Grant Monitoring: Department of Education Could Improve Its Processes with Greater Focus on Assessing Risks, Acquiring Financial Skills, and Sharing Information
Published: 2009-11-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Education (Education) awards about $45 billion in grants each year to school districts, states, and other entities. In addition, the American Recovery and Reinvestment Act of 2009 provided an additional $97 billion in grant funding. In a series of reports from 2002 to 2009, Education's Inspector General cited a number of grantees for failing to comply with financial and programmatic requirements of their grant agreements. GAO was asked to determine: (1) what progress Education has made in implementing a risk-based approach to grant monitoring, (2) to what extent Education's program offices have the expertise necessary to monitor grantees' compliance with grant program requirements, and (3) to what extent information is shared and used within Education to ensure the effectiveness of grant monitoring. To do this, GAO reviewed agency documentation related to Education's internal controls and interviewed senior Education officials and staff in 12 of the 34 offices that monitor grants.
section_title: What GAO Found
paragraphs: In October 2006, Education began to look at ways to improve the efficiency and effectiveness of the department's grant management processes; in particular, it sought ways to more effectively monitor its grants after they were made. In 2007, Education created the Risk Management Service (RMS) to work with all components of the department to ensure that each office has an effective risk management strategy in place. Effective monitoring protocols and tools based on accepted control standards are key to ensuring that waste, fraud, and abuse are not overlooked and program funds are being spent appropriately. Such tools include identifying the nature and extent of grantee risks and managing those risks, having skilled staff to oversee grantees to ensure they are using sound financial practices and meeting program objectives and requirements, and using and sharing information about grantees throughout the organization. Our review of Education's current grant monitoring processes and controls found that it: (1)Has made uneven progress in implementing a department-wide, risk-based approach to grant monitoring. Education has not disseminated department-wide guidance on grantee risk assessment, but it has planned some new efforts in this area. In the absence of guidance on a department-wide risk assessment strategy, individual program offices have developed their own strategies for assessing and managing risk that vary in rigor. (2) Has limited financial expertise and training, hindering effective monitoring of grantees' compliance with financial requirements. Education has monitoring tools that aid in reviewing basic financial compliance, but the lack of staff expertise limits the ability to probe more deeply into grantees' use of funds. (3) Lacks a systematic means of sharing information on grantees and promising practices in grant monitoring throughout the department. These shortcomings can lead to weaknesses in program implementation that ultimately result in failure to effectively serve the students, parents, teachers, and administrators those programs were designed to help.

section_title: Letter
paragraphs: The Department of Education (Education) administers about 200  programs that award grants totaling about $44 billion per year to state and  local educational agencies, institutions of higher education, and other  eligible entities. Currently, there are 18,650 grantees with open grant  awards from Education. In addition, as part of the American Recovery and  Reinvestment Act of 2009 (Recovery Act), Congress dramatically  increased Education’s grant funding by an additional $97 billion. However,  in a series of reports between 2002 and 2009, the Department of  Education’s Office of Inspector General identified a number of problems  related to the management of grant funding by state and local educational  agencies and institutions of higher education. Such findings raise  questions about Education’s ability to monitor its grantees, particularly  when coupled with such a large increase in funding from the Recovery  Act. How well Education, or any agency, can oversee grantees depends on  the management and accountability tools and controls it has in place to  properly implement monitoring in order to prevent or detect abuses by  grantees. Such tools and controls include identifying the nature and extent  of risks and managing those risks, having skilled staff to implement  oversight activities to ensure that program objectives are fulfilled, and  using and sharing relevant information throughout the organization. If any  of the tools or controls are weak or not in place in a grant monitoring  process, there is heightened risk of the program not fully meeting its  objectives.
Because of the Office of Inspector General’s findings and other reports on  the improper use of funds by grantees and the implications for how well  Education monitors its grants, you asked us to review Education’s grant  monitoring process. In meeting with your staff, we agreed to examine  various aspects of Education’s grant monitoring. Specifically, our  objectives were to determine: (1) What progress has Education made in  implementing a risk-based approach to grant monitoring? (2) To what  extent do Education’s program offices have the expertise necessary to  monitor grantees’ compliance with grant program requirements? (3) To  what extent is information shared and used within Education to ensure the  effectiveness of grant monitoring?
To answer these questions, we used information collected from current  and past GAO engagements related to grant monitoring, and held  additional discussions with department officials to gain an understanding  of grant monitoring at Education. We documented our understanding of  Education’s grant monitoring process and asked department officials to  review the document and provide comments. They confirmed that our  understanding was consistent with their grant monitoring practices and  procedures. We based our evaluation of Education’s grant monitoring  process on GAO’s standards for internal control in the federal government.  We selected 12 of the department’s 34 program offices from which to  obtain more detailed information about their grant monitoring activities  (see table 1). We selected these program offices because they encompass a  wide variety of grant programs and they administer approximately 91  percent of grant funds in the department. Nine of the 12 program offices  reside in four of the principal offices, which collectively administer the  department’s largest grant programs in terms of total funding. To ensure  that we included programs from all seven of the principal offices  administering grants to entities that provide education or education- related services to students, we also selected the program offices that  administered the largest amount of grant funds in the other three principal  offices. (App. I illustrates where the offices we selected are in Education’s  principal office structure.)
We interviewed the directors and other supervisory staff involved in grant  monitoring in these 12 offices and held discussions in each office with  groups of program specialists ranging from 4 to 10 program specialists. In  offices with large numbers of program specialists, we interviewed random  samples of program specialists. In smaller offices, we interviewed all the  program specialists who were available to meet with us. From these  interviews, we obtained information on how grant monitoring was  implemented by program office staff, which monitoring activities staff  considered to be reasonably effective in ensuring compliance with federal  requirements, and where improvements in the grant monitoring process  were needed.
We corroborated the information from the interviews and small group  discussions with review and analysis of plans, guidance, and protocols  used by each program office to conduct its monitoring, as well as  documentation concerning monitoring outcomes, interviews with officials  from department management, and the results of outside evaluations or  audits.
We conducted this performance audit from November 2008 to November  2009 in accordance with generally accepted government auditing  standards. The standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe the  evidence obtained provides a reasonable basis for findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Department of Education
paragraphs: The Department of Education’s mission is to promote student  achievement and preparation for global competitiveness by fostering  educational excellence and ensuring equal access. Toward this end,  Education distributes federal grant funds to applicants throughout the  nation to improve access to and the quality of education. Education  supplements and complements the efforts of states, local school systems,  the private sector, public and private nonprofit educational research  institutions, other community-based organizations, parents, and students.
Education has seven principal offices that administer grants to entities  that provide education or education-related services to students (see fig.  1). The principal offices focus on specific areas of education, such as  special education, elementary and secondary education, and  postsecondary education. Within each of these principal offices, there are  individual program offices responsible for one or more specific grant  programs. For example, the Office of Special Education Programs and the  Rehabilitation Services Administration are program offices in the principal  Office of Special Education and Rehabilitative Services. Program offices  have directors, supervisors, and program specialists responsible for the  everyday administration of grants in the department. Department-wide  offices—the Risk Management Service, Office of Chief Financial Officer,  Office of General Counsel, and Budget Service—provide technical  assistance and guidance to the principal and program offices.
section_title: Grant Monitoring at Education
paragraphs: Education describes its grant management processes as a “cradle-to-grave”  strategy. As shown in figure 2, this strategy includes phases for pre-award,  award, post-award, and close-out. Monitoring to ensure administrative,  financial, and performance compliance occurs primarily during the post- award phase, after the grantee has successfully applied for and been  awarded a grant from Education.
In Education, grant monitoring is the responsibility of each program  office. Each program office has the flexibility to tailor its monitoring to its  respective grant programs. For example, program offices that oversee  formula grants to state agencies generally conduct on-site monitoring on a  3-to-5-year cycle but can make more frequent visits if necessary. For  discretionary grants, site visits to the recipients are generally less frequent,  in part because of the relatively small size of the awards and the relatively  large number of discretionary grant awards made by the department.   Relatively more desk-top monitoring is used in monitoring discretionary  grants. In general, recipients of grants from Education must:    conform to the approved grant application and approved revisions;    adhere to laws, regulations, conditions of the grant, and certifications;    share progress on established performance measures; and    manage federal funds according to federal cash management  requirements.
Education’s grant monitoring practices and procedures require that  program office staff undertake numerous activities to monitor grantees for  compliance with administrative, financial, and performance regulations  and requirements to protect against fraud, waste, and abuse of federal  resources. These activities include on-site visits and desk reviews of  grantees, review of annual reports submitted by grantees, and evaluation  of grant projects with respect to performance. For example, some  financial monitoring activities that program office staff perform include  reviewing reports generated in the Grant Administration and Payment  System, Education’s primary information system and tool for financial  oversight, and available audit reports. In cases where technical assistance  and normal monitoring do not improve grantee performance, special grant  conditions may be imposed on the grantee such as requiring the grantee to  obtain prior approval for certain expenditures. Findings of material  noncompliance are reported to other offices in Education, such as the  Office of General Counsel, while findings of potential illegal activity  involving fraud, waste, and abuse are reported to the Office of Inspector  General for further action. Continuous monitoring of grantees offers  program office staff the opportunity to provide customized technical  assistance, appropriate feedback, and follow-up to help grantees improve  in areas of need, identify project strengths, and recognize significant  achievements.
section_title: Education Has Made Uneven Progress in Implementing a Department-wide, Risk-based Approach to Grant Monitoring
paragraphs: Education allows individual program offices to develop their own  procedures for assessing grantee risk. While the department has not yet  provided department-wide guidance on grantee risk assessment, the Risk  Management Service (RMS) is planning to introduce several new efforts  designed to help in this area. In the absence of a department-wide strategy  for risk assessment procedures, we found that in the program offices we  visited, the procedures for assessing grantee risk varied in rigor, with  some offices using a variety of indicators or data elements to measure  relative risk, while others had no formal grantee risk assessment process  in place.
subsections: section_title: Education Has Not Yet Provided Department-wide Guidance on Risk Assessment but Is Developing New Grantee Risk Assessment Tools
paragraphs: Federal guidance directs that management should identify internal and  external risks that may prevent an organization from meeting its  objectives. In 2007, the department’s Grants Pilot Project Team  recommended the establishment of a coordinated, comprehensive, and  department-wide approach to risk-based grant monitoring for  discretionary and formula grants. The Secretary created RMS in October  2007 to work with all components of the department to ensure that each  office has effective procedures in place to assess and mitigate risk among  its grantees. Specifically, RMS is to develop tools to assess grantee risk for  use throughout the department and train department staff to use the  tools. RMS has not yet issued department-wide guidance on assessing  grantee risk, and key guidance, such as the updated discretionary grant  handbook, does not provide information on how to develop a risk-based  approach to monitoring grants. Program officials said that such guidancewould be a valuable tool for program offices in developing their own risk  assessment procedures. RMS is currently testing software it developed  that would assist Education staff in evaluating grantee risk. For exampl e,  the new software collects financial information from Dun and Bradstreet, among other sources, and uses that information to calculate a score  reflecting the financial stability of grantees. The software will also h with risk assessment by providing other information from agency and outside sources, along with relevant findings from grantee audits.  However, RMS does not have a timetable for using this new software  throughout th e department.
RMS has worked closely with the Office of Postsecondary Education  (OPE) to develop risk assessment procedures, and hopes to work with  officials in the other principal offices for this purpose. RMS helped OPE  develop an index that ranks the potential risk level of grantees based on  such risk criteria as net operating results, status with an accrediting  agency, enrollment trends, and ability to manage federal funds. RMS also  provides OPE with monthly analyses of grantees’ level of financial risk. In  the meantime, some program offices have developed risk assessment  procedures on their own.
section_title: Grantee Risk Assessment Procedures Used by Program Offices Vary in Rigor
paragraphs: We observed a wide range of risk assessment procedures that varied in  rigor among the program offices we reviewed. In discussing how program  offices assess grantees’ financial risk, we noted there was an indicator that  program offices routinely reviewed to assess a grantee’s financial risk: the  rate at which a grantee draws down grant funds, known as the drawdown  rate. Although staff we met with in all of the offices that disburse funds  through periodic drawdowns reported checking the drawdown rate, the  frequency varied from office to office, with some checking the rate  monthly and others checking it quarterly. Further, the drawdown rate is  limited as an indicator of the soundness of a grantee’s financial  management practices because it only shows when the grantee is using  funds and does not show what the funds are used for.
In addition to monitoring the grantees’ drawdown rates, staff in three of  the offices we met with OPE, Student Achievement and School  Accountability (SASA), and Office of Special Education Programs (OSEP)  described using more rigorous risk assessment procedures than those  developed in the other offices we visited. As discussed above, OPE  worked with RMS to develop new risk assessment procedures. Staff in  SASA have recently moved to risk-based monitoring procedures; they use  a risk assessment procedure that incorporates an extensive list of risk  indicators and numerous sources of information to determine an  individual grantee’s level of risk and whether grantees are meeting  performance expectations. These indicators include program performance  data, the grantee staff’s level of experience, the size of the grant and the  population served, and issues raised by the Office of Inspector General.  Once the program specialists in that office collect and analyze the  information, they tailor monitoring and technical assistance accordingly.  The staff routinely track major compliance or performance issues, and  also conduct staff briefings before site visits to share information the  office has developed about the grantee and issues that may arise, and  afterwards, to discuss findings and possible corrective action plans.
Specialists in OSEP reported that they categorize grantees based on such  factors as audit findings, data indicating how well the grantee is  accomplishing its objectives, and special conditions attached to the grant.  Based on this information, they categorize the level of risk for the grantee  and the level of monitoring and technical assistance the grantee requires.  For example, a grantee that has high staff turnover or recurring problems  in external audits, or is unable to meet its performance expectations,  would be monitored more closely and receive more technical assistance  than a grantee with experienced staff that is consistently meeting the  program’s administrative, financial, and performance requirements.
Program specialists from OPE, Parental Options and Information, and the  Continuation and Professional Grants Division told us that their risk  assessment process begins when they first contact grantees and provide  expectations for reporting performance and financial information. This  early contact gives these program specialists a sense of the level of  experience the grantee has in managing federal grants. In developing those  assessments, the program specialists and supervisors said they can tailor  their monitoring to provide additional technical assistance, for example, or  reach out more frequently than they might otherwise to grantees that  appear likely to have compliance problems.
While some of Education’s program offices are making progress assessing  and managing grantee risk as discussed above, staff in three other program  offices described significant limitations of the risk assessment process in  place for their grant programs:    Program specialists in one office told us that experienced program  specialists rely on their skills and experience to determine what to look  for. However, without a formalized risk assessment process, they said a  new hire might miss key issues while monitoring a grantee. They added  that a more formal risk assessment process would be helpful.
The program specialists in another office said they are not able to review  all possible risk indicators that may pertain to grantees or do more in- depth risk assessments because of competing demands on their time. For  example, one program specialist described a situation in which grant  funds were improperly paid out to a grantee because the program  specialist did not have time to check whether the grantee was in good  standing. He added that the office was able to recover the funds, but he  was concerned this could happen again and result in losses.
One program office director told us that the large number of grantees  makes it impossible to conduct routine risk assessments of them all.  Program specialists from that office told us that because of their heavy  work load—ranging from 85 to 260 grants per specialist—they did not  have enough time to review all the grantees identified as being at risk.
section_title: Limitations in Financial Expertise and Training Hinder Education’s Ability to Effectively Monitor Grantees
paragraphs: Directors and supervisors in the program offices we visited noted that  while their staff generally have the expertise needed to perform their  monitoring duties, limited financial expertise and training hinder effective  monitoring of grantees’ compliance with financial requirements. In many  of the program offices we visited, program specialists monitor grantees for  compliance with administrative, financial, and performance requirements.  In most program offices, staff we spoke with—including directors,  supervisors, and specialists—said that the program specialists have  limited financial knowledge and lack the skills needed for conducting  financial reviews and ensuring grantees’ financial compliance. While  monitoring protocols aid in reviewing compliance with basic financial  requirements, the ability to verify or evaluate what grantees report about  their use of funds is limited by a lack of expertise. For example, using  findings from consolidated audit reports on grantees’ financial statements  is an activity that aids in identifying monitoring issues, but staff in some  program offices have difficulty accessing these reports or are not able to  determine how to use the report findings to identify areas that need closer  monitoring. Some program office staff said that training on performing  financial reviews is needed to help fill the gap in this skill area. Education  has identified the need for more financial review capability in its grant  program staff through a skills assessment inventory it has conducted for  the last several years. However, Education has not fully developed a  strategy to enhance the financial review capacity of its grant program staff.
subsections: section_title: Lack of Financial Expertise Limits the Depth of Grantee Monitoring, Hindering Its Effectiveness
paragraphs: According to federal control standards, as part of their management  responsibilities, agencies should have standards or criteria for hiring  qualified people. Program office directors and supervisors told us their  staffs generally have the background and expertise needed to monitor  grantees, but directors, supervisors, and staff in eight of the program  offices we reviewed said their program specialists generally did not have a  sufficient level of financial knowledge or skills needed to review grantee  compliance in that area. Several noted that some of their program  specialists previously worked in state or local education systems or have  strong backgrounds in education programs, and that they seek individuals  with these backgrounds or experience specific to their programs.
However, program specialists from three of the groups we met with—that  administer about 47 percent of Education’s total grant funding—told us  specifically that they, as a group, did not possess the needed knowledge or  skills for reviewing grantee financial compliance and that this hindered  their offices’ ability to adequately monitor grantees. The director in one of  those offices also expressed doubt that, in general, his staff have the  ability to conduct more in-depth financial reviews of grantees beyond  reviewing drawdown activity reports.
Program offices took different steps to try to ensure proper financial  reviews. Five of the 12 offices we reviewed addressed their need for  financial expertise by designating staff to perform financial compliance  reviews. However, the directors or supervisors from three of these offices  said that more of their program specialist staff will need to be trained in  financial monitoring as their office’s workload increases and as individuals  with fiscal expertise retire.
Program office staff can work with the department-wide offices that  provide technical assistance and guidance (see fig. 1) on financial  compliance issues. Six offices obtained assistance in conducting financial  monitoring from other offices such as RMS and the Office of Chief  Financial Officer (OCFO). However, these arrangements sometimes had  limits. One program office found OCFO’s ability to assist was limited by  their lack of program knowledge. RMS is responsible for providing  principal and program offices with advice and assistance on issues  concerning grant administration, but officials in RMS told us their offers of  assistance to program offices are often met with skepticism or resistance.  The director of RMS also has concluded that he would need additional  staff to provide support to the program offices, including development of  financial monitoring standards and training.
In addition to designating staff to perform financial compliance reviews or  obtaining assistance in conducting financial monitoring from other  Education offices, four of the offices retained contractors to assist with  monitoring activities, including participating in site visits. However, staff  in two of these offices found that the contractor personnel also lacked  sufficient knowledge and skills to conduct financial compliance  monitoring. Another office terminated its contract because the contractor  was not meeting the office’s standards for preparing site visit reports.  Some of these program offices that used contractors did so to complement  their own staffs with additional resources in order to meet their  monitoring needs. One director told us he used contractors because more  money was available for contractors than for hiring or training staff.
Education has not assessed the effectiveness of using contractors to  conduct fiscal monitoring. An official in the Office of the Secretary told us  he was not aware of any attempts at such an analysis.
Most of the program offices we reviewed use written tools or protocols  that typically give instruction for monitoring compliance, including  compliance with financial requirements, but these protocols generally do  not provide instruction or guidance on verifying or evaluating information  obtained during the review. The group of program specialists we met with  in one office told us they usually have to rely on grantees’ self-reporting  about their use of funds. These specialists said they do not have the  background or skills needed to corroborate what the grantees are  reporting, and the office’s protocols we reviewed do not provide further  guidance or instruction on corroborating or evaluating information  obtained. The director in this office also acknowledged his staff’s lack of  financial skills and said he would like to see the department develop some  better tools for assuring that grantees are complying with financial  requirements and using their funds consistently with their plans.
section_title: Education Has Not Fully Developed a Strategy to Enhance the Financial Review Capacity of Its Monitoring Staff
paragraphs: While Education has begun an effort to inventory the skills of its grant  monitoring staff, it has not yet developed a training program or other  strategy to fill gaps in their financial monitoring capacity. Some program  office staff noted that training specifically in financial monitoring is  needed and would help improve skills. Also, the Grants Pilot Project Team  concluded that initial training efforts in financial monitoring had not yet  yielded long-term and sustained improvements or a critical mass of better  trained staff. To identify where financial monitoring training is needed, the  department has been conducting an inventory of the skills of its program  specialist staff for the last several years. Supervisory staff in the program  offices are asked to identify the skills needs of each person reporting to  them, including financial compliance knowledge. The results of the  inventory are to be used to design training in financial compliance and  determine how much training is needed in each office. Supervisors are  encouraged to meet with their staff, discuss the skills needs, and inform  those individuals about available training. However, under this program,  financial management or analysis skills are not competencies on which all  program specialist staff are assessed. Only about 10 percent of staff with  grant administration responsibilities are assessed on a financial skills  competency. Based on the most recent year for which inventory results  are available, 25 of the individuals assessed on financial skills were  identified as needing training on financial compliance.
Financial monitoring is currently available as a module in classes on grant  monitoring, but the course material is limited to use of the Grant  Administration and Payment System and grantees’ use of tools such as  fund carryovers and budget transfers. In addition, there are two courses  on understanding the role of audits in grantee compliance, but they have  been offered only once in 2007 and once in 2008 with an enrollment limit  of 30. Similarly, Education also offers a course on basic accounting theory  and principles for any department staff without prior accounting training.  One of its goals is to provide knowledge for monitoring use of funds by  grantees. The course most recently has been offered three times in 2009,  and department officials estimate about 23 program office staff with grant  monitoring responsibilities have successfully completed or are currently  taking it.
Education is planning to make changes in the financial compliance  components of its grant administration training, but these efforts are just  beginning and management has not committed to a time frame for full  implementation. RMS is developing a class on grants management that will  focus on financial and administrative requirements and compliance.  Preliminary materials we reviewed indicate it will cover such topics as  grantee cash management and payment systems, cost principles for  grantees, and financial reporting. Two program offices have expressed  interest in registering their staffs to take this class when it becomes  available. RMS is also planning to develop a curriculum for newly hired  grant administration staff that would be offered through “just-in-time”  modules, one of which would focus on financial compliance. According to  the RMS official responsible for developing these courses, though, the  development is being delayed while he implements similar courses for  grantees and their subrecipients. He also noted that his own instructor  staff have limited financial knowledge, which could impose a constraint on  the success of the new training.
section_title: Limitations in Education’s Information-Sharing Systems Hinder Effective Grant Monitoring
paragraphs: Education staff responsible for grant monitoring generally do not have  access to relevant information on how well grantees comply with the  requirements of other Education grants and whether their performance  with respect to those grants meets expectations. Because many grantees  receive multiple grants from Education in a given year, program specialists  said this type of information sharing could help program specialists carry  out their grant monitoring responsibilities more effectively (see fig. 3).  Additionally, the program offices responsible for grant monitoring lack a  systematic means to share information on promising practices for  conducting grant monitoring. Program office managers and staff said it  would be helpful to have information on ways to improve or enhance  current monitoring practices.
Program office management and staff identified challenges in accessing  information relevant to grant monitoring. Program management and  specialists acknowledged that while it might be useful to share  information with other principal or program offices, there is no formal  mechanism to do so. One program office director, for example, said such  exchanges might provide other program offices information about  systemic management or personnel problems state grantees are  experiencing, since these types of problems could affect a wide variety of  the department’s grant programs. A supervisor in another office observed  that if his staff find questionable issues with a grantee, they do not have  a  systematic method of reporting it to other pr ogram or principal offices  that may also be funding that same grantee.
Moreover, program staff within the same office said they do not always  have access to information about a grantee’s performance. In one of our  discussion groups with program specialists, one participant was aware a  grantee was having performance issues but another participant who also  e  monitors the same grantee under a different grant was unaware of thes performance issues. Had he known about these issues, he would have  intensified his monitoring of that grantee. The program specialists in this  office said they do not know who works with which grantees and th no formal process within the program office to share information.
Managers in several program offices said they have databases or other  repositories housing grant monitoring information including findings and  past program performance, but these databases are not available to staff  outside their program office. In those offices, information is available for  internal program office use but is not typically shared with or accessib monitoring staff in other program offices. For example, one principal  office has a database of monitoring findings and recommendations from  the last 6 years, but we were told it was for use only in that principal  office. Program office management and staff noted that Education has a  shared computer drive where program offices may store current and  historical information on grantees’ performance in folders, but access to  their information on the drive is typically restricted to their own staff. The shared drive was never intended for sharing information among different  principal offices. Staff in one program office would need to be given  access to browse files saved in another program office’s folder on the  shared drive. However, even with access to the folders on the shared  drive, the information may not be easily searchable according to some  program staff. One program officer explained to us that in his office, he  and his colleagues can use this drive as a repository for all documents  related to their work. However, they have to notify each other of what is  available on the drive.
One notable exception to the limitations in information sharing inv the department-wide team headed by RMS that is responsible for  coordinating the monitoring of designated high-risk grantees. The  designation is assigned when the results of audits or other monitoring  olves  activities show the grantee has significant deficiencies and is not meeting  program, financial, or administrative requirements. Currently there ar e 17  grantees with this designation. This team meets weekly and includes  representatives from the program offices, OCFO, and other department- wide offices. At these meetings, the team shares information about the  high-risk grantees, monitoring issues involving those grantees, progres made in addressing corrective action plans, and other issues that may  arise. As noted previously, RMS is nearing completion of an information sharing tool for the department that would provide program specia lists  with relevant information related to all grantees department-wide.  However, RMS does not h information-sharing tool.  ave a targeted implementation date for the  In addition to the limited accessibility of information on grantees, w found there is limited information on promising practices in grant  monitoring. In 2007, the department’s Grants Pilot Project Team  recommended disseminating promising practices for grant monitoring to  all program offices. However, the program office directors and other staff  we interviewed were generally not aware of a formal mechanism for  sharing promising practices and desired a more formal approach. While  management staff in some offices said they share information on  promising practices through informal contacts and networks, managers in four of the offices we visited said that a means to share such information  more systematically would be helpful to all offices and a good way to  improve grant monitoring practices.
section_title: Conclusions
paragraphs: Since it created RMS in October 2007, Education has made progress in  developing a risk-based approach to monitoring its more than 18,000  grantees. While allowing individual program offices to develop their own  procedures might make sense given the range of programs and mis the various offices, not all of the program offices have developed  procedures for assessing grantee risk. RMS is developing training,  software, and technical assistance that the program offices can use to ai in the development of their own risk assessment procedures; however,  many of these efforts are in the planning stages and do not have an  implementation timeline.
section_title: Recommendations Executive Action
paragraphs: In order to better target grant monitoring and ensure that monitoring st have the knowledge and information that would help them focus their  monitoring efforts, we recommend that the Secretary of Education take  the following three actions:    Develop department-wide guidance on risk assessment, continue effo develop new grantee risk assessment tools that can be implemented  department-wide, a are implemented.  nd work with the program offices to ensure these tools  Implement a strategy to ensure each program office has staff with  sufficient financial monitoring expertise to conduct or assist other  program specialists in conducting financial compliance reviews. This  could include proceeding with plans for enhanced financial training an also assessing options such as using dedicated staff or contractors to  conduct grantee financial reviews.
Develop an easily accessible mechanism for sharing information across a offices about grantees’ past and present performance, and an accessible forum for sharing promising practices in grant monitoring to ensure all  program offices are able to effectively and efficiently perform all of their  duties and responsibilities.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretary of Education.  Education’s comments are presented in appendix II. Education generally  agreed with our recommendations and said it is taking various steps to  address them. However, Education believed the draft report should  provide a more complete and accurate picture of its overall monitoring  efforts and provided technical comments to provide a more complete and accurate analysis of its monitoring practices. We believe our draft report  provided an accurate portrayal of Education’s monitoring presented appropriate evidence for our conclusions and  recommendations. We reviewed Educa incorporated them when appropriate. tion’s technical comments and  We are sending copies of this report to appropriate congressional  committees, the Secretary of Education, and other interested parties. In  addition, the report will be available at no charge on GAO’s Web site at  http://www.gao.gov. Please contact me at (202) 512-7215 if you or your  staff have any questions about this report. Contact points for our offices of Congressional Relations and Public Affairs may be found on the last page  of this report. Other major contributors to this report are listed in  appendix III.
section_title: Appendix I: Comparison of Grant Funding in the Department of Education’s Principal and Program Offices
paragraphs: Each pie chart in figure 4 represents a principal office in Education that  awards grants to state and local educational agencies, institutions of  higher education, and other eligible entities. The chart for each office is  sized according to its share of the total amount of Education’s grant  funding in that office based on fiscal year 2008 appropriations. The  program offices we included in our review, and their percentage of  principal office grant funds, are shown by the labeled slices. The unlabeled  slices represent the program offices that were not included in our review.
Academic Improvement and  Teacher Quality Programs $1.9 bil.
Student Achievement and School Accountability $848 mil. $15.2 bil. $721 mil. $684 mil.
Office of Special Education Program $280 mil.
section_title: Appendix II: Comments from the Department of Education
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, other GAO staff who made key  contributions to this report are Bill Keller, Assistant Director; Joel Marus,  Analyst-in-Charge; Travis Hill; Jill Yost; Charles Willson; Kate Van Gelder;  Luann Moy; Walter Vance; Jim Rebbe; and James Bennett.