BNUMBER: B-257977
DATE: November 15, 1995
TITLE: EEOC - Payment for Training of Managment Interns
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Matter of: EEOC - Payment for Training of Managment Interns
File: B-257977
Date: November 15, 1995
DIGEST
The Equal Employment Opportunity Commission may obligate its fiscal
year funds in advance for the full cost of the two-year training
program that the Office of Personnel Management (OPM) operates for the
Presidential Management Intern (PMI) program. Since under the PMI
program an agency can hire an intern noncompetitively only if the
intern completes the full two-year program, the OPM training may be
viewed as an entire, nonseverable undertaking. It is thus a bona fide
need of the fiscal year in which EEOC appoints an intern under the
program.
DECISION
The Director of the Financial Management Division of the U.S. Equal
Employment Opportunity Commission requested an advance decision
concerning whether the Commission should pay a bill from the Office of
Personnel Management under the Presidential Management Intern program.
Specifically, the Director questions whether the Commission may pay
the entire cost of an intern's two year training program at the
beginning of the program. For the reasons indicated below, we
conclude that the training of interns under the Presidential
Management Intern program is an entire, nonseverable undertaking and
that the Commission may pay the full costs of the training in advance.
Background
The Presidential Management Intern program (PMI) is a recruitment and
career development training program designed to attract individuals
with graduate or professional degrees into federal service. Under the
program, universities nominate students who then submit applications
to the Office of Personnel Management (OPM). The successful
candidates are referred to participating agencies that may then
appoint them as interns.
Upon acceptance of an agency offer, interns begin a continuous
two-year career development training program. During this period,
interns receive training from their employing agency as well as
centralized training from OPM. The training is designed to expose
interns to governmental issues and to assist them in applying
management tools within their specific work environment. Interns who
successfully finish the full two-year program are eligible to be
considered for permanent employment by their agencies. The two-year
training program must be completed by each individual intern.
Substitution of one individual for another may not be made during the
two-year period.
OPM carries out its coordination of the PMI program and its training
of interns under the authority of Executive Order 12364, 47 Fed. Reg.
22931 (May 24, 1982),[1] and the Training Act, 5 U.S.C. 4101-4118.
It finances the program through its revolving fund established by 5
U.S.C. 1304(e)(1). Prior to 1993, OPM charged each agency
participating in PMI on a yearly basis for each intern the agency
hired. In May 1993, however, OPM informed participating agencies that
in the future they would each be required to pay for the costs of both
years of the program in advance. Each agency was billed accordingly.
Discussion
The Director questions whether the Commission may, consistent with the
bona fide need rule, obligate its one year appropriation to cover
training and related services being provided by OPM over a two-year
period. The bona fide need rule provides that an agency may obligate
a fiscal year appropriation only to meet a legitimate, or bona fide,
need arising in the fiscal year for which the appropriation was made.
70 Comp. Gen. 296 (1991); 64 Comp. Gen. 359, 362 (1985). Consistent
with this rule, delivery of goods or performance of services in a
fiscal year subsequent to the year in which a contract is executed
does not necessarily preclude charging earlier fiscal year funds with
the full cost of the goods or services. 70 Comp. Gen. at 297; 65
Comp. Gen. 741, 743 (1986). The test is whether the goods or services
meet an immediate need of the agency, regardless of when the work is
actually performed. Id.
As a general rule, service contracts are viewed as chargeable to the
appropriation current at the time the services are rendered. 71 Comp.
Gen. 428, 429 (1992). However, a need may arise in one fiscal year
for services which, by their nature, cannot be separated for
performance in separate fiscal years. Id. The question whether to
charge the appropriation current on the date of contract award or to
charge the appropriation current on the date the services are rendered
turns on whether the services are "severable" or "nonseverable" (or
"entire"). Id.; see 65 Comp. Gen. at 743. A severable
service is one in which the government receives value as the service
is rendered. A nonseverable or entire service is one in which the
government receives value only when the entire service has been
performed.
Training tends to be nonseverable (or entire). Thus, when a training
obligation is incurred and training begins in one fiscal year, the
entire cost of the training is chargeable to that year even if the
training continues into the next fiscal year. See 70 Comp. Gen. 296,
297 (1991). We have further held that even if a training course does
not begin until early in the next fiscal year, an agency may charge
funds current at the time it enters into the training obligation so
long as it has a valid need for the training at that time and the
delay between the obligation and the start of the training is not
excessive. Id.
We have developed our view that training is entire rather than
severable in the context of single training courses. Thus, we view a
course that extends over several sessions as an entirety; the
government receives benefit for the course only when its employee has
completed it. This rationale, however, would not apply, for example,
to a training curricula consisting of several courses, leading to an
advance degree from an accredited college or university. Although
each of the individual courses may be viewed as entire, the curriculum
itself is severable; the government presumably receving a benefit as
its employee completes each course.
In the PMI program, the services being rendered by OPM, for which it
receives reimbursement from agencies, consists of centralized training
for interns as well as management of the program. The training
activities provided include an orientation seminar, cluster group
meetings, special briefings and workshops, and an end of program
seminar. Although this training may appear to be a series of separate
activities and therefore severable, on close analysis, we think it is
more properly viewed as a single, nonseverable undertaking.
In participating in the PMI program, agencies are seeking to recruit
trained master or doctoral degree graduates to their staffs. Under
the program agencies cannot offer permanent employment to an intern
unless and until the intern has completed the two year program.[2]
Thus, while in one sense the agency may benefit from the individual
training activities attended by the intern, in another, greater sense,
the agency receives no benefit from the individual OPM training
activities until the program is completed. It is only when the intern
has received all of the OPM training and is thus eligible to be hired
permanently that the agency receives a benefit. Therefore, we do not
object to viewing the services agencies receive from OPM under the PMI
program as entire, rather than severable, and the agencies should
charge the appropriation current at the time they engage an intern for
the full cost of OPM's services.
Accordingly, the Commission may obligate its fiscal year funds for the
full cost of OPM's two-year PMI training program at the time it
engages an intern. To the extent required by OPM, it may make full
payment in advance.
/s/Robert P. Murphy
for Comptroller General
of the United States
1. Executive Order 12364, May 24, 1982, reconstituted the PMI program
which was originally established by Executive Order 12008, 42 Fed.
Reg. 43373 (August 25, 1977).
2. An intern who does not complete the training may, independent of
the PMI program, apply for a vacancy at the agency and complete with
other applicants for the position.