This document contains the testimony given by Cornelia M. Blanchette, associate director of education and employment issues in the Health, Education, and Human Services Division of the U.S. Department of Education. The document discusses challenges that the Department of Education faces in carrying out its mission in a cost-efficient and effective manner: (1) ensuring access to postsecondary institutions, while at the same time protecting the financial interests of the government; and (2) promoting access to and excellence in elementary, secondary, and adult education. The report also discusses how the Department's ability to meet these challenges could be enhanced by improved management. Although the department has made progress in ensuring access to postsecondary education and in providing financial accountability, challenges remain in providing educational access to low-income and minority students and in protecting the financial interests of the federal government. The student aid programs are hampered by a complicated loan process and management shortcomings. The department also faces challenges in promoting access to and excellence in preschool, elementary, secondary, and adult education programs. The demonstration of program accountability is made more difficult by lack of clearly defined program objectives and a lack of resources (information and financial) to manage department funds. Finally, recent legislation provides powerful tools for improving agency operations and accountability. These laws include the 1993 Government Performance and Results Act (GPRA), the expanded Chief Financial Officers (CFO) Act, the 1995 Paperwork Reduction Act, and the 1996 Clinger-Cohen Act. Two figures and a list of related General Accounting Office publications are included. (LMI)