DOD's Reexamination of Its Fiscal Year 1978 Budget as It Relates to Reimbursements of Foreign Military Training

The Department of Defense (DOD) reexamined its fiscal year 1978 budget as it related to reimbursements of foreign military training. DOD reevaluated its pricing policy for foreign military training, which includes the International Military Education and Training Program as well as foreign military sales training.

In general, the Department's revisions are a major step in providing for the recovery of the full cost of training foreign students. DOD's actions indicated an intention to comply with the intent of the Congress and GAO recommendations concerning the recovery of these costs. However, under the revised pricing guidelines, prescribed factors for computing military retirement pay and the cost of other civilian benefits were too low. The revised pricing guidelines also still provide for the use of a 4% asset use charge for aircraft training in lieu of hourly aircraft use and attrition rates which would generally result in higher charges to foreign governments. It is imperative that DOD complete planned evaluations in these areas as soon as possible and revise training tuition rates as warranted. DOD's estimates of the amount of increased reimbursements resulting from the revised pricing policy appeared to be reasonable if all assumptions and computations were correct.