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Congressional Testimony
October 26, 2000, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 9849 words
COMMITTEE:
HOUSE EDUCATION AND THE WORKFORCE
HEADLINE: TESTIMONY EDUCATION DEPARTMENT FRAUD
TESTIMONY-BY: RICHARD RILEY , REPRESENTATIVE
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.
LOAD-DATE: November 1, 2000, Wednesday