borrower

Services

Financial

Partners

Servicesb

Chief

Financial

Officer

Chief

Information

Officer

Enterprise

Performance

Management

Services

Workforce

Support

Servicesc

Communications

Management

Services

Source: FSA human capital documents.
Page 8 GAO-05-31 Better Strategic and Human Capital Planning 

eligible for retirement.11 We also reported that the agency had experienced 

difficulty in reaching agreement with its union on a past human capital 

initiative.12 Additionally, we noted that particular attention was needed to 

address human capital planning, leadership continuity, and succession 

planning, as well as recruitment and development to meet organizational 

needs. 

FSA has made progress in addressing key issues in the areas of financial 

management and internal control, systems integration, program integrity, 

and determining the cost of administering its programs, but FSA has not 

completely fulfilled its responsibility with respect to developing 

performance plans and reports. Many of the changes made by FSA have 

been based on GAO recommendations. Of the 22 recommendations that 

GAO has made related to student financial aid since 2001, we determined 

that FSA has fully implemented 12, partially implemented 5, and is in the 

process of implementing 5 others. A listing of past GAO recommendations 

related to FSA and student financial aid and their status is contained in 

appendix II. 

FSA’s progress varied by key area. FSA made significant progress in 

financial management and addressed several internal control weaknesses 

reported by us and outside auditors. FSA has completed several critical 

systems integration tasks but is not yet operating in a fully integrated 

environment. Also, FSA has taken some actions to improve program 

integrity and developed a model to calculate the cost of administering its 

programs. 

For several years, independent auditors reported serious financial 

management problems at FSA, but in fiscal years 2002 and 2003, the 

agency received an unqualified—or “clean”—opinion on its financial 

statements. In addition, although the auditors identified two reportable 

 11GAO, Federal Student Aid: Additional Management Improvements Would Clarify 

Strategic Direction and Enhance Accountability, GAO-02-255 (Washington, D.C.: April 

2002). 

12The American Federation of Government Employees, Council 252, represents all eligible 

employees of Education, including those in FSA. 

FSA Has Made 

Progress Addressing 

Key Issues, but Has 

Not Completely 

Fulfilled Its Planning 

and Reporting 

Responsibilities 

FSA’s Progress Varied by 

Key Area 

Financial Management and 

Internal Control 
Page 9 GAO-05-31 Better Strategic and Human Capital Planning 

conditions,13 they did not identify any material internal control 

weaknesses14 in FSA’s fiscal year 2003 audit. The two reportable 

conditions the auditors identified concern management controls 

surrounding the calculation and reporting of the loan liability activity and 

subsidy estimates and information systems controls. FSA has developed a 

corrective action plan to address these findings and is working to 

implement it. Also, FSA prepared its financial statements earlier than 

required in 2003.15 

We determined that FSA has established processes to address several 

internal control weaknesses. Since we previously reported that internal 

control weaknesses made FSA vulnerable to improper payments in its 

grant and loan programs,16 FSA has taken steps to better ensure that Pell 

Grants are not issued to ineligible students. In fiscal year 2002, FSA 

implemented a process for verifying an applicant’s age when the 

information indicated that the applicant was 75 or older and another 

process for identifying and investigating schools with high percentages of 

students with certain characteristics, such as older, noncitizen Pell Grant 

recipients. These reviews are used to identify problems such as eligibilityrelated violations or indications of possible fraudulent activities, which are 

referred to the OIG. In addition, since our finding that FSA did not correct 

Social Security numbers and dates of birth in all records, FSA has 

implemented its new loan origination and disbursement system, which 

automatically makes such changes to records in all systems. 

 13Reportable conditions are matters coming to the auditor’s attention relating to significant 

deficiencies in the design or operation of internal control that could adversely affect the 

entity’s ability to record, process, summarize, and report financial data consistent with the 

assertions by management in the financial statements. 

14A material weakness is a reportable condition in which the design or operation of one or 

more of the internal control components does not reduce to a relatively low level the risk 

that errors or fraud in amounts that would be material in relation to the financial 

statements being audited may occur and not be detected within a timely period by 

employees in the normal course of their assigned duties. 

15Beginning with fiscal year 2004, FSA and other government agencies are required to 

produce audited financial statements within 45 days after the end of the fiscal year, 

compared with 120 days in the previous two fiscal years. 

16GAO, Financial Management: Poor Internal Controls Expose Department of Education 

to Improper Payments, GAO-01-1151 (Washington, D.C.: September 2001) and GAO, 

Education Financial Management: Weak Internal Controls Led to Instances of Fraud 

and Other Improper Payments, GAO-02-406 (Washington, D.C.: March 2002). 
Page 10 GAO-05-31 Better Strategic and Human Capital Planning 

Independent auditors also reported in 2003 that Education’s systems did 

not substantially comply with the Federal Financial Management 

Improvement Act’s requirements.17 Because FSA’s financial reporting relies 

on the department’s systems, computer security weaknesses identified at 

Education also affect FSA. The auditors found that while the department 

had made progress in strengthening controls over information technology 

processes, computer security weaknesses still existed. However, the 

auditors also reported that these weaknesses were not material. 

FSA is continuing to take actions toward better integrating systems 

supporting its student financial aid programs. FSA’s integration strategy 

focuses on achieving a seamless information exchange environment in 

which users—students, educational institutions, and lenders—would 

benefit from simplified access to the agency’s financial aid processes and 

more consistent and accurate data across its programs. The strategy 

involves consolidating FSA’s existing legacy systems, in which the 

functionality of certain systems would be incorporated into new or 

modernized systems and, in the long term, integrating systems and using 

electronic interfaces to facilitate data exchanges across systems.18

Consistent with OMB guidelines,19 FSA has made progress toward 

establishing an enterprise architecture needed to guide its systems 

integration. An enterprise architecture provides a framework for 

developing and maintaining integrated information systems and 

establishes the rules and standards required for interrelated systems to 

work together efficiently and effectively. FSA has completed many of the 

required elements of its architecture, including the baseline and target 

architectures that, respectively, describe the agency’s current and future 

information systems environments. In addition, FSA has named a 

permanent chief architect, with responsibility for overseeing its systems 

integration efforts. 

 17FFMIA is intended to ensure that federal financial management systems can and do 

provide reliable, consistent financial data and that they do so on a basis that is uniform 

across the federal government using generally accepted accounting principles. 

18Functionality refers to the capabilities or behaviors of a program, part of a program, or 

system, seen as the sum of its features. 

19Office of Management and Budget, Management of Federal Information Resources, OMB 

Circular A-130 (November 30, 2000). 

Systems Integration 
Page 11 GAO-05-31 Better Strategic and Human Capital Planning 

FSA has also begun consolidating certain information systems, thus 

reducing the overall number of systems that it must rely on to administer 

its student financial aid programs. Over the past several years, the agency 

has retired 6 of 18 systems and incorporated their functionality into 

certain other systems. (Definitions for these systems are in app. III.) From 

2002 to 2004, FSA retired 3 systems and incorporated their functionality 

into the Common Origination and Disbursement (COD) System.20 COD 

supports a single process for delivering Direct Loan and Pell Grant aid to 

students and relies on middleware as a solution for exchanging data 

between incompatible systems while the agency works toward full 

integration.21 According to FSA, the consolidation of the three systems’ 

functions into COD has improved the delivery of student aid by simplifying 

the process by which schools request, report, and reconcile federal Pell 

Grant and Direct Loan funds and by facilitating schools’ submissions of 

student aid data through the use of a common student record. FSA also 

retired 3 systems that supported its financial activities, such as collecting 

on defaulted student loans, and incorporated these functions into its 

Financial Management System—creating a repository for the agency’s 

financial information.22 FSA reported that these actions have helped 

improve financial decision-making and the ability to create financial 

reports for FSA, lenders, and guaranty agencies. 

Nonetheless, FSA remains several years from operating in a fully 

integrated information systems environment. While it has reduced the 

number of systems supporting its programs, FSA plans further actions to 

reengineer the agency’s information processing environment. In this 

regard, FSA has begun three major systems integration initiatives, which it 

plans to complete by 2008: 

• Front-End Business Integration is planned to simplify and improve the 

front-end processes (for example, grant and loan originations) associated 

with FSA’s student aid delivery services by integrating the information, 

 20The three systems that FSA incorporated into COD were the Pell Grant Recipient 

Financial Management System, the Recipient Financial Management System, and the Direct 

Loan Origination System. 

21Middleware is a type of software that enables databases located on different systems to 

work together as if they all resided in a single database. 

22The three systems incorporated into FSA’s Financial Management System were the 

Federal Family Education Loan System, the Financial Accounting and Reporting System, 

and the Central Data System. 
Page 12 GAO-05-31 Better Strategic and Human Capital Planning 

processes, and supporting systems that applicants, their parents, and 

others rely on in seeking financial aid. 

• Integrated Partner Management is planned to improve FSA’s ability to 

reduce fraud and errors in its student aid programs by incorporating 

improved controls, such as common identifiers, system access 

information, and a single point of enrollment. The initiative is expected to 

reengineer or replace FSA’s current database of entities, such as schools 

and lenders that participate in the student aid programs. 

• Common Services for Borrowers is planned to improve and simplify backend services related to the management of student aid obligations (for 

example, loan repayments) by combining the borrower-related functions 

of existing loan servicing systems into an integrated process.23

FSA officials explained that, overall, the three integration initiatives are 

expected to streamline systems and operations through further 

consolidating common processing functions and interfacing systems that 

receive and process loan applications, monitor program participation, and 

track loan obligations. As an essential first step for sharing common 

financial aid data in the integrated environment, FSA is in the process of 

completing data standardization across its systems. In addition, the agency 

has begun hiring contractors to support the three integration initiatives. 

However, the agency has not yet fully defined the technological solutions 

for the initiatives—a step that is necessary to know what specific 

technology will be used to integrate the systems. FSA officials stated that 

the agency would rely on the supporting contractors to perform this 

crucial task. 

The agency also plans to define integration strategies that would enable 

existing financial management and other systems to share data with its 

integrated components.24 However, the technological solutions for 

accomplishing this have not been defined. FSA’s approach for integrating 

its systems is depicted in figure 2. 

 23The Common Services for Borrowers initiative is planned to be completed by 2006 and 

would combine the functionality of four systems—Debt Management and Collection 

System, Direct Loan Consolidation System, Direct Loan Servicing System, and Conditional 

Disability Discharge Tracking System. 

24The other systems include the Electronic Campus-Based System, the National Student 

Loan Data System, and the Ombudsman Call Tracking System. 
Page 13 GAO-05-31 Better Strategic and Human Capital Planning 

Figure 2: FSA’s Approach for Integrating Its Information Systems 

a

FSA anticipates completing the Common Services for Borrowers initiative in 2006. 

Until FSA achieves a fully integrated environment, it lacks assurance that 

it will realize greater efficiencies in sharing student financial aid 

information across its programs. Further, the agency cannot be assured 

that it will be able to provide sustained higher-quality information and 

enhanced services to students, parents, schools, and others. 

In response to issues raised in past reports, FSA has taken several steps to 

improve program integrity, but FSA has no assurance that comprehensive 

compliance reviews are being performed properly or that the results are 

Program Integrity

Source: GAO analysis of FSA systems integration plan.

Front-end Business 

Integration

Direct Loan 

Origination 

System

Pell Grant 

Recipient Financial 

Management 

System

Recipient 

Financial 

Management 

System

Retired systems

Central Processing System

(Free Application for Federal 

Student Aid on the Web)

Common 

Origination and 

Disbursement 

System

Additional 

integrated solutions 

to be defined.

Will interface 

after completion 

of initiatives.

Ombudsman 

Call Tracking 

System

Electronic 

Campus-based 

System

National 

Student Loan 

Data System

Financial 

Management 

System

Retired systems

Central Data 

System

Financial 

Accounting and 

Reporting 

System

Federal Family 

Education 

Loan System

Integrated Partner 

Management

eZ-Audit

Postsecondary 

Education 

Participants 

System

Initiatives planned for implementation by 2008a

Common Services for 

Borrowers

Direct Loan 

Consolidation 

System

Debt 

Management 

and Collections 

System

Conditional 

Disability 

Discharge 

Tracking System

Direct Loan 

Servicing 

System

Debt 

Management 

and Collections 

System
Page 14 GAO-05-31 Better Strategic and Human Capital Planning 

reliable.25 To improve the oversight of and assistance to foreign schools, 

FSA (1) added controls to verify the existence of foreign schools and their 

students, (2) hired a consultant to help determine how best to ensure 

accountability of foreign schools, and (3) started developing an online 

training program to help foreign school officials properly administer the 

program.26 Also, FSA has taken steps to help address concerns raised 

about students who have underreported family income on their student 

aid applications.27 FSA conducted studies with the Internal Revenue 

Service (IRS) to compare student and parent income on student aid 

applications with reported income on tax forms to determine the extent of 

over- and under-reporting of income in student applications. FSA also 

worked with OMB and the Department of the Treasury to draft legislation 

that would permit the IRS to disclose taxpayer information to Education.28

Such legislation, if passed, would enable FSA to compare the income data 

on the financial aid applications with tax records to better ensure that only 

eligible students receive financial aid. According to agency officials, FSA 

has developed several approaches for implementing the comparison 

process in anticipation of passage of the legislation. 

Moreover, FSA has taken steps to enhance its student loan default 

management efforts. In 2003, FSA created a work group that identified 

over 60 default prevention and management initiatives and a new 

organizational unit, Portfolio Risk Management, that focuses on mitigating 

and reducing the risk of loss to the taxpayer from student aid obligations. 

FSA also added information to its exit-counseling guide to help increase 

 25According to FSA headquarters officials, a comprehensive compliance review involves 

looking at data about the school that are contained in FSA’s databases, in the public 

domain, and in communications to FSA. It may include a visit to the school if warranted. 

26GAO, Student Loans and Foreign Schools: Assessing Risk Could Help Education Reduce 

Program Vulnerability, GAO-03-647 (Washington, D.C.: July 2003); GAO, Department of 

Education: Guaranteed Student Loan Program Vulnerabilities, GAO-03-268R

(Washington, D.C.: November 2002). 

27GAO, Taxpayer Information: Increased Sharing and Verifying of Information Could 

Improve Education’s Award Decisions, GAO-03-821 (Washington, D.C.: July 2003); GAO, 

Benefit and Loan Programs: Improved Data Sharing Could Enhance Program Integrity, 

GAO/HEHS-00-119 (Washington, D.C.: September 2000); and OIG, Department of 

Education, Accuracy of Student Aid Awards Can Be Improved by Obtaining Income Data 

from the Internal Revenue Service, ACN: 11-5001 (Washington, D.C.: January 29, 1997). 

28This bill, entitled Student Aid Streamlined Disclosure Act of 2003, H.R. 3613, was referred 

to the House Committee on Ways and Means on November 21, 2003. 
Page 15 GAO-05-31 Better Strategic and Human Capital Planning 

borrowers’ awareness of the benefits of repaying their loans through 

electronic debiting accounts and prepayment options.29

In its 2003 annual performance report, FSA stated that it had completed 

several reviews to enhance the integrity of its programs. Among other 

things, FSA reported that the agency had monitored 40 percent of all 

participating schools through comprehensive compliance reviews. 

According to FSA headquarters officials, a comprehensive compliance 

review is triggered by specific events, such as compliance deficiencies 

identified during independent audits, financial statements that do not 

conform to accepted accounting standards, schools applying for initial 

eligibility or renewing their eligibility, or schools changing ownership or 

merging. FSA officials stated that these reviews could result in a decision 

to perform a more in-depth on-site review. FSA officials explained that 

during comprehensive compliance reviews, regional teams are to review 

all available data about that school in addition to addressing the triggering 

event. However, FSA officials could not provide us written documents 

defining a comprehensive compliance review or guidance on how teams 

are to perform these reviews. Without such documentation and guidance, 

FSA has no assurance that regional teams are properly performing these 

reviews, the results are reliable, or the related decisions are appropriate. 

As part of its effort to demonstrate that it has reduced the cost of 

administering its programs—one of the purposes established in the HEA—

FSA is implementing an activity-based cost (ABC) model. FSA’s proposed 

ABC model is intended to produce information on the full cost of 

administering federal student aid programs to help manage costs and 

measure performance. The model as designed will enable FSA to comply 

with federal managerial cost-accounting standards.30 When fully 

implemented, the proposed ABC model should facilitate progress toward 

meeting FSA’s goal of identifying the full cost of its separate activities and 

determining the change in such costs over time. For example, using this 

model, FSA would be able to compare the changes in costs for using Free 

 29FSA’s Exit Counseling Guide for Direct Loan Borrowers provides information for 

borrowers no longer in school on repaying their federal student loans. 

30Federal Accounting Standards Advisory Board, Statements of Federal Financial 

Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Concepts and Standards 

for the Federal Government. (July 31, 1995). 

Cost of Administering FSA’s 

Programs 
Page 16 GAO-05-31 Better Strategic and Human Capital Planning 

Application for Federal Student Aid (FAFSA) on the Web to the use of 

paper financial aid applications. Figure 3 summarizes FSA’s model. 
Page 17 GAO-05-31 Better Strategic and Human Capital Planning 

Figure 3. FSA’s Activity-Based Cost Model 

a

FSA interviewed and surveyed staff to obtain information on activities and their costs. 

b

Other systems include those related to student financial aid programs such as the Debt Management 

and Collections System. 

However, FSA’s proposed ABC model was not fully operational as of July 

2004. FSA has completed the initial design of the ABC model and has 

Source: Office of Federal Student Aid.

Resource drivers

Data that link the usage of a

resource to a specific activity,

compiled through interviews, a

Web-based surveya tool, and

other FSA systems.b

Activity drivers

Statement of

net cost Budget Performancemeasures

Resources are accounting data

specific to FSA’s costs that are

imported from Education’s general

ledger. 

Resources

Activities are descriptions of the

work done using the accounting data

specific to FSA’s costs arranged to

reflect the organizational structure of

the agency.

● Primary business processes cost ● Unit cost

Resource

cost assignment

Activities

Outputs

Activity

cost assignment

Cost objects

● Primary business process ● Fully costed business process ● Unit-cost of business process ● Cost of programs

Management

reports

Data that link specific activities

to one or more cost objects,

based on data from other FSA

systems, direct relationships,

or calculations.
Page 18 GAO-05-31 Better Strategic and Human Capital Planning 

partially tested it using financial and nonfinancial workload data for fiscal 

years 2002 and 2003. During the test of the model using fiscal year 2002 

data, FSA identified costs of more than $24.8 million that could not be 

assigned to a specific activity because insufficient information was known 

about these costs. Further, FSA had not fully reconciled the fiscal year 

2002 costs used to test the model to total cost amounts reported in its 

audited financial statements. In March 2004 FSA staff advised us that they 

plan to address both of these issues. In July 2004 FSA officials updated us 

on the status of their implementation efforts. FSA staff advised us that 

they had further tested the model using fiscal year 2003 data, including 

fully reconciling the fiscal year 2003 costs in the model to amounts 

reported in its audited financial statements. Further, FSA officials advised 

us that all fiscal year 2003 costs could be assigned to activities, and that 

they plan to use the knowledge gained from this effort to revisit and 

resolve the issues outstanding from the tests using fiscal year 2002 data. 

FSA officials told us that FSA plans to complete testing its model and have 

it fully operational by spring 2005. When its cost model is fully operational, 

FSA plans to use the results to drive changes in how it does business, such 

as identifying targets for business process improvements and comparing 

resource allocations with results. FSA also expects to be able to measure 

changes in the cost of its program activities over time. Once FSA’s cost 

model is fully tested and operational, FSA should be able to identify the 

full cost to administer its financial aid programs and reliably determine the 

changes in such costs over time. 

The HEA requires FSA to develop a 5-year performance plan annually, and 

FSA issued its first one in June 2004. This plan covers fiscal years 2004-

2008 and contains five strategic goals referred to by FSA as strategic 

objectives: (1) integrating FSA systems and providing new technology 

solutions, (2) improving program integrity, (3) reducing program 

administration costs, (4) improving human capital management, and 

(5) improving products and services to provide better customer service. 

While FSA’s 5-year performance plan provides a general discussion of 

each objective, it lacks measures for later determining the extent to which 

the objectives have been met. Furthermore, FSA’s plan identifies a number 

of action steps, referred to as tactical goals by FSA. These steps, however, 

are not directly linked to a specific strategic objective, and some do not 

contain specific performance measures that can be used to assess 

progress over time. For example, FSA’s 5-year performance plan describes 

the establishment of an office to serve as the central point of contact for 

all FSA projects and provides a general discussion of the office’s purpose 

and activities. However, this action step is not linked to a particular 

FSA Has Not Completely 

Fulfilled Its Planning and 

Reporting Responsibilities 
Page 19 GAO-05-31 Better Strategic and Human Capital Planning 

strategic objective and does not include any measures or targets for 

assessing future progress. 

FSA’s 2004 annual plan does not fully complement its 5-year performance 

plan. FSA’s annual plan lists annual goals, referred to as action items and 

success measures, but the success measures do not provide a means for 

assessing performance toward achieving longer-term strategic objectives. 

As shown in figure 4, an X in one or more related columns in the annual 

plan indicates which strategic objective or objectives the annual goal 

supports, but it does not indicate how achievement of the annual goal will 

result in progress toward the strategic objective or objectives. In addition, 

in reviewing the 2004 plan, we found that the annual plan contained six 

strategic objectives, while the 5-year performance plan for fiscal years 

2004-2008 contained five.31 According to FSA officials, the sixth goal was 

identified while the 5-year performance plan was going through the review 

process. FSA did not add the sixth goal to this plan before it was finalized 

because it did not want to delay the plan’s issuance. However, FSA 

officials said that they would add it to the 2005-2009 performance plan. 

 31The sixth goal is to “deliver student aid effectively and accurately.” FSA officials could not 

describe this goal beyond what is contained in the title heading of the table. 
Page 20 GAO-05-31 Better Strategic and Human Capital Planning 

Figure 4: Illustration of a Segment of FSA’s Annual Plan 

Source: GAO analysis of FSA’s fiscal year 2004 annual plan.

1 - FSA systems integration

Project n

 and technology

umber

Action items

Responsible area

Business need

Success measures

Target completion date

2 - Improve program

 integrity

3 - Reduce cost

4 - Improve human

 capital management

5 - Improve products

 and services

6 - Deliver student aid

 effectively and accurately

Objectives

Performance activities

12 Borrower

Services

Sept.

04

Transition to Common ✗

Services for Borrowers 

(CSB) as Direct Loan 

Consolidation System 

(DCLS) contract expires.

Ensure continued 

service during 

transition to CSB.

Contract expires September 2004 with 

no impact on service.

13 Borrower

Services

Sept.

04

Enhance program ✗✗ ✗✗

monitoring and 

oversight.

Address issues that 

resulted in GAO 

designating FSA as 

a high-risk program.

FSA will move closer to realizing the goal 

of being removed from the GAO high-risk 

list by implementing the success 

measures below.

13.1 Borrower

Services

Sept.

04

Default recovery rate ✗ ✗

on FSA-held portfolio 

9.5% or more by the 

end of the fiscal year.

Achieve a 9.5% recovery rate on FSA’s 

default portfolio (excluding consolidations) 

in FY 2004. 

13.2 Borrower

Services

June

04

Update FSA-wide risk ✗✗ ✗

management and 

default prevention 

inventory.

Identify gaps in default prevention 

inventory and identify new opportunities 

for default prevention. In collaboration, 

with FSA trading partners, identify and 

establish parameters and set baselines 

for two new measures that will assess the 

progress and the status of the FSA default 

management prevention strategies.

13.3 Borrower

Services

Sept.

04

Complete the work on ✗✗ ✗✗

the implementation of 

the lifetime default rate 

measure.

Finalize the lifetime default rate measure. 

Identify characteristics of defaulted loans 

to determine the predictability of 

borrowers defaulting in the future. Begin 

initial development of the predictability 

model for lifetime default measure.

13.4 Borrower

Services

Sept.

04

Identify new and ✗✗ ✗✗

enhance current 

delinquency/default 

prevention tools for the 

Direct Loan program.

Increase the cure rate on Direct Loans 

(excluding consolidation loans) that are 

180 days or more delinquent by 1% over 

FY 2003 baseline (53.7%). Data are 

available monthly to evaluate progress.

To promote program 

integrity, FSA will 

conduct a vulnerability

assessment of 

targeted back-end 

business processes 

and systems to 

identify potential 

areas that may be 

vulnerable to fraud.

13.5 Borrower

Services

Sept.

04

Conduct vulnerability ✗

assessment.

Implementation of the CSB will eliminate 

many system vulnerabilities because one 

system will replace seven systems. Staff 

will assess vulnerabilities of Phase I and 

the start of Phase II of the CSB transition. 

Older fraud, waste, and abuse information 

will be the basis for the assessment. This 

item will be reported monthly.
Page 21 GAO-05-31 Better Strategic and Human Capital Planning 

FSA’s annual performance report for fiscal year 2003 does not conform to 

the requirements of HEA or GPRA.32 FSA is to issue an annual 

performance report that includes an evaluation of the extent to which the 

agency met the strategic objectives established in its prior year’s 5-year 

performance plan. Although FSA had not previously prepared a 

performance plan, it had strategic objectives and annual goals, and its 2003 

performance report clearly discusses FSA’s achievement of its annual 

goals. The report also provides a general discussion of its 

accomplishments under each strategic objective. 

However, the performance report does not include measures or trend data 

by which the Congress could clearly see the extent of FSA’s progress, 

because, as previously noted, the annual plans did not provide a means for 

assessing performance toward achieving strategic objectives. For 

example, under its objective to improve program integrity, FSA describes 

the Late Stage Delinquency Assistance Program as an initiative to mitigate 

potential defaults in the Direct Loan Program by eliciting assistance from 

schools in locating and contacting borrowers prior to default. The report 

states that initial results are promising but does not provide a measure of 

the extent to which this effort contributes to the overall program integrity 

objective or the extent of the agency’s progress in meeting this strategic 

objective. Further, the report does not include all required information 

regarding the COO and senior officials. The report summarizes the bonus 

amounts paid but does not include performance-rating information for the 

COO and senior officials, as required. 

 32The HEA requires that the annual report include, among other things, financial and 

performance requirements applicable to the PBO under the Chief Financial Officer Act of 

1990 and the Government Performance and Results Act of 1993, results achieved in the 

previous year, and evaluations ratings and the amounts awarded as bonuses to the COO 

and senior managers. 
Page 22 GAO-05-31 Better Strategic and Human Capital Planning 

FSA has laid the foundation for a comprehensive human capital strategy 

and has taken steps to further its efforts to address the accountability of 

senior officials, but some of the human capital strategy’s components and 

the accountability system have weaknesses. For example, FSA’s draft 

succession plan identifies the staff that are eligible to retire in the next few 

years, but the plan relies heavily on redistributing workloads to other 

employees, and none of the strategy’s other components described how 

these individuals would be trained to fulfill these duties. FSA has taken 

added steps to increase accountability for senior officials, such as holding 

them responsible for achieving individual goals specified in annual 

agreements and changing the way bonuses are awarded. However, we 

found that the new criteria for awarding bonuses for senior officials was 

unclear and could undermine other efforts to increase accountability, such 

as making greater distinctions in performance by using a new performance 

management system. 

FSA has undertaken steps to develop a comprehensive human capital 

strategy in part because of issues raised in our previous reports; however, 

we found weaknesses with some of the strategy’s components.33 FSA 

officials told us that they worked in collaboration with an organization 

that specializes in government workforce issues to develop a document 

that summarizes the various components of its human capital strategy. 34

Agency officials provided us with a copy of its final human capital plan at 

the end of July 2004. Our work and guidance in this area indicates that in 

developing a human capital strategy, leading agencies identify talent at all 

levels of the organization, emphasize developmental projects for staff, 

address human capital challenges specific to the organization, and 

facilitate broader transformation efforts, such as training, to address 

organizational needs that position the organization to meet its future 

challenges.35 FSA’s human capital plan indicates that the agency has 

strategies that include many of these practices. For example, the plan 

 33In 2002 we recommended that FSA develop and implement a comprehensive human 

capital strategy that incorporates succession planning and addresses staff development; 

and since 2001, we have reported that human capital management was a challenge facing 

FSA and agencies governmentwide. 

34The Partnership for Public Service is a nonprofit organization that works to revitalize 

interest in public service through educational outreach, research, legislative advocacy, and 

hands-on partnerships with agencies on workforce management issues. 

35GAO, Human Capital: Insights for U.S. Agencies from Other Countries’ Succession 

Planning and Management Initiatives, GAO-03-914, (Washington, D.C.: September 2003). 

FSA Has Developed a 

Human Capital 

Strategy and Taken 

Steps to Increase the 

Accountability of 

Officials, but Both 

Efforts Have 

Weaknesses 

FSA Has Developed a 

Human Capital Strategy, 

but Some of its 

Components Have 

Weaknesses 
Page 23 GAO-05-31 Better Strategic and Human Capital Planning 

outlines challenges the agency will likely face in coming years and 

discusses recognized weaknesses and challenges, such as the need to 

develop the skills of staff and maintain the focus of the agency’s leadership 

on human capital issues. 

However, we found weaknesses in some of the strategy’s components. 

FSA’s succession plan identifies likely retirements but relies on a shortterm solution—shifting duties to other staff. As for one of its components 

used to develop staff skills, the learning coupon staff can use for external 

training, FSA has not established a method to fully evaluate its usefulness. 

Also, FSA’s realignment plan may be delayed because the agency has not 

reached agreement on its implementation with union officials. Table 1 lists 

and briefly describes the five key components of FSA’s human capital 

strategy. 

Table 1: Components of FSA’s Human Capital Strategy 

Component name Description of component 

Succession plan An approach for identifying, training, and transitioning 

future leaders into roles without impairing business 

objectives 

Staff realignment project A proposal to reorganize the workforce that includes 

targeted voluntary early retirements and separation 

incentive payments 

Skills Catalog An inventory of required skills for FSA positions 

Online learning tools and 

training resources 

Learning tracks 

• Web-based curriculum that supports a set of 

competencies needed to perform a specific job 

Career Zone 

• An office that manages internal training courses and 

provides counseling to staff to help them match 

individual skills and career planning with organizational 

priorities 

Learning coupon 

• $500 benefit for external training courses 

Recruitment plan Methods for recruiting, hiring, and retaining staff 

Source: GAO analysis of 2004 FSA draft human capital plan and other FSA materials. 

Furthermore, FSA does not maintain an information system to track staff 

development—a critical piece in strategic workforce planning. According 

to agency officials, FSA staff members have access to a number of standalone human capital information systems, including one housed at the 

department that contains data on training courses taken by staff. However, 

an official described this system as outdated and said that it did not allow 
Page 24 GAO-05-31 Better Strategic and Human Capital Planning 

staff to create individual development plans or provide data that managers 

needed for other agency planning efforts, such as its succession plan. Our 

previous studies indicate that information systems play a critical role in 

workforce planning. Valid and reliable data on knowledge and skills of 

staff are critical to assessing an agency’s current and future workforce 

gaps. With such data, agencies can minimize these gaps and better manage 

risk by allowing managers to spotlight areas for attention and take 

appropriate actions before crises develop. A senior official agreed that the 

agency does not have systems that allow the agency to track staff 

development but also said that an independent system was not a good 

investment because of the ongoing efforts by Education to procure a 

departmentwide human capital management system. 

FSA prepared a draft succession plan that addresses, in part, the concerns 

we raised in 2002 about the pending retirement of senior employees in key 

positions across the agency.36 This draft plan identified almost 250 

employees from across the agency that are likely to retire between 2003 

and 2006, about 22 percent of the agency’s workforce. Also, the plan 

designated 167 of the positions as critical positions that help FSA achieve 

its organizational goals and identified 31 positions as “hard to fill” because 

specific skills and program knowledge are required to perform the duties 

related to these positions. When these hard-to-fill positions become 

vacant, FSA plans to fill one-third of the positions through internal hiring; 

one vacancy will be filled through a mentoring opportunity. 

However, the succession plan did not include information about all 

positions and relied on short-term solutions. The plan did not include any 

information for 12 positions, 10 of which are in regional offices and 

include responsibility for oversight of lenders, banks, and guaranty 

agencies. Moreover, according to the plan, FSA will redistribute the 

workload to existing staff for 140 of the 247 positions but the strategy’s 

components do not discuss how the agency will use developmental 

projects or training to prepare these staff to assume these duties. We 

previously reported that training and developing new and current staff to 

fill new roles and work in different ways would be a crucial part of the 

federal government’s endeavors to meet future challenges.37 Agency 

officials acknowledge that this is a short-term approach but stated that it 

 36GAO-02-255. 

37GAO, Guide for Assessing Strategic Training and Development Efforts in the Federal 

Government, GAO-04-546G (Washington, D.C.: March 2004). 

Succession Plan 
Page 25 GAO-05-31 Better Strategic and Human Capital Planning 

will allow them time to consider the full range of options to best position 

its resources while getting the job done. Our work and guidance in this 

area indicates that leading organizations develop succession plans that 

strategically focus on both the organization’s current and future capacity. 

Leading organizations are shifting from a short-term replacement 

approach that identifies individuals for a specific vacancy to a strategic 

approach that identifies and develops high-potential individuals. Using 

certain approaches, such as shifting duties from retired staff to those who 

remain—even in the short term—may put the agency at risk because staff 

may not be prepared to adequately fulfill new duties. As a result, essential 

functions of the agency may suffer. 

FSA’s human capital strategy includes proposals to realign its workforce 

and offer early out packages to staff, but as of August 2004, the union had 

not agreed to either proposal. The realignment proposal would affect the 

Application, School Eligibility, and Delivery Unit (ASEDS), which has 

more than 530 employees—nearly half of the agency. This proposal states, 

among other things, that FSA would eliminate the office responsible for 

providing specific, program-related training for schools participating in the 

Direct Loan program because it has decided to adopt an approach that 

supports all schools and all student aid programs. As a result of the 

realignment, some staff from this office will be reassigned to other units, 

as needed. For other staff, the proposal states that because they have skills 

that no longer align with the agency’s needs, it would be more costeffective for the organization to offer “early out packages” than to engage 

in an extensive retraining effort. FSA’s second proposal, which is related 

to but not dependent on the implementation of the realignment proposal, 

would allow some employees to retire early or receive voluntary 

separation payments.38 The early out packages are intended to provide the 

agency with greater flexibility in managing its workforce and recruiting 

workers with needed skills. This proposal states that using this approach, 

vacancies will be created that will allow FSA to hire individuals that 

possess the requisite skills. 

 38Early retirement for federal employees was first authorized under P.L. 93-39 in 1973 and 

clarified through subsequent legislation detailing eligibility criteria in P.L. 105-174. The 

purpose of the legislation was to provide agencies with a tool to minimize the involuntary 

separation of employees in major periods of downsizing by qualifying for early retirement. 

Voluntary incentive separation payments were authorized through P.L. 104-208 and provide 

agencies with the authority to make lump-sum payments of no more than $25,000 to eligible 

employees who voluntarily agree to resign, retire, or retire under voluntary early 

retirements. 

Staff Realignment and Early 

Out Proposals 
Page 26 GAO-05-31 Better Strategic and Human Capital Planning 

However, FSA and union officials had not reached agreement on the 

realignment proposal and had yet to begin discussions on its early out 

proposal. According to an agency official, the realignment proposal was 

developed over a 6-month period. At the end of May 2004, after the 

Secretary of Education gave his approval, FSA submitted the realignment 

proposal to the union. The collective bargaining agreement between FSA 

and its union states that the union should have the opportunity to review 

actions affecting any aspect of employee working conditions, including 

those related to training, development, and appraisals. This agreement 

requires FSA to share proposals with the union after receiving approval by 

the department—which it did. An agency official told us that FSA had not 

received input from labor union officials on the agency’s proposed 

realignment and that union officials had requested additional information 

before agreeing to meet with FSA officials to discuss the proposal. As of 

August 2004, FSA had informed the union that it had met its collective 

bargaining obligations and would proceed with the implementation of the 

realignment proposal during September 2004. As for the early out 

proposal, FSA officials told us that it received approval from the Secretary 

in early June, and by the month’s close he requested authority from Office 

of Personnel Management (OPM) to offer early out packages (i.e., early 

retirement options and voluntary separation buyouts). FSA has informed 

the union of this proposal and indicated that it would wait until OPM 

granted approval before entering into collective bargaining with the union. 

As of August 2004, FSA had not received approval from OPM for the early 

out packages. 

In an effort to identify the skills and competencies required to perform at 

all levels of the agency, FSA revised its Skills Catalog, which should enable 

staff to independently plan their professional development. The catalog 

was originally created in 2000 and was revised based on a series of 

interviews with senior managers and subject matter experts throughout 

the agency. Its purposes are to (1) provide a common tool for management 

and staff to set expectations, (2) help employees identify opportunities for 

development through courses offered externally or by FSA, and (3) assist 

managers in future workforce planning efforts. FSA’s 5-year plan indicates 

that one potential use of the Skills Catalog would be to identify gaps in 

critical competencies and provide employees with information on when 

and where additional training and development are needed. We previously 

reported that effective training and development programs are an integral 

part of a learning environment that can enhance the federal government’s 

Skills Catalog 
Page 27 GAO-05-31 Better Strategic and Human Capital Planning 

ability to attract and retain employees with the skills and competencies 

needed to achieve results.39 FSA encouraged its employees to think of the 

catalog as a restaurant menu through which they would place an order to 

address their individual development needs and contribute to the agency’s 

objectives. In addition to listing a set of core competencies that every FSA 

employee is expected to demonstrate,40 the catalog defines three 

competency areas for each organizational unit consisting of functions, 

skills, and knowledge. FSA has developed draft competencies for all units. 

For example, selected competencies listed in the Skills Catalog for staff in 

the office of the Chief Financial Officer are summarized in Figure 5. 

 39GAO-04-546G. 

40For example, personnel in managerial, leadership, and other positions, such as team 

leaders or project managers, are expected to demonstrate core managerial skills and 

knowledge including business acumen, employee development and empowerment, 

financial management, knowledge sharing, problem solving and decisionmaking, program 

and project management, and team building. 
Page 28 GAO-05-31 Better Strategic and Human Capital Planning 

Figure 5: Selections from FSA’s Skills Catalog: FSA’s Office of the Chief Financial 

Officer 

FSA-wide core competencies 

Business ethics 

Continuous learning and improvement 

Customer service 

FSA business knowledge 

Time and task management 

Results orientation 

Interpersonal skills 

Oral and written communication 

Technology literacy 

Chief Financial Officer 

Functions Skills Knowledge 

Contract management 

Reconciliation of FSA data 

Federal financial 

management 

Budget presentation and 

justification 

Budget formulation 

Research and analysis 

Presentation 

Customer service and 

support 

Budget concepts and 

practices 

Chief Financial Officer Act 

Credit Reform Act 

Generally Accepted 

Accounting Principles 

Source: FSA Skills Catalog, Summer 2004 (draft). 

FSA introduced online learning tools as an added resource for some staff 

who are responsible for providing oversight and determining eligibility of 

schools. FSA developed unit-specific online tools, called learning tracks, 

designed to improve the skills needed to perform everyday tasks. FSA 

created five online tools in fiscal year 2003, and agency officials told us 

that they plan to introduce more online tools by fiscal year 2005 that 

further address organizational needs, such as tools to enhance 

communication and supervisory skills. An FSA official said that the 

development of these online tools would be a key part in the agency’s 

efforts to strengthen program integrity. According to a draft document on 

the tools, the development of learning tracks would shift the agency away 

from developing an entire agencywide curriculum based on particular 

position descriptions and toward developing resources for specific on-thejob skills. Officials told us that learning tracks have been introduced to 

divisions in ASEDS that perform case management and oversight and 

determine school eligibility. These learning tracks target the development 

of skills, such as data analysis and comprehension, leadership, and critical 

thinking. 

Also, FSA continued to support internal and external training 

opportunities. FSA offered a wide variety of courses internally through its 

Online Learning Tools and 

Training Resources 
Page 29 GAO-05-31 Better Strategic and Human Capital Planning 

Career Zone. In 2003 FSA expanded this office, and contracted services 

from two full-time career counselors who began providing individualized 

career counseling sessions and career development courses. FSA also 

continued to offer its staff a $500 learning coupon, to pay for technical and 

work-related external training courses. Officials told us that the coupon 

was part of an effort to enable employees to take a proactive approach to 

planning their professional development. Around 40 percent of FSA’s staff 

used the learning coupon during fiscal years 2003 and 2004, although the 

agency had allocated sufficient funds to provide this benefit for up to 50 

percent of the staff. While the agency has surveyed staff that used the 

learning coupon, officials told us that they were not certain why more staff 

did not use it.41 Our work in this area shows that evaluation is an integral 

part of planning that allows agencies to build upon lessons learned and 

improve performance. Because the agency has surveyed only coupon 

users, officials cannot be assured that the learning coupon is an effective 

tool for helping staff develop their skills or that these funds are being 

budgeted for likely needs. Officials indicated that they had plans to 

broaden their efforts to survey all staff to better understand perceptions 

about the coupon. 

To fill vacancies, FSA plans to use a variety of techniques and to recruit 

nationwide, governmentwide, and internally. FSA also plans to recruit 

interns and subsequently offer, to those who perform well, permanent 

positions. In addition, FSA will continue to use the flexibilities allowed in 

the HEA for hiring senior executives and technical staff. According to the 

plan, FSA will use these flexibilities to address critical agency needs such 

as in the information technology area. 

 41In 2004, agency officials surveyed learning coupon users to determine both user 

satisfaction and the effectiveness of the coupon. 

Recruitment 
Page 30 GAO-05-31 Better Strategic and Human Capital Planning 

FSA has taken steps to increase the accountability of its senior officials—

one of its purposes as a PBO.42 FSA modified its performance 

measurement system, emphasized individual achievement of goals, and 

provided bonuses based on individual performance. However, we found 

that the criteria for awarding bonuses to senior officials were not clear. 

Beginning in 2001, as a result of a departmentwide initiative, FSA adopted 

new performance appraisal systems for all of its employees, including its 

SES members and senior managers, to provide the agency with the ability 

to make greater distinctions in performance.43 Before the new systems 

were adopted, all department employees were evaluated on a pass-fail 

basis. The new system for SES uses three performance levels, while the 

new system for senior managers and others uses five performance levels.44

Our body of work in this area suggests that effective performance 

management systems allow organizations to make meaningful distinctions 

in performance.45 By utilizing multiple performance categories, FSA has 

improved its ability to make distinctions in performance among its senior 

officials and increase accountability. 

The 2003 performance agreements we reviewed for both types of senior 

officials—SES and senior managers—emphasized individual achievement 

of goals. Prior to 2003, performance agreements specified (1) how a senior 

official’s performance would be evaluated; (2) individual projects and 

activities to be performed by the official; and (3) six organizational, or 

“cross-cutting,” goals to which all senior officials were expected to 

contribute.46 For the 2003 performance period, SES agreements for senior 

 42Our analysis included those senior officials that served on the FSA Management Council 

and reported directly to the agency’s Chief Operating Officer. 

43These systems are known as the Education Department Performance Appraisal System 

(EDPAS) and Senior Executive Performance Management System (SEPMS). EDPAS is for 

managers and staff. SEPMS is for all SES employees hired under the flexible hiring 

authority under the HEA. 

44The three performance levels are unsatisfactory, minimally satisfactory, and successful, 

and the five performance levels are unacceptable, minimally successful, successful, highly 

successful, and outstanding. 

45GAO, Human Capital: Senior Executive Performance Management Can Be 

Significantly Strengthened to Achieve Results, GAO-04-614 (Washington, D.C.: May 2004). 

46These goals were (a) leaving the GAO high risk list, (b) achieving a default recovery rate 

of 7.2%, (c) limiting Pell Grant overpayments to $138 million, (d) making timely 

reconciliations to the general ledger, (e) improving customer service, and (f) completing all 

FSA system integration targets. 

FSA Has Taken Steps 

to Increase the 

Accountability of 

Officials, but Its 

Criteria for Awarding 

Bonuses Are Not 

Clear 
Page 31 GAO-05-31 Better Strategic and Human Capital Planning 

officials included three performance element groups: (1) leadership, 

management, and coaching; (2) work quality, productivity, and customer 

service; and (3) organizational priorities/job specifics. For each senior 

official at FSA, the organizational priorities/job specifics performance 

element primarily consisted of unique individual goals for which the 

official has responsibility and for which he or she is held accountable. 

However, FSA’s emphasis on individual goals still included the use of 

organizational, or cross-cutting, goals—only to a lesser extent. But we also 

found that the use of such goals has become more strategic. FSA’s fiscal 

year 2003 annual plan contained at least four such cross-cutting goals, 

including goals to implement a data strategy and enhance program 

monitoring and oversight. Having performance agreements that consist of 

both job-specific individual and cross-cutting organizational goals 

reinforces accountability for both individual and organizational success. 

We view the use of collaborative efforts as a key practice in achieving 

results. Figure 6 illustrates the change from organizational goals used in 

the fiscal year 2002 performance agreements to individual goals in FSA’s 

2003 performance agreements. 
Page 32 GAO-05-31 Better Strategic and Human Capital Planning 

Figure 6: Change in FSA’s Performance Agreements from Organizational Goals in Fiscal Year 2002 to Individual Goals in 

Fiscal Year 2003 

 Success measures:

 Work collaboratively to develop contract and

 interagency agreements

 Determine the impact on affected employees

 Define communication strategy

 Secure physical space for service

 Obtain funding

 Success measures:

 Review internal controls in financial management 

 system to ensure accurate, reliable, and timely data 

 to maintain adequate stewardship and accountability

 Work with the department and auditors to ensure full 

 compliance with Financial Managers Improvement 

 Act and other laws and regulations

 Work with the department to correct all material 

 internal control weaknesses identified in financial 

 statement audit report

Director of

Human Capital

Manager for

Schools

Chief Financial

Officer

Organizational goals: Add counseling services to Career Zone

 Success measures:

 Reengineer and streamline case management 

 and oversight business processes to reduce 

 decision-making time frame and achieve consistency 

 of outcomes

 Implement electronic audit and financial statements

 Define measures for compliance/oversight 

 activities to demonstrate the effectiveness of case 

 management and technical assistance

Integrate school information systems

Obtain a clean audit of FSA’s 

financial statements

FY 2002: All managers collectively responsible for

successful completion of both organizational and

individual goals

FY 2003: Each manager responsible for the successful

completion of individual goals

 Leave the GAO high-risk list

Achieve default recovery rate 

of 7.2%



Limit Pell Grant overpayments 

to less than $138 million



Make timely FSA reconciliations

to the General Ledger



 Improve customer service

Attain 100% completion of FSA 

integration targets



Sources: GAO analysis of FSA data; GAO and Copyright  Corel Corp. All rights reserved (images).
Page 33 GAO-05-31 Better Strategic and Human Capital Planning 

The HEA specifies that performance agreements should reflect the 

organization’s measurable performance goals. However, not all individual 

goals in the performance agreements we reviewed were aligned with FSA’s 

annual plan.47 We were provided the 2003 performance agreements for 11 

senior officials and found that 6 of them had goals that were not included 

in FSA’s 2003 annual plan.48 According to FSA officials, some of these 

individuals were serving in acting capacities and would not have 

performance agreements that directly conformed to the organization’s 

annual plan until they assumed the jobs permanently. Additionally, FSA 

officials stated that many of the goals for these 6 senior officials were not 

included in the fiscal year 2003 annual plan because the plan did not 

include daily operational activities. For instance, the duties of the 

Ombudsman were not included in the fiscal year 2003 annual plan. The 

Ombudsman’s agreement required that official to identify regulatory 

limitations that may serve as the basis for borrower complaints and to 

meet statutory mandates for distributing public information, among other 

things. Other senior officials had daily operational activities included in 

their performance agreements, such as (1) ensure that all FSA contracts 

support the core operation and support functions required to implement 

the agency’s organizational strategy, and (2) acquire knowledge of all 

collection group activities, including information systems and staff duties. 

According to agency officials, FSA has changed its approach for 

constructing its annual plan and included daily operational activities as 

well as the top organizational priorities in its fiscal year 2004 plan. 

FSA also changed the way bonuses are awarded to senior officials to 

emphasize individual performance, but the criteria used to make these 

decisions are not readily apparent. In previous years, bonuses were 

awarded to senior officials based in equal parts on a manager’s overall 

contributions to the organization and achievement of the organizational 

goals. Beginning in fiscal year 2003, FSA’s COO took steps to modify this 

practice by basing performance awards on the achievement of goals 

 47Attached to each senior official’s performance agreement is FSA’s 2003 Annual Planning 

Matrix. Agency officials told us that this internal document is equivalent to the agency’s 

annual plan for the same fiscal year and includes additional goals scheduled for action but 

not funded. The published fiscal year 2003 annual plan, on the other hand, includes only 

those goals that were funded. For the purposes of this review, we looked at those goals 

under the performance elements “organizational priorities/job specifics” that most closely 

relate to the agency’s annual plan. 

48These 11 officials included 4 who were members of the FSA Management Council in 2002 

and continued in 2003, and 7 more who began their service on the council in 2003. 
Page 34 GAO-05-31 Better Strategic and Human Capital Planning 

related to each official’s area of responsibility. According to the COO, this 

approach better ensures that only officials who have achieved goals 

important to the organization receive bonuses. Under the previous system, 

a manager that accomplished some, but not all, of his or her goals could 

still receive a bonus if the organization as a whole was successful. The 

COO told us that this arrangement had a crippling effect on accountability 

in the organization. By making officials accountable for individual goals, 

FSA can reward individuals that are successful even when the 

organization as a whole is not. We were also told that under the new 

system for awarding bonuses, the COO could make distinctions based on 

the level of responsibility carried by managers—those who accomplish 

tasks that diminish the risks and challenges faced by FSA could receive 

bigger bonuses than those who perform equally well but are in jobs that 

are considered less demanding. For example, it is possible for a manager 

who is responsible for systems integration to receive a larger bonus than a 

manager of an area deemed less critical, even if both received the same 

rating. 

However, FSA has not established or communicated its criteria for 

awarding bonuses, which has the potential to undermine its other efforts 

to increase accountability of officials. Under the previous system, the 

criteria were articulated in managers’ performance agreements. 

Specifically, the agreements stated that 50 percent of the bonuses would 

be determined based on a manger’s overall contributions to the 

organization and the other 50 percent would be determined based on 

whether the agency as a whole was successful. The new agreements do 

not include such information. When we asked some senior officials to 

explain the criteria to us or provide related documentation, we were 

referred to the COO. The COO discussed the criteria and noted that the 

process for awarding bonuses was still under review. However, we were 

told that every manager was familiar with the process. The COO also 

stated that the final determination of whether or not a manager received a 

bonus was at the COO’s discretion. Furthermore, responsible agency 

officials provided us with inconsistent information as to which senior 

officials received bonuses. Although the agency has taken additional steps 

to increase the accountability of its officials, the lack of clear criteria and 

transparency in the process for awarding performance bonuses could 

undermine the other efforts to increase accountability, such as using a 

system with three performance levels to evaluate and distinguish 

performance. Part of fostering a results-oriented culture requires having a 

process for making awards for contributions to the organization in a way 

that is consistent, reliable, and transparent. 
Page 35 GAO-05-31 Better Strategic and Human Capital Planning 

FSA has devoted substantial time and resources to addressing 

management weaknesses and has made significant progress in some areas. 

However, FSA has not fully addressed all requirements established by the 

Congress when it created FSA as a PBO, or all concerns raised by others 

and us, and therefore, FSA needs to continue its efforts to improve its 

operations. Further, systems integration projects will continue for several 

years, and new challenges that could require different efforts and 

approaches to ensure program integrity may emerge. 

FSA has taken steps to enhance the integrity of its programs and reported 

that its comprehensive compliance reviews were a significant part of this 

effort. However, FSA does not have guidance for its review teams to direct 

them in performing these reviews. Therefore, FSA cannot be certain that 

these reviews are being done consistently and appropriately. Thus, 

problems at some schools may go undetected. 

While FSA has issued a 5-year performance plan, it has not fully met its 

planning and reporting responsibilities. FSA’s plans and reports could be 

more clearly linked to facilitate review and determination of progress 

made. FSA’s new 5-year performance plan is a good starting point for 

serving as the framework for setting agency goals and objectives and for 

preparing its annual plans and reports. But the action steps in the annual 

plan were not clearly linked to its strategic objectives in its 5-year 

performance plan and did not always include specific performance 

measures. As for its performance report, FSA did not include measures or 

trend data in the report as required. Without such information in the 

performance report, FSA has not clearly informed the Congress or the 

public about its progress toward achieving its purposes established by law. 

FSA has also made progress in addressing its human capital management 

challenges, but weaknesses remain. The succession plan did not identify 

developmental projects or training for staff that would assume the duties 

of those who retired. These staff may not be able to perform their new 

duties, and the agency may not have staff with needed skills in all 

positions. As a result, the agency’s ability to continue to make progress 

and fulfill its mission in an effective and efficient way may be hindered. 

Further, although FSA has devoted funds for the use of learning coupons 

to support external training, it does not know why these coupons are 

underutilized because the agency has not surveyed all of its employees to 

ascertain their views about their usefulness. Systematic evaluation of 

human capital initiatives is an integral part of planning that allows 

agencies to improve and invest wisely. Without such evaluation, FSA may 

not be investing its resources wisely. If FSA has excess funds budgeted for 

Conclusions 
Page 36 GAO-05-31 Better Strategic and Human Capital Planning 

its learning coupons, funds may not be available to support other 

programs or agency projects. 

Further, although FSA has taken several steps to increase the 

accountability of its senior officials, the agency has not clearly 

communicated its criteria for awarding bonuses to senior officials. This 

lack of clear criteria for awarding bonuses could undermine its other 

efforts, such as its performance evaluation system, that have helped to 

foster a culture of accountability at FSA. 

We are making five recommendations to help FSA enhance its strategic 

planning and improve its human capital management planning. These 

recommendations will help FSA to fulfill its responsibilities under the 

HEA; strengthen efforts to protect its programs from fraud, waste, and 

abuse; or improve its human capital management initiatives. 

We recommend that the Secretary of Education direct FSA’s Chief 

Operating Officer to 

• issue clear guidance and detailed directions for teams to follow when 

performing comprehensive compliance reviews; 

• develop 5-year performance plans with action steps that are linked to 

FSA’s strategic objectives and with specific performance measures or 

targets for its objectives; and include measures or trend data in FSA’s 

performance reports that clearly demonstrate whether the agency has 

made progress toward achieving its strategic objectives; 

• revise the succession plan to include approaches that focus on the current 

and future capacity and needs as well as provide developmental projects 

or training for staff to prepare them to fulfill new duties; 

• enhance systematic evaluation activities for its human capital initiatives 

such as the learning coupon; and 

• establish and communicate clear criteria for awarding bonuses to senior 

staff. 

In written comments on a draft of this report, FSA generally agreed with 

our findings and recommendations. Specifically, FSA stated that it plans to 

or has taken steps to address four of the five recommendations made in 

Recommendations to 

the Secretary of 

Education 

Agency Comments 

and Our Evaluation 
Page 37 GAO-05-31 Better Strategic and Human Capital Planning 

this report. FSA stated that it is developing comprehensive guidance for 

conducting compliance reviews, creating appropriate measures or trend 

data in its 5-year plan, and revising individual performance plans to 

include an explanation of the awarding of any performance bonuses. FSA 

also said that it has revised its succession plan. However, we were not 

provided a copy of this plan. FSA did not specifically address the fifth 

recommendation—to enhance its evaluation of human capital initiatives 

such as the learning coupon—in its comments. 

In addition, FSA stated that it has made significant progress in the area of 

systems integration. We agree that FSA has taken important steps toward 

establishing the necessary technical infrastructure to support its system 

integration. However, as previously stated in the report, FSA does not plan 

to complete all three major initiatives that are essential to achieving full 

integration of the systems supporting its student financial aid programs 

until 2008. Thus, fully meeting the requirement to integrate its systems, as 

established in the Higher Education Act in 1998, remains several years 

away. 

FSA also provided technical corrections and comments that we 

incorporated where appropriate. 

We are sending copies of this report to the Secretary of Education, the 

Chief Operating Officer of Education’s Office of Federal Student Aid, the 

Director of the Office of Management and Budget, and appropriate 

congressional committees. Copies will also be made available to other 

interested parties upon request. Additional copies can be obtained at no 

cost from our Web site at www.gao.gov. 

If you or your staff should have any questions, please call me at (202) 

512-8403. The key contributors to this report are listed in appendix V. 

Cornelia M. Ashby 

Director, Education, Workforce, 

 and Income Security Issues 
Appendix I: Scope and Methodology 

Page 38 GAO-05-31 Better Strategic and Human Capital Planning 

We performed several steps that contributed to both objectives of this 

review. We reviewed relevant laws and documentation, and we reviewed 

pertinent reports prepared by the Department of Education’s Office of the 

Inspector General as well as our previously issued reports, testimonies, 

and other correspondence. Specifically, we analyzed the Higher Education 

Act (HEA) to understand the Title IV programs and to understand the 

purposes and requirements established for the Office of Federal Student 

Aid (FSA) when the Congress designated the agency as a performancebased organization (PBO). We analyzed key documentation that would 

provide insight about the agency’s efforts to address the key management 

issues and human capital challenges. We also obtained and reviewed 

several reports prepared by the Department of Education’s Office of the 

Inspector General that relate to these issues and challenges. We reviewed 

all GAO reports, testimonies, and correspondence issued since 2000 that 

discussed FSA or the student loan programs. We also reviewed GAO 

recommendations related to FSA and identified those that have been 

implemented as well as those that remained open as of July 10, 2004. For 

open recommendations, we talked with agency officials and obtained and 

reviewed the corresponding internal corrective action plans. 

We also attended briefings presented by senior FSA officials and 

interviewed FSA and Department of Education officials to understand 

their plans and reasons for taking actions related to addressing the key 

management issues and the human capital matters. During January and 

February of 2004, we attended nine briefings presented by senior FSA 

officials on topics that would serve as the foundation for our work. These 

briefings were entitled (1) Financial Management and Internal Control, 

(2) FSA’s High-Risk Designation/Management Improvement Team, (3) 

Default Prevention and Management, (4) Systems Integration, (5) Program 

Integrity, (6) PBO Accountability, (7) Human Capital Management, 

(8) FSA’s Activity-Based Cost Model, and (9) FSA’s Progress on Reducing 

Administrative Costs. Following these briefings, we interviewed senior 

officials and responsible program managers and had several meetings, 

phone conversations, and e-mail exchanges to follow up on and further 

clarify the information presented at the briefings. 

In addition to taking our overall approach, we took specific steps to 

address the first objective—the extent to which FSA has made progress 

addressing key management issues related to financial management, 

systems integration, program integrity, and administrative costs, and 

fulfilling its planning and reporting responsibilities. We reviewed the 

guidance related to the Federal Financial Management Improvement Act 

Appendix I: Scope and Methodology 

Overall Approach 

Objective I: Key 

Management Issues 
Appendix I: Scope and Methodology 

Page 39 GAO-05-31 Better Strategic and Human Capital Planning 

because auditors found that the Department of Education and FSA did not 

comply with the act’s requirements because of computer security 

weaknesses. We also reviewed the Government Performance and Results 

Act (GPRA) because the HEA stated that FSA’s reporting requirements 

had to be consistent with GPRA and other laws. 

We reviewed and analyzed numerous documents related to the topics 

covered in this objective. These documents included 

• audit reports submitted by auditors from Ernst and Young for fiscal years 

2002 and 2003; 

• corrective action plan for addressing reportable conditions identified in 

FSA’s 2003 financial statement audit report; 

• data summarizing erroneous payments for 2000-2002; and 

• administrative cost model and components 

• information on FSA’s enterprise architecture plans and documentation, 

such as its sequencing plan for transitioning from baseline to target 

architecture; 

• business cases and timeline documents for the three major systems 

integration projects—Front-End Business Integration (FEBI), Integrated 

Partner Management (IPM), and Common Services for Borrowers (CSB); 

• information documenting FSA’s inventory of major legacy systems, 

including consolidation, retirement, and reengineering of some existing 

systems; and 

• information on the solicitation and request for proposal for the FEBI 

project 

• proposed legislation for conducting IRS data matches; 

• memoranda of understanding regarding data sharing with agencies such as 

the Social Security Administration and the Department of Justice; 

• quality control procedures for determining student and school eligibility, 

and program monitoring; 

• 2001 Program Review Guide for Case Management and Oversight and 

School Performance Improvement and Procedures Guidance;

49

• School Eligibility Channel: Case Management Process Model; 

• inventory of 60 default management and prevention initiatives; 

• Authentication Plan for New Foreign Schools; 

• foreign school training module and lesson list; 

 49Case management includes processes for monitoring schools such as reviews and 

analysis of reports to help ensure compliance with program regulations. 

Financial management 

Systems integration 

Program integrity
Appendix I: Scope and Methodology 

Page 40 GAO-05-31 Better Strategic and Human Capital Planning 

• Student Financial Aid Handbook, Volume 2—School Eligibility and 

Operations, 2004-2005; 

• Guidelines for Case Managing Services for New Title IV Participants, 

October 17, 2003; 

• Default Prevention Workgroup charter and FSA-wide approach to default 

prevention strategies briefing slides, May – September 2003 

• minutes from Debt Management/Default Prevention Management group 

meeting September 10, 2003; and 

• Exit Counseling Guide for Direct Loan Borrowers 

• annual plans for fiscal years 2002, 2003, and 2004; 

• annual performance report for fiscal year 2003; and 

• draft and final 5-year performance plan covering fiscal years 2004-2008. 

We met with several senior FSA officials as well as responsible program 

managers. We met with officials from the agency’s Chief Financial Office 

to discuss financial management, financial audits, and statements and its 

activity-based cost model. We met with officials from the office of the 

Chief Information Officer to discuss the agency’s system integration 

efforts and sequencing plan, enterprise architecture, and current 

procurement projects related to systems integration such as Common 

Services for Borrowers. We met with officials in the Case Management and 

Oversight Office to discuss their procedures for monitoring schools and 

providing technical assistance and with officials that participate in FSA’s 

Default Management Group. 

We also took specific steps to determine whether FSA had created a 

comprehensive human capital plan and taken steps to increase the 

accountability of its officials. Several GAO publications and guidance 

documents on strategic workforce planning served as the criteria for our 

analyses. These publications included 

• Human Capital: Senior Executive Performance Management Can Be 

Significantly Strengthened to Achieve Results, May 2004, (GAO-04-614); 

• Human Capital: A Guide for Assessing Strategic Training and 

Development Efforts in the Federal Government, March 2004, 

(GAO-04-546G); 

• Human Capital: Key Principles for Effective Strategic Workforce 

Planning, December 2003, (GAO-04-39); 

• A Model of Strategic Human Capital Management, March 2002, 

(GAO-02-373SP); and 

• Human Capital: A Self-Assessment Checklist for Agency Leaders, 

September 2000, (GAO/OCG-00-14G). 

Planning and reporting 

Objective II: Human 

Capital 
Appendix I: Scope and Methodology 

Page 41 GAO-05-31 Better Strategic and Human Capital Planning 

We obtained and reviewed the agency’s documents related to its human 

capital planning and accountability measures. We analyzed FSA’s draft 

human capital plan, its final version, and documentation related to its 

succession planning, reorganization efforts, staff deployments and buyout 

proposals, recruitment, Skills Catalog, and training resources. We were 

provided and reviewed hard copy information related to its online learning 

tools, but because these tools reside on the agency’s intranet we did not 

analyze and review these materials firsthand. We also reviewed the 

Department of Education’s Personnel Manual Instruction 430-2, dated 

November 6, 2002, entitled Education Department Performance Appraisal 

System (EDPAS) and the Department of Education’s Personnel Manual 

Instruction 430-3, dated September 6, 2001, entitled Senior Executive 

Performance Management System (SEPMS) since these are the systems 

used to assess FSA’s senior officials. Additionally, we obtained and 

evaluated individual performance agreements, evaluation ratings, and data 

on bonuses awarded to senior officials and the Chief Operating Officer 

(COO). 

We conducted several interviews with agency officials, and had an 

interview with a senior official from the union that represents FSA’s 

employees. We talked with the agency’s COO regarding past and present 

policies affecting performance agreements and bonuses. We also talked 

with the agency’s human capital officer and other human resources staff 

regarding the agency’s human capital strategy and plan, as well as the 

various components of the plan (i.e., the succession plan, and the Skills 

Catalog). During these meetings we also discussed past human capital 

initiatives and proposals for future initiatives. We also talked with a senior 

official from the agency’s union, the American Federation of Government 

Employees, Council 252, to discuss its role in developing human capital 

policies and views about current proposals. We conducted our work for 

this engagement between November 2003 and August 2004 in accordance 

with generally accepted government auditing standards. 
Appendix II: GAO Recommendations to 

Education Related to Student Financial Aid 

and Status of Their Implementation 

Page 42 GAO-05-31 Better Strategic and Human Capital Planning 

Report Recommendations 

 Status in GAO’s tracking 

system as of July 10, 2004a

Financial Management: Poor Internal Controls 

Expose Department of Education to Improper 

Payments. September 2001 (GAO-01-1151) 

 Establish appropriate edit checks to identify 

unusual grant and loan disbursement patterns. 

 Closed—implemented 

 Design and implement a formal, routine process to 

investigate unusual disbursement patterns 

identified by edit checks. 

 Closed—implemented 

Education Financial Management: Weak 

Internal Controls Led to Instances of Fraud 

and Other Improper Payments. March 2002 

(GAO-02-406) 

 Conduct on-site investigations, including 

interviews of school personnel and students at the 

28 schools with characteristics similar to those 

GAO found that improperly disbursed Pell Grants 

to determine whether the grants were properly 

disbursed. 

 Closed—implemented 

 Follow up with the schools that had high 

concentrations of the $12 million in potential 

improper payments for which the department did 

not provide adequate supporting documentation. 

 Closed—implemented 

 Implement a process to verify borrowers’ Social 

Security numbers and dates of birth submitted by 

schools to the Loan Origination System. 

 Closed—implemented 

Direct Student Loans: Additional Steps Would 

Increase Borrowers’ Awareness of Electronic 

Debiting and Reduce Federal Administrative 

Costs. March 2002 (GAO-02-350) 

 Update the Exit Counseling Guide for Borrowers

to reflect the repayment incentives for Direct Loan 

borrowers who repay their loans through 

electronic debiting accounts (EDA) as well as 

borrowers' prepayment options. 

 Closed—implemented 

 Take steps to inform EDA borrowers about steps 

they can take to prepay their loans. Such steps 

could include modifying EDA application to allow 

borrowers interested in prepaying their loans to 

designate withdrawal amounts in excess of their 

scheduled payments when they initially complete 

the EDA application. 

 Closed—implemented 

 Consider renegotiating the fee provision in its 

contract with the Direct Loan servicer to eliminate 

the servicing fee for accounts with payments less 

than 7 days late. 

 Closed—implemented 

Federal Student Aid: Additional Management 

Improvements Would Clarify Strategic 

Direction and Enhance Accountability. April 

2002 (GAO-02-255) 

 Fully disclose in its performance plans and 

subsequent performance reports the bases of its 

unit cost calculation and clarify what costs are 

included in and excluded from the calculation. 

 Open—in process 

 Develop and include clear goals, strategies, and 

measures to better demonstrate in FSA’s 

performance plans and subsequent performance 

reports its progress in implementing plans for 

integrating its financial aid systems. 

 Openb

Appendix II: GAO Recommendations to 

Education Related to Student Financial Aid 

and Status of Their Implementation 
Appendix II: GAO Recommendations to 

Education Related to Student Financial Aid 

and Status of Their Implementation 

Page 43 GAO-05-31 Better Strategic and Human Capital Planning 

Report Recommendations 

 Status in GAO’s tracking 

system as of July 10, 2004a

 Develop performance strategies and measures 

that better demonstrate in its performance plans 

and subsequent performance reports its progress 

in enhancing the integrity of its student loan and 

grant programs. In particular, FSA should develop 

measures that better demonstrate whether its 

technical assistance activities result in improved 

compliance among schools and additional 

strategies for achieving default management 

goals. 

 Open—in process 

 Take steps necessary to ensure that complete 

and timely annual performance reports are 

submitted to the Congress. 

 Openc

 Coordinate closely with Education to develop and 

implement a comprehensive human capital 

strategy that incorporates succession planning 

and addresses staff development 

 Opend

Department of Education: Guaranteed 

Student Loan Program Vulnerabilities.

November 2002 (GAO-03-268R) 

 Implement a verification process to ensure that a 

foreign school applying to participate in the 

Federal Family Education Loan (FFEL) program 

actually exists and is recognized by an 

appropriate educational entity. Specifically, the 

Secretary should enter into a relationship with an 

organization such as the Department of State, 

which would verify the existence of a foreign 

school that applies for certification to participate in 

the FFEL program through site visits to the school 

and verification of its accreditation by local 

educational authorities. 

 Closed—implemented 

 Review the process for certifying student loans 

and develop controls to prevent fictitious students 

from obtaining student loans. 

 Closed—implemented 

Federal Student Aid: Progress in Integrating 

Pell Grant and Direct Loan Systems and 

Processes, but Critical Work Remains.

December 2002 (GAO-03-241) 

 Develop metrics and baseline data to measure 

Common Origination and Disbursement (COD) 

benefits and develop a tracking process to assess 

the extent to which the expected results are being 

achieved. 

 Open—in process 

 Establish a process for capturing lessons learned 

in a written product or knowledge base and for 

disseminating them to schools that have not yet 

implemented the common record. 

 Closed—implemented 

Federal Student Aid: Timely Performance 

Plans and Reports Would Help Guide and 

Assess Achievement of Default Management 

Goals. February 2003 (GAO-03-348) 

 Produce a 5-year plan as required by HEA. Opene

 Prepare and issue reports to the Congress on 

FSA’s performance that are timely and clearly 

identify whether performance goals were met. 

 Openf
Appendix II: GAO Recommendations to 

Education Related to Student Financial Aid 

and Status of Their Implementation 

Page 44 GAO-05-31 Better Strategic and Human Capital Planning 

Report Recommendations 

 Status in GAO’s tracking 

system as of July 10, 2004a

Student Loans and Foreign Schools: 

Assessing Risks Could Help Education 

Reduce Program Vulnerability. July 2003 

(GAO-03-647) 

 Develop online training resources specifically 

designed for foreign school officials. 

 Open—in process 

 Undertake a risk assessment to determine how 

best to ensure accountability while considering 

costs, burden to schools and students, and the 

desire to maintain student access to a variety of 

postsecondary educational opportunities. Further, 

after completing the risk assessment, if Education 

determines that legislative or regulatory changes 

are justified, the Secretary should seek any 

necessary legislative authority and implement any 

necessary regulatory changes. 

 Open—in process 

Direct Student Loan Program: Management 

Actions Could Enhance Customer Service.

November 2003 (GAO-04-107) 

 Develop a process for collecting information from 

schools that decide to stop participating in the 

Direct Loan Program about the factors that 

influenced this decision and use this information to 

make improvements to the program. 

 Closed-Implemented 

Source: GAO. 

a

GAO monitors agencies’ progress in implementing recommendations. To accomplish this 

monitoring, GAO maintains information related to open recommendations in a Web-based automated 

program. 

b

FSA included a systems integration goal in its 5-year performance plan and annual performance 

report, but it did not meet all the requirements of the HEA. 

c

FSA submitted its 2003 annual report when due, but the report did not meet all the requirements of 

the HEA or GPRA. 

d

FSA developed a human capital strategy and succession plan in response to our 2002 report, but 

they have not been fully implemented. 

e

FSA issued its first 5-year performance plan in fiscal year 2004. However, the plan does not meet all 

the requirements of the HEA. 

f

FSA’s annual performance report did not clearly identify whether strategic objectives had been met. 
Appendix III: Definitions of Systems 

Supporting FSA’s Student Aid Programs 

Page 45 GAO-05-31 Better Strategic and Human Capital Planning 

Central Data System receives recorded data from multiple loan 

origination systems, edits, and then sends the data to the Direct Loan 

Servicing System and the Financial Accounting and Reporting System. 

Central Processing System uses information from both the paper- and 

Web-based Free Application for Federal Student Aid (FAFSA) to calculate 

and confirm a student’s eligibility for federal student financial assistance. 

This system includes the FAFSA on the Web, which is used by students to 

apply for federal student financial assistance via the Internet. 

Common Origination and Disbursement System provides a common 

student record reporting system for requests, reports, and reconciliations 

related to both the Pell Grants and Direct Loans programs. This is a 

consolidated system consisting of three legacy systems—Pell Grant 

Recipient Financial Management System, Recipient Financial Management 

System, and Direct Loan Origination System. 

Conditional Disability Discharge Tracking System stores loans for 

those borrowers being reviewed for permanent and total disability. 

Debt Management and Collections System services all Title IV loans 

(Direct, Federal Family Education Loans, and Perkins) that have fallen 

into default. Also the system tracks rehabilitated loans, private collection 

agencies’ referrals, or loans undergoing review by FSA. 

Direct Loan Consolidation System consolidates student loan portfolios 

consisting of at least one Direct Loan. 

Direct Loan Origination System records all Direct Loans awarded each 

year, tracks planned and actual disbursements, supports reconciliation, 

calculates eligibility amounts, books loans, and aggregates planned and 

actual disbursements by school. 

Direct Loan Servicing System provides services to borrowers with 

Direct Loans while in school, in deferment status, or in repayment. 

Electronic Campus-Based System tracks, at the school level, 

information related to campus-based funding; this includes receiving and 

processing Web-based applications from schools, calculating annual 

program awards, determining unused amounts, and processing appeals. 

eZ-Audit provides a single point of submission via the Web for schools to 

submit financial statements and compliance audits. 

Appendix III: Definitions of Systems 

Supporting FSA’s Student Aid Programs 
Appendix III: Definitions of Systems 

Supporting FSA’s Student Aid Programs 

Page 46 GAO-05-31 Better Strategic and Human Capital Planning 

Federal Family Education Loan System is used to pay interest and 

claims on defaulted loans to lenders and supports collection activity on 

student loans in default. This system consists of three consolidated 

program systems—Lender’s Application Process (LAP), Lender’s 

Reporting System (LaRS), and Form 2000. 

Financial Accounting and Reporting System serves as the subsidiary 

ledger for the Direct Loan Servicing System, processing both cash and 

noncash financial transactions and then sending them to the department’s 

general ledger. 

Financial Management System provides a repository for financial 

information from all FSA programs. It is used to facilitate financial 

decision making and create reports for both internal and external 

customers. 

National Student Loan Data System contains loan- and grant-level 

information; it is used by schools to screen student aid applicants to 

identify borrowers who are in default, have reached statutory loan limits, 

or are otherwise ineligible to receive aid. 

Ombudsman Call Tracking System supports and tracks the life cycle of 

activities that will be required to process cases and supports and 

integrates with modules that support customer service, data center, call 

center, and service level agreement management functions. 

Pell Grant Recipient Financial Management System records all Pell 

Grants awarded each year, tracks planned and actual disbursements, 

supports reconciliation, calculates eligibility amounts, aggregates planned 

Pell Grant disbursements by school and submits this information to the 

department’s automated payment system to authorize drawdown of funds. 

Postsecondary Education Participants System serves as FSA’s 

management information repository for all entities participating in the 

Title IV student financial assistance programs. This system maintains 

eligibility and oversight data for schools, lenders, guarantors, and 

servicers and provides information to FSA’s student aid delivery systems 

to ensure consistency. 

Recipient Financial Management System records all Pell Grants 

awarded each year, tracks planned and actual disbursements, supports 

reconciliation, calculates eligibility amounts, aggregates planned Pell 
Appendix III: Definitions of Systems 

Supporting FSA’s Student Aid Programs 

Page 47 GAO-05-31 Better Strategic and Human Capital Planning 

Grant disbursements by school and submits this information to the 

department’s accounting systems to authorize drawdown of funds.
Appendix IV: Comments from the U.S. 

Department of Education 

Page 48 GAO-05-31 Better Strategic and Human Capital Planning 

Appendix IV: Comments from the U.S. 

Department of Education 
Appendix IV: Comments from the U.S. 

Department of Education 

Page 49 GAO-05-31 Better Strategic and Human Capital Planning 
Appendix IV: Comments from the U.S. 

Department of Education 

Page 50 GAO-05-31 Better Strategic and Human Capital Planning 
Appendix IV: Comments from the U.S. 

Department of Education 

Page 51 GAO-05-31 Better Strategic and Human Capital Planning 
Appendix V: GAO Contacts and Staff 

Acknowledgments 

Page 52 GAO-05-31 Better Strategic and Human Capital Planning 

Carolyn M. Taylor (202) 512-2974 or taylorcm@gao.gov

Mary Abdella (202) 512-5878 or abdellam@gao.gov 

In addition to those named above, the following individuals made 

important contributions to this report: Margie Armen, Joyce Corry, 

Carla D. Craddock, Elizabeth Curda, William Doherty, Mary Dorsey, 

Susan Higgins, Barbara Hills, Miguel Lujan, Valerie Melvin, Diane Morris, 

Corrina Nicolaou, Robert Owens, Lisa Shames, and William Wright. 

Appendix V: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 
Related GAO Products 

Page 53 GAO-05-31 Better Strategic and Human Capital Planning 

Direct Student Loan Program: Management Actions Could Enhance 

Customer Service, GAO-04-107. Washington, D.C.: November 2003. 

Student Loan Programs: As Federal Costs of Loan Consolidation Rise, 

Other Options Should Be Examined, GAO-04-101. Washington, D.C.: 

October 2003. 

Student Loans and Foreign Schools: Assessing Risks Could Help 

Education Reduce Program Vulnerability, GAO-03-647. Washington, D.C.: 

July 2003. 

Taxpayer Information: Increased Sharing and Verifying of Information 

Could Improve Education’s Award Decisions, GAO-03-821. Washington, 

D.C. July 2003. 

Federal Student Aid: Timely Performance Plans and Reports Would Help 

Guide and Assess Achievement of Default Management Goals, 

GAO-03-348. Washington, D.C.: February 2003. 

High Risk Series: An Update, GAO-03-119. Washington, D.C.: January 

2003. 

Major Management Challenges and Program Risks: Department of 

Education, GAO-03-99. Washington, D.C. January 2003. 

Federal Student Aid: Progress in Integrating Pell Grant and Direct Loan 

Systems and Processes, but Critical Work Remains, GAO-03-241. 

Washington, D.C.: December 2002. 

Department of Education: Guaranteed Student Loan Program 

Vulnerabilities, GAO-03-268R. Washington, D.C.: November 2002. 

Federal Student Aid: Additional Management Improvements Would 

Clarify Strategic Direction and Enhance Accountability, GAO-02-255. 

Washington, D.C.: April 2002. 

Student Financial Aid: Use of Middleware for Systems Integration Holds 

Promise, GAO-02-7. Washington, D.C.: November 2001 

Benefit and Loan Programs: Improved Data Sharing Could Enhance 

Program Integrity, GAO/HEHS-00-119. Washington, D.C.: September 2000. 

Related GAO Products 

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