Education officials tout financial management achievements

Education Department officials got a chance to highlight their accomplishments in fixing the department's finances and addressing other management issues during a hearing Wednesday before a House subcommittee.

Deputy Education Secretary William Hansen told the House Education and Workforce Subcommittee on Select Education that department officials recovered $450 million in missing grant money and caught a group of contractors who charged the department more than $700,000 in false overtime. The contractors also stole $300,000 worth of electrical equipment, including computers, scanners, printers, cell phones, digital cameras, CD players and a 61-inch television.

Nearly 20 people either plead guilty or stood trial for the theft and in a February settlement, Verizon Federal Systems paid the Education Department $2 million to resolve the overtime fraud and other theft associated with the former employees. Another four people were indicted after allegedly stealing $1.9 million in funds intended for schools in South Dakota and spending it on real estate and luxury SUVs.

"The department reached this point by setting out to accomplish three short-term and six long-term goals," Hansen said. He credited a task force of career managers with helping to set and accomplish the department's financial and management goals.

"I am glad to hear that career folks at the department had a lot to do with this improved performance," said Rep. Pete Hoekstra, R-Mich., chairman of the subcommittee.

But following the recitation of accomplishments, Rep. Ruben Hinojosa, D-Texas, questioned why department officials had imposed no other sanctions on the contractor whose employees were involved in the overtime fraud and other theft.

"Somebody this neglectful in their responsibility and oversight…should be made to understand that we are serious about spending the money on children and should not be able to bid on these continuing contracts, at least for two or three years," Hinojosa said.

Though Hansen said department officials felt "the punishment fit the crime," Hoekstra suggested that department officials consider adopting a policy of restricting businesses from bidding for federal contracts when their employees are involved in cases of waste, fraud and abuse.

Education officials also reached a long-term goal in fiscal 2002, when the agency received its first clean financial audit since 1997. Though Office of Management and Budget officials have cautioned that sound financial management requires more than clean audits, Education officials pointed to the accomplishment as a "critical milestone."