NCJ Number
72238
Date Published
1977
Length
21 pages
Annotation
The General Accounting Office (GAO) estimates that the Department of Defense's (DOD's) reduction of training charges for foreign military students will cost the U.S. at least $40.4 million in 1977; GAO questions this reduction.
Abstract
Recovery of full cost of providing training to foreign students is required by law. GAO pointed out in an earlier report to Congress that even prior to the decision to reduce tuition rates, the Defense pricing system was not recovering full costs. GAO had recommended in a 1976 report that, in addition to rescinding the order to reduce tuition rates, the Secretary of Defense should revise the pricing systems so that all applicable costs are recovered. In response to GAO and congressional concerns, DOD issued detailed pricing guidelines on November 1975, which resulted in substantial increases in Army and Air Force tuition rates and reductions in Navy tuition rates. The DOD Deputy Secretary reduced foreign student tuition charges because he felt the substantial increase in tuition prices would cause foreign countries to reduce the number of students participating in the program. GAO's analysis of student loads in the military services' training programs neither confirms nor refutes the secretary's contention. Nevertheless, GAO recommends that some changes be made in DOD guidelines to ensure that the full cost of training be recovered, as expressly required by the Arms Export Control Act. DOD should allocate base operations costs on the basis of missions, specifically include the cost of school overhead personnel, and 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. Appendixes present letters regarding the charge reduction situation and tables illustrating price changes and tuition rates.