The U.S. Department of Education (Education) manages one of the largest discretionary appropriations of any federal agency, and plays a key role in supporting efforts to meet the nation's education goals. While Education managed a discretionary appropriation of over $160 billion in fiscal year 2009 and was responsible for administering about 200 grant programs, it has the smallest workforce of any cabinet agency. As requested, this report examines (1) the key high-level management challenges facing Education, (2) Education's strategic management of its workforce, (3) Education's design of internal controls to help ensure accountability over contracts and student aid grants, and (4) Education's information technology (IT) management controls. To do this, GAO (Government Accountability Office) reviewed relevant Education documents and interviewed Education program and management officials about strategic workforce management, IT, contracts, and Pell Grants. GAO recommends that Education take steps to better estimate workloads; strengthen safeguards over its performance management system; properly implement established contract monitoring guidelines; and improve its management controls over IT resources. Education generally agreed with our recommendations. Appendices include: (1) Objectives, Scope, and Methodology; (2) Summary of Changes to Education's Performance Management System, Implemented in 2010; (3) Education IT Governance Structure; (4) Comments from the Department of Education; and (5) GAO Contact and Staff Acknowledgments. (Contains 2 tables, 5 figures and 86 footnotes.)