[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]







                   IMPROVING DEPARTMENT OF EDUCATION
                     POLICIES AND PROGRAMS THROUGH
                         INDEPENDENT OVERSIGHT

=======================================================================

                             JOINT HEARING

                               before the

                  SUBCOMMITTEE ON HIGHER EDUCATION AND
                           WORKFORCE TRAINING


                                and the

                    SUBCOMMITTEE ON EARLY CHILDHOOD,
                  ELEMENTARY, AND SECONDARY EDUCATION

                                 of the

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, SEPTEMBER 10, 2014

                               __________

                           Serial No. 113-66

                               __________

  Printed for the use of the Committee on Education and the Workforce

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


      Available via the World Wide Web: www.gpo.gov/fdsys/browse/
           committee.action?chamber=house&committee=education
                                   or
            Committee address: http://edworkforce.house.gov
                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

89-632 PDF                     WASHINGTON : 2015 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Publishing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001            
            
            
            
            
            
            
            
            
            
            
            
            
            
             
            
            
   
                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin           George Miller, California,
Howard P. ``Buck'' McKeon,             Senior Democratic Member
    California                       Robert C. ``Bobby'' Scott, 
Joe Wilson, South Carolina               Virginia
Virginia Foxx, North Carolina        Ruben Hinojosa, Texas
Tom Price, Georgia                   Carolyn McCarthy, New York
Kenny Marchant, Texas                John F. Tierney, Massachusetts
Duncan Hunter, California            Rush Holt, New Jersey
David P. Roe, Tennessee              Susan A. Davis, California
Glenn Thompson, Pennsylvania         Raul M. Grijalva, Arizona
Tim Walberg, Michigan                Timothy H. Bishop, New York
Matt Salmon, Arizona                 David Loebsack, Iowa
Brett Guthrie, Kentucky              Joe Courtney, Connecticut
Scott DesJarlais, Tennessee          Marcia L. Fudge, Ohio
Todd Rokita, Indiana                 Jared Polis, Colorado
Larry Bucshon, Indiana               Gregorio Kilili Camacho Sablan,
Lou Barletta, Pennsylvania             Northern Mariana Islands
Joseph J. Heck, Nevada               Frederica S. Wilson, Florida
Mike Kelly, Pennsylvania             Suzanne Bonamici, Oregon
Susan W. Brooks, Indiana             Mark Pocan, Wisconsin
Richard Hudson, North Carolina       Mark Takano, California
Luke Messer, Indiana
Bradley Byrne, Alabama

                    Juliane Sullivan, Staff Director
                Megan O'Reilly, Minority Staff Director
                                 ------                                

        SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE TRAINING

               VIRGINIA FOXX, North Carolina, Chairwoman

Thomas E. Petri, Wisconsin           Ruben Hinojosa, Texas
Howard P. ``Buck'' McKeon,             Ranking Minority Member
    California                       Timothy H. Bishop, New York
Glenn Thompson, Pennsylvania         Frederica S. Wilson, Florida
Tim Walberg, Michigan                Suzanne Bonamici, Oregon
Matt Salmon, Arizona                 Mark Takano, California
Brett Guthrie, Kentucky              Carolyn McCarthy, New York
Lou Barletta, Pennsylvania           John F. Tierney, Massachusetts
Joseph J. Heck, Nevada               Rush Holt, New Jersey
Susan W. Brooks, Indiana             Susan A. Davis, California
Richard Hudson, North Carolina
Luke Messer, Indiana
  SUBCOMMITTEE ON EARLY CHILDHOOD, ELEMENTARY, AND SECONDARY EDUCATION

                     TODD ROKITA, Indiana, Chairman

John Kline, Minnesota                David Loebsack, Iowa,
Thomas E. Petri, Wisconsin             Ranking Member
Virginia Foxx, North Carolina        Robert C. ``Bobby'' Scott, 
Kenny Marchant, Texas                    Virginia
Duncan Hunter, California            Carolyn McCarthy, New York
David P. Roe, Tennessee              Susan A. Davis, California
Glenn Thompson, Pennsylvania         Raul M. Grijalva, Arizona
Susan W. Brooks, Indiana             Marcia L. Fudge, Ohio
Bradley Byrne, Alabama               Jared Polis, Colorado
                                     Gregorio Kilili Camacho Sablan,
                                       Northern Mariana Islands
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on September 10, 2014...............................     1

Statement of Members:
    Foxx, Hon. Virginia, Chairwoman, Subcommittee on Higher, 
      Education and Workforce Training...........................     1
        Prepared statement of....................................     2
    Loebsack, Hon. Dave, Subcommittee on Early Childhood, 
      Elementary, and Secondary Education........................     7
        Prepared statement of....................................     9
    Rokita, Hon. Todd, Chairman, Subcommittee on Early Childhood, 
      Elementary, and Secondary Education........................     3
        Prepared statement of....................................     4
    Hinojosa, Hon. Ruben, Subcommittee on Higher Education and 
      Workforce Training.........................................     5
        Prepared statement of....................................     6

Statement of Witnesses:
    Nowicki, Jacqueline, Acting Director, Education, Workforce 
      and Income Security Issues, U.S. Accountability Office, 
      Boston, MA, Inc............................................    22
        Prepared statement of....................................    24
    Tighe, Hon. Kathleen, Inspector General, U.S. Department of 
      Education, Washington, DC..................................    11
        Prepared statement of....................................    13

Additional Submissions:
    Mr. Miller:
        National Association for the Education of Homeless 
          Children and Youth.....................................    69
    Polis, Hon. Jared, a Representative in Congress from the 
      State of Colorado:
        Article from the Denver Post.............................    48
    Questions submitted for the record by:
        Chairwoman Foxx..........................................    72
        McCarthy, Hon. Carolyn, a Representative in Congress from 
          the State of New York..................................    73
    Response to questions submitted:
        Ms. Nowicki.............................................. 76-80
        Inspector General Tighe..................................    75

 
                              IMPROVING DEPARTMENT OF EDUCATION
                     POLICIES AND PROGRAMS THROUGH
                        INDEPENDENT OVERSIGHT

                              ----------                              


                     Wednesday, September 10, 2014

                       House of Representatives,

             Subcommittee on Higher Education and Workforce

                               Training,

                             joint with the

              Subcommittee on Early Childhood, Elementary,

                        and Secondary Education,

               Committee on Education and the Workforce,

                            Washington, D.C.

                              ----------                              

    The subcommittees met, pursuant to call, at 9:33 a.m., in 
Room 2175, Rayburn House Office Building, Hon. Virginia Foxx 
[chairwoman of the Subcommittee on Higher Education and 
Workforce Training] presiding.
    Present from the Subcommittee on Higher Education and the 
Workforce: Representatives Foxx, Petri, Guthrie, Brooks, 
Hinojosa, Bonamici, Takano, and McCarthy.
    Present from the Subcommittee on Early Childhood, 
Elementary, and Secondary Education: Representatives Rokita, 
Kline, Petri, Foxx, Roe, Brooks, Loebsack, Scott, McCarthy, 
Polis, and Sablan.
    Staff present: Kathlyn Ehl, Legislative Assistant; James 
Forester, Professional Staff Member; Nancy Locke, Chief Clerk; 
Daniel Murner, Deputy Press Secretary; Brian Newell, 
Communications Director; Krisann Pearce, General Counsel; 
Lauren Reddington, Deputy Press Secretary; Emily Slack, 
Professional Staff Member; Alissa Strawcutter, Deputy Clerk; 
Juliane Sullivan, Staff Director; Brad Thomas, Senior Education 
Policy Advisor; Tylease Alli, Minority Clerk/Intern and Fellow 
Coordinator; Jacque Chevalier, Minority Senior Education Policy 
Advisor; Eamonn Collins, Minority Education Policy Advisor; 
Eunice Ikene, Minority Labor Policy Associate; Brian Kennedy, 
Minority General Counsel; and Rich Williams, Minority Senior 
Education Policy Advisor.
    Chairwoman Foxx. A quorum being present, the Subcommittee 
on Higher Education and Workforce Training and the Subcommittee 
on Early Childhood, Elementary, and Secondary Education will 
come to order.
    Good morning. I welcome our guests and thank our colleagues 
on the K-12 Subcommittee for joining us.
    I want also to thank our distinguished panel of witnesses 
for participating in today's hearing.
    Independent oversight is a central tool to ensure the 
federal government spends taxpayer dollars wisely and 
administers programs and policies in the most efficient and 
effective way. When you consider the challenges facing our 
schools and workplaces as well as the tsunami of red ink 
confronting taxpayers, the need for responsible administration 
of the federal government has never been more important.
    The Government Accountability Office and each agency's 
Office of Inspector General play vital roles in the oversight 
effort. The hardworking staff of these nonpartisan entities are 
the taxpayers' first line of defense against fraud, waste, and 
abuse of tax dollars. They also help identify areas where 
programs and policies can be improved to ensure the American 
people receive the best services possible.
    Like all federal agencies, the Department of Education has 
a responsibility to take the concerns and recommendations 
offered by these independent investigators seriously. There is 
certainly no shortage of improvements needed at the department.
    In recent years the GAO has issued numerous reports 
highlighting areas where programs and policies should be 
strengthened, including reports entitled: ``Use of New Data 
Could Help Improve Oversight of Distance Education;'' ``Foreign 
Medical Schools: Education Should Improve Monitoring of Schools 
that Participate in the Federal Student Loan Program;'' 
``Better Oversight Could Improve Defaulted Loan 
Rehabilitation;'' and ``Improved Tax Information Could Help 
Families Pay for College.''
    These reports are in addition to those routinely released 
by the Inspector General's office. The examples I just cited 
are especially noteworthy because they include recommendations 
not yet implemented by the department.
    Agencies may not agree with every recommendation in every 
report. In fact, this committee may question various 
recommendations from time to time. However, each independent 
report represents an opportunity for a federal agency to 
consider changes and improve.
    Whether it is the solutions outlined by the GAO and I.G. 
offices or a set of changes proposed internally by an agency, 
action must be taken. The American people deserve no less.
    I look forward to hearing from our witnesses about the 
important work they do. We have a special event starting at 11 
o'clock that many members are interested in attending, so I 
hope we can conduct this hearing expeditiously.
    Toward that end, I will conclude by recognizing Chairman 
Rokita, of the Subcommittee on Early Childhood, Elementary, and 
Secondary Education, for his opening remarks.
    [The statement of Chairwoman Foxx follows:]

Prepared Statement of Chairwoman Foxx, Subcommittee on Higher Education 
                         and Workforce Training

    Good morning. I welcome our guests and thank our colleagues on the 
K-12 subcommittee for joining us. I want also to thank our 
distinguished panel of witnesses for participating in today's hearing.
    Independent oversight is a central tool to ensure the federal 
government spends taxpayer dollars wisely and administers programs and 
policies in the most efficient and effective way. When you consider the 
challenges facing our schools and workplaces, as well as the tsunami of 
red ink confronting taxpayers, the need for responsible administration 
of the federal government has never been more important.
    The Government Accountability Office and each agency's Office of 
Inspector General play vital roles in the oversight effort. The hard-
working staff of these nonpartisan entities are the taxpayers first 
line of defense against waste, fraud and abuse of tax dollars. They 
also help identify areas where programs and policies can be improved to 
ensure the American people receive the best services possible.
    Like all federal agencies, the Department of Education has a 
responsibility to take the concerns and recommendations offered by 
these independent investigators seriously. There is certainly no 
shortage of improvements needed at the department. In recent years, the 
GAO has issued numerous reports highlighting areas where programs and 
policies should be strengthened, including reports entitled:
    * ``Use of New Data Could Help Improve Oversight of Distance 
Education'';
    * ``Foreign Medical Schools: Education Should Improve Monitoring of 
Schools That Participate in the Federal Student Loan Program'';
    * ``Better Oversight Could Improve Defaulted Loan Rehabilitation''; 
and
    * ``Improved Tax Information Could Help Families Pay for College.''
    These reports are in addition to those routinely released by the 
Inspector General's office. The examples I just cited are especially 
noteworthy, because they include recommendations not yet implemented by 
the department. Agencies may not agree with every recommendation in 
every report. In fact, this committee may question various 
recommendations from time to time.
    However, each independent report represents an opportunity for a 
federal agency to consider changes and improve. Whether it's the 
solutions outlined by the GAO and IG offices, or a set of changes 
proposed internally by an agency, action must be taken. The American 
people deserve no less.
    I look forward to hearing from our witnesses about the important 
work they do. We have a special event starting at 11:00 o'clock that 
many members are interested in attending, so I hope that we can conduct 
this hearing expeditiously. Toward that end, I will conclude by 
recognizing the senior Democrat of the higher education subcommittee, 
Congressman David Loebsack, for his opening remarks.
                                 ______
                                 
    Mr. Rokita. Well thank you, Chairman.
    And good morning, everyone. I also want to thank our panel 
of witnesses for joining us this morning, and I extend my 
appreciation to Chairwoman Foxx for leading today's hearing.
    You know, a free and democratic society requires government 
transparency and accountability. We all want the federal 
government to serve the best interests of every American--those 
directly affected by federal programs and those whose tax 
dollars fund those programs. Now, to get there we need to know 
what is working and what isn't, and we need to know the steps 
an agency should take to turn things around.
    The Department of Education alone administers roughly 80 
programs tied to K-12 schools--80 programs just at the 
elementary and secondary education level. That alone requires a 
massive bureaucracy to administer so many programs, and the 
greater the bureaucracy the greater the opportunities for 
mismanagement, frankly. And that is just not an offhand 
statement; that comes from a guy who used to manage five 
bureaucracies.
    That is why the House has taken action that would begin 
streamlining these programs, because a more efficient 
Department of Education can do a better job supporting our 
nation's schools.
    However, even the leanest federal agency can still be 
susceptible to waste, fraud, and abuse. We must remain vigilant 
in our oversight, both in Congress and the offices of our 
independent partners.
    The Government Accountability Office and inspectors general 
are at the forefront of this important effort. Their knowledge 
and investigative authority are vital tools in the fight 
against government corruption and mismanagement.
    Chairwoman Foxx noted several reports by GAO affecting 
higher education policies with recommendations that remain 
open. Now here are just a few examples affecting K-12 education 
policies:
    ``Education Could Do More to Assist Charter Schools with 
Applying for Discretionary Grants,'' number one. Number two: 
``Students with Disabilities: Better Federal Coordination Could 
Lessen Challenges in the Transition from High School.'' Number 
three: ``Selected States and School Districts Cited Numerous 
Federal Requirements as Burdensome, While Recognizing Some 
Benefits.'' Four: ``Education Research: Further Improvements 
Needed to Ensure Relevance and Assess Dissemination Efforts.''
    Each report embodies a new opportunity, frankly, to serve 
the American people more effectively and spend taxpayer dollars 
more wisely. President Reagan once noted, ``Government is the 
people's business, and every man, woman, and child becomes a 
shareholder with the first penny of tax paid.''
    I am fighting for all those people so that they can build 
better lives for themselves and for their families. It is our 
responsibility to protect their tax dollars and ensure the 
American people receive the highest level of government service 
they expect.
    Thank you again, Chairwoman, for hosting today's hearing, 
and I look forward to a good discussion this morning.
    [The statement of Mr. Rokita follows:]

Prepared Statement of Chairman Rokita, Subcommittee on Early Childhood, 
                  Elementary, and Secondary Education

    Good morning. I also want to thank our panel of witnesses for 
joining us this morning and extend my appreciation to Chairwoman Foxx 
for leading today's hearing.
    A free and democratic society requires government transparency and 
accountability. We all want the federal government to serve the best 
interests of every American - those directly affected by federal 
programs and those whose tax dollars fund federal programs. To get 
there, we need to know what's working and what isn't. And we need to 
know the steps an agency should take to turn things around.
    The Department of Education administers roughly 80 programs tied to 
K-12 schools; 80 programs just at the elementary and secondary 
education level. It requires a massive bureaucracy to administer so 
many programs, and the greater the bureaucracy the greater the 
opportunities for mismanagement. That is why the House has taken action 
that would begin streamlining these programs, because a more efficient 
Department of Education can do a better job supporting our nation's 
schools.
    However, even the leanest federal agency can still be susceptible 
to waste, fraud, and abuse. We must remain vigilant in our oversight, 
both in Congress and the offices of our independent partners. The 
Government Accountability Office and inspectors general are at the 
forefront of this important effort. Their knowledge and investigative 
authority are vital tools in the fight against government corruption 
and mismanagement.
    Chairwoman Foxx noted several reports by GAO affecting higher 
education policies with recommendations that remain open. Here are just 
a few examples affecting K-12 education policies:
    * ``Education Could Do More to Assist Charter Schools with Applying 
for Discretionary Grants'';
    * ``Students with Disabilities: Better Federal Coordination Could 
Lessen Challenges in the Transition from High School'';
    * ``Selected States and School Districts Cited Numerous Federal 
Requirements as Burdensome, While Recognizing Some Benefits''; and
    * ``Education Research: Further Improvements Needed to Ensure 
Relevance and Assess Dissemination Efforts.''
    Each report embodies a new opportunity to serve the American people 
more effectively and spend taxpayer dollars more wisely. President 
Reagan once noted, ``Government is the people's business, and every 
man, woman, and child becomes a shareholder with the first penny of tax 
paid.'' I am fighting for all those people so that they can build 
better lives for themselves and their families. It is our 
responsibility to protect their tax dollars and ensure the American 
people receive the highest level of government service they expect. 
Thank you again, Chairwoman Foxx, for hosting today's hearing and I 
look forward to our discussion this morning.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Chairman Rokita.
    Next I recognize the senior Democrat of the Subcommittee on 
Higher Education, Workforce Training, Congressman Ruben 
Hinojosa, for his opening remarks.
    Mr. Hinojosa. Thank you. Thank you, Chairwoman Foxx.
    Today's joint committee hearing will examine the Government 
Accountability Office, to which I will refer as GAO, and the 
Inspector General's, which I will refer to in my remarks as 
OIG--their recommendations made to the U.S. Department of 
Education to improve quality and oversight.
    To begin, I must underscore that independent oversight is a 
critical tool in helping the U.S. Department of Education 
achieve its goals. The GAO and the inspector general play a 
vitally important role in improving the quality, efficiency, 
and effectiveness of the department's programs.
    With regard to implementation, the Department of Education 
has made substantial progress in responding to GAO and OIG's 
recommendations over the past decade. Since 2004 the department 
has implemented 218 of the 268 recommendations made by GAO.
    While the government-wide average for the implementation of 
GAO recommendations is 80 percent, the Department of Education 
has surpassed that average with an implementation of 93 percent 
of GAO's recommendations from 2004 through 2014. And that is 
remarkable.
    According to the GAO, the implementation of these 
recommendations has resulted in significant benefits, 
generating more than $2.1 billion in financial benefits and 
making programmatic and administrative improvements.
    Since the most recent 2012 audit, the OIG has noted that 
the Department of Education has placed significantly more 
organizational priority in remedying outstanding audits which 
have improved the timeliness of audit resolution and the follow 
up. I understand that the department has action teams in place 
to resolve the audits in as little time as 3 months.
    In the area of higher education, the department has been 
responsive on growing concerns regarding fraud rings and campus 
debit cards. Since 2011 the OIG has issued a series of reports 
showing an increase in fraud rings, particularly for distance 
education courses. Between the years 2009 and 2012 the OIG 
estimated that there was an 82 percent increase of students 
participating in fraud rings, impacting $187 million in federal 
student aid.
    In light of the OIG's findings, Ranking Member Miller and I 
urged the Department of Education to take proactive steps to 
address that important issue. Thus far, I understand the 
department has made progress in mitigating fraud rings, 
including increasing verification requirements and better 
tracking systems that can identify when a person attempts to 
receive awards at multiple college campuses.
    Similarly, GAO and the OIG have released reports to 
Congress concluding that student and taxpayer funds are at risk 
when banks create deals with colleges to steer students into 
expensive debit cards that can quickly erode their financial 
aid money. In a report issued in February of 2014, GAO found 
that 40 percent of students attend colleges with debit card 
arrangements, potentially exposing students to an array of 
troubling and expensive fees, lack of free access to financial 
aid, and marketing that unfairly steers the students into 
potentially expensive accounts.
    The OIG had similar findings, noting many agreements 
provided multimillion dollar kickbacks to schools and colleges. 
So as a result, the OIG recommended that the department 
consider implementing a series of reforms, including the 
banning of revenue sharing when colleges partner with banks to 
offer credit cards.
    Along the same lines, GAO recommended that Congress 
consider requiring banks to submit their contracts and their 
fee structures to the Consumer Financial Protection Bureau, 
which we call the CFPB, for annual analysis and publication, 
just like they are required to do with the credit cards.
    Since these reports were issued, several bank regulators 
and consumer groups have echoed the same recommendations.
    In closing, I want to say that House Democrats have also 
introduced H.R. 4714, entitled ``The Campus Debit Cards Act,'' 
which would, among other things, implement the GAO and OIG 
recommendations for transparency and disclosure of these 
arrangements. However, we have seen no action from our 
Republican friends and colleagues, to protect students from 
these abusive financial products or to act on the 
recommendations of the GAO.
    As ranking member of the Higher Education and Workforce 
Training Committee, I look forward to hearing from our panel of 
witnesses on how we can continue to enhance oversight and 
improve the quality and effectiveness of our federal programs 
in the Department of Education.
    And with that, I thank you, and I yield back.
    [The statement of Mr. Hinojosa follows:]

   Prepared Statement of Hon. Ruben Hinojosa, Subcommittee on Higher 
                    Education and Workforce Training

    Thank you, Chairwoman Foxx.
    Today's joint committee hearing will examine the Government 
Accounting Office (GAO) and the Inspector General's (OIG)'s 
recommendations made to the U.S. Department of Education to improve 
quality and oversight.
    To begin, I must underscore that independent oversight is a 
critical tool in helping the U.S. Department of Education achieve its 
goals. The GAO and Inspector General play a vitally important role in 
improving the quality, efficiency, and effectiveness of the 
Department's programs. With regard to implementation, the Department of 
Education has made substantial progress in responding to GAO and OIG 
recommendations over the past decade. Since 2004, the department has 
implemented 218 of the 268 recommendations made by GAO.
    While the government-wide average for implementation of GAO 
recommendations is 80 percent, the Department of Education has 
surpassed that average with an implementation 93 percent of GAO 
recommendations from 2004-2014.
    According to the GAO, the implementation of these recommendations 
has resulted in significant benefits, generating more than $2.1 billion 
in financial benefits and making programmatic and administrative 
improvements.
    Since the most recent 2012 audit, the OIG has noted that the 
department of education has placed significantly more organizational 
priority in remedying outstanding audits which have improved the 
timeliness of audit resolution and follow up. I understand that the 
department has action teams in place to resolve audits in as little as 
three months.
    In the area of higher education, the Department has been responsive 
on growing concerns regarding fraud rings and campus debit cards.
    Since 2011, the OIG has issued a series of reports showing an 
increase in fraud rings, particularly for distance education courses. 
Between 2009 and 2012, the OIG estimated that there was an 82 percent 
increase of students participating in fraud rings, impacting $187 
million in federal student aid.
    In light of the OIG's findings, Ranking member Miller and I urged 
the U.S. Department of Education to take proactive steps to address 
this issue. Thus far, I understand the department has made progress in 
mitigating fraud rings, including increasing verification requirements 
and better tracking systems that can identify when a person attempts to 
receive awards at multiple campuses.
    Similarly, GAO and the OIG have released reports to Congress 
concluding that student and taxpayer funds are at risk when banks 
create deals with colleges to steer students into expensive debit cards 
that can quickly erode their financial aid money.
    In a report issued in February of 2014, GAO found that 40% of 
students attend colleges with debit card arrangements, potentially 
exposing students to an array of troubling and expensive fees, lack of 
free fee access to financial aid, and marketing that unfairly steers 
students into potentially expensive accounts.
    The OIG had similar findings--noting many agreements provided 
multi-million dollar kickbacks to schools. As a result, the OIG 
recommended that the Department consider implementing a series of 
reforms, including banning revenue sharing when colleges partner with 
banks to offer debit cards.
    Along the same lines, GAO recommended that Congress consider 
requiring banks to submit their contracts and fee structures to the 
Consumer Financial Protection Bureau (CFPB) for annual analysis and 
publication, just like they are required to do with credit cards.
    Since these reports were issued, several bank regulators and 
consumer groups have echoed these recommendations.
    House Democrats have also introduced H.R. 4714, ``The Campus DEBIT 
Cards Act'' which would, among other things, implement the GAO and OIG 
recommendations for transparency and disclosure of these arrangements. 
However, we have seen no action from our Republican colleagues to 
protect students from these abusive financial products, or to act of 
the recommendations of the GAO.
    As Ranking Member for Higher Education and Workforce Training, I 
look forward to hearing from our panel of witnesses on how we can 
continue to enhance oversight, and improve the quality and 
effectiveness of our federal programs in the department of education.
    Thank You!
                                 ______
                                 
    Chairwoman Foxx. Thank you, Mr. Hinojosa.
    I now recognize the senior Democrat of the Subcommittee on 
Early Childhood, Elementary, and Secondary Education, 
Congressman Dave Loebsack, for his opening remarks.
    Mr. Loebsack. I want to start by thanking Chairwoman Foxx 
for calling this joint subcommittee hearing today.
    I also want to thank Ranking Member Hinojosa for sharing 
the dais with me, and Chairman Rokita, as well.
    And I want to thank our witnesses for testifying before us 
today, as well.
    We are here today to examine oversight of the Department of 
Education. Specifically, we will look at the Government 
Accountability Office, GAO; and the Department of Education 
Office of Inspector General, OIG; and the recommendations they 
made to the Department of Education to improve program quality 
and management.
    My friends in the majority will want to highlight the 
department's challenges in responding to OIG and GAO audit 
findings--challenges the department is actively working to 
overcome. Yet in recent years the department has made 
meaningful progress not only in implementing GAO and OIG 
recommendations, but also in implementing them in a more timely 
manner.
    In that time, E.D. has made strategic staffing decisions to 
more effectively put OIG recommendations into place, and it has 
also established an internal governance panel to address key 
challenges in the audit process and ways to improve response 
time. And I won't repeat the statistics that Ranking Member 
Hinojosa just mentioned, but those are impressive statistics, 
as well.
    Recently the department has also placed greater priority on 
resolving OIG audit reports and ensuring that appropriate 
action takes place. Under the Inspector General Act of 1978, 
OIG is authorized to carry out various audits or reviews to, 
quote--``promote economy, efficiency, and effectiveness in the 
administration of and prevent and detect fraud and abuse in the 
department's programs and operations.''
    During the Obama administration, E.D. has eliminated 
backlog--its backlog of overdue OIG audits and has begun 
preparing corrective action plans in response to audits more 
quickly. As of today, Department of Education only has one 
unresolved audit more than 6 months old, and the GAO and the 
OIG are vital to the Department of Education's efforts to 
monitor, review, and enhance its administration and its 
programs.
    In addition to making recommendations to the Department of 
Education, both the GAO and the department's OIG often uncover 
problems that can best be addressed by congressional action. 
These critical issues fall within our committees' jurisdiction; 
that is why we are here today.
    But sadly, we have seen in the past, as was mentioned, the 
majority has refused to act on many of these, and I am 
concerned in particular that the majority appears indifferent 
to problems within the purview of the subcommittee on which I 
am the ranking member, although I am confident that Chairman 
Rokita and I can work together on these issues going forward.
    In recent years, for example, the GAO has identified gaping 
holes in state laws that leave children and students vulnerable 
to physical and sexual abuse both in school and out of school, 
and Democrats on this committee have sent at least five letters 
to Chairman Kline requesting committee action on these gaps in 
child abuse prevention. But four of our formal requests have 
gone unanswered, and none have resulted in hearings or markups 
on legislation to address the troubling findings of GAO's 
investigative work.
    And while committee Democrats have introduced legislation 
that protects students and families, we cannot enact such 
common-sense regulations without the help of colleagues on both 
sides of the aisle.
    And GAO has produced troubling findings on a number of 
issues on which our committee is still awaiting action, 
including curbing abusive seclusion and restraint in schools, 
sex abuse of children and athletics programs, and aligning the 
definition of ``homelessness'' across federal agencies to 
better serve homeless students. And that is just to name a few.
    We all know that oversight is one of this body's most 
important functions. Again, that is why we are here today. And 
Congress and Congress alone has the authority to put many of 
the reforms recommended by OIG and the GAO into action.
    And as the committee under whose jurisdiction education 
laws and regulations fall, it is our duty to give those 
recommendations serious consideration. Agency oversight is 
important, but we must not lose sight of what we are here to 
do, and that is first and foremost to protect children and 
families and to help set them up for success in school and in 
life.
    And I do look forward to hearing from our witnesses today, 
and in the future, working with my colleagues on the other side 
of the aisle to make sure that we implement the GAO and OIG's 
most pressing proposals.
    And thank you, and I yield back.
    [The statement of Mr. Loebsack follows:]

Prepared Statement of Hon. Dave Loebsack, Subcommittee Early Childhood, 
                   Elementary and Secondary Education

    I want to start by thanking Chairwoman Foxx for calling this joint 
subcommittee hearing. I also want to thank Ranking Member Hinojosa for 
sharing the dais with me.
    And I want to thank our witnesses for testifying before us.
    We are here today to examine oversight of the Department of 
Education (the Department or ED). Specifically, we will look at the 
Government Accountability Office (GAO) and the Department of Education 
Office of Inspector General (OIG), and the recommendations they've made 
to the Department of Education to improve program quality and 
management.
    My friends in the majority may want to highlight the Department's 
challenges in responding to OIG and GAO audit findings, challenges the 
Department is actively working to overcome. Yet, in recent years, the 
Department has made meaningful progress not only in implementing GAO 
and OIG recommendations, but also in implementing them in a timelier 
manner.
    In that time, ED has made strategic staffing decisions to more 
effectively put OIG recommendations into place. It has also established 
an internal governance panel to address key challenges in the audit 
process and ways to improve response time.
    Since 2004, ED has made more than 90 percent of the changes that 
GAO has advised--far exceeding the government-wide average for 
implementing GAO recommendations. According to GAO, taking up these 
recommendations has resulted in 2.1 billion in financial benefits and a 
slew of other programmatic and administrative improvements for the 
Department.
    Recently, the Department has also placed a greater priority on 
resolving OIG audit reports and ensuring that appropriate action takes 
place. Under the Inspector General Act of 1978, OIG is authorized to 
carry out various audits or reviews to ``promote economy, efficiency, 
and effectiveness in the administration of, and ... prevent and detect 
fraud and abuse in ... [the Department's] programs and operations.''
    During the Obama Administration, ED has eliminated its backlog of 
overdue OIG audits and has begun preparing corrective action plans in 
response to audits more quickly. As of today, ED only has one 
unresolved audit more than six months old.
    The GAO and OIG are vital to the Department of Education's efforts 
to monitor, review and enhance its administration and its programs. In 
addition to making recommendations to ED, both the GAO and ED-OIG often 
uncover problems that can best be addressed by Congressional action. 
These critical issues fall within our committee's jurisdiction, but, 
sadly, committee Republicans refuse to act on many on them
    This Republican majority seems to be particularly indifferent to 
problems within the purview of the Early Childhood, Elementary and 
Secondary Education Subcommittee. In recent years, for example, GAO has 
identified gaping holes in state laws that leave children and students 
vulnerable to physical and sexual abuse, both in school and out of 
school.
    Democrats on this committee have sent at least five letters to 
Chairman Kline requesting committee action on these gaps in child abuse 
prevention--but four of our formal requests have gone unanswered, and 
none have resulted in hearings or markups on legislation to address the 
troubling findings of GAO's investigative work. While Committee 
Democrats have introduced legislation to protect students and families, 
we cannot enact such commonsense regulations without the help of our 
Republican colleagues.
    GAO has produced troubling findings on a number of issues, on which 
our committee is still awaiting action:
    * Curbing abusive seclusion and restraint in schools;
    * Sex abuse of children in athletics programs; and
    * Aligning the definition of homelessness across federal agencies 
to better serve homeless students
    That is just to name a few.
    We must not forget that oversight is one of this esteemed body's 
most essential functions. Congress and Congress alone has the authority 
to put many of the reforms recommended by OIG and the GAO into action. 
And as the committee under whose jurisdiction education laws and 
regulations fall, it is our duty to give those recommendations serious 
consideration. Agency oversight is important, but we must not lose 
sight of what we're here to do: protect children and families and set 
them up for success in school and in life.
    I look forward to hearing from our witnesses today, and, in the 
future, to working with my Republican colleagues to implement the GAO 
and OIG's most pressing proposals.
    Thank you. I yield back.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Mr. Loebsack.
    Pursuant to committee rule 7(c), all members will be 
permitted to submit written statements to be included in the 
permanent hearing record. And without objection, the hearing 
record will remain open for 14 days to allow such statements 
and other extraneous material referenced during the hearing to 
be submitted for the official hearing record.
    It is now my pleasure to introduce our distinguished 
witnesses.
    The Honorable Kathleen S. Tighe has served as the inspector 
general for the U.S. Department of Education here in 
Washington, D.C. since 2010. Ms. Tighe has a long career in 
government accountability. Notably, she was appointed to chair 
the Recovery, Accountability, and Transparency Board and has 
served on the Government Accountability and Transparency Board.
    Prior to her work with the Department of Education, Ms. 
Tighe was the deputy inspector general of the U.S. Department 
of Agriculture and also served as counsel to the inspector 
general at the General Services Administration.
    Ms. Jacqueline Nowicki is the acting director of education, 
workforce, and income security issues for the U.S. Government 
Accountability Office in Boston, Massachusetts. Ms. Nowicki 
directs GAO's K-12 education work.
    Previously, she was assistant director for budget issues at 
GAO, along with having worked in private sector consulting, 
leading projects on education, job training, and social policy 
issues.
    Ms. Melissa Emrey-Arras is the director of education, 
workforce, and income security issues for the U.S. Government 
Accountability Office in Boston, Massachusetts. In this 
capacity, she oversees the agency's K-12 and higher education 
work, including national studies on education issues ranging 
from student loans to veterans' education benefits.
    Ms. Emrey-Arras is available for questions.
    Before I recognize you to provide your testimony, let me 
briefly explain our lighting system. You have 5 minutes to 
present your testimony. When you begin, the light in front of 
you will turn green; when 1 minute is left the light will turn 
yellow; when your time is expired the light will turn red.
    At that point I ask that you wrap up your remarks as best 
as you are able. Members will each have 5 minutes to ask 
questions.
    I now would recognize Kathleen Tighe for 5 minutes, thank 
you very much.

 STATEMENT OF HON. MS. KATHLEEN TIGHE, INSPECTOR GENERAL, U.S. 
           DEPARTMENT OF EDUCATION, WASHINGTON, D.C.

    Ms. Tighe. Thank you.
    Good morning, everybody. Thank you for inviting me here 
today to discuss audit resolution and the timeliness of actions 
by the U.S. Department of Education to address recommendations 
made by the Office of Inspector General. I want to thank the 
two subcommittees for holding this hearing and highlighting an 
issue that is such a vital part of good government.
    The goal of the Office of Inspector General's audit and 
related work is not simply to identify and tally problems, but 
to recommend improvements and promote corrective action based 
on those recommendations. That is what audit resolution and 
follow up are all about.
    They are important mechanisms to help the department 
improve the management and performance of its programs and 
operations, and since 2002 my office has issued six reports on 
the department's audit resolution and follow-up processes, most 
recently in 2012. Each report noted problems with ineffective 
internal controls, lack of staff and training to conduct 
resolution activity, a lack of organizational priority placed 
on audit resolution activities, and an overall lack of 
accountability.
    After our 2012 review, the department proposed a series of 
actions that addressed many of the specific recommendations in 
the report. As discussed in my written testimony, we have seen 
some progress as a result of those actions. Specifically, the 
department has made progress in its efforts to more timely 
resolve recommendations made in internal audit reports, which 
are those OIG reports where the department is directly 
responsible for implementing corrective action.
    For internal reports issued in 2010, only 63 percent of OIG 
audit recommendations were resolved timely, but in each 
calendar year since then, 93 percent or more of OIG 
recommendations have been resolved timely. While this progress 
in noteworthy, challenges remain, particularly in the area of 
repeat findings, which are too common in our information 
technology security and financial statement audit work.
    Regarding OIG external audits, where our recommendations 
are aimed at nonfederal entities such as state and local 
education agencies, participants in the student financial aid 
programs, and other grantees or contractors, the department has 
also made some progress. However, timeliness still remains a 
challenge.
    For example, 10 of 49 external audit reports issued between 
2010 and 2013 remain unresolved. Of those 39 resolved audits, 
only 13 have been fully implemented.
    Ninety-five percent of the audits resolved had not been 
resolved within OMB's 6-month deadline. These audits were 
overdue for resolution by an average of about 439 days.
    In each calendar year between 2010 and 2014, 80 to 100 
percent of OIG external audit reports issued were not resolved 
timely.
    This is an area of particular concern as the untimely 
resolution of external audits impacts the potential recovery of 
funds and creates delays in the development and implementation 
of corrective actions by auditees that are intended to correct 
noted weaknesses in program management. Delays also send the 
wrong message to program participants about the department's 
tolerance for noncompliance and misuse of program funds.
    This is why we periodically review the department's audit 
resolution and follow-up processes. As previously stated, we 
have conducted six reviews since 2002 and we have a seventh 
audit presently underway.
    We are currently evaluating the effectiveness of the 
department's processes to ensure that external auditees are 
taking corrective actions to address weaknesses identified in 
OIG reports. We expect to issue the results of our findings 
later this year.
    Audit recommendations can serve as a tool for department 
management in its daily operations, long-term planning, and 
overall risk management. Our work, however, is effective only 
if the department implements corrective actions in a timely 
manner to address identified deficiencies or weaknesses.
    We see that the department is taking positive steps in this 
area. However, work still remains. We will continue to closely 
monitor and report on the department's progress.
    This concludes my statement. I once again want to thank you 
for highlighting this issue and making it a priority for the 
department. I am happy to answer any questions.
    [The statement of Ms. Tighe follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Chairwoman Foxx. Thank you very much.
    Ms. Nowicki, you are recognized for 5 minutes.

     STATEMENT OF MS. JACQUELINE NOWICKI, ACTING DIRECTOR, 
     EDUCATION, WORKFORCE AND INCOME SECURITY ISSUES, U.S. 
   GOVERNMENT ACCOUNTABILITY OFFICE, BOSTON, MASSACHUSETTS; 
 ACCOMPANIED BY MS. MELISSA EMREY-ARRAS, DIRECTOR, EDUCATION, 
     WORKFORCE AND INCOME SECURITY ISSUES, U.S. GOVERNMENT 
          ACCOUNTABILITY OFFICE, BOSTON, MASSACHUSETTS

    Ms. Nowicki. Good morning, Chairwoman Foxx, Chairman 
Rokita, Ranking Members Hinojosa, Ranking Member Loebsack, and 
members of the subcommittee. We appreciate the opportunity to 
be here today to discuss the status of GAO's prior 
recommendations to the Department of Education.
    GAO's recommendations create tangible benefits for the 
American people by improving the efficiency, effectiveness, and 
accountability of government. Government-wide, approximately 80 
percent of our recommendations are implemented within 4 years, 
yielding significant results. At the end of fiscal year 2013, 
for example, over 1,400 recommendations we made in fiscal year 
2009 had been implemented, resulting in over $50 billion in 
financial benefits for the federal government, a return of 
about $100 for every dollar appropriated to GAO.
    However, these benefits may only be achieved when federal 
agencies implement our recommendations.
    My remarks today will focus on two key areas. First, I will 
discuss Education's progress in implementing GAO's 
recommendations and the benefits stemming from them. Second, I 
will discuss characteristics of recommendations Education has 
not yet implemented.
    In regards to my first point, the department has 
implemented 218 of the 286 recommendations we have made to 
Education since fiscal year 2004. These recommendations span 
more than 100 separately issued reports and address a wide 
range of programs.
    They have resulted in more than 2.1 billion in documented 
financial benefits and 145 documented nonfinancial benefits, 
such as improved accuracy in calculating students' need for 
financial aid, new guidance that ensures students with 
disabilities have equal opportunities to participate in 
athletics, and a streamlined and less burdensome grant 
application process for school districts.
    In tracking the progress agencies make in implementing our 
recommendations, we actively track each recommendation for 4 
years. If a recommendation has not been implemented within 4 
years, our experience has shown that it is not likely to be 
implemented. So, for example, recommendations we made in fiscal 
year 2009 are tracked through fiscal year 2013.
    We are pleased to report that during the last 5 years, by 
working closely with the department, we were able to close on 
average about 93 percent of our recommendations to Education as 
implemented, compared to a government-wide average of about 80 
percent.
    With regard to my second point, Education has not 
implemented 68 of the 286 recommendations we have made since 
2004. These include 10 recommendations we closed after 4 years 
after determining that Education was unlikely to implement 
them, and 58 open recommendations that we are still actively 
monitoring. These 58 open recommendations, the majority of 
which Education agreed with when they were made, span four of 
Education's strategic goals, though more than one-third of our 
open recommendations relate to Education's goal of 
strengthening elementary and secondary education programs.
    These 58 open recommendations also address various 
weaknesses that crosscut many education programs and strategic 
goals. These include strengthening external oversight and 
monitoring of grantees and contractors, coordination and 
collaboration with other agencies, and departmental internal 
management.
    Fully implementing these recommendations could yield 
significant improvements in Education's operations. For 
example, they would improve equity in K-12 education for racial 
and ethnic minorities and strengthen postsecondary education 
oversight by addressing potential inconsistencies in how 
schools are treated.
    In conclusion, we are proud of the many important 
improvements made in both elementary and postsecondary 
education as a result of GAO's work. However, the full benefit 
of our work can only be achieved when federal agencies timely 
implement our recommendations.
    We appreciate Education's sustained efforts to work with us 
in implementing recommendations that have improved outcomes for 
kids, reduced administrative burden on states and schools, and 
strengthened accountability for federal funds. We will continue 
to closely monitor and report on the department's progress in 
implementing our recommendations and pay particular attention 
to the 20 recommendations that have been open for 2 or more 
years.
    This completes my prepared remarks. I would be pleased to 
answer any questions you may have.
    [The joint statement of Ms. Nowicki and Ms. Emrey-Arras 
follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairwoman Foxx. Thank you very much.
    What great witnesses you are--stay within time.
    I now recognize Chairman Rokita for 5 minutes.
    Mr. Rokita. Thank you, Chairwoman.
    Yes, I have to agree. We have a lot of witnesses sit in 
those chairs and we can tell that you are with the GAO and OIG.
    [Laughter.]
    Starting with you, Ms. Nowicki, thank you--and again, thank 
all the witnesses for the testimony, but thank you, Ms. 
Nowicki, as well, for talking about the 58 of the 68 
recommendations that are still open, the 68 being that are 
older than 4 years. Describe for me in greater detail, if you 
would for the committee, what makes you decide to keep certain 
ones open longer than 4 years and close other ones out. What 
criteria do you use?
    Ms. Nowicki. Well, typically when recommendations are open 
longer than--longer in that window, or sometimes longer than 4 
years, as you have said, we typically do that when we believe 
that there is some reason that those recommendations will be 
implemented. So, for example, there were I believe two 
recommendations that we still have open right now from 2006. We 
have recently learned that there is - that those 
recommendations were related to managerial cost accounting 
practices at the department, but we have recently learned that 
it is unlikely that the department would close those older 
recommendations so we will probably close them on our end as 
unimplemented.
    Mr. Rokita. Now it is true, though, that all 68 were agreed 
to by the Department of Education. They thought the 68 
recommendations were a good idea. Yes or no?
    Ms. Nowicki. They generally agreed with almost all of the 
recommendations that we made at the time they were made.
    Mr. Rokita. Okay. And so the 58 still open, you are not 
driving whether something is still open or closed; the 
department is. They say, ``Now we don't want to--this is older 
than 4 years. We are still not giving up on it. We still want 
to try to pursue it.'' You have some evidence to that effect so 
you keep it open. Is that accurate?
    Ms. Nowicki. Correct.
    Mr. Rokita. Okay. Then with the ones that are still open, 
do you still follow up with them annually, or what is the 
criteria for--
    Ms. Nowicki. Yes. So our policies and procedures require 
that for all open recommendations we follow up at least 
annually and check in with the department on their status and 
the progress of them implementing our recommendation.
    Mr. Rokita. And from the introduction that Chairwoman Foxx 
elaborated on, you worked in the private sector and you have 
been doing this kind of work for how long?
    Ms. Nowicki. Seventeen years.
    Mr. Rokita. What is your biggest frustration, given your 
experience--or your top three?
    Ms. Nowicki. I think, you know, for us, recommendations 
that remain open for longer periods of time represent a missed 
opportunity to improve outcomes on the ground for students and 
to, you know, improve efficiency in the working of federal 
government.
    Mr. Rokita. Per your testimony, do you believe in federal 
government?
    Ms. Nowicki. Do I believe in the federal government?
    Mr. Rokita. Yes. How big should it be? Is it too big now?
    Ms. Nowicki. I--
    Mr. Rokita. No comment?
    Ms. Nowicki. No comment.
    Mr. Rokita. Thank you for your testimony, as well, Ms. 
Tighe?
    Ms. Tighe. Tighe.
    Mr. Rokita.--Tighe. Thank you.
    You indicated that--let's see--let me just ask you what 
formal reporting and oversight mechanisms exist for the OIG to 
monitor department programs and services?
    Ms. Tighe. Oh, I think the primary means we monitor the 
department is actually through our audit work. I mean, that is 
our--by annually deciding what areas we want to look at for the 
department through our annual work plan, and then conducting 
those audits and inspections and other type of work is how we 
do our job. It is certainly then up to the department to 
provide specific monitoring of the department's programs.
    Mr. Rokita. In your testimony you mentioned ``lack of 
staff,'' for doing the--reacting to your audits or doing their 
own internal audits. Can you elaborate on that? What do you 
mean by ``lack of staff?'' And are you suggesting that the 
bureaucracy get bigger?
    Ms. Tighe. Well, I do think the department has a lot of 
responsibilities, and I think that--
    Mr. Rokita. You find people overworked there? And I am not 
being flippant. Seriously, I mean--
    Ms. Tighe. Well, you know, we haven't done audit work 
specifically. I would say my impression, yes, a lot of people 
carry a lot of responsibility and are, in fact, working very 
hard.
    The department has a lot of programs. It is not a really 
large department when you look at across the federal 
government. And I do think in the area of audit resolution that 
we have been talking about, I don't know if we have 
specifically sort of looked at--I know there is staff in every 
program office that does handle audit resolution; there is an 
audit liaison and people who deal with audit resolution.
    You know, sometimes they may carry other responsibilities, 
so I think that part of what we looked at like in our 2012 
audit was, okay, you have staff here. You know, if you don't 
have enough we at least need--part of what our issue was, you 
need to train them. You also need to make sure that they 
understand their obligations, that they understand what OMB A-
50, you know, the OMB circular that is--governs this area, you 
know, what that means to the department to the 
responsibilities, and I think that is an important part of the 
issue.
    Mr. Rokita. My time is expired. Thank you.
    Chairwoman Foxx. Thank you, Mr. Rokita.
    Mr. Loebsack, you are recognized for 5 minutes.
    Mr. Loebsack. Thank you, Madam Chairwoman.
    Just a couple quick questions.
    Ms. Emrey-Arras, if I could ask you, I think that we got a 
little bit in terms of numbers how Education compares with 
other federal agencies in implementing the GAO's 
recommendations. Can you elaborate on that a little bit?
    Ms. Emery-Arras. Sure. I would be happy to.
    Overall, looking between 2004 and 2009, 93 percent of 
recommendations made by the GAO were implemented by the 
Department of Education within a 4-year window, and that was 
higher than the government-wide average of about 80 percent.
    Mr. Loebsack. Do we have any idea why that is the case, or 
is that not something for you folks to sort of investigate as 
to why that is the case?
    Ms. Emery-Arras. That was not within the scope of our work, 
though I do like to think that we work hard to collaborate with 
the department to close those recommendations.
    Mr. Loebsack. Any thoughts on the part of others on that, 
why that is the case with the Department of Education, why they 
do a good job?
    Ms. Tighe. On closing audit recommendations?
    Mr. Loebsack. Well, how does they accomplish 93 percent--
was that the number? And government-wide it is 80 percent. Is 
that correct?
    Ms. Tighe. Well, I think the department has taken steps in 
the last couple years to--do what we, you know, put in our 
2012, which--audit report, which was a failing at that time, 
which is: You need to make it an organizational priority; you 
need to say this is important to the Department of Education to 
resolve these audits.
    And I think it has, which is why it has been somewhat 
successful in the area of internal audits. I mean, their 
timeline is--numbers are good now, and it has not been as 
successful in the external audits but I think you have to do 
that. Accountability is another thing that needs to happen, 
too.
    Mr. Loebsack. Right. Ms. Nowicki, in May of 2009 GAO 
testified before this committee on the issue of restraint and 
seclusion in our nation's schools. The testimony looked at 
individual case studies of serious student injury and sometimes 
death resulting from misuse of these harmful practices. 
Additionally, GAO examined the patchwork of state laws 
regulating use of restraint and seclusion.
    Can you speak about the findings and the factors 
contributing to student death and injury?
    Ms. Emery-Arras. Hi. This is Melissa. I will--
    Mr. Loebsack. Okay.
    Ms. Emery-Arras.--respond on Ms. Nowicki's behalf.
    Mr. Loebsack. Sure.
    Ms. Emery-Arras. We have done a body of work from around 
2007 to 2009 on just those issues--the seclusion and restraint, 
and services for children in residential treatments centers or 
boot camps or wilderness camps. We did find serious concerns 
regarding reported deaths at facilities. For example, in our 
study of residential treatment centers we did a survey and 
found that at least 28 states reported one death in residential 
facilities in 2006. We also found data that showed that over 
1,500 incidents of abuse or neglect of youth had occurred in 
those facilities. We also found, in terms of seclusion and 
restraint, multiple cases where children had died as a result 
of those techniques being used in schools.
    We have made recommendations in the past to address these 
issues. For example, in our work on residential treatment 
centers we did make a recommendation to multiple federal 
agencies, including the Department of Education, to enhance its 
oversight of state activities--for example, by including these 
facilities in their reviews when they went out to states. 
However, Education did not implement this recommendation and it 
is currently closed as not implemented.
    Mr. Loebsack. Is part of the issue that this is dealt 
differently in different states?
    Ms. Emery-Arras. There is definitely a patchwork of state 
requirements, and we show in our report how certain centers are 
exempt from state licensing requirements.
    Mr. Loebsack. Right. So really what you are saying is 
Department of Education probably has to get more involved in 
this in terms of looking at the different states and what is 
happening in the different states.
    Ms. Emery-Arras. That was the basis for our recommendation; 
and unfortunately, the department did not act and it was closed 
unimplemented.
    Mr. Loebsack. Okay.
    Well thanks to all of you, and I yield back the remainder 
of my time.
    Thank you, Madam Chairwoman.
    Chairwoman Foxx. Thank you, Mr. Loebsack.
    Mr. Chairman, Mr. Kline, you are recognized for 5 minutes.
    Mr. Kline. Thank you, Madam Chair.
    Thank to the witnesses for your work and for being here 
with us today, your testimony and answering questions. Just a 
couple of questions.
    Ms. Nowicki or Emrey-Arras, I am not sure who is going to 
answer here, but looking at the Government Accountability 
Office, you have reported saving the government and taxpayers 
billions of dollars--that sounds pretty good sitting here--
including--you specifically mention $2.1 billion in financial 
benefits to Department of Education since 2004.
    What does that mean? How are those realized? Is that cash 
that piles up on a desk? Is it fewer dollars appropriated? What 
does that mean?
    Ms. Emery-Arras. I can answer that one.
    Mr. Kline. Okay.
    Ms. Emery-Arras. In the area of education it relates mostly 
to the delivery of federal student aid funds. And in this case, 
the bulk of the 2.1 billion resulted from decreased Pell Grant 
expenditures. Basically, we came up with a recommendation to 
improve the accuracy of the financial aid calculations, which 
resulted in a decreased need for Pell Grant expenditures for 
those students.
    Mr. Kline. So fewer dollars were spent.
    Ms. Emery-Arras. Correct.
    Mr. Kline. Okay.
    To Inspector General Tighe: You, in response to Chairman 
Rokita's questions--he asked about staffing and was there 
enough staffing and you said that people are really busy. And 
so there are several ways that you can approach that problem, 
right? You could spend more money and get more staff, you could 
train the existing staff to perform more efficiently, or you 
could perhaps have fewer programs so you don't have to have all 
that audit compliance and all that sort of thing for each of 
the programs.
    And we know in this committee, because we have been looking 
at legislation in workforce training and in K-12 and a number 
of places, there are just a lot of programs. I think there are 
over 80 programs--federal programs in K-12 education. If you 
had, say, half that number then presumably you would need less 
staff.
    Do you look at that, or do you just say a program is a 
program and we are only going to be concerned about whether or 
not we got enough staff to deal with it?
    Ms. Tighe. Well no, and I--you know, I don't know if we 
always necessarily look at whether there is level of staffing 
sufficient for programs in a lot of our audits. I mean, I think 
we try to, in targeting our audit work, look and make sure 
programs are being efficient. We have looked a little bit at 
whether there is potential duplication among programs, and I am 
happy to give you further information on that to follow up with 
this testimony.
    So it is an issue we care about. I think it is a good 
government issue. We should always be looking at government's 
programs to makes sure they are needed, to make sure they are 
running efficiently and effectively. I think that is an 
important part of what the OIG should be doing and I hope we 
are doing.
    So it isn't just about, wow, we need more people to do more 
programs. I think it is really about, you know, once you all 
decide you want a program, right, that let's make sure that it 
is staffed appropriately both in terms of oversight and 
monitoring as well as execution of the program, which I think 
are important parts of the puzzle.
    Mr. Kline. Well let me--and thank you very much for that 
response, but let me ask you to provide what you just offered. 
If you looked at this and are there programs where you see some 
redundancy or duplication? I know the GAO has done a number of 
studies for us, and in the workforce training and education 
field, for example, we were looking at that as we moved the 
SKILLS Act, which became WIOA, as we did the WIA 
reauthorization, and part of that was driven by the GAO study 
that showed how many of these programs there were, and we know 
there are a lot of programs in the Department of Education that 
somebody needs to be looking at for duplication.
    So since you have offered, I would accept the offer. We 
would love--
    Ms. Tighe. All right.
    Mr. Kline. And I yield back.
    Chairwoman Foxx. Thank you very much, Mr. Chairman.
    And I now recognize Mrs. McCarthy for 5 minutes.
    Mrs. McCarthy. Thank you, Chairwoman. And I appreciate 
having this.
    I just want to follow back on some confusion that I have on 
my part.
    Ms. Arras, when you talked about, you know, with the 
residential programs selected case of death, abuse, and 
deception marketing, do those programs get federal money?
    Ms. Emery-Arras. Some do and some do not. And so the 
Department of Education would only have purview over those that 
do receive public funds.
    Mrs. McCarthy. All right. So some of the cases that are 
open, are any of them getting federal money?
    Ms. Emery-Arras. I am sorry. Could you repeat that?
    Mrs. McCarthy. The cases that have been left open after 4 
years because you couldn't implement them because some of these 
state laws, but are they getting federal money?
    Ms. Emery-Arras. The recommendation that we had that was 
closed as unimplemented related to facilities that did receive 
federal funds, and we recommended specifically that the 
Department of Education include in its oversight reviews those 
facilities. So we were not recommending that they look at 
facilities that were not receiving federal funds.
    Mrs. McCarthy. And just one more question on the area of 
the children. I guess it is a two-part question. On some of the 
restraints, have you also noticed that there were paddling 
involved in some of these young children? And what are we doing 
to see about sexual abuse or any kind of abuse for those 
children that are in nursing homes or into secluded homes for 
them?
    Ms. Emery-Arras. That is a good question. I don't have the 
details of the case studies at my fingertips at this moment, 
but I do know that there were concerns about sexual abuse as 
well as other forms of physical abuse against these youth both 
in the boot camps and the residential treatment centers.
    We also have done work related to concerns about sexual 
abuse of children in schools by school personnel. We found, for 
example, that the prevalence of abuse is not known; people are 
not tracking how many schoolchildren are being abused by staff. 
We also found that states were not aware of services that were 
available at the federal government to help them provide 
prevention information to their staff.
    And we did make recommendations to the Department of 
Education to assist in tracking the prevalence of this abuse 
and to provide more information to states to help them provide 
prevention training to prevent this from occurring.
    Mrs. McCarthy. One of my concerns is especially with 
children with disabilities that--especially those that might be 
nonverbal--children with autism or things along those lines--
how do they verbalize, and who is watching these children if 
they can't speak for themselves?
    Ms. Emery-Arras. That is a good point. Part of the way that 
people try to prevent issues like this from occurring is to 
increase awareness of staff so that they can be aware of 
situations so it is not all on the children to do the 
reporting, so that the staff can help identify issues when they 
are occurring. And that is something that we addressed in our 
recommendation to help provide states information to assist in 
this training effort.
    Mrs. McCarthy. And to follow up with another question, 
with--saying that our workers, you know, are--have a very large 
case portfolio, I was just curious, is the turnover in these 
departments high where they have to be constantly retrained, or 
maybe a case has been started or maybe they have been working 
on something and then someone new comes in and it is--speaking 
from experience, you start from scratch again.
    Ms. Emery-Arras. Right. I don't believe that the turnover 
was a part of our study looking at the sex abuse of children in 
schools. However, we have done other bodies of work on child 
welfare and foster care issues and we would be happy to follow 
up with you on that if that would be helpful for you.
    Mrs. McCarthy. And if you could get me the statistics on 
paddling in some of these cases I would appreciate it.
    Ms. Emery-Arras. We can certainly look into that.
    Mrs. McCarthy. Thank you.
    With that I yield back.
    Chairwoman Foxx. Thank you, Mrs. McCarthy.
    Ms. Bonamici?
    Ms. Bonamici. Thank you very much, Chairwoman Foxx. And 
thank you for holding this hearing today.
    And thank you to the witnesses for testifying. There is 
certainly no doubt that the Government Accountability Office 
and the Department of Education's Office of Inspector General 
play a critical oversight role, and I know that everyone on 
this committee is grateful for your work.
    Some of you were here at a spring hearing about the student 
loan rehabilitation process, and I appreciate your previous 
work on identifying problems with the debt management and 
collection system at Federal Student Aid, FSA. I thank you for 
identifying the need for improvements for at-risk borrowers.
    I know that there is a lot of work to be done in getting 
more information to borrowers about income-based payment 
options, for example. I think that getting that information to 
students is harder when private collection agencies are used to 
do collection.
    I have to say that back at the hearing in March I asked the 
chief operating officer at Federal Student Aid if the private 
collection agencies that the Department of Education contracts 
with to collect student loans in default were obligated to 
comply with the federal Fair Debt Collection Practices Act, and 
he said he didn't know but he assumed that the collection 
agencies had to follow the law.
    And after about 2 months after that hearing was when the 
Justice Department and the FDIC reached a record settlement 
with Sallie Mae that was $60 million plus an additional civil 
penalty over its mishandling of servicemembers' loans. They 
were not complying with the Servicemembers Civil Relief Act.
    I continue to question whether federal student aid is 
adequately monitoring its contractors to ensure that they are 
following the law, including the Fair Debt Collection Practices 
Act.
    In fact, Inspector General Tighe, in July 2014 your audit 
report says--and just on page one--``We found that the FSA did 
not effectively ensure that the private collection agencies are 
abiding by the federal debt collection laws and the related 
terms of their contractual agreements with FSA.'' Also found 
``FSA did not effectively monitor borrowers' complaints against 
private collection agencies and ensure that corrective actions 
were taken.''
    So I want to ask you, Inspector General Tighe, can you talk 
about the FSA's ability to oversee those collection agencies? 
Are there barriers that prevent them from guaranteeing--the FSA 
from guaranteeing that its contractors obey the law? And I want 
to allow time for another question if you may. Thank you.
    Ms. Tighe. It is clear from our audit work at the report 
issued in July that we took issue with a number of factors 
related to FSA's current oversight process over the PCAs and 
how they handle borrower complaints. I mean, we found that 
there was no consistent, you know, definition used; we found 
they didn't ensure that the complaints are timely provided by 
the PCAs to FSA; and we didn't--they don't ensure that 
corrective action is taken.
    So we did make a number of recommendations to FSA to try to 
improve that process, and I believe, you know, that it is still 
too recent an audit to, you know, to expect--I don't know if it 
has been resolved yet. But I do know that we will--we are going 
to keep an eye on what we are doing on that area.
    Ms. Bonamici. Thank you. I appreciate that because the 
audit report also showed that the FSA was not using service 
quality indicators in calculating--there is a score, the 
competitive performance and continuous surveillance score, that 
it assigns to the private collection agencies. Obviously there 
are some private collection agencies that are doing a better 
job than others, and the system is designed--this scoring 
system is designed to help FSA decide which collection agencies 
to use, but if they are not using the scoring system that is 
problematic.
    So given that customer satisfaction is going to factor into 
the performance structure for servicers, it seems that 
borrowers' complaints would be a very important oversight 
function for the FSA. Were there recommendations made that FSA 
can change to ensure that the collection agencies are reporting 
complaints and responding to them?
    Ms. Tighe. We did make recommendations, I believe, to look 
at that scoring and how they factor in, you know, customer 
feedback or customer complaints into the--how PCAs get paid.
    Ms. Bonamici. Terrific. Well, we have a lot of work to do 
in making sure that higher education is affordable and 
accessible, and income-based repayment is an important 
component that I firmly believe that is--students are not 
getting enough information about their options, and that is 
made harder with the private collection agencies.
    And just in my remaining few seconds, I want to align 
myself with the comments made by my colleagues about the 
importance of making sure that students in schools stay safe 
not only from abuse but also concussions, and a lot of great 
work has been done at the state level. We can bring some of 
that good legislation here, and there are a lot of things we 
can be doing to make sure our students stay safe. And I look 
forward to working with my colleagues on both sides of the 
aisle on that issue.
    Thank you. I yield back the balance of my time.
    Chairwoman Foxx. Thank you, Ms. Bonamici.
    Mr. Sablan, you are recognized for 5 minutes.
    Mr. Sablan. Thank you very much, Madam Chair, and thank you 
for holding today's hearing.
    And good morning, everyone. I apologize for coming in a 
little late.
    I have two questions, and one for Ms. Tighe, if I may.
    And as you know, Congress and the Department of Education 
has established expectations that colleges act in the best 
interest of their students when administering Title IV 
programs. And your report on campus credit cards helps shed 
light that some colleges are receiving hundreds of thousands of 
dollars, if not--if--hundreds of thousands if not millions in 
payouts to endorse certain types of checking accounts from 
banks.
    And while banks have said these accounts are good for 
students, I am concerned that colleges may be more motivated by 
the money than the merit of the product to their students. So 
with 70 percent of students relying on student aid to pay for 
college, my concerns go deeper than this--that these products 
may be driving up the cost of college. They are not selected 
because they provide the best deal for students.
    So do you believe financial incentives paid to colleges by 
banks when endorsing a financial product pose a potential for a 
conflict of interest, one? And two, can you discuss your 
findings on this point, please?
    Ms. Tighe. Yes. Our report that we issued this--6 months 
ago, I think, on debit cards did have a finding related to 
conflict of interests. Our work in looking at the four schools 
we did, did see that financial incentives did exist, and we 
believe that if they are unmitigated can hold the potential for 
conflicts of interest.
    I think one of the schools we looked at, Portland, its 
contract with Higher One gave them additional incentive 
payments--gave the school additional incentive payments based 
on the number of debit cards that were issued under Higher 
One's name, and also the amount of money in the accounts. And I 
think that can lead to perverse, you know, sort of incentives.
    We saw similar issues in the FFEL Program on lender 
inducements, and one way that was developed to mitigate those 
potential conflicts was to require that the schools report to 
FSA on how those arrangements still serve the students' best 
interests. And it is perhaps something to think about, about 
whether we want to have some similar requirement.
    Mr. Sablan. Thank you. Thank you very much.
    And, Ms. Arras, if I may, the GAO, the Government 
Accountability Office, has recommended that Congress consider 
extending the same transparency and disclosure requirements to 
debit cards as banks must follow when marketing credit cards. 
And I believe students and their families should be able to 
scrutinize the agreements between banks and schools that give 
students access to their aid money, their aid dollars. So if 
these arrangements aren't working in the students' interests, 
we all have a right to know.
    Could you describe how transparency and disclosure on debit 
card arrangements may help students better understand the 
incentives for colleges and banks under these arrangements or 
change bank and college behavior, one? And number two also, how 
has similar transparency provisions helped students when 
required for credit cards?
    Ms. Emery-Arras. Thank you for the question.
    We do believe that transparency and disclosure could help 
students know if there are potential conflicts of interest in 
those arrangements. They may not be aware that their school is 
receiving payments or other financial benefits from the debit 
card company and it would be helpful for them to be aware of 
that when making that decision about how to receive their 
federal student aid.
    And we also think that this disclosure could have positive 
benefits for the students. We have found that since the CARD 
Act went into effect, which did put certain requirements on 
credit cards that have the school's name on them, that there 
has been a decrease in payments between card issuers and 
colleges, and credit card marketing that is specifically 
targeted to college students has declined.
    Mr. Sablan. Because, you know, and I come from a very small 
community, and actually it wasn't until we started working on 
the Affordable Care Act when I discovered the relationships 
between doctors and pharmacies. I mean, I was amazed at that, 
you know, the incentives there.
    And so we need to follow this, too.
    And I have one question, and any one of you may feel free 
to answer, if I may. Actually, the number of resolutions of 
some of your findings within the Department of Education and 
some of the numbers of closed findings--is that normal within 
the federal government or is that--is it a much better, you 
know, is it much better within the Department of Education than 
across the federal government? You know what I am saying? 
Closed unsolved, and closed resolved.
    Chairwoman Foxx. Mr. Sablan, since we are under a really 
tight time schedule I am going to ask the witnesses to submit 
their response to you in writing. Thank you.
    Mr. Sablan. My time is up.
    Chairwoman Foxx. Mr. Polis, you are recognized for 5 
minutes?
    Mr. Polis. Thank you, Dr. Foxx. I appreciate the time.
    I wanted to talk about a couple things. First I wanted to 
follow up on Mrs. McCarthy's question regarding abusive 
practices of restraint and seclusion. I would like to see if 
any of you would like to talk about the state laws on parental 
notification. Do all states require that schools notify parents 
whenever a child is abused?
    Ms. Emrey-Arras?
    Ms. Emery-Arras. We can follow up with you on that, as 
well, along with the other information.
    Mr. Polis. Very good.
    A recent Denver Post article--without objection, I would 
like to submit to the record, Madam Chair--
    [The information follows:]
    [Additional Submissions by Mr. Polis follow:]
   
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Chairwoman Foxx. Without objection.
    Mr. Polis.--cited that the Colorado Department of Education 
statistic found the number of homeless children in Colorado has 
tripled in a decade. And before I was in Congress I had the 
opportunity to form two charter school networks in Colorado and 
New Mexico, one of which serves many homeless youth, and I got 
to work firsthand and understand the unique circumstances 
facing homeless kids.
    Now according to a recent GAO report, many students 
designated as homeless by the Department of Education are 
denied housing benefits because HUD uses a different definition 
of ``homeless.''
    I would like to address to Ms. Nowicki if she can speak 
about the definitional barrier GAO found and how its 
implementation might leave these vulnerable students without 
the necessary support to live a stable life and excel at school 
just because one government agency says they are homeless and 
another says they are not.
    Ms. Nowicki. If you don't mind, Ms. Emrey-Arras will cover 
that.
    Mr. Polis. Okay.
    Ms. Emery-Arras. We did find just that, that there are 
differing definitions regarding homelessness and that situation 
is a barrier to providing services to individuals. And we have 
an open existing recommendation that has not been implemented 
to come up with a common definition regarding homelessness to 
resolve that issue.
    Mr. Polis. And is that across HUD and Education or are 
there other agencies involved with that definition?
    Ms. Emery-Arras. It is at least across HUD and Education; 
there may also be other agencies, and we can circle back with 
you on that front as well.
    Mr. Polis. Great.
    I also wanted to address GAO's recognition that certain 
vulnerable groups, including LGBT students, are not protected 
from discrimination under federal civil rights law. And while I 
am the lead sponsor of the Student Non-Discrimination Act and 
all of our committee Democrats are sponsors of it, we have yet 
to act on that piece of legislation and I would like you to 
expand upon the GAO's recommendation related to preventing 
discrimination against LGBT students.
    Ms. Emery-Arras. We will include that information in our 
follow up.
    Mr. Polis. Very good.
    I wanted to also address a question to Ms. Nowicki with 
regard to the 2012 GAO report that found that charter schools 
enrolled a lower percentage of students with disabilities than 
traditional schools. In my home state charter schools have 
recognized this issue and are working to improve and coordinate 
services, and I was proud to work with Ranking Member Miller 
and Chairman Kline to improve the Federal Charter School 
Program, which we passed in the House and awaits action in the 
Senate.
    I would like to ask Ms. Nowicki if she can expand upon her 
findings and recommendations for what the Department of 
Education needs to do or can do to address the issue of equity 
in charter schools with regards to students with disabilities.
    Ms. Nowicki. Sure. I would be happy to.
    So as you said, we did find that charter schools enroll a 
slightly lower percentage of students with disabilities than 
public schools do. In our report from 2012 we noted some 
reasons that might be, but those are anecdotal. So our 
recommendations to Education were to take steps to help charter 
schools recognize practices that may in fact--may affect 
enrollment of children with disabilities, and also to perform 
more research at the Department of Education to identify those 
factors. So those recommendations do remain open--
    Mr. Polis. I would also encourage you to look one step 
deeper at the economic relationship, or namely the charter, 
between the charter schools and the district. In some cases the 
charter schools are, if you will, paying their fair share of 
special education costs, paying the district average, it is 
just that kids are enrolled and being served elsewhere, much as 
in a particular neighborhood school they might not--they might 
have a significantly lower percentage of kids with disabilities 
because better accommodations are at a different school in the 
district. And so it is a relatively common phenomena but it 
depends on the actual charters and might be considered a best 
practice that the charter school simply pays into a district 
average fund, and it might be perfectly reasonable, given that 
it is a small school or a specialized curriculum, that they 
might have a lower percentage of special education students 
enrolled in that particular campus of the district at that 
charter school.
    Be happy to yield back the balance of my time.
    Chairwoman Foxx. Thank you, Mr. Polis.
    I am going to now ask my questions, and then I will 
recognize the remaining members who are here.
    I don't think I heard you say what percentage of the 
recommendations that are made by both of your entities are not 
agreed to by the department. Did you mention that? If you did, 
I apologize for missing it.
    Ms. Tighe. Well in our case, we would--you should 
distinguish between external and internal audits.
    Chairwoman Foxx. Right. Okay.
    Ms. Tighe. Currently, for internal we have resolution, 
which means they have agreed with our recommendations and have 
proposed corrective actions on all audits issued I think from 
2010 through the end of 2013 except for one recommendation that 
relates to DMCOs too. For the external audits, you know, the 
track record is a little different, and then I think we have 
achieved resolution of about--of the audit reports issued on--
we have 10 audit reports out of 49 issued during that tenure 
that we have not agreed to at all.
    Chairwoman Foxx. Okay.
    Ms. Nowicki?
    Ms. Nowicki. Yes. Thank you for the question. For the 58 
open recommendations that we are still tracking, there are five 
of them with which Education disagreed at the time that they 
were made.
    Chairwoman Foxx. Okay.
    The reason I wanted to sort of pin that down is because it 
seems as though the department is very--and I am very proud to 
hear them say that they have implemented 93 percent. That is a 
great record and they should be complimented for that.
    But what I am concerned about is it--do they simply agree 
to the recommendations and then stonewall you all and not 
implement some? And do we have any way of knowing, of the ones 
that are not implemented, value--I mean, do--there is no weight 
put to the--or is there any weight put to the recommendations 
in terms of what would be the value both short-term and long-
term? Because they might just say, ``Okay, we agree,'' and then 
just never implement them.
    Ms. Tighe. Well yes, I am concerned that at least in some 
cases that implementation still seems to take a while. And I 
think there is a cost. I think it is not a, you know, put money 
in the bank kind of cost, but I do think--let's take the 
example of some of the external audits, which really do take a 
long time. You know, let's assume you are not going to get the 
money back from, say, a particular school district you do an 
audit of, but what about the recommendations related to 
internal controls? Don't those--if those aren't implemented, 
you know, don't you miss--you know, it affects future 
expenditures, right? And so it really just keeps the problem 
festering.
    Chairwoman Foxx.--because it seems to me that ought to be 
built into the evaluation of employees. We read all these 
things about how most federal employees get top ratings for 
their performances, and you mentioned--both of you, I think, 
mentioned the issue--the word ``accountability.''
    Okay. How do we hold individual employees accountable and 
see that is part of the evaluation made of them relative to 
pay, promotion, and other things? Because it is my feeling that 
until we are able to hold individual employees accountable, we 
will not see the changes in performance that we need to see.
    Ms. Tighe. Oh, I agree. I mean, I think the best way to 
achieve accountability in this regard, particularly on an area 
where people--a lot of different people within the department 
touch this process--so it is not one person and it is not one 
office; it goes across--it is through accountability in 
individual performance evaluations. I mean, I think that should 
be happening. I use that in my own office to drive performance, 
and I think it is an important government tool for achieving 
performance and accountability.
    Chairwoman Foxx. Ms. Nowicki?
    Ms. Nowicki. Thank you.
    I think on the GAO side in terms of agreeing or 
disagreeing, there is also a category of recommendations with 
which Education neither agreed nor disagreed. I can get you the 
exact number; it is somewhere in the 30s, I believe, of our 
open set.
    But we do follow up with them at least once a year and work 
with them to understand any barriers that may--you know, 
unanticipated barriers that they may be encountering. We 
collaborate with them to help them understand what types of 
documentation and steps we are looking for so that we can close 
recommendations as implemented. So it is a fairly collaborative 
process. We try and make it be so because we believe it is in 
the best interests of taxpayers and of our American 
schoolchildren to close those recommendations as implemented.
    Chairwoman Foxx. Thank you very much.
    Mr. Takano, you are recognized for 5 minutes?
    Mr. Takano. Thank you, Madam Chair.
    As you noted in your--I am not sure which person I am 
directing this to, but as you noted in your testimony, in 2011 
you recommended that the Department of Education address 
potential inconsistencies in its treatment of schools receiving 
federal student aid by revising and applying its guidance for 
determining fines for schools that violate the ban on paying 
incentive compensation to individuals based on success in 
enrolling students and securing their financial aid.
    I am sure you know that incentive compensation is a 
practice commonly used by for-profit schools, and I find this 
practice very disturbing. Do you have any guesses or surmises 
as to why the department has yet to address this 
recommendation?
    Ms. Emery-Arras. We are not sure ourselves. We think that 
this is something that could be easily accomplished by the 
department to provide very specific guidance to its staff to 
make sure that the penalties that are assigned to schools are 
consistent and that there isn't that potential sort of unlevel 
playing field when schools are penalized for violations.
    Mr. Takano. In your estimation, it is a rule that could 
ensure that we reduce the number of bad actors in this 
particular sector?
    Ms. Emery-Arras. Our guidance is really focused at making 
sure that the department is consistent in its treatment of 
schools so that you--if you have a certain set of circumstances 
in terms of a violation, that you come out with the same 
penalty each time. And in that report we put out some examples 
where you could receive very different penalties depending on 
how things were interpreted, and we thought that wiggle room 
was not good for students and not good for schools in terms of 
equal treatment by the department.
    Mr. Takano. Ms. Tighe, you have something to add to this?
    Ms. Tighe. Yes. I just would point out that we actually 
have ongoing work and I think a draft report that is being 
looked at related to FSA's enforcement of the incentive 
compensation ban, so we will be happy to provide that to you 
once it is--
    Mr. Takano. I would appreciate that. Thank you much.
    I have a follow-up question to Mr. Polis' question about 
the difference in charter enrollments of students with 
disabilities. Didn't you find, for example, that students with 
intellectual disabilities are enrolled in non-charters at twice 
the rate as they are in charter schools?
    Ms. Nowicki. I don't have those specific details at my 
fingertips, but we did find that there were differences in the 
types of disabilities that some children had and the rates at 
which they were enrolled in different charter schools versus 
traditional public K-12 schools. I can follow up with--
    Mr. Takano. If you would, I would sure like to know just 
how this is all sort of panning out in terms of the 
distribution of students, and are we indeed seeing an undue 
burden on the existing public schools with having to serve--I 
wouldn't call it a burden, but there is a definite issue of 
equity.
    Thank you so much.
    I would yield back my time. I yield back my time, Madam 
Chair.
    Chairwoman Foxx. Thank you very much, Mr. Takano.
    Dr. Roe, you are recognized for 5 minutes?
    Mr. Roe. Thank you, Chairman, for holding this hearing.
    And I want to start by saying that just briefly to both GAO 
and to the I.G., I had no idea until I got to Congress about 
the oversight responsibility that Congress has and the role you 
all play in bringing this information forward to us. Mr. Takano 
and I just spent way too many hours on the V.A. Committee in 
the last few months, and much of the work we were able to 
uncover was due to the--what your shop does, both the GAO and 
I.G. And I guess--so I want to thank you all for that because 
without that information we can't really effectively do our 
jobs.
    I guess in doing that, how do you all determine what to 
audit? Is it a whistleblower? Is it a request from Congress? 
You know, out of all the things you could pick, how do you do 
that?
    Ms. Tighe. It is a process. I mean, we do an annual work 
plan, so we sit down, you know, once a year we sort of go 
through a process where we sort of decide what it is we want to 
start auditing that next year. Part of it is complaints that 
come into us through whistleblowers and through our hotline 
generally. Some of it we also solicit you all for work plan 
suggestions every year. We solicit the department for work plan 
suggestions.
    And we also, just ourselves, based on our experience, based 
on prior audit work, based on--we have some risk modeling we 
are able to do; we have some data analysis tools we have 
developed that allows us to do sort of risk assessments. All of 
that feeds into how we decide and who we decide to audit.
    Mr. Roe. Well I think the chairman brought this up just a 
minute ago, and I found it to be frustrating to me is that when 
you implement these things or ask that these be--and I think, 
as--I agree with her, 90-whatever percent is pretty good. But 
there doesn't seem to be any accountability if it doesn't 
happen. What are the penalties if you make these 
recommendations and then never carry it out?
    That is the thing that I have noticed and I have watched. 
If you stick around long enough--if you have only been here a 
term you don't see that, but after three or four terms you 
begin to see, ``Hey, wait a minute. We talked about that 4 
years ago and nothing has happened,'' and no one takes any 
responsibility.
    Ms. Tighe. I think that is the hard part, because I think 
that resolution is really just the first step--that is when you 
agree to something, and it is really just the first step in a 
very long process. Or maybe our audit report issuance is the 
first step and then you have resolution.
    But until those recommendations are implemented you really 
have nothing. It is like, you know, you have the recipe but you 
don't have the cake at the end of it. I mean, you really need 
to get to that point.
    And I think the department is doing a pretty good job on 
moving forward on resolution, but I think that implementation 
that is real and that really gets the job done I think is still 
something that they have not achieved accountability on.
    Mr. Roe.--let me ask my final question and I will yield 
back. We have an 11 o'clock event we need to get to, but the 
last question is, would there be some recommendations from you 
all for mechanisms to hold people accountable--some real teeth 
in what we do so that you know that it is going to be done or 
there are going to be consequences to that?
    Ms. Nowicki. I think that, you know, from GAO's 
perspective, Congress has been a--often been a very effective 
tool in helping get GAO recommendations implemented. There are 
a number of times where, for example, in 2011 we reported on 
the school improvement grant process and that it did not allow 
some districts enough time to plan and implement reforms, and 
we recommended that the department issue guidance to help 
school districts issue grant awards earlier in the school year. 
And Congress itself cited our findings and urged the department 
in that direction and they did actually implement new guidance. 
So Congress has been a very effective tool itself in helping 
draw attention to particularly potent GAO recommendations that 
it takes an interest in.
    Mr. Roe. Well, thank you all for your hard work.
    And I yield back, Madam Chairman.
    Chairwoman Foxx. Thank you, Dr. Roe.
    Mr. Hinojosa, you are recognized for 5 minutes.
    Mr. Hinojosa. Thank you.
    Inspector General Tighe, I know that before I returned that 
one of the members asked a question about the campus debit 
cards, and I am pleased that you have answered that because I 
have two daughters in college and they are always calling that 
they need money.
    Ms. Tighe. Mine do, too.
    Mr. Hinojosa. They don't necessarily want to talk to me, 
just get me the message that they need money, so that was very 
important.
    The second thing that is of great importance to me also, 
amongst many, is the financial literacy. I serve as the co-
chair of financial literacy, together with co-chair Congressman 
Stivers from Ohio, and we are working to try to raise the level 
of awareness of the importance of financial literacy. So we do 
that because it is crucial in helping students understand the 
complex financial products and obligations that are being 
offered to them to solve some of their problems.
    So when colleges partner with banks, do the schools or the 
banks help the students understand how much they would likely 
pay in average costs on those accounts?
    Ms. Tighe. Our report on debit cards did note, you know, 
although we did not talk about financial literacy as such, we 
did note the problem that students aren't getting, you know, 
good information from the schools, and the schools really do 
have a role to play, either on their own or in partnership with 
the servicers, on making sure that the students do have 
knowledge of the average cost of fees in a manner that is 
meaningful to them. You know, a schedule buried on a Web site 
somewhere maybe isn't that meaningful, and how can they avoid 
fees.
    I mean, some of the cards--debit cards we looked at, if you 
handled it a certain way during a transaction you would avoid 
the fee. How many students really knew to do that? And, you 
know, I think that, you know, our report touched on those 
issues.
    Mr. Hinojosa. I know that we need to get to an event so I 
am going to not use up my 5 minutes, but I want to thank each 
and every one of you for coming to be witnesses and to share 
with us information that is vital for us to make decisions.
    And with that, I yield back.
    Chairwoman Foxx. Thank you, Mr. Hinojosa.
    I want to thank, again, our witnesses for taking the time 
to testify before the subcommittees today. It is very, very 
useful, very enlightening, and I appreciate the time that you 
have given us.
    I know, Mr. Hinojosa, you yielded back your time. I just 
want to see if you have any other closing remarks before I 
close the hearing.
    Mr. Hinojosa. Yes. I would like to make a closing 
statement.
    I want to thank our witnesses for joining us today, and I 
can say that this discussion has also been very informative to 
me. Moving forward, I will continue to work with my colleagues 
on this committee on both sides of the aisle to ensure that we 
have strong oversight of our federal agencies and programs, and 
I am pleased that the Department of Education is working to 
enhance the quality and effectiveness of our federal education 
programs.
    And I thank you.
    Chairwoman Foxx. Thank you, Mr. Hinojosa.
    I find, again, the comments that you have made very 
important. The term ``accountability,'' again, the word 
``accountability'' came up. That is a word I use a lot. And I 
do think that it is very important that all of us be sensitive 
to the issue of accountability.
    We are asking hardworking Americans to give us some of 
their money through their taxes, through their fees, and I 
think about the people who really do work very hard out there--
people that I know in dangerous jobs, working under stressful 
conditions. I think about those people when I think about 
accountability, and I think, you know, most people in this 
country pay their taxes willingly and it is our responsibility 
to see that money is well spent.
    I hold my staff accountable. The staff members hold me 
accountable. And I think it is important that we spread that 
message throughout the federal government just because it is 
the only fair thing to do for those people who are giving us 
their money.
    So, there being no further business, the subcommittees 
stand adjourned.
    [Additional Submissions by Mr. Miller follow:]
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
    
    [Questions submitted for the record and their responses 
follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    [Responses to questions submitted for the record follows:]
 
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
    
    [Whereupon, at 10:57 a.m., the subcommittees were 
adjourned.]

                                 [all]