1/ Reflects a reduction of $189,000 required by Section 512 of Public Law 100-202

Purpose and Method of Operation

The Office of the Inspector General (OIG) has authority to inquire into all
program and administrative activities of the Department and related activi-
ties of all parties performing under contracts, grants, or other agreements
with the Department. These inquiries may be through audits, investigations,
or other appropriate measures. The OIG promotes economy and efficiency in
the administration of the Department's programs and operations, and prevents
and detects fraud, waste and abuse. The OIG does not administer any programs
directly.

Accomplishments

In 1987, the OIG issued or processed 3,405 audit reports prepared by non-
Federal auditors on Departmental operations, grantees, contractors, and other
participants in Departmental programs. It also issued or processed 51
program audits, 37 pre-award audits of Departmental contracts, 26 audits of
Departmental contracts, 24 internal audits of Departmental operations, and
provided technical assistance in 130 cognizant assignments provided under the
Office of Management and Budget Circular A-128. The audit reports recommended
disallowances of $81.0 million in costs. Recoveries of funds disallowed in
1987 and prior years were $26.1 million in 1987. The OIG estimates that if
recommendations for improving management and program procedures included in
the audit reports are implemented, the result would be a more efficient or
effective use of approximately $129.8 million in program and administrative
funds.

In 1987, 693 investigations and inquiries were completed. Those investiga-
tions that substantiated criminal wrongdoing resulted in the referral of 212
cases to prosecutors. Of the 212 cases referred, 118 were accepted and 94
were declined. Additionally, OIG investigations led to 98 indictments and 84
convictions. The total dollar impact derived from investigation activities
in 1987 was: fines, $31,750; restitutions, $603,093; recoveries, $150,430;
restitution payments collected, $225,097; and civil judgments, $22,000,000.
In 1987, OIG closed 110 complaints received on the OIG Hotline. These
complaints alleged fraud, waste or mismanagement of ED funding by school
officials, students, or Department employees. Of the number of complaints
closed, 30 were substantiated and resulted in corrective action by the Depart-
ment.

OIG reviwed 570 legislative and regulatory documents, as well as Departmental policy documents and reports to the Congress.

Office of the Inspector General

397

1989 Budget Proposal

The 1989 request is for $17,911,000, an increase of $351,000 above the 1988 appropriation of $17,560,000. The request is an increase of $540,000 from the 1988 obligations level of $17,371,000, which reflects the lapse in travel funds required by Section 512 of P.L. 100-202. The proposed staffing for OIG in 1989 is 320 FTE, the same level as in 1988, which is 41 FTE more than the 279 FTE used in 1987. The 1989 request provides funds for operations at substantially the same level as 1988. In both years, the OIG will give increasing attention to investigations of proprietary schools prone to abuse the student aid programs.

The major increases for 1989 are: $373,000 in personnel compensation due to annualization of the 1988 pay raise, a 2 percent pay raise for 1989, withingrade increases, merit pay increases, and career ladder promotions; $58,000 in benefits; and $540,000 for all costs associated with computer purchases, which are partially offset by a $313,000 decrease in computer leasing costs. The OIG is continuing its policy of replacing computer leases with computer purchases.

Other increases from the 1988 level include: $162,000 in contracts for services such as copy centers, movers, and cleaning, which were previously paid from the Program Administration account; 38,000 for non-ADP equipment purchases; and $14,000 for increased costs for health units, guards service and administrative systems. These are more than offset by decreases, which include: $170,000 for rental payments to GSA due to release of space; $106,000 for office renovations that were necessary to accommodate the reduction in space; $42,000 for GSA telecommunications charges; and $14,000 for miscellaneous

THURSDAY, APRIL 14, 1988.

SPECIAL EDUCATION AND REHABILITATIVE SERVICES

WITNESS

MADELEINE C. WILL, ASSISTANT SECRETARY, SPECIAL EDUCATION AND REHABILITATIVE SERVICES

Mr. NATCHER. At this time we take up the budget request for fiscal year 1989 for Special Institutions for the Handicapped. We have with us Mrs. Madeleine Will, and, Mrs. Will, who do you have with you there at the table?

Mrs. WILL. On my right I have Carol Cichowski and Sally Christensen, who are with the Office of Planning, Budget and Evaluation; and on my left I have Dr. Nolan, who is the Director of the American Printing House for the Blind.

Mr. NATCHER. Glad to have all of you before the committee. Mrs. Will, as we know on this committee, and in order for those in the audience to know, you are the Assistant Secretary for Special Education and Rehabilitation Services, and you have made a good one, Mrs. Will. We will be glad to hear from you.

Mrs. WILL. Thank you.

OPENING STATEMENT

Mr. Chairman and members of the committee, thank you for the opportunity to present the Departmental testimony for the Special Institutions for the Handicapped account, which includes the American Printing House for the Blind (APHB), the National Technical Institute for the Deaf (NTID) and Gallaudet University.

Representatives of these institutions will provide detailed testimony in support of the Department's budget requests of $5,381,000 for the American Printing House for the Blind, $33,031,000 for the National Technical Institute for the Deaf, and $63,463,000 for Gallaudet University. I will not duplicate their testimony.

SINGLE NEW ACCOUNT

The 1989 budget request proposes a single new account instead of three separate accounts for these institutions. The three institutions have a unique relationship with the Federal Government. All three serve handicapped students, but all three receive the majority of their funding through Federal appropriations. A single account also simplifies budget presentation, analysis and program administration and encourages consideration of policy toward these institutions in concert with other policies and programs for the handicapped. Separate earmarks are provided for each institution to identify the specific amounts of support to be provided.