The U.S. General Accounting Office (GAO) has rejected the Department of Education's request to remove the GAO's "high-risk designation" of the federal student aid programs. Secretary Rod Paige made the request in a May 2 letter in which he described how the Department had addressed GAO's concerns and discussed plans for continued improvement.
In its June 9 response, GAO-03-885R Education’s High Risk Designation, the GAO agreed that the Department "has taken actions over the last several years to improve its financial management and the weaknesses identified. Significant progress was made recently when the department received an unqualified - or "clean" - opinion on its financial statements for fiscal year 2002."
The GAO noted, however, that "While this is an important milestone, significant management weaknesses remain that must be addressed in the other two key measurements we identified," which are detailed in its response. The GAO also noted that "it is important that the department demonstrate that it can sustain the clean opinion, as well as other improvements that are made. As you know, the department first received an unqualified audit opinion on its fiscal year 1997 financial statements, but was not able to sustain that result, nor repeat it until this year." It goes on to say that "in our independent and professional judgment as of January 2003, the SFA programs did not fully satisfy the criteria for removal from the high-risk list, largely because of the remaining financial management issues."
The GAO began its program of reporting on government operations it identified as high risk in 1990, and since then has issued status reports that generally coincide with the start of each new Congress. The GAO noted that "In our January 2003 update for the new 108th Congress, we identified the following actions related to SFA programs as remaining
to be completed by the department:
- continue with systems integration and improve plans and reports to better
demonstrate progress,
- make comprehensive improvements to address financial management and
internal control weaknesses,
- improve plans and reports to clearly explain strategies for achieving default
management goals, and
- continue implementation of strategic human capital measures, including
succession planning and staff development."
Posted June 13, 2003 on www.NASFAA.org, the Web Site of the
National Association of Student Financial Aid Administrators (NASFAA).
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