Contact: Lindsey Kozberg (202) 401-3026   

Speaker Frequently Deviates from Prepared Text

Thank you for coming.

As you all know, the president put forward a plan to change the culture of elementary and secondary education in America. Our plan calls for accountability at every level, including the student, school, district, and state levels. Accountability is just as important at the federal level, and I will demand the same kind of accountability and results of myself and of this Department that I would demand of any school.

The most urgent departmental matters to be addressed are the substantial mismanagement and fraud that have marred the Department's finances and reputation over the past several years. Our most recent annual audit, by the accounting firm of Ernst & Young, showed that some improvements have been made, but overall, this Department still failed in its job of taking care of the people's money.

The problems are serious. The auditors have cited the Department for inadequate financial reporting, bad reconciliation of financial records, and poor control over information systems. Numerous other audits and reports have covered abuses in great detail, so there is no need for me to recount them here.

I do, however, have a response to these issues, and that is the Truman response: The buck stops here.

Since my first day at the Department, I have been working to understand the scope and the nature of the problems, and to put together an action plan for addressing them. We have interviewed stakeholders within the Department, we have talked at length with Members of Congress who are keenly interested in the issue and we have worked with the White House to put together objectives and a comprehensive strategy to reach those objectives.

Today I am pleased to announce an initiative that will have two goals: first, to restore the confidence of Congress and the public in the Department, and second, to make sure that no money that ought to be spent on improving the education of American children is wasted in Washington.

When this Department was authorized in 1979, Congress charged it to supplement and complement efforts to improve the quality of education. That's why we need to safeguard the taxpayers' money so carefully.

I want to thank the members of Congress, the Department's Office of the Inspector General and other key senior managers, and the General Accounting Office for their hard work and assistance. They have done much over the last several weeks to help us identify the issues, understand what has been done and what remains to be done, and begin the process of addressing the persistent abuses.

The result is a three-part plan of attack for the next three months:

• install new leadership in the financial and management areas of the Department;
• assemble a task force of career Department leaders; and
• solicit the counsel and advice of external advisors.

As you know, this Department has not had a chief financial officer in two years, nor an Assistant Secretary for Management in more than five years. I am working closely with the President, who is seeking some experienced leaders with strong management credentials to appoint to these positions. Along with the strong leadership of the President's nominees to be Deputy Secretary and Under Secretary, this management team will work to put the Department's business in order.

I have selected eight senior managers from within the Department, and I will pull them away from their regular jobs for the next three months so they can focus exclusively on developing a Blueprint for Management Excellence to solve these management problems as efficiently and expeditiously as possible.

I would like to introduce the members of the team. The leader will be Jack Higgins, of the Inspector General's office.

Phil Maestri, Office of the Chief Financial Officer
Rick Miller, Office of the Chief Information Officer
Bob Davidson, Office of the Chief Information Officer
Tom Pestka, Student Financial Aid
Linda Paulsen, Student Financial Aid
Terry Bowie, Office of the Chief Financial Officer
Danny Harris, Office of the Chief Financial Officer