United States Department of Education: Ed Gov/about/reports/annual/201 Reportlindex - HTML

UNITED STATES DEPARTMENT OF EDUCATION
OFFICE OF THE CHIEF FINANCIAL OFFICER

Honorable Darrell Issa
Chairman
Committee on Oversight and
Government Reform
House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
March 31,2011
I am responding to your March 8, 2011, letter requesting information about electronic systems in
use at the Department of Education (Department). The specific responses to the questions you
posed are enclosed.
In addition, we recommend you review the Department's Fiscal Year 2010 Agency Financial
Report available at http://www2.ed.gov/about/reports/annual/201 0reportlindex.html .
Please do not hesitate to contact Assistant Secretary Gabriella Gomez, Office of Legislation and
Congressional Affairs, at 202-401-0020, if you have any questions or require additional
information.
Enclosure
Sincerely,
~ / ?
Thomas P. Skelly
Delegated to Perform the Duties and Functions
of the Chief Financial Officer
400 Maryland Avenue, SW, 4th Floor, Washington, DC 20202-4447
Our Mission is to promote student achievement and preparation/or global competitiveness by fostering
educational excellence and ensuring equal access
March 31,2011
Honorable Todd R. Platts
Chairman
Subcommittee on Government Organization,
Efficiency and Financial Management
Dear Mr. Chairman:
posed are enclosed.
Report available at http://www2.ed.gov/aboutirepOJts/annuall2010report/index. html .
information.
Enclosure
Sincerely,
~ l ~
Thomas P. Skelly
400 Maryland Avenue, SW, 41b Floor, Washington, DC 20202-4447
Our Mission is to promote student achievement and preparaJionfor global competitiveness by fostering
educational exceUence and ensuring equal access
March 31, 2011
Honorable James Lankford
Chainnan
Subcommittee on Technology, Infonnation
Policy, Intergovernmental Relations and
Procurement Refonn
Dear Mr. Chainnan:
I am responding to your March 8, 2011, letter requesting infonnation about electronic systems in
posed are enclosed.
Report available at http://www2.ed.gov/aboutireports/annual/2010reportJindex.html.
infonnation.
Enclosure
Sincerely,

Thomas P. v - ..... 7
Delegated to Perfonn the Duties and Functions
400 Maryland Avenue, SW, 4
111
Floor, Washington, DC 20202-4447
Our Mission is to promote student achievement and preparation for global competitiveness by fostering
educational excellence and ensuring equal access
Honorable Jim Jordan
Chairman
March 31, 2011
Subcommittee on Regulatory Affairs,
Stimulus Oversight and Government Spending
Dear Mr. Chairman:
posed are enclosed. '
Report available at http://www2.ed.gov/aboutireports/annua1J201 Oreportlindex.html.
information.
Enclosure
Sincerely
. ~ J . ~
Thomas P. Skelly
400 Maryland Avenue, SW, 4th Floor, Washington, DC 20202-4447
Our Mission is to promote student achievement and preparation/or global competitiveness by fostering
educational exceUence and ensuring equal access
Responses to Committee on Oversight and Government Reform
US Department of Education
March 31, 2011
1. Identify and briefly describe each of your agency's business and accounting systems. If
separate divisions, bureaus, or offices of your agency use separate systems, identify which
divisions, bureaus, or offices use each system.
The Department of Education's department-wide accounting and business systems are all
captured under an umbrella system named the Education Centralized Automated
Processing System (EDCAPS). A brief description of these systems follows. Please see
Attachment 1 for a flowchart of the EDCAPS component systems.
The Financial Management Support System (FMSS) is the Department of Education's
department-wide core financial management (accounting) system. The services it provides
include: funds control, budget planning, general ledger, accounts payable, accounts
receivable, administrative payments, and financial reporting.
The Government-wide E2 Travel System is a department-wide system and manages all
employee and invitational travel authorizations and vouchers with an automated interface
to the FMSS.
The Nortridge Loan System manages the Department's portfolio of promissory notes and
has an automated interface to the FMSS.
The Contracts and Purchasing Support System (CPSS) is a department-wide system for
contracts management and processes procurement and contract data with an automated
interface to the FMSS.
The G5 Grants Management System is a department-wide system for grants management
and processes grants data with an automated interface to the FMSS.
The CheckFree system is a cash reconciliation and SF224 reporting system to the
Department of the Treasury.
The Unbilled Lockbox processes electronic refunds via P A Y.gov and check refunds
through US Bank for the Department with an automated interface to the FMSS.
The Accounts Receivable Reporting Database is a database of accounts receivable
information used to generate reports specific to accounts receivable functions.
The Hyperion Budget Planning System is a department-wide system used to input annual
budget plans.
The Department of Interior processes all payroll for the Department of Education.
The Department of the Treasury processes payments for the Department of Education.
The Federal Student Aid Financial Management System (FSA FMS) processes student loan
and grant accounting data from the Federal Student Aid systems with an automated
interface to the FMSS. Please see Attachment #2 for a diagram of the FSA component
systems and their descriptions.
2. Explain how the business and accounting systems identified in response to Request No. 1
interact with one another.
All Education systems identified in Response No.1 above interact via automated
processes. These processes are controlled through scheduled predefined procedures that
either interface via online, real-time or via batch mode depending upon the business
requirement.
3. For each system identified in response to Request No.1, state whether information found in
that system is regularly or periodically submitted to any of the government-wide
accounting systems maintained by the Department of the Treasury, e.g., GFRS, FACTS I,
FACTS II, IFCS, etc., ,and explain how and at what intervals those submissions occur,
including descriptions of both manual and automated processes.
The FMSS regularly submits information to the government-wide accounting systems
maintained by the Department of the Treasury. All submissions are automated. The
frequency of the submissions is: GFRS--annually; FACTS I and FACTS II--quarterly; and
IFCS--quarterly.
that system is regularly or periodically submitted to the Office of Management and
Budget's ("OMB") MAX Information System, and explain how and at what intervals those
submissions occur, including descriptions of both automated and manual processes.
FMSS data is submitted to Treasury's FACTS II system quarterly for budget execution
reporting. From the FACTS II system, MAX is automatically populated with the agency
financial data.
Department staff uses FMSS data in preparing SF-132 apportionment requests, which are
manually entered into the MAX Apportionment module, as needed. Department staff
usually processes several requests each month.
Department staff also manually enter prior-year budget execution data from FMSS into
MAX in budget presentation format during the annual budget formulation process, which
normally occurs between November and January.
2
Finally, Department staff periodically responds to OMB Budget Data Requests (BDR' s),
which may require FMSS budget execution and financial data to be manually entered into a
MAX application module.
5. For each system identified in response to Request No.1, describe recent, current, and
planned migration or modernization projects.
The FMSS resides on an Oracle database and uses the Oracle Federal Financials 11.5.10
release of the application. A new version of the software has been released (Version 12)
and the Department is currently in the initial stages of analyzing the business need, effort,
and resources necessary to implement this new version.
The E2 Travel system contract with GSA expires in 2013. If a new vendor is chosen,
Education will migrate to a new system in 2014.
The Nortridge Loan System has no recent, current, or planned modernization projects at
this time.
The Contracts and Purchasing System--The Department of Education has initiated a project
to integrate a new Commercial-Off-The-Shelf (COTS) product into the enterprise,
replacing or significantly enhancing the current contract writing system.
The G5 Grants Management System--The final component of the G5 implementation was
completed March 14, 2011, and the system is now operational.
The CheckFree system has no recent, current, or planned modernization projects at this
time.
The Unbilled Lockbox was recently migrated from US Bank to PA Y.gov for electronic
refunds.
The Accounts Receivable Reporting Database has no recent, current, or planned
modernization projects at this time.
The Hyperion Budget Planning System has no recent, current, or planned modernization
projects at this time.
The Federal Student Aid Financial Management System has no recent, current, or planned
modernization projects at this time.
6. In addition to your agency's submissions to government-wide accounting systems
maintained by the Department of the Treasury and OMB, as described in response to
3
Requests Nos. 3 and 4, does your agency publish any of the same infonnation online for
public viewing? If so, describe how and in what fonnat that information is published.
The Department does not publish any of the same information online for public viewing.
7. Identify and briefly describe each system that your agency uses to manage grants, direct
loans, and/or loan guarantees. If separate divisions, bureaus, or offices of your agency use
separate systems, identify which divisions, bureaus, or offices use each system.
The Department uses the G5 Grants Management System to manage grants and direct loan
disbursements. The G5 investment has been selected and approved by OMB as a Consortia
Lead for the Grants Management Line of Business (GMLoB). The shared service model
enables ED to provide services to client agencies that will migrate to the Department of
Education's end-to-end grant management system. The G5 solution supports the Agency's
grant-making business process and is a full life cycle, end-to-end grants management
system (intake of applications, peer review, award, payment, perfonnance monitoring, and
final closeout of the grant award). Also, please see Attachment 2 for a description ofthe
Federal Student Aid office systems that support grant, direct loan, and/or loan guarantee
activity.
8. For each system identified in response to Request No.7, explain how it interacts with any
business or accounting system identified in response to Request No.1.
G5 interacts with the FMSS accounting system in both a real-time mode for funds control
on awards and a batch mode for drawdowns.
The FSA-FMS system interfaces with the FMSS accounting system and G5 grants system
in a batch mode. Please see Attachment 2 for a description of grant systems with the
Federal Student Aid office.
that system is regularly or periodically submitted to the Catalog of Federal Domestic
Assistance (CFDA), and describe how and at what intervals those submissions occur,
including descriptions of both automated and manual processes.
New programs are entered into the G5 system as pending, manually placed into the Catalog
of Federal Domestic Assistance (CFDA), and updated in the Department's Grants System
(G5) once approved within the CFDA. The existing CFDA program information is also
reviewed and updated on an annual basis.
10. For each system identified in response to Request No.7, state whether infonnation found in
that system is regularly or periodically submitted to any of the government-wide grants
4
management and reporting systems, e.g., F AADS, F AADS PLUS, etc., and describe how
and at what intervals those submissions occur, including descriptions of both automated
and manual processes.
Data from the G5 application is submitted to F AADS quarterly (prior to the F AADS
discontinuance) and to USASpending.gov (using the FAADS Plus format) bimonthly. The
F AADS submission process includes running reports from G5 and manually submitting
them to the F AADS system. For USASpending.gov, submissions are run from the G5
database and manually uploaded to USASpending.gov.
11. For each system identified in response to Request No.7, describe recent, current, and
The final component of the G5 implementation was completed March 14,2011, and the
system is now operational.
See Attachment 2-The Direct Loan Servicing System and the Conditional Disability
Discharge Tracking System are migrating to the Title IV Additional Servicers model and
being decommissioned. The Debt Management and Collection System (DMCS) is being
replaced by DMCS2.
12. In addition to your agency's submissions to government-wide grants management and
reporting systems, described in response to Requests Nos. 9 and 10, does your agency
publish any of the same information online for public viewing? If so, describe how and in
what format that information is published.
Forecast of Funding Opportunities under the Department of Education Discretionary Grant
Programs for the fiscal year is posted biweekly to the Department's Web site at
http://www2.ed.gov/fundlgrantlfindledlite-forecast.html. The Forecast lists virtually all
programs and competitions under which the Department has invited or expects to invite
applications for new awards and provides actual or estimated deadline dates for the
transmittal of applications under these programs. The lists are in the form of charts--
organized according to the Department's principal program offices--and include programs
and competitions previously announced, as well as those planned to be announced. The
information is advisory only and is not an official application notice. The Department
provides updates to this document starting in the first week of November in a fiscal year
and continuing through the following July.
Education also publishes a Discretionary and Formula Grants Award database on the
Department's Web site at http://wdcrobcolpOl.ed.gov/CFAPPS/grantaward/start.cfin. The
5
database contains information on discretionary and formula grants made in the last several
years. It has multiple methods for searching, viewing, and downloading data about awards.
13. Identify and briefly describe each system that your agency uses to manage contracts. If
separate divisions, bureaus, or offices of your agency use separate systems, identify which
divisions, bureaus, or offices use each system.
The Department of Education uses a contract writing system, CPSS. It supports the
acquisition process from pre-award planning activities (e.g., initiating, fund obligation and
commitment, contract assembly, and issuance) through contract close out.
14. For each system identified in response to Request No. 13, explain how it interacts with any
business or accounting system identified in response to Request No.1.
CPSS has a near real-time two-way interface to the FMSS. Financial data in support of
commitments, adjustments to commitments, obligations, adjustments to obligations and
vendor data are passed from CPSS to the FMSS. Account classification codes are sent
from the FMSS to CPSS. Status messages regarding posting status are sent to CPSS from
theFMSS.
15. For each system identified in response to Request No. 13, state whether information found
in that system is regularly or periodically submitted to any of the government-wide contract
management and reporting systems, e.g., FPDS, FPDS-NG, FAPIIS, etc., and describe how
and at what intervals those submissions occur, including descriptions of both automated
and manual processes.
Contract data is submitted to USASpending on behalf of Education from the Federal
Procurement Data System - Next Generation (FPDS-NG). To ensure that contract actions
get entered into FPDS-NG, the Department's CPSS automatically requires FPDS-NG
reporting be completed before a contract obligation can be made. To address timeliness,
Education ensures that all new grant and loan transactions are submitted twice monthly.
This ensures that we meet the 3D-day reporting requirement. We also enter contract data
near real-time, which exceeds the requirement for posting in the Federal Procurement Data
System within 3 days of award.
16. For each system identified in response to Request No. 13, describe recent, current, and
The Department of Education has initiated a project to integrate a new Commercial-Off-
The-Shelf (COTS) product into the enterprise, replacing, or significantly enhancing the
current contract writing system.
6
17. In addition to your agency's submissions to government-wide contract management and
reporting systems, described in response to Request No. 15, does your agency publish any
of the same information online for public viewing? If so, describe how and in what format
that information is published.
Department contracting personnel manually post contract opportunities and awards to
FedBizOps and also post a list of active contracts and the annual forecast of contract
opportunities to the Department's Web site in html, .doc, .docx, andlor PDF format.
18. Briefly describe your agency's efforts to comply with OMB's memorandum on the Open
Government Directive - Federal Spending Transparency, dated April 6, 2010. In
particular, describe whether and how your agency has begun to collect and report sub-
awards data, as required by the memorandum, and describe how your agency's reports on
OMB's data quality metrics, as required by the memorandum, are generated.
The Department complies with the guidance ofOMB's Memorandum of April 6, 2010, by
issuing new grant policies around "Sub-award and Executive Compensation Reporting
Requirements under the Federal Funding Accountability and Transparency Act." The
policy disseminated information about sub-award and executive compensation reporting
requirements set forth in the Federal Funding Accountability and Transparency Act
(FFATA), and to establish guidance and policy regarding the inclusion of the related
special grant award conditions established by OMB for the purpose of ensuring compliance
with FF AT A. The policy further requires all prime awardees to report sub-awards by the
end of the month following the month the award or obligation was made. Prime awardees
and sub-awardees information is reported to the Federal Sub-award Reporting System
(FSRS) and is made available to the public via USASpending.gov. Department program
staff ensure grantee compliance with FF AT A reporting requirements, by including the
applicable Grant Award Notification (GAN) attachment with GANs that are to be issued to
prime awardees that must comply with FFATA reporting requirements. Program staff also
remind these grantees of their reporting requirements during monitoring.
19. If your agency interacts directly with USASpending.gov, in addition to submitting
information to the systems that feed USASending.gov, describe the nature, frequency, and
purposes of that interaction.
The Department interacts with USASpending.gov for bimonthly data submissions. Outside
ofthis, the Department works with the USASpending.gov technical teams to answer data
submission and display questions. The Department has contacted the USASpending.gov
team approximately five times over the past year.
7
20. Describe the data quality controls and procedures that your agency has implemented for
information that is submitted to USASpending.gov, including information submitted
directly and information submitted to one of the systems that feeds USASpending.gov.
For grant and loan data, Education staff conducts a 3-way validation ofthe data between
the G5 grant system, the file submitted, and USASpending. The Office of the Chief
Financial Officer extracts information from the 05 grant system and validates it against the
FMSS general ledger in order to generate monthly department-wide financial spending
reports. For contract data, the Education staff compares the FPDS-NO accounting data
against the accounting data in the Department's CPSS contract system. In addition, the
agency Senior Procurement Executive certifies annually in writing the accuracy of the data
the Department submits to FPDS-NO.
21. State whether all of your agency' s current grants, contracts, and loans are accurately
reflected on USASpending.gov, and, if not, estimate the percentage of current grants,
contracts, and loans that are not accurately reflected, using both the number of transactions
and the dollar figures.
99 percent of the Department's current grant data represented on USASpending.gov is
accurately reflected. 100 percent of the Department's current contract data represented on
USASpending.gov is accurately reflected.
22. State whether your agency incurs any reporting burdens or costs as a result of its
obligations under the Federal Financial Assistance Transparency Act ("FFATA") that it
does not incur as a result of other reporting obligations, and estimate those burdens and
costs in worker-hours and dollars.
Approximately 1 FTE is required to support the FFATA reporting requirements.
8
Responses to Committee on Oversight and Government Refonn
23. Identify the individual(s) who serve(s) as Senior Accountable Official(s) ("SAO") over
federal spending data quality for your agency, as defined by OMB.
Danny A. Harris, Ph.D.
Chief Information Officer
Office of the Chief Information Officer
9
G5/GAPS
AR Bal, Unapplied Refunds, and AC
Treasury
GL - General Ledger
AR - Accounts Receivable
Fed Admin - Federal
Administrator
PO - Purchase Orders
AP - Accounts Payable
GAPS/G5 - Grants Management
Attachment 1
EDCAPS System Flowchart
FSA FMS
0
-
Gl :J],
,
" ;
,, ; ',
Fed Admin I,
Unbilled
lockbox
FMSS
Oracle Financials

PO
AP
"I:
Nortridge
.; ;0..
:- , .
CPSS
EOCAPS
Functional
Arc h itectu re
Hyperlon
Budget
Planning
e2
Travel
System
001
Attachment 2
Federal Student Aid
Grant and Loan Financial Overview Chart
External Partnars/Services
I
Department 01 Educltion Systems
I
other Government Systems
Common Services for Borrowers (CSa)

5, .....
(DLSS)
4.0 Central
Processing
System
I .. O.. odc..:!
'"
Mac':::':6
6.0 Common
f f
01iglnaUon &
Disbursemenl
I !
(COO)
!
7.0 Trtle IV 3.0 Federal studenl
Additionsl Aid Financial
Se1Vi<:ers (TIVAS) Management System
1.0 U.S. T,.asuIY
(FSA FMS)
1
5.0 E-Campus
Based
3.1 Lenders ....
(eCB)

2.0 Education Central
3.2 Guaranty
Automated Processing
Agendas
System (EOCAPS)
Overview
This appendix shows a high level overview of the systems and services that support Federal
Student Aid's (FSA) grant and loan financial activity. The numbers on the sections below
correspond to the numbering on the chart above.
Please note that the Title IV Additional Servicers (7.0) and the Common Services for Borrowers
(CSB) components (B.O - 11.0) are service contracts, not FSA systems. In addition, non-
financial supporting systems (e.g., NSLDS, etc.) are not included in the diagram.
1.0 Treasury
See Appendix 1.
2.0 EDCAPS
See Appendix 1.
3.0 Financial Management System (FMS)
FMS consolidates and manages all Federal Student Aid program transactions from Federal
Student Aid's "feeder" systems. FMS facilitates reconciliation and internal program
management and reporting. The system tracks and manages payment processing for Federal
Direct Loan originations and processes refunds to borrowers for overpaid loans and payments
I
Attachment 2
to lenders (3.1) and guaranty agencies (3.2). It also performs validations and reasonability
checks to minimize erroneous payments.
FMS is currently in "operations and maintenance" (O&M) mode.
4.0 Central Processing System (CPS)
Central Processing System (CPS) provides a centralized system for processing the FAFSA form
and determining aid eligibility. CPS processes each submitted FAFSA through a series of data
checks, formula calculations, and data matching/verifications with other Federal agency
databases. CPS also sends eligibility notifications to applicants, schools, service providers, and
State agencies.
5.0 eCampus-Based
The eCampus-Based system addresses the Congressionally mandated activities of providing
Campus-Based funds to eligible Title IV institutions. The Federal Perkins Loan, Federal Work-
Study, and Federal Supplemental Educational Opportunity Grant Programs are referred to as
Campus-Based programs because the Department allocates these funds to participating
institutions for students who need financial aid to meet the costs of postsecondary education.
The eCampus-Based system uses Web-based technologies that improve service, reduce
improper payment of student aid, and strengthen financial management and internal controls by
providing relevant and timely information in the management of day-to-day operations.
6.0 Common Origination and Disbursement (COD)
The COD system enables approximately 6,200 eligible institutions of higher education to
originate and disburse approximately $41 billion of Title IV funds. These funds are disbursed to
approximately 9.6 million eligible students/recipients each award year under the Federal Direct
Loan program, Federal PELL, ACG/SMART, IASG, and TEACH grant programs. The COD
system processes, stores, and reconciles data from several FSA programs. The COD
contractor provides operation and maintenance, a call center, and customer service to assist
institutions with processing data and managing their administration of Federal Direct Loans and
grants. The COD system began servicing Foreign School operations during the 2010/2011
award year. In addition, COD serves as FSA's loan distribution vehicle across the Title IV
Additional Servicers (TIVAS).
7.0 Title IV Additional Servicers (TIVAS)
TIVAS provide a full range of serviCing functions for student loans such as processing of
payments, debt collection, and loan consolidation. Customer services range from call centers to
system maintenance and enhancements. The performance-based deliverable pricing structure
of the contracts encourages the contractor to avert borrower delinquency and move delinquent
borrowers to repayment status. Servicing costs are associated with three main drivers: 1) loan
volume, specifically unique borrowers; 2) timing of loan servicing, when unique borrowers begin
receiving loans; and 3) distribution of total volume among loan statuses: In-School, Grace or
Current Repayment, Delinquency, and Default.
These are not government-owned systems, but service contracts only with ACS Education
Solutions, LLC.
2
Attachment 2
Common Services for Borrowers (CSB)
8.0 Direct Loan Servicing System (DLSS)
The Direct Loan Servicing System (DLSS) services Direct Loans while borrowers are in school,
in deferment status, or in repayment. DLSS, like the TIVAS, provides a full range of servicing
functions for student loans such as processing of payments, debt collection, and loan
consolidation. In support of the 100% Direct Lending model, DLSS is in the process of
transferring its loan portfolio to the TIVAS model. DLSS will then be decommissioned.
This is not a government-owned system, but part of a service contract with ACS Education
Solutions, LLC.
9.0 Direct Loan Consolidation System (DLCS)
The Direct Loan Consolidation System (DLCS) serves to simplify loan repayment by allowing
the borrower (Le., students) to combine several types of federal student loans with various
repayment schedules into a single loan. The consolidated loans are then sent to the Title IV
Servicers (TIVAS) through the Common Origination and Disbursement (COD) system.
Solutions, LLC.
10.0 Debt Management & Collection System (DMCS)
The Debt Management and Collection System (DMCS) is the repository and management
system for the Department's defaulted loan and grant overpayments that went to borrowers
and/or schools. DMCS is responsible for the collection and servicing of these defaulted loans
and grants.
DMCS is in the process of being replaced by the new Debt Management & Collection System
(DMCS2).
DMCS and DMCS2 are not government-owned systems, but part of a service contract with ACS
Education Solutions, LLC.
11.0 Conditional Disability Discharge Tracking System (CDDTS)
The CDDT System supports financial servicing and tracks borrower claims for total and
permanent disability discharges. Final discharge of the loan and interest is made if the borrower
meets all eligibility requirements in an allotted period. If borrowers are determined to be
ineligible for disability based on program guidelines, they are returned to an active servicing
status.
In support of the 100% Direct Lending model, CDDTS is in the process of transferring its loan
portfolio to the TIVAS model. CDDTS will then be decommissioned.
Solutions, LLC.
3

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OFFICE OF THE CHIEF FINANCIAL OFFICER

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