Long way to go for student aid system, GAO says

Officials at the Education Department's Federal Student Aid (FSA) Office have made progress in integrating the agency's high-risk financial aid systems, but complete integration is still several years away, according to a new study by Government Accountability Office officials.

Past delays in completing the systems integration work, begun in 1999, left Education vulnerable to fraud, waste and abuse.

The report on FSA's management procedures and systems integration recommends, among other things, that the chief operating officer clarify the agency's strategic planning objectives and finish integrating incompatible financial aid systems.

FSA officials have hired a permanent chief architect to oversee the systems integration and have completed many of the rules and standards necessary for it. However, they are still in the midst of a project to standardize common data elements so that information can be shared among financial aid systems.

GAO auditors offered kudos to FSA officials for retiring six of 18 systems used for administering federal financial aid and for integrating those functions into a new system that delivers direct loans and Pell grant aid and collects on defaulted loans. But auditors recommended that Education officials capture baseline data and subsequent measures of how well the new system is working.

FSA officials have since begun work on three more integration projects that they plan to compete by 2008. The additional work is to improve front-end systems that students and their parents use to apply for federal aid and to create better back-end systems for processing and tracking financial aid applications, agency officials said.

The lack of integration has meant, for example, that financial aid officers and accounting staff members have had to continually log in and out of different systems, using different school identifiers and passwords, to gain access to student aid information.

In her written response to GAO's report, FSA's chief operating officer, Theresa Shaw, wrote that FSA officials have made significant progress on integrating the agency's financial aid systems, including installing middleware to standardize the systems' interfaces.

But Shaw said systems integration is a moving target. "Because business requirements and technology change over time, we view this as a continuous endeavor, not a project with a beginning and an end," she wrote.

In the report, issued earlier this month, GAO auditors disclosed that FSA officials have been working with officials in the Office of Management and Budget and the Treasury Department on legislation to permit Internal Revenue Service officials to disclose taxpayer information to FSA officials.

FSA officials are seeking a means to compare income data on financial aid applications with tax records to ensure that only eligible students receive federal aid.