Defense Infrastructure: Funding Risks in Services' 1999 Central Training
Programs (Letter Report, 02/24/99, GAO/NSIAD-99-56).

Pursuant to a congressional request, GAO examined the significant
differences in two Department of Defense training programs, focusing on
the: (1) training categories and military services with the most
significant funding changes from the 1998 to the 1999 Future Years
Defense Program (FYDP); (2) bases for the changes; and (3) potential
impact of the changes on the services' future training budgets.

GAO noted that: (1) the total funding for central training was projected
to be $8.4 billion less in the 1999 FYDP than the 1998 FYDP; (2) the
categories with the most significant changes in each of the services
were the Army's training of new personnel; and the Army's, the Navy's,
and the Air Force's professional and skill training, aviation and flight
training; (3) the majority of the $8.4 billion decrease was due to
changes in the Army's central training program; (4) $4 billion of the
decrease in Army funding was to correct for an error in the 1998 FYDP
that overstated the cost of enlistees' student salaries; (5) another
$1.1 billion of the decrease related to the realignment of Army aviation
procurement out of central training; (6) the remaining $3.3 billion
primarily came from projected savings from: (a) the Army, the Navy and
the Air Force reducing the number of personnel projected to be trained;
(b) all of the military services contracting some installation support
functions with lower cost providers; and (c) the Army and the Navy
implementing training initiatives that utilize technology and other cost
savings measures; (7) additionally, some of the $3.3 billion came from
cuts by the Army and the Navy in funding levels for installation support
and underfunding by the Army of some of its training programs; (8) the
Army, the Navy and the Air Force may not be able to accomplish their
central training programs at the funding levels in the 1999 FYDP; (9)
the services are experiencing lower-than-expected retention rates for
enlisted personnel, which will require increased accessions and
additional funds for new personnel and skill training; (10) the services
projected savings in installation support and funded real property
maintenance at minimum maintenance levels; (11) if the programmed
savings do not materialize, the services will need additional funds to
maintain the current levels of maintenance or add to the existing
backlog of real property maintenance; (12) the Army did not fully fund
training initiatives, but it plans to fully fund these initiatives in
the future; (13) the Army already had to request supplemental funding
for fiscal year 1999 for the Army reserve professional development
training programs because it found that programmed reductions adversely
affected the programs; (14) the Army's actual aviation training
workloads are higher than those used to develop FYDP 1999; and (15) the
Army and the Navy programmed savings from training initiatives that use
technology to reduce training.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-99-56
     TITLE:  Defense Infrastructure: Funding Risks in Services' 1999 
             Central Training Programs
      DATE:  02/24/99
   SUBJECT:  Future budget projections
             Military cost control
             Comparative analysis
             Military training
             Military budgets
             Education or training costs
IDENTIFIER:  Navy Training Technology Initiative
             DOD Future Years Defense Program
             Army Distance Learning Program
             Total Army School System
             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed product.                         **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************


Cover
================================================================ COVER


Report to the Chairman, Committee on the Budget, House of
Representatives

February 1999

DEFENSE INFRASTRUCTURE - FUNDING
RISKS IN SERVICES' 1999 CENTRAL
TRAINING PROGRAMS

GAO/NSIAD-99-56

Defense Infrastructure

(701145)


Abbreviations
=============================================================== ABBREV

  DOD -
  FYDP -
  QDR -

Letter
=============================================================== LETTER


B-281814

February 24, 1999

The Honorable John R.  Kasich
Chairman, Committee on the Budget
House of Representatives

Dear Mr.  Chairman: 

In a June 1998 report on the Department of Defense's (DOD) formal
training and education programs, referred to as central training, we
stated that our preliminary analysis of DOD's fiscal year 1999 Future
Years Defense Program (FYDP) identified significant reductions from
the fiscal year 1998 FYDP in the funds programmed for central
training.\1 Because central training is the third largest of eight
DOD infrastructure categories, and DOD is looking, in part, to
infrastructure savings and efficiencies to buy modern weapons, you
requested that we examine the significant differences in the two
central training programs.\2 Specifically, you requested that we
identify the (1) training categories and military services with the
most significant funding changes from the 1998 to the 1999 FYDP, (2)
bases for the changes, and (3) potential impact of the changes on the
services' future training budgets.  We included the entire fiscal
year 1999-2003 period in our analysis. 

Central training programs include individual training activities that
provide training for active military personnel, reserve component
personnel, and DOD civilians.  Central training is different from
unit mission training.  Unit mission training is undertaken by
operational units to maintain the units' required readiness in their
primary combat, combat support, or combat service support missions. 
Central training is the training of individual military members in
formal courses. 


--------------------
\1 Defense Infrastructure:  Central Training Funding Projected to
Remain Stable During 1997-2003 (GAO/NSIAD-98-168, June 30, 1998). 

\2 DOD defines infrastructure as activities that provide support
services to mission programs and primarily operate from fixed
locations.  The other infrastructure categories are installation
support; acquisition infrastructure; central logistics; central
medical; central personnel; central command, control, and
communications; and force management. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Our analysis shows that total funding for central training was
projected to be $8.4 billion less in the 1999 FYDP than the 1998
FYDP.\3 Army funding changes account for $7.2 billion of this
reduction.  The categories with the most significant changes in each
of the services were the Army's training of new personnel; the
Army's, the Navy's, and the Air Force's professional and skill
training, aviation and flight training, and installation support; and
the Navy's command managed training.  We describe these and all of
the other central training categories in appendix I. 

The majority of the $8.4-billion decrease was due to changes in the
Army's central training program.  According to Army officials, $4
billion of the decrease in Army funding was to correct for an error
in the 1998 FYDP that overstated the cost of enlistees' student
salaries.  Another $1.1 billion of the decrease related to the
realignment of Army aviation procurement out of central training. 
The remaining $3.3 billion primarily came from projected savings from
(1) the Army, the Navy, and the Air Force reducing the number of
personnel projected to be trained; (2) all of the military services
contracting some installation support functions with lower cost
providers; and (3) the Army and the Navy implementing training
initiatives that utilize technology and other cost savings measures. 
Additionally, some of the $3.3 billion came from cuts by the Army and
the Navy in funding levels for installation support and underfunding
by the Army of some of its training programs. 

The Army, the Navy, and the Air Force may not be able to accomplish
their central training programs at the funding levels in the 1999
FYDP.  Service training officials told us that some training
categories are underfunded and may require higher funding levels in
future FYDPs for the following reasons.  First, the services are
experiencing lower-than-expected retention rates for enlisted
personnel, which most likely will require increased accessions and
additional funds for new personnel and skill training.  Second, the
services projected savings in installation support and funded real
property maintenance at minimum maintenance levels.  If the
programmed savings do not materialize, the services will need
additional funds to maintain the current low levels of maintenance or
add to the existing backlog of real property maintenance.  Third, the
Army did not fully fund training initiatives, such as the Army's
human relations training in new recruit training, but it plans to
fully fund these initiatives in the future.  Fourth, the Army already
had to request supplemental funding for fiscal year 1999 for the Army
Reserve professional development training programs because it found
that programmed reductions adversely affected the programs.  The Army
plans to increase funding for this program in the future.  Fifth, the
Army's actual aviation training workloads are higher than those used
to develop the 1999 FYDP.  These additional training workloads may
require additional training funds.  Finally, the Army and the Navy
programmed savings from training initiatives that use technology to
reduce training costs.  Since these initiatives have not been fully
implemented, there is risk that the savings may not materialize to
the level programmed.  If the services are not able to accomplish
their central training programs at the funding levels in the 1999
FYDP, DOD may have to provide additional funds for this
infrastructure category, which could contribute to a transfer of
procurement funds that would have been used to pay for weapons
modernization. 


--------------------
\3 Unless otherwise stated, the dollar values shown in this report
are in constant 1999 dollars and on a fiscal year basis. 


   BACKGROUND
------------------------------------------------------------ Letter :2

DOD stated in its May 1997 Report of the Quadrennial Defense Review
(QDR) that a steady increase in investment in modern equipment to an
annual level of $60 billion is required to fulfill the defense
strategy.  To achieve modernization goals, DOD plans to reduce the
cost of its infrastructure, which includes central training.  A focus
of the QDR was to build a solid financial foundation for a
modernization program that could reliably support future war-fighting
capabilities.  The key to that foundation was to stop the chronic
diversion of procurement funds to pay for underestimated operating
costs, unrealized savings, and new program demands by properly
projecting and funding DOD's operating and support activities.  To
address the problem of the migration of these procurement funds to
other activities, the QDR redirected resources to modernization
through program adjustments that streamline infrastructure as well as
reduce force structure and revise modernization plans.  For example,
the QDR proposed reducing active military personnel by 61,700 and
reserve component personnel by 54,000.  These QDR actions and
initiatives were reflected in the fiscal year 1999 FYDP and caused
some of the net decrease in central training funding. 

The services consider a number of factors in formulating their
central training requirements.  Factors include projected authorized
end strength, losses in each occupational specialty/category by grade
and years in grade, accessions, promotions, and reenlistments. 
Therefore, a change in end strength levels may not lead to a
proportional change in training requirements.  For example,
lower-than-expected retention rates may necessitate increased
training requirements even though personnel levels are lower.  The
services compile "training workload" to determine resources (people,
funds, material, and facilities) required to conduct training. 
Training workload measures the output of the services' central
training programs. 


   ARMY FUNDING CHANGES ACCOUNT
   FOR LARGEST SHARE OF PROJECTED
   DECREASE
------------------------------------------------------------ Letter :3

DOD's 1998 FYDP projected a 1-percent increase in funding for central
training between 1999 and 2003, while the 1999 FYDP projected a
2.5-percent decrease in funding for the same period.  The total
decrease in funding between the two FYDPs was $8.4 billion.  Figure 1
compares the annual funding levels for the two FYDPs. 

   Figure 1:  Comparison of the
   1998 and 1999 FYDPs' Funding
   for Central Training In
   billions of fiscal year 1999
   dollars

   (See figure in printed
   edition.)

Source:  Our analysis of DOD FYDP data. 

Army funding changes account for $7.2 billion (86 percent) of this
projected decline.  The Air Force projected slightly lower funding
levels in the 1999 FYDP.  Although Navy funding in the 1999 FYDP
shows an increase for 1999 and 2000, it too fell below projected 1998
FYDP levels in 2001 through 2003.  Annual funding for the Marine
Corps, which accounted for less than 9 percent of central training
funding in 1999, was projected to decrease by less than 3 percent
annually in the 1999 FYDP from the levels projected in the 1998 FYDP. 
Defense-wide training, which fell each year of the 1999 FYDP,
accounted for less than 6 percent of central training funding in
1999.  Figure 2 shows the funding changes by component between the
1998 and 1999 FYDPs. 

   Figure 2:  Changes in Annual
   Central Training Funding by
   Component Between the 1998 and
   1999 FYDPs (in billions of
   fiscal year 1999 dollars)

   (See figure in printed
   edition.)

Source:  Our analysis of DOD FYDP data. 


   ARMY BUDGET IS SMALLER
   PRIMARILY DUE TO ERRORS IN 1998
   FYDP
------------------------------------------------------------ Letter :4

The 1998 FYDP projected that Army central training funding would
remain relatively stable over the 1999-2003 period, while the 1999
FYDP projected a decline of $7.2 billion over the same period.  The
most significant reductions in the Army's budget were in four
categories--training of new personnel, professional and skill
training, aviation and flight training, and installation support for
training.  Most of the reductions were made to correct errors in the
1998 FYDP.  Other contributing factors were personnel reductions as a
result of the QDR, programmed reductions for planned efficiencies,
shifts in programs from central training to other parts of the
budget, and reduced funding for installation support and professional
development training.  Table 1 lists the amounts programmed for the
four categories that changed the most between the two FYDPs. 



                                     Table 1
                     
                     Comparison of Funding for Selected Army
                     Training Categories in the 1998 and 1999
                                      FYDPs

                         (In millions of fiscal year 1999
                                     dollars)

                                        Fiscal year
                      ------------------------------------------------
Training    FYDP          1999      2000      2001      2002      2003     Total
category    --------  --------  --------  --------  --------  --------  ========
Training    1998        $1,390    $1,410    $1,448    $1,480    $1,465    $7,194
 of new
 personnel
            1999           654       620       605       618       614     3,112
      Change        -736      -790      -843      -862      -851    -4,081
Profession  1998         2,718     2,709     2,706     2,742     2,756    13,631
 al and
 skill
 training
            1999         2,572     2,476     2,461     2,457     2,458    12,425
      Change        -146      -233      -245      -285      -297    -1,206
Aviation    1998           561       594       622       640       597     3,015
 and
 flight
 training
            1999           423       401       405       412       414     2,056
      Change        -138      -193      -218      -228      -182      -959
Installati  1998         1,493     1,424     1,399     1,385     1,419     7,120
 on
 support
 for
 training
            1999         1,422     1,407     1,289     1,323     1,244     6,684
      Change         -71       -17      -110       -62      -175      -435
Total Army  1998        $7,305    $7,243    $7,304    $7,342    $7,345   $36,540
 central
 training\
 a
            1999        $6,080    $5,909    $5,776    $5,805    $5,746   $29,316
      Change     $-1,225   $-1,335   $-1,528   $-1,537   $-1,599   $-7,223
--------------------------------------------------------------------------------
Note:  Category totals may not add due to rounding. 

\a Includes funding for all nine training categories. 

Source:  Our analysis of 1998 and 1999 FYDPs. 


      TRAINING OF NEW PERSONNEL
---------------------------------------------------------- Letter :4.1

Funding for the training of new personnel in the 1999 FYDP was
projected to be about $4.1 billion less in total than projected in
the 1998 FYDP.  Most of the decrease ($4 billion) was to correct an
error in the Army's allocation of military salaries.  During the
development of the 1999 program, Army personnel found that they had
been overestimating the salaries of enlisted trainees that were
allocated to new personnel training and underestimating salary costs
in other programs.  An Army official stated that the error had no
impact on the Army's budget requests for military personnel salaries
and benefits.  Moreover, there were funding reductions due to
programmed personnel cuts from the QDR.  According to Army training
officials, instructors and training support staff will be reduced as
a result of consolidating training functions and increased contractor
support. 

According to Army training officials, the Army did not fully fund
several training initiatives in the 1999 FYDP such as improvements in
the Army's human relations training.  Because these are high
priorities for the Army, the Army officials expect that these
initiatives will be fully funded in the 2000 FYDP, probably at the
expense of other major commands. 

Further, Army training officials stated that the funding levels in
the 1999 FYDP do not fully support a projected increased workload. 
The Army projected that workload for the training of new personnel
would increase because of increased attrition and a 1-week extension
of recruit and One-Station Unit Training.  As a result, the Army's
Training and Doctrine Command has already requested additional funds
for the 1999 budget year and the Army will likely have to increase
the funding levels for this training category in the 2000 FYDP. 


      PROFESSIONAL AND SKILL
      TRAINING
---------------------------------------------------------- Letter :4.2

The 1999 FYDP programmed $1.2 billion less in total for this category
than the 1998 FYDP.  Several factors contributed to the lower
projected funding.  Programmed personnel reductions (a result of the
QDR) contributed to a decrease in Army Reserve funding.  In addition,
as part of the implementation of the Total Army School System
program,\4 the Army Reserve reviewed its professional development
training programs and cut its budget for students, instructors, and
overhead.  However, according to Army training officials, the Army
Reserve underestimated its training requirements, and as a result,
requested and received a $48-million increase in the fiscal year 1999
appropriations that offset the shortfall programmed in the 1999 FYDP. 
Army training officials stated that funding for Reserve professional
and skill training in the 2000 FYDP will be increased. 

Changes in and programmed savings from the Army's Distance Learning
Program also contributed to lower programmed funding for professional
and skill training.\5 In 1998, funding for the management of this
program was moved from the central training infrastructure to another
infrastructure category.  In addition, funding was reduced beginning
in 1999 to reflect both training load decreases and projected savings
through the Army's ongoing investment in distance learning
technology.  These savings are to accrue as classroom training time
is shortened and student travel and per diem costs are reduced.  Army
training officials informed us that the Army continues to fully
implement its Distance Learning Program, so the service can achieve
the savings planned from the program, but substantial savings are not
projected to begin until 2004 because of the lengthy implementation
process. 

The decline in Army funding would have appeared even greater if the
Army had not received additional funding for its professional and
skill training programs from Defense-wide central training
activities.  The Defense Reform Initiative\6 directed the transfer of
the National Defense University operation and maintenance funding
from the Defense-wide accounts to the Army.  This increased Army
funding by $111 million in 1999. 


--------------------
\4 The Army consolidated its training structure for both its active
and reserve components into a Total Army School System. 

\5 Distance learning is structured training that can take place
almost anywhere and anytime without the physical presence of an
instructor. 

\6 Announced in November 1997, the Defense Reform Initiative requires
DOD to adopt those business practices that American industry has
successfully used to become leaner and more flexible in order to
remain competitive. 


      AVIATION AND FLIGHT TRAINING
---------------------------------------------------------- Letter :4.3

Total funding for aviation and flight training was projected to be
about $1 billion lower in the 1999 FYDP than in the 1998 FYDP.  This
occurred primarily because planned procurement funding in the Army's
undergraduate pilot training program was transferred to programs that
are not included in central training.  Army training and budget
officials stated that the funding will be allocated to line units
based on Army priorities, although training programs will still
receive equipment that is excess to the line units' needs. 

According to Army training officials, the Army is experiencing high
attrition rates for Apache helicopter pilots because of an increased
pace of operations and more requirements for Apache battalions
outside of the United States than inside the United States.  As a
result, the aviation and flight training workload will be even higher
than projected in the 1999 budget to meet the increased demand for
training new pilots.  Increased workload may result in increased
funding requirements for this training category in the 2000 FYDP.  In
an effort to increase pilot retention and reduce flight training
requirements, the Army recently received approval for Apache pilot
retention bonuses. 


      INSTALLATION SUPPORT FOR
      TRAINING
---------------------------------------------------------- Letter :4.4

Funding for installation support for training was projected to be
about $435 million less in total in the 1999 FYDP than in the 1998
FYDP.  The projected reduction is primarily due to planned
efficiencies from DOD's reinvention initiatives.  The efficiencies
are projected to result from such efforts as the outsourcing and
privatization of installation support functions, lower lease costs,
the elimination of less energy-efficient structures, and the upgrade
of existing utilities.  The Army has assumed some risk by making
these projections because it does not know whether the savings can be
achieved. 

The Army is also assuming risk by delaying some real property
maintenance to free up additional funds for modernization and
readiness.  Army training officials stated that the Army knowingly
underfunded some training installation support programs, adding to
the existing maintenance backlog.  For example, the Army reduced
funding for its barracks conversion program.  The training officials
noted that several commanders have stated that the real property
maintenance shortfall is adversely affecting morale. 


   CHANGES IN NAVY FUNDING
   PRIMARILY DUE TO SURGE IN NEW
   RECRUITS, PERSONNEL REDUCTIONS,
   PLANNED SAVINGS FROM TRAINING
   INITIATIVES, DEFERRED
   MAINTENANCE, AND HIGHER
   FLYING-HOUR COSTS
------------------------------------------------------------ Letter :5

Although both the 1998 and 1999 FYDPs projected a net decrease in
Navy central training funding, there were some substantial changes
within several training categories in the 1999 FYDP.  The most
significant changes between the two FYDPs were in four
categories--professional and skill training, aviation and flight
training, command managed training, and installation support for
training.  These changes were primarily due to personnel reductions,
planned savings from training initiatives, deferred real property
maintenance, planned savings from changes in the procurement profile
for trainer aircraft, higher flying-hour costs, and planned savings
from competitive sourcing and regionalization initiatives.  Table 2
lists the amounts programmed for the four categories that changed the
most between the two FYDPs.




                                     Table 2
                     
                     Comparison of Funding for Selected Navy
                     Training Categories in the 1998 and 1999
                                      FYDPs

                         (In millions of fiscal year 1999
                                     dollars)

                                        Fiscal year
                      ------------------------------------------------
Training    FYDP          1999      2000      2001      2002      2003     Total
category    --------  --------  --------  --------  --------  --------  ========
Profession  1998        $1,743    $1,771    $1,750    $1,727    $1,705    $8,696
 al and
 skill
 training
            1999         1,779     1,783     1,686     1,653     1,659     8,561
      Change          36        12       -63       -74       -46      -135
Aviation    1998           985     1,053     1,061     1,042       964     5,105
 and
 flight
 training
            1999         1,041     1,089     1,011       982       854     4,977
      Change          56        35       -50       -60      -109      -128
Command     1998         1,265     1,239     1,256     1,251     1,248     6,258
 managed
 training
            1999         1,313     1,305     1,308     1,301     1,298     6,525
      Change          48        66        52        50        51       267
Installati  1998           693       751       684       697       675     3,499
 on
 support
 for
 training
            1999           680       683       692       672       619     3,345
      Change         -13       -68         8       -25       -56      -154
Total Navy  1998        $5,413    $5,543    $5,475    $5,436    $5,309   $27,175
 central
 training
 funding\a
            1999        $5,567    $5,617    $5,443    $5,352    $5,173   $27,152
            Change        $155       $74      $-32      $-84     $-135      $-23
--------------------------------------------------------------------------------
Note:  Category totals may not add due to rounding. 

\a Includes funding for all nine training categories. 

Source:  Our analysis of 1998 and 1999 FYDPs. 


      PROFESSIONAL AND SKILL
      TRAINING
---------------------------------------------------------- Letter :5.1

Projected total funding for professional and skill training shows a
decrease of $135 million from the 1998 FYDP to the 1999 FYDP, with
increases in the earlier years and decreases beginning in 2001. 
Beginning in 1999, the Navy has programmed savings due to
QDR-directed personnel reductions and various initiatives.  One such
initiative, the Training Technology Initiative, plans to upgrade
classrooms and produce interactive software to enhance instruction
and reduce the overall cost and time of training.  Until the
initiatives are implemented, it is difficult to determine if and how
much savings will accrue from the initiatives.  The Navy projected
reduced workload levels between 2001 and 2003 for professional and
skill training as a result of force structure reductions and military
personnel reductions identified in the QDR.  The Navy is also
reducing the numbers of professors and academic support personnel at
the Naval Postgraduate School in conjunction with the reduced student
levels. 

In September 1998, the Chief of Naval Operations testified before the
Senate Committee on Armed Services that the Navy is experiencing
shortfalls in its recruiting and retention rates.  If enlisted
retention rates continue to fall below the Navy's goals, additional
recruits will be required, resulting in higher than projected surges
in training.  As in 1997 and 1998, the Navy may look to real property
maintenance as a source of funds to pay for this additional training
workload. 


      AVIATION AND FLIGHT TRAINING
---------------------------------------------------------- Letter :5.2

Total funding levels for aviation and flight training were projected
to be lower by $128 million in the 1999 FYDP than in the 1998 FYDP
primarily due to changes in the procurement profile of the T-45
trainer aircraft.  According to the Navy, Congress added three T-45
aircraft to the 1998 procurement plan and changed the acquisition
program to a multiyear procurement contract, which added three
aircraft per year through 2002.  The number of aircraft planned for
procurement in fiscal year 2003 dropped from six to four.  Planned
procurement funding in 2001 and 2002 is projected to be lower in the
1999 FYDP, even though the number of aircraft increased, because of
projected savings from the multiyear procurement contract.  Funding
is projected to drop further in 2003 because of the procurement
contract savings and the reduction in the number of aircraft to be
purchased that year.  The grounding of the T-2 trainer aircraft from
April to November 1997 because of flight control problems caused a
decrease in workload and associated funding for 1997 and 1998, but
workload and funding were projected to increase for 1999 to make up
some of the shortfall in pilot production in the previous 2 years. 


      COMMAND MANAGED TRAINING
---------------------------------------------------------- Letter :5.3

Total funding for command managed training was projected to be $267
million higher in the 1999 FYDP than in the 1998 FYDP.  The higher
funding projections were due to the increasing cost of flying
aircraft.  Actual flying-hour costs experienced in 1997 were higher
than those projected in the 1998 FYDP.  The funding levels were
adjusted upwards in the 1999 FYDP to reflect these higher estimates. 


      INSTALLATION SUPPORT FOR
      TRAINING
---------------------------------------------------------- Letter :5.4

Total funding levels for installation support for training were
projected to be lower by $154 million in the 1999 FYDP than in the
1998 FYDP primarily due to projected savings from Navy-wide
competition sourcing and regionalization initiatives, the shifting of
some funds for installation support activities from the training
mission to the Naval Facilities Engineering Command, and the use of
some installation support funds for skill training programs, a higher
Navy priority.  The Chief of Naval Education and Training is
currently in the process of developing a regionalized base operating
support organization and conducting a competitive sourcing analysis. 
Since these initiatives have not been fully implemented, there is
risk that the savings may not materialize to the level programmed. 


   AIR FORCE FUNDING CHANGES
   PRIMARILY DUE TO PROJECTED
   LOWER ATTRITION, INCREASES IN
   PILOT PRODUCTION, AND INCREASES
   IN REAL PROPERTY MAINTENANCE
   AND COST OF STUDIES
------------------------------------------------------------ Letter :6

Although both the 1998 and 1999 FYDPs projected an overall increase
in Air Force central training funding over the 1999-2003 period and
both projected about the same annual funding levels, there were
significant funding shifts among three categories--professional and
skill training, aviation and flight training, and installation
support for training.  The funding changes were primarily due to
projected lower attrition, increases in pilot production, and
increases in real property maintenance funds and the cost of
outsourcing/privatizing studies.  Table 3 lists the amounts
programmed for the three categories that changed the most between the
two FYDPs. 



                                     Table 3
                     
                      Comparison of Funding for Selected Air
                      Force Training Categories in the 1998
                                  and 1999 FYDPs

                         (In millions of fiscal year 1999
                                     dollars)

                                        Fiscal year
                      ------------------------------------------------
Training    FYDP          1999      2000      2001      2002      2003     Total
category    --------  --------  --------  --------  --------  --------  ========
Profession  1998        $1,528    $1,465    $1,499    $1,474    $1,478    $7,444
 al and
 skill
 training
            1999         1,483     1,385     1,382     1,361     1,361     6,972
      Change         -45       -80      -117      -113      -117      -472
Aviation    1998           968       994     1,016     1,036     1,124     5,139
 and
 flight
 training
            1999         1,017     1,034     1,033     1,108     1,202     5,394
      Change          49        40        17        71        78       255
Installati  1998           786       797       833       850       866     4,132
 on
 support
 for
 training
            1999           828       830       879       905       939     4,381
      Change          43        33        46        55        73       250
Total Air   1998        $5,942    $5,948    $6,087    $6,051    $6,192   $30,221
 Force
 central
 training
 funding\a
            1999        $5,933    $5,934    $6,014    $6,046    $6,172   $30,099
            Change         $-9      $-14      $-73       $-6      $-20     $-122
--------------------------------------------------------------------------------
Note:  Category totals may not add due to rounging. 

\a Includes funding for all nine training categories. 

Source:  Our analysis of 1998 and 1999 FYDPs. 


      PROFESSIONAL AND SKILL
      TRAINING
---------------------------------------------------------- Letter :6.1

Total funding for professional and skill training was projected to be
$472 million lower in the 1999 FYDP than in the 1998 FYDP.  The Air
Force programmed lower funding because it estimated lower attrition
rates.  The Air Force testified before the Senate Committee on Armed
Services in September 1998 that overall retention is a serious
concern and that the retention of mid-level noncommissioned officers
is of special concern because they are experienced and provide an
important leadership base critical to force readiness.  The Air Force
has developed new programs to lower attrition, but these programs
have not yet been approved and implemented, introducing risk into its
central training program.  If retention rates do not improve, the Air
Force will need to increase accessions, which leads to higher costs
for recruit, initial skills, and professional development training. 
For example, attrition rates increased more than the Air Force
projected in 1998, requiring additional funding for recruit and
professional and skill training.  Air Force training officials stated
that because 1999 recruit and professional and skill training
programs are also underfunded due to lower than projected retention
rates, the training officials requested additional funding for these
programs and shifted funds from other training areas, such as
installation support, to these programs. 


      AVIATION AND FLIGHT TRAINING
---------------------------------------------------------- Letter :6.2

Total funding for aviation and flight training in the 1999 FYDP was
projected to be $255 million more than that projected in the 1998
FYDP.  The increases were for additional pilot production to
alleviate the pilot shortage resulting from lower than expected
retention rates.  The Air Force expects pilot retention problems to
continue for the foreseeable future. 

The Air Force plans to increase the number of pilots trained annually
until it reaches a maximum training rate of 1,100 active duty pilots
in fiscal
year 2000, based on capacity constraints such as the number of
training aircraft, runways, and instructor pilots.  According to Air
Force training officials, this rate of 1,100 pilots will not be
sufficient to alleviate the Air Force's pilot shortage.  Because of
the overall shortage, the Air Force intends to forego filling some
staff positions that the service says require rated pilots so that it
can fill all operational, training, and joint positions. 

According to Air Force training officials, programmed funds in fiscal
years 1998 and 1999 were lower than required to fund the planned
increase in pilot production.  The shortfalls in 1998 and 1999 were
funded from transfers from other training activities, such as
installation support.  According to the officials, the 2000 FYDP, as
currently planned, will have higher funding levels for this training
category to fully fund the undergraduate pilot training program. 


      INSTALLATION SUPPORT FOR
      TRAINING
---------------------------------------------------------- Letter :6.3

Funding for installation support in the 1999 FYDP was projected to be
$250 million more than that programmed in the 1998 FYDP.  According
to Air Force training officials, the Air Force increased programmed
funds for real property maintenance at Air Education and Training
Command bases, which funds maintenance and repair at minimum
levels--only necessary repairs will be completed, no preventative
maintenance will be done.  According to the officials, the increase
brings these bases up to the same level of maintenance as other Air
Force Commands. 

Funding was also increased to pay for studies to determine if
installation support functions should be performed under contract
with commercial sources (outsource) or in-house using government
facilities and personnel.  The Air Force plans to begin studies for
outsourcing base support functions for several bases over the
2000-2003 period.  However, the Air Force programmed expected savings
from these efforts using an almost 40-year old Air Force model.  Even
with the programmed savings, the one-time costs of the studies result
in a net increase in funding for this training category over the 1999
FYDP period.  If the savings do not materialize, and the Air Force
wants to maintain installations at the level they programmed, the Air
Force will need to look elsewhere for this funding.  Air Force
training officials believe that if additional funding is needed, it
will come from reductions in its weapon system modernization
programs. 


   CONCLUSIONS
------------------------------------------------------------ Letter :7

Funding for central training in the 1999 FYDP was projected to be
considerably lower than that projected in the 1998 FYDP primarily
because of the adjustments by the Army for previous errors.  Other
factors contributing to the programmed reductions were projected
personnel reductions as a result of the QDR, optimistic personnel
retention rates, projected savings from competitive sourcing of
installation support activities and technological advances in
training, and lower installation support funding.  The services are
accepting risk in their central training programs with this lowered
funding level.  If retention rates do not improve, savings and
efficiencies are not fully realized, and real property maintenance
can no longer be delayed, there will be little or no reduction in
central training infrastructure and DOD will likely will require an
increase in funds.  Therefore, DOD will not be able to shift funds
from this infrastructure category to modernization. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

In written comments on a draft of this report, DOD concurred with the
report.  DOD provided some technical comments, which we incorporated
in the report where appropriate.  DOD's comments are reprinted in
their entirety in appendix II. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :9

To compare the funding levels for central training, we analyzed
funding data from the 1998 and 1999 FYDPs for 1999-2003.  We did not
test DOD's management controls of the FYDP data.  We adjusted the
nominal dollars to constant 1999 dollars using 1999 DOD Comptroller
inflation indexes.  To identify trends in workload data, we used data
contained in the Army's, the Navy's, and the Marine Corps' annual
Operation and Maintenance Justification of Estimates budget books
submitted to Congress for fiscal years 1998 and 1999.  Because the
Air Force was unable to provide workload data for several training
categories from the fiscal year 1999 Justification of Estimates book,
we obtained the Air Force's fiscal
year 1998 and 1999 workload submissions for the annual DOD Military
Manpower Training Report.  The training programs analyzed were those
that DOD categorized as central training infrastructure and
Defense-wide support training mission.  Essentially, we accepted
DOD's allocation of central training infrastructure programs to the
training categories.  We assigned Defense-wide support training
mission programs, including health personnel training, that were not
already categorized as central training infrastructure to the most
appropriate training categories.  These Defense-wide support training
mission programs accounted for less than 8 percent of the total value
of central training in 1999.  In cases where DOD recategorized
program elements, we made adjustments to both the 1998 and 1999 data
to ensure that all programs were placed in the same training
categories to make accurate comparisons between the two FYDPs. 

To determine the causes for the changes in annual funding and
workload trends for central training categories between the two FYDPs
and the impact of the changes on future central training funding
levels, we interviewed officials in the Office of the Secretary of
Defense and in the Army, the Navy, the Marine Corps, and the Air
Force headquarters training divisions.  Additionally, we examined
numerous DOD documents, including annual Military Manpower Training
Reports, the Report of the Quadrennial Defense Review, the Defense
Reform Initiative Report, and service budgets.  We also reviewed
reports that pertained to military training that had been issued by
us and by other organizations.  In addition, we provided each of the
services with copies of our data analyses and questions about the
changes between the two FYDPs.  We have included their responses
throughout the report, as appropriate. 

Our work was conducted from July 1998 to February 1999 in accordance
with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :9.1

We are providing copies of this report to appropriate congressional
committees; the Secretaries of Defense, the Air Force, the Army, and
the Navy; the Commandant of the Marine Corps; and the Director,
Office of Management and Budget.  We will also provide copies to
other interested parties upon request. 

If you have any questions concerning this report, please call Robert
Pelletier on (202) 512-4032.  Major contributors to this report are
Edna Thea Falk and Gaines R.  Hensley. 

Sincerely yours,

Henry L.  Hinton, Jr.
Assistant Comptroller General


CENTRAL TRAINING CATEGORIES
=========================================================== Appendix I

Central training consists of programs that furnish funding,
equipment, and personnel to provide nonunit, or central training of
defense personnel.  Central training activities provide for the
training of new personnel, multiple types of skill and proficiency
training, management of the central training systems, and support of
central training installations. 

Administrative Support:  includes management headquarters and visual
information activities that support central training activities. 

Installation Support:  includes base operations and support, real
property maintenance activities, and base communications for central
training infrastructure. 

Command Managed Training Programs:  include nonunit training
activities managed by the operational commands.  These activities
include transition training into new weapon systems, supplemental
flying to maintain pilot proficiency, graduate flight training in
operational aircraft, and specialized mission flight training. 

General Central Training Activities:  include general support to the
training establishment and training developments.  These resources
provide training aids for troop schools and training centers. 

Health Personnel Training:  includes the education and training of
health personnel at military and civilian training institutions,
health professional scholarship programs, University of the Health
Sciences, and other health personnel acquisition programs.  Although
the Department of Defense categorizes these programs as central
medical infrastructure, we included them in central training because
the Department considers health personnel training a segment of its
central training mission. 

Training of New Personnel:  includes recruit or accession training
and One-Station Unit Training. 

Officer Training and Academies:  include reserve officer training
corps, other college commissioning programs, officer training
schools, and the service academies. 

Aviation and Flight Training:  includes flight screening,
undergraduate pilot training, navigator training, North Atlantic
Treaty Organization pilot training, and procurement of new training
aircraft. 

Professional and Skill Training:  includes academic and professional
military education programs as well as multiple types of skill
training.  This category includes the Department's civilian training,
education and development, language training, undergraduate space
training, acquisition training, general skill training, and other
professional education. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
=========================================================== Appendix I


*** End of document. ***