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DOCUMENT RESUME
00285 - (A0891451]
Defense Action to Reduce Ciarges for Foreig, Military Training
Will Result in Loss of 'j.lions of Dollars. FGMSD-77-17;
B-159835. February 23, 1977 Released March 1. 1977. 6 pp. + 7
appendices (14 pp.).
Report to Rep. Clarence D.. Long; by Robert F. Keller# Acting
Comptrcll3r General.
Issue Area: Accounting and Financial Reporting (2800).
Contact: Financial and General management Studies Div.
Budget 'anction: miscellaneous: Financial Haragesent and
Information Systems (1002).
Organization Concerned: Department of the Navy; Eepartment of
Defense; Department of the Army; Department of the Air
F o -e.
Congressional Relevance: Rep. Clarence D. Long.
Authority: Foreign Assistauce Act of 1961, as amended (22 U.S.C.
2311). Arms Export Control Act.
Questions were raised about the Department of Defense's
action to reduce tuition rates for training foreign military
students. The reelction of training charges fcr foreign Lilitary
students will cost the UniteS States over $40 million in fiscal
year 1977. Findings/Conclusions: Different pricing systems were
established by each of the military services concerning the
extent to which the costs of trainLng foreign military students
should be reccevered. If the decision to reduce rates is
rescinded, DOD pricing systems are not necessarily adequate to
recover the full cost cf providing training. Defense military
personnel appropriations will finance $13 million of the $40.4
millior in reduced training charges; operations and maintenance
appropriations will finance $8.4 million; and the remaining $19
million will, in effect, be financed by miscellaneous receipts
of the Treasury. The decision to reduce foreign 'training charges
was made by former Deput7 Secretary of Deterse Villiam P.
Clements because the sudden and substantial increase in tuition
prices had a drastic impact on foreign countries.
Recommendations: The November 1975 revisie4 to the pricing
guidelines should be rescinded. The guidelines should be changed
to require the rilitary services to (1) allccate base operations
costs on the basis of missions; (2) include the cost of school
overhead personnel; and (3) use factors which will result in the
full recovery of civilian and military retirement costs and the
cost of civilian health benefits and life insurance. (RRS)](ViewImageLocal?handle=hein.gao/gaobaabva0001&div=1&collection=&method=preview&ext=.png&size=3)