U.S. Department of Education: Promoting Educational Excellence for all Americans
FY 2010 Budget Summary

Fiscal Year 2010 Budget Summary — May 7, 2009

 

Section V. Departmental Management

History and Background

Congress established the Department of Education as a Cabinet level agency in 1980. Today, the Department operates programs that touch on every area and level of education. The Department's elementary and secondary programs annually serve nearly 14,000 school districts and some 57 million students attending more than 98,000 public schools and 29,000 private schools. Department programs also provide grant, loan, and work-study assistance to more than 14 million postsecondary students.

In general, the Department of Education is responsible for administering education programs authorized by Congress and signed into law by the President. This responsibility involves developing regulations and policy guidance that determine exactly how programs are operated, determining how program funds are awarded to recipients, ensuring that programs are operated fairly and in conformance with both authorizing statutes and laws prohibiting discrimination in federally funded activities, collecting data and conducting research on education, and helping to focus attention on education issues of national importance.

Most Federal funds for education are distributed using one of three methods: a statutory formula based on certain eligibility requirements, such as the number of low-income students in a school district; a competitive process aimed at identifying the most promising proposals or projects targeting a particular educational purpose; or an assessment of financial need, such as the ability of a student or family to pay for college.

Key programs administered by the Department include Title I Grants to Local Educational Agencies, which under the President's 2010 request would deliver $13 billion to help 20 million students in high poverty schools meet State proficiency standards; Individuals with Disabilities Education Act Part B Grants to States, which would provide $13 billion to help States and school districts meet the special educational needs of students of all ages with disabilities; Federal Pell Grants, which would make available over $28 billion in grant assistance to poor students enrolled in postsecondary institutions; and the postsecondary student loan programs, which would help provide over $97 billion a year in new low-interest loans to help students and families pay for college.

While the Department's programs and responsibilities have grown substantially over the years, the agency itself has not. In fact, with a planned fiscal year 2010 level of 4,202 full-time equivalent employees, the Department's staff is 44 percent below the 7,528 employees who administered Federal education programs in several different agencies prior to the creation of the Department in 1980. As a result, the Department has the smallest staff of any Cabinet agency, yet administers the third-largest discretionary budget. This small, efficient staff, along with many management improvements over the years, helps limit administrative costs to approximately 2 percent of the Department's budget, ensuring that the agency delivers about 98 cents on the dollar in education assistance to States, school districts, postsecondaryinstitutions, and students.

The 2010 request for administration, described in detail below, would help the Department continue this record of effective and efficient management of Federal education programs.

Departmental Management
(BA in millions)

  2008   2009   2010
Request		  
 
Program Administration $411.3 1 $433.5 1 $456.5 1
Office for Civil Rights 89.6   96.8   103.0  
Office of the Inspector General 50.8   54.5   60.1  
Student Aid Administration 695.8   753.4   870.4  
Other 13.3 2 16.7 2 10.2 2
Total
1,260.8		  
1,354.9		  
1,500.2		  

Full-time equivalent employment (FTE)

  2008   2009   2010
Request		  
 
Program Administration 2,092   2,044   2,102  
Office for Civil Rights 614   595   614  
Office of the Inspector General 264   273   298  
Student Aid Administration 1,102   1,096   1,167  
Other 31 2 37 2 21 2
Total
4,089		 3
4,045		 3
4,202		 3
   1Includes $2.1 million in 2008, $5.4 million in 2009, and $8.2 million in 2010 for Building Modernization.
   2Includes small Federal Credit Administration accounts and S&E activities in program accounts.
   3Actual FTE usage in 2008; target for 2009 and 2010.

Salaries and Expenses Overview

The 2010 budget request for Salaries and Expenses (S&E) will pay the costs of staff, overhead, contracts, and other activities needed to administer and monitor the Department's educational assistance programs and provide $129 billion in grants and loans to more than 14 million postsecondary students and parents.

The Department is requesting $1.5 billion for its discretionary S&E budget in 2010, an increase of $145 million over the 2009 level. This includes $561 million for payroll costs, which would rise an estimated $35 million to pay for an additional 157 FTE, the proposed 2 percent Governmentwide pay raise in 2010, and employee benefit increases.

The non-personnel costs for the administrative accounts cover such items as travel, rent, mail, telephones, utilities, printing, information technology (IT), contractual services, equipment, supplies, and other Departmental services. The total request for non-personnel activities in 2010 is $939 million.

FY 2010 Salaries and Expenses Costs by Category

This pie chart shows that in FY 2010, 51 percent of Department of Education salaries and expenses costs will be for contracts, 37 percent for personnel costs; 5 percent for overhead (rent and mail); and 7 percent for other non-personnel costs.


The additional funds requested for 2010 are targeted to a few key areas, as follows:

The net increase for all other items from 2009 to 2010 is $3 million, as the Department is holding costs down for these items as much as possible.

Note that the increases for pay raises and rent are "fixed" increases that will be incurred in 2010. Unless these increases are provided in the 2010 appropriation, the Department will have to reduce support for other activities or cut staff to ensure that resources are available to pay these fixed costs. Student aid contracts and additional staff for Recovery Act administration are essential to ensuring that two of the Department's most important ongoing operations are not jeopardized. And IT improvements are critical to the effective performance of nearly every aspect of the Department's business.

Even with the increase requested for 2010, the discretionary administrative budget would be just 2 percent of the Department's total discretionary appropriation and less than 1 percent of all grants and loans made by the Department last year.

Department Employment

This bar graph shows that full time equivalent employment at the Department of Education has gone from 7,528 in 1980 to a target of 4,202 in 2010.

The 2010 request includes funding for 4,202 FTE, a net increase of 157 FTE from the 2009 level of 4,045 FTE.

While the Department's workload has steadily increased, its staffing has been reduced through a combination of attrition and hiring freezes. In fact, as the above chart shows, 2009 FTE levels are expected to be the lowest in the past 10 years. Allowing key staff to leave without hiring behind results in the loss of important institutional knowledge, and places key priorities at risk.

An increase of 69 FTE is needed to fill the Department's most important vacancies resulting from 2009 funding constraints and to implement the portions of the Recovery Act for which no administrative funding was provided by the Act. These staff are needed to administer and monitor Elementary and Secondary, Special Education, and Postsecondary Education grants; student aid reauthorization and rulemaking efforts; keep the public informed of the Department's programs and policies; enforce Civil Rights laws; and improve financial management to ensure accountability for the Department's assets and for the expenditure of taxpayer funds.

Several new student loan programs (e.g., loan purchase, asset-backed commercial paper conduit) were created in 2009 aimed at ensuring continued student access to loans for postsecondary education. These programs are high profile, complex, and will require strict oversight. The 71 additional FTE for Federal Student Aid will help implement these new programs, as well as meet the need for more oversight of ongoing programs and monitoring program compliance of participants.

The Department has placed particular emphasis in the last few years on strengthening its role in implementing the Elementary and Secondary Education Act. This effort has emphasized staffing key positions in the Office of Elementary and Secondary Education (OESE), and the 2010 includes the following additions in FTE for OESE: 1 FTE to perform grant management activities for the Teacher Incentive Fund program—this program is expected to grow significantly in the next few years, 1 FTE to perform grant management activities for the Striving Readers program—the Administration is requesting a ten-fold increase in the appropriation for this program, and 6 FTE to work with States on their accountability systems, which is a high priority of the Administration.

An increase of 25 FTE in the Office of Inspector General is needed to handle an increasing audit and investigation workload, fueled in large part by the creation of new programs authorized by the Ensuring Continued Access to Student Loans Act of 2008.

These FTE increases are partially offset by a decrease in 16 FTE for the National Institute for Literacy, for which no funding is requested in 2010.

Despite steadily reducing its workforce, the Department has improved its operational performance, in part by relying heavily on automation and private contractors to handle such functions as awarding grants, processing student aid applications, and providing grants and loans to more than 14 million college students. Already the smallest of the Cabinet agencies, the Department streamlines administrative tasks and privatizes functions that can be handled more efficiently by outside contractors. A prime example of this management approach is the effective use of contracts to operate the Federal Direct Student Loan program.

As shown in the following chart, staff is divided among the Washington, D.C. headquarters, 10 regional offices, and 8 field offices. Most regional and field office employees are in the Federal Student Aid office, the Office of the Inspector General, and the Office for Civil Rights. Regional and field office activities include review of lenders, institutions, and guaranty agencies participating in the student financial aid programs, as well as collections on defaulted student loans; audits and investigations of Department programs and operations; and civil rights complaint investigations and compliance reviews.

This map of the United States shows the locations of the regional and field offices of the Department of Education.

Program Administration

The Program Administration account provides administrative support for most programs and offices in the Department. The 2010 request totals $456.5 million, an increase of $23 million from the 2009 level. The budget request includes $288.2 million for personnel compensation and benefits to support 2,102 FTE, an increase of $15.4 million and 58 FTE from the 2009 level.

Non-personnel costs cover such items as travel, rent, mail, telephones, utilities, printing, information technology, contractual services, equipment, supplies, and other services. The total request for non-personnel activities in 2010 is $168.3 million, an increase of $7.6 million from 2009. The increase is primarily for rental payments, the Department's centralized information technology network, and the Building Modernization activity, which will help complete the renovation of the Mary E. Switzer building in Washington, D.C. and consolidate Department staff in that building.

Student Aid Administration

The Department will administer over $129 billion in new Federal student aid grants and loans to more than 14 million students and parents in fiscal year 2010. In addition, the Department will support the consolidation of an estimated $20 billion in loans made in earlier years. In providing this essential financial assistance to postsecondary students and their families, the Department and its contractors will interact on a daily basis with approximately 6,200 schools; 3,100 lenders; 35 guaranty agencies; and dozens of accrediting agencies, participants in the secondary market for student loans, and other organizations. Ensuring the smooth operation of the complex array of financial transactions and participants involved in the student financial aid programs—and safeguarding the interests of both students and Federal taxpayers—is perennially the Department's greatest management challenge and one of its highest administrative priorities. Primary responsibility for administering the Federal student financial assistance programs rests with Federal Student Aid (FSA) and the Office of Postsecondary Education (OPE).

The Student Aid Administration account represents 58 percent of the Department's total administrative budget. The request would provide $870 million to administer student aid programs in 2010, an increase of $117 million from the 2009 level. Of the total request, $152.8 million is for staff pay and benefits for 1,167 FTE and $629.3 million is for information technology contracts, primarily for the processing of student aid grant and loan applications; payments to students, schools, guaranty agencies, and lenders; and to collect defaulted loans.

Office for Civil Rights

The Department's Office for Civil Rights (OCR) investigates discrimination complaints, conducts compliance reviews, monitors corrective action plans, and provides technical assistance on civil rights issues. The 2010 request for OCR is $103 million, an increase of $6.2 million over the 2009 level. About $76 million of the OCR budget is for staff pay and benefits for its 614 FTE; the remaining $27 million covers overhead costs as well as computer equipment, data analysis and reporting activities, travel, staff training, and other contractual services.

The requested funds will ensure essential program support to resolve complaints of discrimination filed by the public and to ensure that institutions receiving Federal financial assistance are in compliance with the civil rights laws enforced by OCR. The request also will provide resources for technical assistance to recipients, parents, and students to informally address civil rights concerns and to prevent problems from arising in the future. OCR provides extensive information on its Internet site, including self-assessment materials for recipients, data on school characteristics, brochures, and other information for the public.

Office of the Inspector General

The Office of the Inspector General (OIG) conducts audits and investigations of the Department's programs and activities to help ensure accountability for taxpayer-provided funds and to identify management improvements. The 2010 request for the OIG is $60.1 million, an increase of $5.5 million over the 2009 level. Approximately 69 percent of this amount, or $41.5 million, is for personnel compensation and benefits to support a staffing level of 298 FTE.

The non-personnel request of $18.6 million includes $1.7 million to contract for the mandated annual audit of the Department's financial statements. The scope of the audit will include the examination and analysis of account balances, review of applicable financial systems, and evaluation of internal controls and compliance with significant laws and regulations.

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For further information contact the ED Budget Service.

This page last modified—May 7, 2009 (mjj).