Press Release

Jordan calls for subpoena of former federal student aid COO over improper payments

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Lima, May 25, 2017 | Darin Miller (202-225-2676) | comments

“Today’s hearing highlights exactly what American taxpayers hate about the federal government,” said Congressman Jim Jordan (R-Ohio) today, calling for the House Oversight and Government Reform Committee to subpoena a former Department of Education official during a hearing. The Oversight committee hearing, entitled “Improper Payments in the Federal Government: Student Aid,” looked at the Education Department’s high rate of improper payments, most of which are overpayments (Improper payments are defined as any payment that should not have been made or that was made in an incorrect amount.). The federal government improperly pays out $144 billion annually, and that trend has been growing over the past four years.

During the hearing, Rep. Jordan questioned the Education Department inspector general and the CFO of the Federal Student Aid office about improper student aid payments overseen by the former chief operating officer of the Federal Student Aid program. The Improper Payments Elimination and Recovery Act (IPERA) requires an agency to periodically identify and report its programs that are susceptible to significant improper payments, and the Office of Management and Budget (OMB) has designated the Federal Direct Student Loan program and the Pell Grant program as “high priority” programs because they have some of the highest improper payments of all federal programs. Unfortunately, the Inspector General for the Education Department has repeatedly found that the Department failed to accurately estimate improper payments and comply with the IPERA.

James Runcie, now-former COO of the Federal Student Aid office, resigned this week instead of testifying before Congress. Runcie received a $75,000 bonus last year, and a combined more than $400,000 in bonuses over the past six years, despite his failure to comply with federal law.

During the hearing Rep. Jordan said:

“No wonder the American taxpayers are fed up with their federal government and the way this place operates. I think, Mr. Chairman, we should have Mr. Runcie in here. I think we should go ahead and subpoena the guy and bring him in here to answer some of these questions. I mean again, you just walk through it: $144 billion across government; the agency that’s maybe one of the most egregious offenders of overpayments is the Department of Education; two laws they don’t comply with; ... the guy who’s responsible is asked several times to come in front of this committee and instead of coming in front of this committee he up and resigns – and add insult to injury, he’s been receiving bonus payments for the last six years that total $432,885. This is amazing. This is why we have this committee: to get to the bottom of these kinds of things.”

Kathleen Tighe, inspector general for the Education Department; Justin Draeger, president of the National Association of Student Financial Aid Administrators (NASFAA); and Jay Hurt, chief financial officer in the Federal Student Aid office, served as witnesses.

VIDEO of Rep. Jordan’s Q/A during the hearing: https://youtu.be/57l3Z4vfs0Y

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