WASHINGTON (AP) - Education Secretary Rod Paige said Tuesday his agency has made numerous improvements to combat financial problems and fraud involving hundreds of millions of dollars.

The department has been addressing the concerns of congressional investigators, who have been scrutinizing the agency's books since learning last year that $3 million in grants was stolen.

It also lost track of $450 million in the last three years of the Clinton administration through waste, fraud and errors, the department's chief inspector told lawmakers last April. The department, which has a $44.5 billion budget and manages billions more in student loans, has now recovered more than half of the money.

``Hundreds of millions of dollars have been mishandled. Public confidence in the department has eroded,'' Paige said at a news conference. ``We cannot expect our schools to be accountable if we aren't accountable in Washington. This department owes it to the American people to do a better job of managing their money.''

Announcing the first results of an internal overhaul begun in April, Paige said the department had addressed nearly half of the 661 recommendations made by the General Accounting Office and outside auditors to improve the agency's financial management. The changes include increased oversight, limits on employee spending and investigations into workers who may have broken the law.

One problem noted by investigators was that, as of October, about 230 department employees had government credit cards in their names, with most allowed to charge up to $10,000 each month. Some had higher monthly limits, the probe found, including 36 workers who could charge up to $25,000 and two who could charge up to $300,000.

The investigators found that 141 statements, with purchases valued at nearly $1 million, were not signed by a supervisor. Several of the purchases included items that could be used for personal purposes, including computers, software, cell phones and Internet service.

Paige said 30 cards had been canceled, all future charges will be reviewed and all spending limits had been scaled back, most down to $2,500 or less. Workers with the highest limits were cut back to $30,000 each month.

In their report to the House Education and Workforce investigations subcommittee last April, congressional auditors reported 21 cases in which grant checks, totaling $250 million, were issued twice to the same recipient. All the duplicate checks were recovered.

An additional $200 million was lost in unauthorized purchases and fraud cases. Some of the money was recovered through court orders of restitution to people outside the department. The Justice Department is pursuing much of the rest.

Paige said the agency's goal is to achieve a clean financial audit in 15 months. He noted that improved computer programs had recovered $65 million in defaulted student loans since April.

Rep. John Boehner, R-Ohio, chairman of the education subcommittee, praised Paige Friday for ``responding so quickly to the waste, fraud, and abuse that occurred under the previous administration.''

Last year, nearly $2 million in Education Department funds intended for children living on Indian reservations and military bases was diverted with forged documents into Maryland bank accounts and used to purchase a Cadillac, real estate and other property. The government seized the property after winning a civil judgment, and much of the money has been returned.

In another case, six department employees pleaded guilty to stealing $1 million in equipment and falsely reporting overtime. In May, the government charged 11 more people in that case.