[Federal Register Volume 73, Number 90 (Thursday, May 8, 2008)]
[Proposed Rules]
[Pages 26056-26059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10110]


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DEPARTMENT OF EDUCATION

34 CFR Part 5b

[Docket ID ED-2008-OM-0004]
RIN 1880-AA85


Privacy Act Regulations

AGENCY: Office of Management, Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Education (Department) proposes to amend its 
regulations implementing the Privacy Act of 1974, as amended (Privacy 
Act). These proposed regulations would amend the Department's current 
Privacy Act regulations to exempt from certain Privacy Act requirements 
investigative material in a new system of records to be maintained by 
the Department that will be known as the Office of Inspector General 
Data Analytics System (ODAS) (18-10-02). Specifically, the exemption 
would apply to materials compiled by the Department's Office of 
Inspector General (OIG) for law enforcement purposes to identify 
internal control weaknesses and system issues and to improve methods of 
data modeling and

[[Page 26057]]

annual audit planning in order to detect and investigate fraud, waste, 
and mismanagement in Department programs and operations.

DATES: We must receive your comments on or before June 9, 2008.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or by e-mail. Please submit your comments only 
one time, in order to ensure that we do not receive duplicate copies. 
In addition, please include the Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to http://www.regulations.gov to submit your comments electronically. Information 
on using Regulations.gov, including instructions for accessing agency 
documents, submitting comments, and viewing the docket, is available on 
the site under ``How To Use This Site.''
     Postal Mail, Commercial Delivery, or Hand Delivery. If you 
mail or deliver your comments about these proposed regulations, address 
them to Regulatory Information Management Services, Office of 
Management, U.S. Department of Education, 400 Maryland Avenue, SW., 
Room 8166, Washington, DC 20202-5920. Attention: NOPR Comments.

    Privacy Note: The Department's policy for comments received from 
members of the public (including those comments submitted by mail, 
commercial delivery, or hand delivery) is to make these submissions 
available for public viewing in their entirety on the Federal 
eRulemaking Portal at www.regulations.gov. Therefore, commenters 
should be careful to include in their comments only information that 
they wish to make publicly available on the Internet.


FOR FURTHER INFORMATION CONTACT: Shelley Shepherd, Office of Inspector 
General, U.S. Department of Education, 400 Maryland Avenue, SW., room 
8166, Washington, DC 20202-5920. Telephone: (202) 245-7077.
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Relay Service (FRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION:

Invitation to Comment

    We invite you to submit comments regarding these proposed 
regulations. We also invite you to assist us in complying with the 
specific requirements of Executive Order 12866 and its overall 
requirement of reducing regulatory burden that might result from these 
proposed regulations. Please let us know of any further opportunities 
we should take to reduce potential costs or increase potential benefits 
while preserving the effective and efficient administration of the 
program.
    During and after the comment period, you may inspect all public 
comments about these proposed regulations by accessing Regulations.gov. 
You may also inspect the comments, in person, at the National Library 
of Education, 400 Maryland Avenue, SW., Washington, DC 20202, between 
the hours of 8:30 a.m. and 4 p.m., Eastern time, Monday through Friday 
of each week except Federal holidays. For more information on 
inspecting public comments call (202) 205-4410.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking 
Record

    On request, we will supply an appropriate aid to an individual with 
a disability who needs assistance to review the comments or other 
documents in the public rulemaking record for these proposed 
regulations. If you want to schedule an appointment for this type of 
aid, please contact the person listed under FOR FURTHER INFORMATION 
CONTACT.

Background

    Under the Inspector General Act of 1978, as amended (5 U.S.C. 
Appendix) Inspectors General, including the Department's Inspector 
General (OIG), are responsible for conducting, supervising, and 
coordinating audits and investigations relating to programs and 
operations of the Federal agency for which their office is established. 
The Department intends to establish a new system of records entitled 
the ``Office of Inspector General Data Analytics System'' (ODAS) (18-
10-02) in order to facilitate the OIG's performance of this statutory 
duty.
    The new system of records will be managed by the OIG's Information 
Technology Audits and Computer Crimes Investigations (ITACCI) division, 
which is responsible for providing computer programming, data 
acquisition and analysis and statistical modeling in support of OIG 
operations. ITACCI will use this new system of records to gather data 
from Department systems and analyze them using data modeling techniques 
to detect waste, fraud, abuse, and internal control weaknesses and to 
identify potential violations of laws, rules and regulations. These 
data will include information related to transactions between the 
Department and individuals and entities that have applied for and/or 
received grants, contracts, loans, or payments from the Department. 
ITACCI will conduct data modeling on these data, using statistical and 
mathematical techniques, in order to predict anomalies indicating 
fraudulent activity and to predict which transactions have a high 
probability of fraudulent activity.
    ITACCI will review this information to determine whether further 
action is warranted. If so, ITACCI will refer potential violations of 
law, rules, or regulations that it identifies to other divisions of OIG 
for investigation, audit, or inspection, as appropriate. Thus, the ODAS 
will contain data related to transactions with the Department, as well 
as information related to ITACCI's review and investigation of that 
data for law enforcement purposes.
    Pursuant to section (k)(2) of the Privacy Act (5 U.S.C. 552a), the 
Secretary, through rulemaking, may exempt from a limited number of 
Privacy Act requirements a system of records that contains 
investigatory materials compiled for law enforcement purposes. The 
investigatory materials in the ODAS will fall within the scope of 
section (k)(2) of the Privacy Act because the system will consist of 
investigatory materials compiled for purposes of enforcing Federal 
legal requirements applicable to individuals and entities receiving 
Department funds.

Significant Proposed Regulations

Exempt Systems (Sec.  5b.11(c))

    Statute: Section (k)(2) of the Privacy Act provides that the head 
of any agency may promulgate rules to exempt any system of records from 
the requirements in sections (c)(3), (d), (e)(1), (e)(4)(G), (H), and 
(I), and (f) of the Privacy Act if the system of records contains 
investigatory material compiled for law enforcement purposes other than 
material related to criminal subjects and investigations that is within 
the scope of section (j)(2) of the Privacy Act. Section (k)(2) 
provides, however, that, in the event that any individual is denied any 
right, privilege, or benefit that the individual would otherwise be 
entitled to by Federal law, or for which the individual would otherwise 
be eligible, as a result of the maintenance of the material, the 
material must be provided to the individual, unless the disclosure of 
such material would reveal the identity of a source who furnished the 
information to the Department under an express

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promise, or, prior to September 27, 1975, an implied promise that the 
identity of the source would be held in confidence.
    Current Regulations: The Department does not currently claim any 
exemption under section (k)(2) of the Privacy Act for the investigatory 
materials that will be maintained in the ODAS. However, the Department 
claims exemptions under this section for two other OIG systems of 
records--the Investigative Files of the Inspector General (18-10-01) 
and the Hotline Complaint Files of the Inspector General (18-10-04).
    Proposed Regulations: The Department proposes to claim an exemption 
under section (k)(2) of the Privacy Act for investigatory materials 
that will be maintained in the ODAS.
    Reasons: As authorized by section (k)(2) of the Privacy Act and for 
the reasons specified in this section, the Secretary of Education 
proposes to exempt investigatory material compiled for law enforcement 
purposes in the ODAS from the following provisions of the Privacy Act 
and corresponding Departmental regulations:
    1. Section (c)(3) of the Privacy Act (5 U.S.C. 552a(c)(3)) and 34 
CFR 5b.9(c)(3) require the Department to make an accounting of 
disclosures from a system of records available to the individual named 
in the record at the individual's request. The Secretary proposes to 
exempt the investigatory material compiled for law enforcement purposes 
in the ODAS because if OIG made this accounting available to a target 
individual, it could impede or compromise the OIG's investigation 
efforts by prematurely revealing its existence and nature. In addition, 
if OIG were to make this accounting available to a target individual, 
the target could compromise, interfere with, or make witnesses 
reluctant to cooperate with the OIG investigation, and this could lead 
to the suppression, alteration, or destruction of evidence.
    2. Sections (d)(1) through (4) and (f) of the Privacy Act (5 U.S.C. 
552a(d)(1) through (4) and (f)) and 34 CFR 5b.5(a)(1) and (c), 5b.7, 
and 5b.8 require the Department to provide access to records pertaining 
to an individual requestor, to follow specific procedures relating to 
requests for correction or amendment of records, and to notify an 
individual of the existence of records pertaining to him or her upon 
request. The Secretary proposes to exempt the investigatory material 
compiled for law enforcement purposes in the ODAS from these 
requirements because providing an individual with access to 
investigative materials and permitting the individual to contest the 
records' contents and to try to force changes to the information 
contained therein could interfere with and compromise the ability of 
OIG to conduct an orderly and unbiased investigation of potential 
violations of laws, rules, and regulations.
    3. Section (e)(1) of the Privacy Act (5 U.S.C. 552a(e)(1)) and 34 
CFR 5b.4(a)(1) require the Department to maintain in its records only 
``relevant and necessary'' information about an individual. This 
provision is inappropriate for OIG's investigatory duties because it is 
not always possible to detect the relevance or necessity of each piece 
of information reported to the OIG or collected in the preliminary 
phase of an investigation. In some cases, it is only after the 
information is evaluated in light of other evidence that its relevance 
and necessity are clear. In other cases, what may appear to be a 
relevant and necessary piece of information may become irrelevant in 
light of further inquiry or investigation. In order not to impede the 
OIG's investigation of potential violations of laws, rules, and 
regulations, the Secretary believes it is appropriate to exempt the 
investigatory materials in the ODAS from this requirement.
    4. Section (e)(4)(G) and (H) of the Privacy Act (5 U.S.C. 
552a(e)(4)(G) and (H)) require the Department to publish notice of 
procedures for notification, access, and correction of records in the 
system. If the Department exempts the investigatory materials in the 
ODAS from the underlying Privacy Act requirements, notification of 
these requirements would be illogical. For this reason, the Department 
proposes to exempt the ODAS investigatory materials from this 
requirement as well.

Executive Order 12866

1. Potential Costs and Benefits
    Under Executive Order 12866, we have assessed the potential costs 
and benefits of this regulatory action. The potential costs associated 
with the proposed regulations are those resulting from statutory 
requirements and those we have determined to be necessary for 
administering this program effectively and efficiently.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of this regulatory action, we have determined that the 
benefits would justify the costs.

Summary of Potential Costs and Benefits

    We do not view this proposed regulatory action as imposing any new 
costs as the Department is proposing only to exempt itself from having 
to meet limited Privacy Act requirements. We view the potential 
benefits as decreasing the risk that individual(s) whose actions are 
being investigated could interfere with or compromise the ability of 
the OIG to conduct an orderly and unbiased investigation of potential 
violations of laws, rules, and regulations.
2. Clarity of the Regulations
    Executive Order 12866 and the Presidential memorandum on ``Plain 
Language in Government Writing'' require each agency to write 
regulations that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following:
     Are the requirements in the proposed regulations clearly 
stated?
     Do the proposed regulations contain technical terms or 
other wording that interferes with their clarity?
     Does the format of the proposed regulations (grouping and 
order of sections, use of headings, paragraphing, etc.) aid or reduce 
their clarity?
     Would the proposed regulations be easier to understand if 
we divided them into more (but shorter) sections? (A ``section'' is 
preceded by the symbol ``Sec. '' and a numbered heading; for example, 
Sec.  5b.11 Exempt systems.)
     Could the description of the proposed regulations in the 
``Significant Proposed Regulations'' section be more helpful in making 
the proposed regulations easier to understand? If so, how?
     What else could we do to make the proposed regulations 
easier to understand?
    Send any comments that concern how the Department could make these 
proposed regulations easier to understand to the person listed in the 
ADDRESSES section.

Regulatory Flexibility Act Certification

    The Secretary certifies that these regulations would not have a 
significant economic impact on a substantial number of small entities.
    These regulations involve procedural rights of individuals under 
the Privacy Act. Individuals are not considered to be ``entities'' 
under the Regulatory Flexibility Act.

Paperwork Reduction Act of 1995

    These proposed regulations do not contain any information 
collection requirements.

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Intergovernmental Review

    This program is not subject to Executive Order 12372 and the 
regulations in 34 CFR part 79.

Assessment of Educational Impact

    The Secretary particularly requests comments on whether these 
proposed regulations would require transmission of information that any 
other agency or authority of the United States gathers or makes 
available.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, area at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://www.gpoaccess.gov/nara/index.html.

(Catalog of Federal Domestic Assistance Number does not apply.)

List of Subjects in 34 CFR Part 5b

    Privacy.

    Dated: May 2, 2008.
Michell Clark,
Assistant Secretary for Management.
    For the reasons discussed herein, the Department of Education 
proposes to amend part 5b of title 34 of the Code of Federal 
Regulations as follows:

PART 5b--PRIVACY ACT REGULATIONS

    1. The authority citation for part 5b continues to read as follows:

    Authority: 5 U.S.C. 301, 5 U.S.C. 552a.

    2. Section 5b.11 is amended by revising paragraph (c)(1) 
introductory text to read as follows:


Sec.  5b.11  Exempt systems.

* * * * *
    (c) Specific systems of records exempted under (k)(2). (1) The 
Department exempts the Investigative Files of the Inspector General ED/
OIG (18-10-01), the Hotline Complaint Files of the Inspector General 
ED/OIG (18-10-04), and the Office of Inspector General Data Analytics 
System (ODAS) (18-10-02) from the following provisions of 5 U.S.C. 552a 
and this part to the extent that these systems of records consist of 
investigatory material and complaints that may be included in 
investigatory material compiled for law enforcement purposes:
* * * * *
 [FR Doc. E8-10110 Filed 5-7-08; 8:45 am]
BILLING CODE 4000-01-P