Education: We'll fix our finances

Facing congressional scrutiny of its financial management troubles for the first time under President Bush's watch, the Education Department reported July 24 that a new accounting system it is installing will help it earn a clean financial audit opinion.

"Our auditors identified many weaknesses in the current accounting system, and these weaknesses are being addressed in the implementation of a completely new accounting system that will produce fully integrated financial management information," said William Hansen, deputy secretary of Education, testifying before a House subcommittee.

The new system, using Oracle Corp. software, should reduce manual accounting practices and be ready for full use next year, Hansen said.

Education Inspector General Lorraine Lewis praised the work of Education's Management Improvement Team, but said that its initial report issued earlier this month shows that "significant challenges" remain.

Major internal control weaknesses revolve around Education's financial management and other information technology systems, she said.

Hansen said that in the past 90 days, the department deployed a new intrusion-detection system, arranged disaster-recovery facilities for its financial management system and its network, updated security policies and developed a security training program for IT staff members and managers.

Linda Calbom, director of financial management and assurance for the General Accounting Office, said problems with edit checks in the department's Grant Administration and Payment System have resulted in ineligible students receiving money.