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Congressional Testimony
October 25, 2000, Wednesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 9993 words
COMMITTEE:
HOUSE EDUCATION AND THE WORKFORCE
HEADLINE: TESTIMONY FINANCIAL MANAGEMENT ISSUES AT THE
DEPARTMENT OF EDUCATION
TESTIMONY-BY: RICHARD W. RILEY
, SECRETARY
AFFILIATION: U.S. DEPARTMENT OF EDUCATION
WASHINGTON, DC
BODY:
October 25, 2000 Statement of
The Honorable Richard W. Riley Secretary U.S. Department of Education
Washington, DC Mr. Chairman and Members of the Committee: Thank you for this
opportunity to testify on behalf of this Administration s efforts to improve
education in America, and to transform the Department of Education into a
high-performance agency focused on meeting the needs of its customers. This has
been a difficult time for the American people, with the death of so many brave
American sailors on the USS Cole. On this Committee, it was an especially
terrible blow to Rep. Bobby Scott, whose district includes the Norfolk Naval
Base that serves as the Cole s home port. I served in the Navy for several years
in the mine force, including duty overseas, and I know that the Navy family will
take these deaths very hard. I extend my sympathy to the families of those who
have lost loved ones, and my prayers are with those who are now recovering from
their injuries. This tragedy reminds us of the very real price that we pay for
defending democracy and freedom throughout the world. I also was saddened by the
death of my good friend Governor Mel Carnahan, his son, and a close aide. I
attended his funeral last Friday along with Representative Bill Clay. Governor
Carnahan was a true champion of children and of education, and the people of
Missouri will greatly miss him. Finally, I want to acknowledge the fact that
both of the leaders of this Committee are retiring at the end of the current
session of Congress. I want to congratulate you, Chairman Goodling, for your
long-standing commitment to education. I know we have occasionally disagreed on
policy matters, but you and I have always maintained a cordial relationship and
respect for each other s abiding commitment to improving education. In addition,
I want to extend my sincere thanks to Representative Clay, who also is retiring,
for his forceful advocacy on behalf of public education. AMERICAN PEOPLE SUPPORT
FEDERAL ROLE IN EDUCATION Since this is very likely my last opportunity to
testify before this Committee as Secretary of Education, I would like to begin
with few comments on the current state of American education before responding
to the specific questions that are the subject of this hearing. Over the past
eight years, I have had the unique experience of visiting hundreds of schools in
communities all across America and meeting with thousands of parents and
dedicated teachers and principals. As a result, I have come to learn a great
deal about how the American people think about the education of their children.
One thing I know for certain is that the American people are deeply committed to
the success of public education. They recognize the importance of education for
both individual success and national prosperity. They understand that we are
making a difficult but necessary transition from the old status quo of low
expectations to a new era of high standards and greater accountability. To help
accomplish this transition, the American people have made education one of their
highest national priorities. A vast majority of Americans support the Department
of Education and its efforts to help improve our schools. We are a junior
partner in America s educational enterprise, but an essential one. I also
believe they want us to work together when it comes to the education of their
children. That doesn t mean we can t have a healthy debate about what works best
to improve our schools. There are many roads to success in education,
particularly in a Nation of 15,000 school districts and almost 90,000 public
schools. But we can t provide those districts and schools the help they need if
we get caught up in what I call the politics of division. America s parents and
teachers expect and deserve better from us, particularly in light of the new
consensus on education that has emerged in recent years. A NEW CONSENSUS ON
EDUCATION This consensus crosses party lines and reflects a widespread
understanding of what we must do to reach the goal of helping all students to
reach high standards. It includes a strong focus on smaller classes, a zeal for
quality teaching, a powerful and sustained push to improve basic reading and
math, greater emphasis on early childhood initiatives aimed at overcoming the
achievement gap between poor and minority students and other students, the
expansion of after-school and other extended- learning opportunities, a
commitment to a first-class education for children with disabilities, and
improved access to college. The driving force behind these reforms is the
growing emphasis on standards-based accountability in our education system. And
no matter what we do, we must encourage greater parent involvement in schools
and in our communities. The American people also want us to continue to bring
public education into the 21st century as rapidly as possible. This is why there
is such strong support for getting technology into the classroom and modernizing
our schools. Parents want-and their children deserve-schools that are safe,
healthy, and modern. Many of our nation s schools are overcrowded. And,
unfortunately, there are thousands of schools across our Nation-mostly in poor
rural and inner-city districts-that are dingy and worn-out. Asthma has become a
leading cause of absenteeism and the run-down condition of so many of our
schools certainly has to be considered a contributing factor. Children who are
struggling to breathe have a hard time learning to high standards. I know the
Congress is increasingly aware of this emerging consensus on education in
America. One result is growing support for Federal involvement in school repair
and renovation, as demonstrated by the bipartisan Johnson-Rangel school
modernization legislation, which now has 228 co-sponsors in the House of
Representatives. There may be no better opportunity to move beyond the
partisanship that the American people so dislike than to pass this legislation,
which would help States and local districts rebuild overcrowded, crumbling
school facilities while holding down local property taxes for senior citizens.
GETTING RESULTS I believe one reason the new consensus on education has taken
hold is the growing evidence that raising standards and holding schools
accountable for results really works. This Administration has worked very hard
to end the tyranny of low expectations and to help State and local leaders bring
the standards movement into the mainstream. In 1993, only 14 States were putting
challenging standards to work in their classrooms. Today, all States are using
standards in one form or another to improve student achievement, and the early
returns are promising. For example, the 1998 National Assessment of Educational
Progress (NAEP) reading assessment showed that for the first time average
reading scores increased for students at all grades tested (grades 4, 8, and
12). The NAEP report called these results "encouraging," and I believe this is a
very positive sign of the progress we are making, particularly since reading is
a major focus of Federal programs. The Long Term Trend NAEP confirms this
improvement, with reading scores for nine-year-olds in the lowest quartile on
the way up again. In particular, reading and math scores for nine-year-olds in
the highest-poverty schools-the focus of most Federal dollars- rose by nearly
one grade level between 1992 and 1996. The Long Term Trend NAEP also showed
substantial gains in mathematics achievement from 1990 to 1999 for all grades
tested. In addition, SAT math scores increased from 501 in 1992 to 514 in 2000,
the highest level since the 1960s. One reason for this improvement is that more
young people are taking tough courses to prepare for college. For example, the
percentage of 17-year-olds taking chemistry rose from 40 percent in 1986 to 57
percent in 1999, with the greatest increases occurring among minority students.
And the number of students taking Advanced Placement tests has increased by
two-thirds since 1993. Young people are taking these challenging courses because
they realize that going to college pays off. As a result, 63 percent of all 1999
high school graduates went directly on to college in fall 1999. More than 15
million Americans are now going to college-a new national record-and in the last
decade we have seen a 9 percent increase in the number of Americans completing
their degrees. Federal student aid, including the new HOPE Scholarship and
Lifetime Learning tax credits, has more than doubled from $25 billion to nearly
$60 billion. There are other important signs of progress in our schools as well.
In 1993, there was only one charter school in all of America. Today, there are
nearly 1,700. Eight years ago, there were no nationally recognized,
board-certified "master" teachers. Today, there are nearly 5,000, and by the end
of this school year we expect to have thousands more. A decade ago, there was
only one instructional computer for every 20 students; in 1998 there was one
computer for every six students. In 1994, only 35 percent of our schools and 3
percent of our classrooms were connected to the Internet. Today, 95 percent of
our schools and 63 percent of our classrooms are connected. These improvements
are too often ignored by the critics of our public schools and opponents of the
Federal role in education. I recognize that we still have a long way to go in
many areas. Clearly we must do a better job of teaching math. This is why I
asked Senator John Glenn to lead a National Commission on Math and Science
Teaching for the 21st Century, which just recently recommended a number of
measures to improve our performance in this area. I hope the next Congress will
look favorably at these recommendations. IMPROVEMENT WAS NO ACCIDENT The
progress we have made in improving education of our children was no accident.
Parents, teachers, and principals are doing the hard work of raising
expectations and standards, and we are beginning to turn around low performing
schools in districts across the country. But they have had a supportive partner
in the Department of Education. We set out eight years ago to challenge the
status quo and support those working to change and improve our public schools.
The programs and policies we have put into place with the support of this
Committee have made a difference. Reading is one example. In 1993 and 1994, we
worked with the Congress to end the practice of giving young people in Title I
schools a watered down curriculum. In 1995, the President launched the America
Reads Challenge, and in 1996 the President called upon the Nation to make sure
that every child could read well and independently by the end of the third
grade. In response, Congress worked together in a bipartisan fashion in 1998 to
pass the Reading Excellence Act-the first major piece of literacy legislation in
30 years. Equally important, Governors and educators all across America followed
the President s leadership and adopted as their own the goal of ensuring that
all children can read well by the end of the third grade. We also provided an
incentive through the Work- Study program that helped enlist more than 25,000
students from the Nation s colleges and universities to serve as reading tutors.
The National Research Council helped provide definitive research on how to teach
children to read. And we held a National Reading Summit in 1998 to help get the
word out about the best ways to improve the teaching of reading. Our Class-Size
Reduction initiative is built on what parents and teachers know and research
confirms: the importance of individual attention in learning to read. With the
help of Members of this Committee and others in Congress, we were able to begin
reducing class sizes in the early grades in thousands of schools across the
country. As a result, some 1.7 million children in 23,000 schools are now
getting the extra individual attention they need to become good readers. My
point in all this is that if we stay focused on getting results and working
together, we can make real progress in helping districts and schools make the
changes needed to improve student performance. At the end of the day, it seems
to me this is the real test of effective management SPECIAL EDUCATION Now let me
address the Individuals with Disabilities Education Act (IDEA),
a program that I know is of great concern to you, Mr. Chairman, as well as other
Members of this Committee. We recently celebrated the 25th Anniversary of IDEA,
and it is important to remember just how far we have come in giving children
with disabilities a better education. The Chairman and other Members of this
Committee have worked hard to improve IDEA and ensure that it is adequately
funded. Funding for the Part B Special Education Grants to States program has
more than doubled over the past five years, rising from $2.3 billion in fiscal
year 1996 to nearly $5 billion in fiscal year 2000. Members of this Committee
have led the effort to obtain these increases through the appropriations
process. I believe there is growing agreement on the need to get on a deliberate
path to reach the goal that the Federal government pay 40 percent of the excess
costs of educating students with disabilities. Mr. Chairman, you have asked me
to address how the increased funding is being used by States and local
districts. Nearly all of the funds flow through to local school districts to
help pay the excess costs of providing special education and related services to
children with disabilities. Every year additional funds are needed by local
school districts to cover increases in the cost of services and to pay for the
costs of serving additional children. We estimate that the excess cost of
educating these children increased from $6,599 in fiscal year 1996 to $7,555 per
child in fiscal year 2000, or 14 percent. In addition, States report serving
about 640,000 more children than they were serving four years ago, for a total
of almost 6.3 million children. Although we do not systematically collect
information on how IDEA funds are used, the National Association of State
Directors of Special Education has conducted an informal survey of 27 States and
school districts within these States. This survey suggests that the increases
are being used to implement the improvements called for in the 1997 IDEA
amendments. For example, States reported using their share of the increases to
expand training for teachers, paraprofessionals, interpreters, and parents, as
well as for improvements in assistive technology and to develop more inclusive
assessment practices. At the local level, school districts reported using most
of the additional funds to hire new special education and related services
personnel that enable children with disabilities to be educated in regular
classrooms in their neighborhood schools, and to decrease the caseloads for
special education teachers. Districts are also purchasing computers for
classroom instruction and to help reduce paperwork burden, and are expanding
professional development in areas like reading instruction, schoolwide
discipline approaches, alternative education settings, and parent-school
collaboration. The 1997 IDEA amendments permit school districts to treat 20
percent of their increased funding as local expenditures for purposes of meeting
their maintenance-of-effort requirement. However, given the rising costs of
special education, we believe it is unlikely that any districts are using this
authority to reduce their spending on special education. Indeed, it would be
inappropriate for districts to use this new authority to reduce spending unless
they can be certain that all children with disabilities in their districts are
receiving the free appropriate public education they are entitled to receive.
President Clinton and I have supported increased appropriations for IDEA grants
to States, as well as increases for other Special Education programs including
National Activities. National Activities programs provide critical support to
States in areas such as research, personnel training, technical assistance and
dissemination efforts, and parent information. For example, implementing
research-based strategies that address reading and behavior problems can reduce
referrals to special education. In addition, because three-quarters of all
children with disabilities spend almost half of their time in regular
classrooms, we believe that many of our broader educational improvement programs
that benefit all children also will help students with disabilities. For
example, all students, including students with disabilities, would benefit from
the individual attention available when we put highly trained teachers into
small classes. We know that smaller classes in the early grades encourage the
early identification of learning problems, and that small classes can help
teachers address those problems at lower cost than if they are discovered in
later grades. Moreover, school districts may use Class Size Reduction funds for
professional development to help regular classroom teachers better serve
children with disabilities, or to hire special education teachers to team teach
with regular teachers in classrooms that contain both special education and
regular students. For these reasons, the President s budget includes a $450
million increase to reduce class size in the early grades. These students also
gain from the extended learning time and enrichment opportunities provided
through the 21st Century Community Learning Centers program. We are proposing to
more than double funding for this program in 2001, for a total of $1 billion to
support high-quality extended learning opportunities for nearly 2.5 million
children, including students with disabilities. Many children in America attend
overcrowded and worn out schools, and to my way of thinking no group will
benefit more from modernized school facilities and educational technology than
children with disabilities. This is another reason why we have been pushing so
hard for Congress to pass school modernization legislation. The $1.3 billion
School Renovation program would help school districts repair or renovate their
schools, while the Administration s School Modernization Bonds proposal would
provide nearly $25 billion in tax credit bonds over two years to modernize up to
6,000 schools. We would continue to support technology upgrades in our schools
through the E-rate program, and a $450 million request for the Technology
Literacy Challenge Fund would help schools integrate technology into the
curriculum and ensure that teachers in high- poverty communities are prepared to
use educational technology effectively. We also would double funding to $150
million for the Preparing Tomorrow s Teachers to Use Technology program, which
helps new teachers use technology effectively to enhance student learning. It is
my opinion that all of these broader educational efforts help us to reach the
Chairman s goal-and mine as well-of helping children with disabilities get a
first-class education. MANAGEMENT ISSUES RAISED BY THE COMMITTEE Turning now to
management issues at the Department, I believe it is important to begin by
recognizing the tremendous progress we have made in this area over the past
seven years. When I arrived at the Department in 1993, the General Accounting
Office (GAO) had just completed a comprehensive study detailing a long history
of mismanagement and poor leadership at the Department. It was clear that the
Department faced serious problems and that was a great concern to me. As the GAO
report noted, these management problems were a serious obstacle to any real
education reforms, such as those proposed by President Clinton. For this reason,
I made improved management a priority from day one. We created a comprehensive
strategic plan, which included as one of four key goals the transformation of
the agency into a high-performance organization dedicated to customer service
and results. The Department s strategic plan, developed in response to the
Government Performance and Results Act (GPRA), was rated number two among 24
government agencies in a 1997 report prepared by House Majority Leader Dick
Armey. Earlier this year, House Appropriations Subcommittee Chairman John Porter
praised the Department for its "admirable progress on developing and applying
performance standards under the Government Performance and Results Act." We also
undertook an extensive review of Department regulations. We cut two-thirds of
the regulations governing our elementary and secondary education programs, and
reduced paperwork and reporting requirements. We greatly increased State and
local flexibility by vigorously implementing Goals 2000 and ESEA waiver
provisions, by extending eligibility for ED-FLEX to all States, and by expanding
the number of Title I schoolwide programs from 5,000 to more than 18,000. The
Department successfully addressed the Year 2000 challenge, completing renovation
of its systems on schedule and making the transition to the New Year without any
disruption to students, schools, or post-secondary institutions. The Department
s Year 2000 efforts earned an "A" grade from the House Subcommittee on
Government Management, Information, and Technology, which is chaired by
Representative Stephen Horn. To help meet new computer system challenges, we
hired an industry expert as our Chief Information Officer, and a computer
security expert to help protect data collected by the Office of Student
Financial Assistance. We need this computer expertise because we are
increasingly using the power of the Internet to improve service to our
customers. For example, last year the Department processed about one-third of
student aid applications electronically, saving processing costs for taxpayers
and time and effort for students and their parents. And we are using our
award-winning web site to provide "same day" service to make sure that citizens
have immediate access to new publications, grant notifications and other
documents. The Department s web site-www.ed.gov-is consistently ranked among the
top ten government web sites most often used by citizens, and was the third most
popular site in a December 1999 survey of teachers. The Internet also plays a
key role in our ED Pubs initiative, an on-line ordering system that provides
one-stop service to customers seeking Department products and publications.
ACCOUNTING AND FINANCIAL MANAGEMENT In addition, the Department began a complex
and difficult renovation of its accounting and financial management systems, a
project known as EDCAPS, or Education Central Automated Processing System. This
project has delivered significant benefits, though we are continuing to make
modifications and improvements in response to new accounting requirements and
the need for better system integration. The requirement for agency-wide audits
first went into effect for fiscal year 1996. The Department obtained a clean
audit opinion in fiscal year 1997, but did not achieve this goal for fiscal
years 1998 and 1999. Unfortunately, the new general ledger software that we
purchased in 1995-from a private company listed on the GSA schedule-proved
incapable of meeting Federal financial accounting requirements. This is a major
reason we have had difficulty obtaining "clean" audits in recent years. Early
this year we purchased a new state-of-the-art financial system-Oracle Federal
Financials-and we are working to implement this new system as soon as possible.
The Department has hired new financial managers, brought in experts from the
Treasury Department, and enlisted the support of private sector accounting firms
like PriceWaterhouseCoopers and KPMG Systems. In addition, we have worked to
implement internal audit control recommendations made by the Inspector General.
For example, the Department has developed an intranet-based, on-line set of
policies and procedures manuals to provide accounting employees with
comprehensive, up-to-date guidance on how to perform their jobs. As a result of
these efforts, we are making progress. For example, over the past year the
Department closed out 118 of the 139 recommendations included in financial
audits dating back to 1995. By early next year we expect to close out all
remaining recommendations with the exception of the implementation of the new
general ledger software, which we hope to complete by the end of next year. The
Department also has strengthened the management of the student aid programs by
transforming the Office of Student Financial Aid Programs into a
performance-based organization (PBO). The PBO is currently implementing a
blueprint for integrating a cumbersome set of 11 student aid delivery systems
into a seamless, user-friendly system that will cost less to operate while
ensuring high-quality service to students and their families. MANAGEMENT REFORMS
DEMONSTRATE SUCCESS I believe it is clear from these examples that we have
worked very hard, and in a comprehensive fashion, to improve Department
management. I also recognize that the true measure of any reform is results. I
want to point to four achievements in particular that reflect our overall
success in improving management. First, with the support of the Congress, we
reduced the student loan default rate by more than two-thirds-from 22.4 percent
to 6.9 percent. At the same time, we increased collections on defaulted loans
from $1 billion in fiscal year 1993 to an estimated $4 billion in fiscal year
2000. These two improvements saved taxpayers some $14 billion over the past
seven years. I believe this record is an outstanding demonstration of our
diligence in protecting taxpayer funds from fraud and abuse. Second, a September
1999 report from the GAO found that over 99 percent of the appropriations for 10
major elementary and secondary education programs administered by the Department
went directly to the States. Significantly, the GAO also concluded that these
programs had limited administrative and overhead costs, reporting that,
"school-level staff spent very little time administering the programs and that
district office staff also generally spent little time administering them." This
report shows that the Department operates very efficiently while imposing little
burden on grant recipients in the ten major programs. Third, the Department is
increasingly serving as a clearinghouse of promising practices and grassroots
ideas through ED Pubs, which received an index score of 80 on a 1999 University
of Michigan Customer Service Survey. That s a full 8 points above the national
index of 72. This score compares favorably with those received by top private
sector businesses like Federal Express, Nordstrom, and Chrysler. In addition, ED
Pubs has saved taxpayers more than $1 million in postage since beginning
operation in May 1998. Clearly our efforts to improve customer service are
paying off. Fourth, our aggressive use of technology is not only helping us to
improve customer service, but to operate more efficiently and do more with less.
This is demonstrated by the fact that the Department now employs 35-percent
fewer full-time-equivalent (FTE) employees than in 1980, and some 200 fewer FTE
than when President Clinton took office in 1993. This decline has occurred
despite the implementation of major new programs-like Direct Loans, GEAR UP,
Goals 2000, Class-Size Reduction, and 21st Century Community Learning
Centers-and a near doubling of both the Department s discretionary budget and
student loan volume. ALLEGATIONS OF FRAUD I believe we have made good progress
in rebuilding the Department. Nevertheless, I will be the first to tell you that
we must continue to strengthen our management infrastructure. In particular, I
share your concern over two recent cases of fraud affecting the Department.
While these specific cases are still under criminal investigation and I cannot
discuss them in any detail, I want to assure you that I do not and will not
tolerate fraud of any kind. We are working closely with the Inspector General
and the Department of Justice to ensure that all perpetrators are brought to
justice and prosecuted to the fullest extent of the law. We intend to recover
every cent of illegally diverted taxpayer assets. One case involved Department
employees who, in collusion with contractors from a respected private sector
supplier of telecommunications services and equipment, stole computer equipment
and other electronics and approved excessive overtime payments. My understanding
of this situation is that our faith in a long-time and trusted career employee,
who was given the responsibility to oversee the work of outside contractors, was
misplaced. We expected this employee-as we do of all our staff and
contractors-to be ethical, honest, and to uphold the integrity of the
Department. Unfortunately, this employee failed the Department and the American
taxpayer. In response to this unacceptable abuse of trust, we have moved
aggressively to seize stolen property and expect to recover every penny by the
time the investigation and prosecution is completed. Moreover, we are doing
everything we can to make sure it does not happen again. We have put stringent
new management procedures into place and retrained other Department employees
who oversee the work of outside contractors. In the case of the Impact Aid funds
that were diverted from two school districts by way of forged documents, we have
seized property and funds. In addition, the two school districts have received
all of their Impact Aid funds. Here again, we take this abuse of our trust very
seriously. The misdirected payments occurred as a result of out-and-out fraud
against the Department. Seen in the context of the 500,000 payments that we
process each year, these payments were clearly an aberration, but one that we
have sought to prevent in the future through additional administrative
safeguards. These safeguards include improved procedures, greater separation of
duties, and stronger supervisory review of the payment process. OFFICIAL TRAVEL
The third issue raised by the Committee is my official travel. I have traveled
to some 400 schools and colleges across the Nation over the past seven years to
see firsthand how principals, teachers, parents, and students are working to
improve education. I can also say that when I visit a school or college, the
people back home always give me an opportunity to learn something new about how
we can improve our programs and policies. And that s the way it should be. I
have often said that our children are not educated as Democrats or Republicans
or Independents, but as Americans. I have tried very hard during my time as
Secretary to make education reform a bipartisan effort, and this extends to my
travel schedule. When I travel on the taxpayers' dollar, every event is intended
to promote educational improvement-and my office works closely with our career
ethics staff to ensure that this is the case. Only a small fraction of my
overall travel includes Members of Congress, and I accept invitations from
Republican Members on the same basis as invitations from Democratic Members.
Doing that is not only the right thing to do; it is clearly in the Department's
interest in working with Congress. It should not be surprising, however, that
nearly all of the requests I get from the Hill come from Members-on both sides
of the aisle-who have supported the Administration s education policies. I would
add that when it has not been possible for me to attend an event personally, it
is our practice to try to identify an appropriate official to fill in for me.
Similarly, when the Department schedules an educational event, our consistent
practice is to notify Members who represent the district in which the event
occurs, as well as other public officials who may be interested, without regard
to party affiliation or campaign status. Our ethics office, by the way, is
another management success story at the Department of Education. Prior to my
arrival as Secretary, the Office of Government Ethics (OGE) had cited this
office for management deficiencies. Today, I am pleased to note that the OGE has
cited our ethics office as well-managed and has promoted our program as a model
for other agencies. CONCLUSION In conclusion, while many challenges remain, I
believe we are on the right track in making real improvements in Department
operations and, more importantly, in providing the assistance that families,
States, colleges, school districts, and schools need to help all students reach
high standards. We are continuing to strengthen our systems, and responsible
oversight from this Committee can make an important contribution to this
process. I urge you to keep in mind, however, that the Department has had to
rebuild itself even as it took on major new responsibilities. We have done more
with less, and occasional problems should not detract from the overall progress
we have made in giving this agency the tools it needs to fulfill its purpose and
mission. I will be happy to take any questions you may have.
LOAD-DATE: November 8, 2000, Wednesday
