TITLE:  Payment of Fees for Actuarial Accreditation Examination Review, B-286026, June 12, 2001
BNUMBER:  B-286026
DATE:  June 12, 2001
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Payment of Fees for Actuarial Accreditation Examination Review, B-286026,
June 12, 2001

Decision

Matter of: Payment of Fees for Actuarial Accreditation Examination Review
Courses and Examination

File: B-286026

Date: June 12, 2001

DIGEST

Under the Government Employees' Training Act, 5 U.S.C. sect. 4109(a), PBGC may
pay for its actuaries to attend accreditation examination review courses and
to provide on-the-job study time, but may not pay the cost of accreditation
examinations.

DECISION

By letter dated August 2, 2000, the General Counsel of the Pension Benefit
Guaranty Corporation (PBGC) asked whether PBGC may use appropriated funds to
pay, as training costs, fees for actuary accreditation examination review
courses, on-the-job study time, and examination fees. As explained below,
PBGC has authority, under 5 U.S.C. sect. 4109(a), to use appropriated funds for
review courses and on-the-job study time, but not for examination fees.

Background

PBGC is a wholly-owned government corporation, 5 U.S.C. sect. 105, that
administers the defined-benefit termination insurance program under Title IV
of the Employee Retirement Income Security Act of 1974, 29 U.S.C. sect.sect. 1301 -
1368. When a covered pension plan terminates with unfunded benefit
liabilities, PBGC takes over the plan and pays the unfunded portion of the
basic benefits with its insurance funds. 29 U.S.C. sect. 1322. PBGC employs a
number of actuaries to calculate pension benefits. To obtain employment as
an actuary at PBGC, a person must have an undergraduate degree or a
combination of relevant education and experience; an actuary need not have a
professional license or credential for employment. Letter from PBGC General
Counsel, August 2, 2000.

Two organizations, the Joint Board for the Enrollment of Actuaries and the
Society of Actuaries, offer examinations to accredit actuaries. In the
course of negotiating a collective bargaining agreement with its actuaries,
PBGC proposes to use its training funds to pay to send actuaries to
examination review courses, provide actuaries with on-the-job study time to
review the course materials, and pay for the accreditation examinations.
PBGC explained that because pension plan participants and sponsors often
challenge PBGC's benefit-calculation decisions (sometimes in litigation),
the review courses, even though designed to prepare examinants for the
exams, would enhance the ability of PBGC actuaries to carry out their
assignments. These courses, PBGC has determined, "focus on a number of
realistic actuarial problems that mirror the problems that PBGC's actuaries
will face as they advance in their careers." PBGC Letter, August 2, 2000.

PBGC expects, further, that having actuaries who sit for the exam and obtain
actuary credentials will enhance PBGC's credibility when dealing with
actuaries hired by participants and sponsors who challenge PBGC's decisions.
PBGC also has determined that offering actuarial training and examinations
at government expense will assist in recruiting and retaining actuaries.
Recruitment and retention problems have been exacerbated in recent times by
the high salaries that actuaries command in the private sector.

Analysis

At issue here is whether the cost of the examination review courses,
on-the-job study time, and accreditation exams are properly viewed as
personal qualification expenses or as training expenses. As early as 1890,
the Supreme Court held that expenses necessary to qualify a government
employee to do his or her job are personal expenses, and as such, are not
chargeable to appropriated funds. "[I]t is the duty of persons receiving
appointments from the government . . . to qualify themselves for the
office." United States v. Duzee, 140 U.S. 169, 171 (1890). The accounting
officers of the government have adhered to this rule. [1] As stated in an
1895 Comptroller of the Treasury decision, "That which is required of a
person to become invested with an office must be done at his own expense
unless specific provision is made by law for payment by the Government." 2
Comp. Dec. 262, 263 (1895). Our decisions have applied this rule on numerous
occasions. In 61 Comp. Gen. 357 (1982), for example, we held that an agency
could not pay the costs of bar review courses or bar membership fees for its
employee attorneys. We viewed these expenses as personal expenses related to
qualifying for office. See also 46 Comp. Gen. 695 (1976) (medical licensing
fees for Public Health Service physicians); 22 Comp. Gen. 460 (1942)
(expenses for Federal Trade Commission attorney's admittance to bar of a
United States Circuit Court of Appeals); B-260771, October 11, 1995 (cost of
obtaining Certified Government Manager designation).

In at least two instances, however, we either expressly or tacitly viewed
accreditation review courses as training costs, rather than as personal
qualification expenses, authorized by the Government Employees' Training Act
(Act). 5 U.S.C. sect.sect. 4101 - 4118. In B-187525, October 15, 1976, we held that
the Interstate Commerce Commission (ICC) could pay, as training costs, the
costs of a California bar review course for a staff attorney already
admitted to the bar of another state. The ICC had assigned the staff
attorney to work in California. The rules of the United States District
Court in California required that an attorney, although already admitted to
the bar of another state, obtain admission to the California bar. ICC had
agreed to pay for its attorney to take a California bar review course,
determining that the review course, by preparing the attorney for the
California bar exam, would enable the agency to perform its duties in
California. We concluded that the bar review course constituted training,
not a qualification expense for the ICC attorney, on the grounds that the
ICC found it necessary to the agency's objectives to assign this attorney to
California, and the attorney had, in fact, already qualified himself for
employment when he gained admission to his first bar. Accordingly, we did
not view the expense of the California bar review course as a personal
qualification expense, but rather as an authorized training expense under
the Act.

In another decision, 55 Comp. Gen. 759 (1976), the Department of Interior's
Bureau of Reclamation had asked whether it could pay the examination fee and
travel costs of an employee taking an examination to qualify as an
accredited rural appraiser. [2] The facts of the decision indicate that the
Bureau had paid the employee's tuition for a review course to prepare for
the accreditation exam. Although the Bureau had not raised the use of
appropriated funds for the review course as an issue, we noted, without
objection, the Bureau's determination that the course was payable as
training under the Act.

These two 1976 decisions share one thing in common - - the explicit or tacit
acceptance of accreditation review courses as authorized training. As the
Comptroller of the Treasury recognized, appropriated funds are available to
pay for what might otherwise constitute a personal expense of qualifying for
a federal position to the extent Congress has authorized the use of
appropriated funds for such purpose. [3] 2 Comp. Dec. at 263. By focusing
solely on the benefit of the review courses to the person seeking to qualify
for a position or to earn an accreditation, our decisions have not
consistently given due regard to agencies' authority to cover such costs in
appropriate circumstances as training expenses. See, e.g., 61 Comp. Gen. at
360.

In 1958 Congress enacted the Government Employees' Training Act to authorize
federal agencies, including government corporations such as PBGC, to use
appropriated funds to train government employees. 5 U.S.C. sect. 4101(1)(C). The
Act authorizes the head of each agency to establish training programs,
consistent with OPM's implementing guidance. The purpose of each agency's
training program is to assist an agency's mission and performance goals by
improving employee performance. 5 U.S.C. sect. 4103. Section 4101(4) defines
training to include "placing or enrolling the employee in, a planned,
prepared, and coordinated program, [or] course . . . in scientific,
professional, technical . . . or other fields which will improve individual
and organizational performance and assist in achieving the agency's mission
and performance goals." [4]

Our decisions have interpreted this Act to be "sufficiently broad and
flexible to enable an agency to provide whatever training is necessary to
develop the skills, knowledge, and abilities that will best qualify
employees for the performance of official duties." B-182398, October 24,
1974. See also B-258442, B-258443, April 19, 1995. While the Act and
regulations grant a considerable degree of discretion to agency heads to
determine the types of training to provide, the head of an agency "is not
authorized to expand the statutory definition or pay for items not
contemplated by the definition." B-187525, October 15, 1974. [5] Section
4101 requires that a program, to constitute training, be designed to
increase the knowledge and proficiency of the persons attending them.
B-182398, October 24, 1974. In this regard, OPM has issued the following
guidance:

"An agency may pay for a refresher course, such as refresher training in
professional engineering for an engineer or in law for an attorney. Although
the training may prepare the employee for a professional examination, the
training itself is justified because it will improve the employee's
performance of his or her official duties."

OPM Human Resources Flexibilities, http://www.opm.gov/hrd/lead/flex.htm.

Given OPM's role under the Act, we believe its guidance merits deference if
otherwise reasonable. Chevron USA, Inc. v. NRDC, 467 U.S. 837, 844 (1984).
Here, in fact, we agree with OPM's guidance. The Government Employees'
Training Act provides an agency head with the discretionary authority to pay
the costs of a review course so long as the agency head determines that the
review course will enhance knowledge, skills, and abilities that the agency
deems important to an employee's performance of official duties. While a
consideration, the fact that the course may also prepare the employee to sit
for a professional accreditation exam is not controlling. To the extent that
our earlier decisions, such as 61 Comp. Gen. 357 (1982), failed to honor an
agency's determination that an examination review course would constitute
appropriate training under the Act and held that the costs of review courses
were expenses of personal qualification not payable from appropriated funds,
we overrule such decisions.

Here, PBGC has determined that the actuary review courses will enhance the
ability of PBGC actuaries to carry out their assignments, even if the
actuaries were later to sit for the exam. In addition, in this case, as in
our 1976 ICC decision, B-187525 (discussed above), PBGC's actuaries, like
the ICC staff attorney, have already qualified themselves for their
positions with PBGC. In these circumstances it would be factually, and
logically, inaccurate to categorize the costs of the review courses as
personal qualification expenses. Even apart from this factual distinction,
PBGC has the discretion under the Training Act to determine that the review
courses constitute appropriate training for its actuaries. As the
Comptroller of the Treasury recognized in 1895, where other authority exists
for payments of arguably personal qualification expenses, determinations
made pursuant to that authority should be respected. Accordingly, PBGC may
use appropriated funds to pay for the cost of the review courses as
training.

Given that the review courses are appropriate training under the Act, we
would not object to PBGC providing actuaries on-the-job study time to work
through the course materials and problems. As PBGC points out, the study
time will enhance their actuaries' "retention of . . . information, [and] .
. . continue their professional development." The Act authorizes agencies to
"pay all of the pay of an employee of the agency selected and assigned for
training under this chapter, for the period of training." 5 U.S.C. sect.
4109(a)(1). [6]

We find no authority, however, that would permit PBGC to pay the cost of the
accreditation examination. We have long held that an agency may not pay the
costs of its employees taking licensing exams, B-187525, October 15, 1976,
or professional accreditation exams, 55 Comp. Gen. 759 (1976). A licensing
or accreditation examination does not fall within the Act's definition of
training, that is, it is not a program or course designed to develop or
enhance knowledge, skills, and abilities. Rather, an accreditation exam is
designed to test knowledge, skills, and abilities to ensure that the
examinant satisfies professional standards as a prerequisite to
accreditation. In 55 Comp. Gen. 759 (1976), discussed above, the Bureau of
Reclamation asked whether it could pay the expenses of an employee taking an
examination to qualify as an accredited rural appraiser. The Bureau cited
reasons very similar to those argued by PBGC in its request letter,
including, among other things, recognition of Bureau appraisers as experts
by the courts. We held that the Bureau was not authorized to use
appropriated funds to pay for the accreditation examination where the exam
merely tested the skills the employee had acquired in a previous training
course. [7] The expense of professional accreditation is personal to the
employee and should be paid with personal funds; accreditation, in fact,
belongs to the employee personally, not the agency, and remains so for life,
irrespective of whether the employee remains with the federal government and
irrespective of whether the government benefits from the accreditation. See
47 Comp. Gen. 116 (1967).

OPM, in this regard, advises agencies that they may not use appropriated
funds to pay for professional examinations, "such as bar exams or CPA
exams." OPM Human Resource Flexibilities (above). Again, we believe OPM's
guidance in this matter is entitled to deference. Although one can differ on
the issue presented, OPM's position is consistent with the Training Act and
our decisions. At the same time, we recognize that using appropriated funds
to pay for certain credentials or professional licenses, including the
examination fee for that credential or license, would likely enhance an
agency's ability to recruit and retain qualified employees. Unfortunately,
we have identified no authority that would permit agencies to use
appropriations for that purpose. [8] To the extent PBGC or another agency
finds it important for the agency to pay for selected exams, we would
encourage such agency to seek the necessary legislative authority from the
Congress. See generally 2 Comp. Dec. at 263. In our view, any such authority
should be structured to ensure that the agency may use appropriated funds
only for payment of selected credentials and licenses that the agency deems
to be in the interest of the federal government and not otherwise required
as a condition of employment.

Conclusion

Under the Government Employees' Training Act, PBGC may pay for its actuaries
to attend review courses for the accreditation examination and to provide
on-the-job study time to review course material, but may not pay for the
cost of the accreditation examination.

Anthony H. Gamboa
General Counsel

Notes

1. The Federal Labor Relations Authority, for example, has consistently
taken the position that the payment of personal expenses is not authorized
under a collective bargaining agreement, since the payment of personal
expenses is not properly chargeable to appropriated funds. See, e.g.,
American Federation of Government Employees Counsel 214, AFL-CIO and Air
Force Logistics Command, 30 FLRA No. 112, cited in B-249061, May 17, 1993.

2. The Bureau determined that having their appraisers designated as
accredited rural appraisers would further the agency's goals, specifically
in condemnation cases. The Bureau took the position that "if Government
appraisers testifying for the government are to enjoy equal credibility
[with appraisers hired by private landowners], they too must be
professionally accredited." 55 Comp. Gen. at 759.

3. See, e.g., 36 Comp. Gen. 465 (1956). Notwithstanding the personal nature
of the expense, Congress has authorized the use of appropriated funds to
reimburse an employee whose job includes serving as a notary public the
expense of the commission. 5 U.S.C. sect. 5945. The expense is payable with
appropriated funds even though the employee uses the commission for private
as well as government business. 36 Comp. Gen. at 466.

4. Section 4118 of the Act authorizes OPM to promulgate regulations
containing the principles, standards, and related program requirements. 5
U.S.C. sect. 4118. Implementing regulations issued by the Office of Personnel
Management (OPM) cite to training that both develops the potential of
employees to meet future agency needs and "improves an employee's current
job performance." 5 C.F.R. sect. 410.101(d)(2).

5. In 68 Comp. Gen. 721 (1989), for example, we held that the FBI could not
use its appropriations to pay, as training, costs incurred by an FBI Academy
firearms instructor related to tryouts for the United States Olympic
Shooting Team. The tryouts, we concluded, were designed not "to develop
skills, knowledge and abilities . . . through a planned, prepared and
coordinated routine of instruction," but to select persons to compete in the
Olympic Games. Id. at 722. The tryouts were, therefore, not training under
the Act.

6. Compare with B-156287, February 5, 1975. We held that an agency could not
pay employees' salaries during the time they were off of work to take bar
review courses and study for the bar exam where the agency had not
authorized the courses as training. In that case, the agency's scheduled
termination five months after the date of the bar exam made a determination
that the training would assist in meeting the agency's mission and
performance goals conceptually difficult.

7. Where a review course, or other training, concludes with an examination
assessing the level of knowledge a student learned in the course, an agency
need not demand that the trainer itemize the cost of the exam. Universities,
for example, typically do not impose a fee for end-of-semester exams
separate from the fee for the course. Costs associated with the examination
would normally be payable as part of the course fee. B-187525, October 15,
1976. The costs of the accreditation examination for actuaries are not
included, however, in the fee for the review courses.

8. The Training Act includes a restriction on the use of training funds for
an employee to obtain an academic degree, whether or not the degree is a job
qualification. 5 U.S.C. sect. 4107. This statutory provision includes an
exception, however, authorizing degree training where there is a need for
such training "to assist in the recruitment or retention of employees" in
shortage occupations. 5 U.S.C. sect. 4107(b), 5 C.F.R sect. 410.308. This
prohibition is conceptually consistent with the longstanding rule that
personal qualification expenses are payable with appropriated funds only
where Congress has explicitly so authorized. See also 41 U.S.C. sect. 433(h).