oversight

Reserve Officer Training Corps: Management Deficiencies Still to Be Corrected

Published by the Government Accountability Office on 1977-03-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                         DOCUMENT RESUME
00661 - [A10516931
Reserve 1rficer Training Corps: Management Deficiencies Still to
Be corrected. FPCD-77-15; B-146947. March 15, 1977. 21 yp-

Report to the Congress; by Rotert P. Keller, Acting Comptroller
General.

Issue Area: Personnel Management and CompenEation (300);
     2ersonnel Management and Compensation: Training and
     Education Programs (304).
Contact' Federal Personnel and Compensation Div.
Budget Function: National Defense: Department of Defense -
    Milita-y (except procurement 6 contracts) (051); Education,
    Manpower, and Social Services: Training and Employment
     (504).
Organization Concerned: Department of Defense; Department of the
     Army; Department of the Air Force; Department of the Navy;
    Departmen- of Defense: Reserve Officer Training Corps.
Congressional Relevance: House Committee on Arrmed Services;
    Senate C;-mitt,-e on Armed Services; Congress.

          Except for reversing a decline in enrollments and
eliminating duplicate physlcal examinations, the Dfpartment of
Defense (DOD) has not corrected many Reserve Officer Training
Corps (ROTC) management proklems discussed by GAO in a 1973
report. GAO interviewed program managers in headquarters, DOD,
the services, and the cormands responsible for implementing the
program which developed out of the 1973 report.
Findings/Conclusions: The services continue to retain ROTC units
which are considered "unproductive" (having toc few students in
relaticn to cost) and vague and subjective considerations are
still used to avoid closing such units. All three services use
enlisted personnel to provide ROTC support which could be
performed by civilians at reduced cost. Lacking a uniform cout
reporting system, the services continue to report ROTC costs Ay
using inconsistent data which cannot be used for effective
management. The services have finally agreed on a legislative
proposal to recover educational expenses from the thousands on
HOTC scholarships who drop out of the program without incurring
any active duty obligation. Recommendations: The Secretary of
Defense should: direct the services to deactivate all units not
meeting prescribed minimua production requirements unless an
exception has been approved revise DOD fnstructicns to clearly
identify substantive reasons for exceptions, require the
Departmei.t's approval of any such exception, and prescribe
consistent procedures for deactivating units which do not meet
prescrited criteria; develop a practical and realistic staffing
guide to be used by all the services; direct the services to
identify and convert military support positions which can be
filled by civilians; and develop and implement a uniform cost
reporting system. Congress should enact legislation which
permits the services to require reimaursement for education and
training costs asa an alternative to active duty.   (Author/QM)
,-4




                      REPORT TO THE CON-GRESS

        S       -
               '~BY      THE COMPTROLLER (;ENERAL
      "- ';-          OF THE UNITED STATES




                      Reserve Officer Training Corps:
                      Management Deficiencies
                      Still To Be Corrected
                      Department of Defense

                      Congress should enact legislation permitting
                      recoupment of investment in ROTC program
                      dropouts in lieu of an active duty obligation.
                      Unproductive   ROTC units should not be
                      retained.
                      Improvements in unit staffing could reduce
                      costs.
                      A uniform cost reporting system is needed.




                      FPCD-77-15
                                                                ',~A (   ' .i i " -   '--(   -
                 COMPTROLUIR GENERAL OF THE UNITED   TrATES
                            WAHINOTON. D.C.   MM




B-146947


To the President of the Senate and the
Speaker of the House of Representatives

     This report discusses the services' efforts to improve
the Reserve Officer Training Corps program since our
Febriary 1973 report to the Secretary of Defense.  More
actions are needed to correct management deficiencies which
still persist.

     We made our review pursuant to the Budget and Accounting
Act of 1921 (31 U.S.C. 53), and the Accounting and Auditing
Act of 1950 (31 U.S.C. 67).

     We are sending copies of this report to the Director,
Office of Management and Budget; the Secretary of Defense;
and the Secretaries of the Army, Navy, and Air Force.




                        ACTING Comptroller General
                               of the United States
COMPTROLLER GENERAL'S                        RESERVE OFFICER TRAINING
REPORT TO THE CONGRESS                       CORPS: MANAGEMENT
                                             DEFICIENCIES STILL TO BE
                                             CORRECTED
                                             Department of Defense

       DIGEST

       Except for reversing a decline in enrollments and
      eliminating duplicate physical examinations, the
      Department of Defense has not corrected many Reserve
      Officer Training Corps (ROTC) management problems GAO
      discussed in a 1973 report.
      At that time the Secretary of Defense agreed to
      correct the problems identified.

      Contrary to Department of Defense directives, the
      services continue to retain ROTC units which are
      considered "'unproductive," i.e., having too few
      students in relation to cost. At the time of GAO's
      review, 134 of 507 ROTC units did not meet criteria
      reauired to retain them. Vague and subjective con-
      siderations are still used to avoid closing such
      units.  (See p. 3.)
      The Department of Defense has published a uniform
      guide for the staffing of ROTC units. The Army and
      the Air Force elected not to use the guide because
      it would have increased their staffing levels. All
      tnree services use enli ted personnel to provide
      ROTC support which could be performed by civilians
      at reduced cost.  (See p. 7.)
      A uniform cost reporting system has not been estab-
      lished. Consequently, the services continue to re-
      port ROTC costs bat using inconsistent data which
      cannot be used for effective management.   (See o. 8.)
      Thousands who are awarded ROTC scholarships withdraw
      from the program withcut incurring any active duty
      obligation. Few dropouts with active duty commit-
      ments are ordered to active service. In either case,
      the Government has incurred considerable expense and
      the dropout has received tangible benefits. The ser-
      vices have finally agreed on a legislative proposal
      to recover educational expenses, which they expect to
      submit to the 95th Congress.  (See p. 11.)
      The Secretary of Defense should:

      -- Direct the services to deactivate all units not

                                                      FPCD-77-1.5
 ITeLartl.    Upon removal. tho report   i
 cover date should be noted hareon.
  meeting prescribed minimum production
  unless an exception has been approved.    ,jiurements
                                            (See p. 6.)
-- Revise Department of Defense instructions
                                              to (1)
   clearly identify substantive reasons for
                                             excep-
   tions, (2) require the Department's approval
                                                 of any
   such exceptions, and (3) prescribe consistent
   expeditious procedures for deactivating units and
                                                  which
   do not meet prescribed criteria.  (See p. 6.)
--Develop a practical and realistic staffing
                                             guide
  to be used by all the services.  (See p. 9 .)
-- Direct the services to identify and convert
   military support positions which can be filled
   by civilians.   (See p. 10.)
--Develop and implement a uniform cost reporting
  system'. (See p. 10.)
GAO recommends that the Congress enact legislation
which permits the services to require reimbursement
for education and training costs as an alternative
active duty.                                        to
              (See p. 13.)
The Department of Defense generally agrees
                                           with GAO's
recommendations; however, it did not agree
                                           to deacti-
vate all units falling below minimum standards
                                                be-
cause it believed there were overriding reasons
                                                 for
retaining them.




                        ii
                    C o n t e n   t s



DIGEST                                                 i

CHAPTER

   1       INRODUCfION

   2       RETENTION OF UNPRODUCTIVE UNITS             3
               4army                                   3
               Navy                                    4
               Air Force                               5
               Conclusions and recommendations         5
               Agency comments and our evaluation      6

   3       IMPROVEMENTS STILL NEEDED IN UNIT
             STAFFING ANiD COST REPORTING              7
               Unit staffing                           7
               Opportunities for making military
                 support positions civilian            7
               Cost repu7ting                          8
               Conclusions and recommendations         9
               Agency comments and our evaluation     10

   4       RECOUPING INVESTMENT IN PROGRAM DROPOUTS   11
               DOD legislative proposal               12
               Conclusions                            12
               Recommendation to the Congress         13
               Agency comments and our evaluation     13

APPENDIX

   I       Legislative proposal                       14

  II       Letter dated February 23, 1977, from
             Assistant Secretary of Defense
             (Manpower and Reserve Affairs)           17

 III       Principal officials responsible for
             administering activities discussed in
             this report                              21

                     ABBREVIATIONS

DOD        Department of Defense
GAO        General Accounting Office
ROTC       Reserve Officer Training Corps
                              CHAPTER 1

                              INTRODUCTION


     The Reserve Officer Training Corps (ROTC) program is
the largest source of commissioned officers for the Army,
Navy, and Air Force    The Department of Defense (DOD)
estimates  that ROTC will produce over 10,000 officers in
1977, or 44 percent of all acquisitions.    During fiscal
year 1976,  the ROTC program was conducted  by 507 units at
365 colleges and universities.   The  Army and  the Air Force
are each permitted to award 6,500 college scholarships, and
the Navy 6,000, which cover tuition and books, plus a $100
monthly subsistence allowance for up to 40 months.     Nonschol-
arship participants are eligible  for  the $100  monthly subsist-
ence allowance  durtng their junior  and senior  {ears (up to
20 months).

     Students drill and attend military training    lasses con-
ducted by commissioned officers  in addition to  -heir regular
baccalaureate courses.  During  the summer they participate
for 2 to 6 weeks in field training activities.   Althouah the
normal program is 4 years, abbreviated 2-vear courses are
available.  DOD estimates that the cost of operating the oro-
gram for fiscal year 1977 will be $177 million.

     The followtin table shows trends in the numbers of
enrolled students for fiscal years 1975-77 and expected
graduates in 1977.

                              Enrollments              Graduates
                       §975                  I977
                                              9T76--
                                                   -     1977-
                                          (note a)     (note a)

Army                 38,362    47,179      55,522        6,022
Navy                  6,964     7,770       8,10)0       1,331
Air Force            17 545    15 852      14,297        2,750

        Total        62,871    70801       77,919       10,103



a/1 9 7 7   data estimated.

     Overall management responsibility for ROTC is vested
in the Director, Defense Education, Office of the Assistant
Secretary of Defense (Manpower and Reserve Affairs).  Besides
providing policy guidance, the Director must approve all
actions to open or close a unit.  Program managers for the
services are:


                                    1
          Army--Training and Doctrine Command

          Navy--Naval Education and Tiaining Command

          Air Force--Air University

     In a February 1973 report to the Secretary of Defense
(B-146947), we identified several deficiencies in the pro-
gram. We reported that the program's efficiency and effec-
tiveness was being impaired by (1) the retention of unpro-
ductive units, (2) a general decline in enrollments, (3) the
lack of a uniform staffing criteria, (4) the duplication of
applicants' physical examinations, (5) a loss of invest-
ment due to voluntary program dropouts, and (6) the lack
of uniform program cost reporting.

     In response to our report, DOD officials and program
maiagers in the services agree-' to take certain corrective
actions. In some instances, such as the duplication of
ROTC applicants' physical examinations, DOD has resolved
the situation and realized measurable savings. The gen-
eral decline in ROTC enrollment has also been reversed.
In other areas, however, former problems continue appar-
ently due to an insufficient commitment by DOD. The
following chapters describe the current status for these
previously identified problems.
     We interviewed program managers in headquarters,
DOD, the services, and the commands :esponsible for imple-
menting the program to arrive at our conclusions. We re-
viewed regulations, reports, and correspondence at:

     -- Training and Doctrine Command, Fort Monroe, Virginia.

     -- Naval Education and Training Command, Pensacola,
        Florida.
     --Air University, Maxwell Air Force Base, Alabama.

We completed our fieldwork in September 1976.




                             2
                         CuAPTER   2

             RETENTION OF TJNPRODUCTIVF   UNITS


     The services continue to retain unproductive PCTC units
contrary to directives provided by LOD, and they use vaque
and subjective considerations tD rationalize actions for
not disestablishing units.  At the time of our review, the
Army had 87 units out of 287; the Navy, 16 out of 58; and
the Air Force, 29 out of 162 which did not meet DOD's
criterion of 17 or more students entering the junior year
of ROTC instruction.  When an ROTC unit produces only two or
three officers each year, the cost per graduate can De as
high as $120,000.

     Our previous report addressed itself to the adverse
effect of unproductive units and the maintenance of
ROTC at schools which did not meet existing production
requirements.  DOD responded by rescinding instructions
which permitted the services to waive production recuire-
ments and by issuing a new criterion for determining a
unit's viability.

     The new DOD standard for schools with 4-year ROTC
programs provides that a urnt is to be considered sub-
standard if less than 17 students enter the junior year of
ROTC i;istruction.  A unit deemed substandard is to be
placed in an evaluative status (probation) for 1 year,
during which time the military department is to work with
the institution to vitalize the unit and make it fully
productive.   If a unit does not meet the criterion by the
end of the evaluation period, it may be disestablished.
However, DOD's instructions contain additional considera-
tions which may justify retention.   These include: cost per
officer produced, cuality 'f officer produced, institutional
support, and retention rate of graduates.   DOD then vests
the Secretary of each department the orerogative to cause
disestablishment.

     The result of the new instructions has not been clear,
since the instructions contain permissive language and con-
ditions which the services have elected to follow or ignore.
Consequently, many unitL. which fall below DOD's minimum
requirements, have been retained.

ARMY

     During the 1975-76 school year, 87 A. ny ROTC units
should have been in an evaluative status based on DOD's
criterion.  But only 51 units were placed on probation be-


                              3
cause the Army had devised its own criteria, based on pro-
jected officer production in each unit, instead of following
DOD's instructions. Seventy-five units have been below mini-
mums for more than 1 year, but only six units have been de-
activated in the last 2 years.   At the time of our review,
the Army had no further olans  for closing units.

       The situation during the most recent Army review cycle
typifies the Army's approach.    Based on their   analysis,
program managers recommended that 20 substandard units be
closed.  DOD concurred with this recommendation, but the
Commanding General of the Training Command interceded
before action could be taken to close the units; with
assistance from the Army Chief of St. ff, he convinced the
Secretary of the Army that only two units should be closed.
The Army's position is that further units will be closed
only if ordered by DOD because the Army needs all of the
officers it can get from ROTC.

NAVY

     The Navy developed an ROTC disestablishment plan which
called for a reduction from 58 units in school year 1975-76
to 43 units by 1982.  ROTC units at four schools were
disestablished in fiscal  year 1976.    Because of the Navy's
approach to disestablish units,  ROTC   instructors will remain
on the campus until all  students, who   had matriculated in
1975, have completed the  program.   In  most instances,
actual disestablishment takes 3 years after the school is
notified instead of the 1 year required by the other two
services. The other services achieve more expedit:.ous
closures by requiring freshman and sophomores to either
transfer to other units or discontinue ROTC instruction.

     The Navy did not choose the four units for disestab-
lishment because they were considered the least oroduc-
tive, but rather because program managers felt their
elimination would face the least amount of congressional and
Naval resistance for retention. Final decisions on the
remaining units to be closed are beina reserved by the Navy.
The rationale for considering disestablishment appears in-
consistent with DOD's criterion.

     The ROTC unit at one university, for example, was
retained to support minority officers' accession goals.
This unit has not met DOD's enrollment criteria in recent
years.  The Navy's own evaluation noted the school's Door
academic rating, low entrance reauirements, lack of scholar-
ship recipients, and proximity to another university which
has a liable unit.  Notwithstanding the Navy's own con-
clusicn that "this is not a viable unit and its din-
establishment is highly recommended," the Navy has chosen

                                 4
not to consider its closure; yet, two consistently viable
units were included in the Navy's plan to carefully scruti-
nize 19 schools for disestablishment. In both cases, Navy
program managers have concluded that there was little to
support the disestablishment of these schools.

AIR FORCE

      Since our February 1973 report, the Air Force has closed
32 units and plans to close another 8 in 1977.
units were on probation as of the end of school Twenty-two
                                                 year 1975-76,
and eight of these had also been on probation the preceeding
year.   Although the Air Force has been most active in elimi-
nating unproductive units, its decision to continue or close
various units has often been based on criteria that is un-
related to the unit's prospects for productivity.

     For example, a prime reason cited by the Air Force
for the probationary retention of one college from April
972 until the present was "political considerations" despite
the unit's substandard productivity.   This unit is now sched-
uled to be closed in fiscal year 1977.   Similar consider-
ations were listed in another case where a unit, which was
never viable, was recommended for disestablishment in the
spring of 1975 by the Air University.   It was finally dis-
established in June 1976.

CONCLUSIONS AND RECOMMENDATIONS

     The services continue to operate unproductive units
contrary to DOD's directives; the instructions for dis-
establishing units permit the services to exercise ex-
cessive discretion.  Since this condition has existed for
more than 3 years, a lack of commitment on DOD's part to
resolve the issue seems apparent.

     The Navy's practice of allowing all enrolled students
to complete training at the institution before closing a
unit is uneconomical and inefficient. Procedures for the
disestablishment of unproductive units should be expeditious
and consistent among the services.

     DOD should clearly identify what circumstances justify
exceptions to its production criterion and require the serv-
ices to obtain its approval for the retention of those units.

    We recommend that the Secretary of Defense



                              5
        -- direct the services to deactivate all units
           not meeting prescribed minimum production
           levels unless an exception has been approved and
        -- revise DOD's instructions to (1) clearly
           identify substantive reasons for exceptions,
           (2) require DOD's approval of any exceptions,
           and (3) prescribe consistent and expeditious
           procedures for deactivating units which do not
           meet prescribed criteria.

AGENCY COMMENTS AND OUR EVALUATION
     DOD said that (1) during the peast year, there has been
a significant reduction in the number of unproductive ROTC
units and (2) the Army has worked intensively to increase
enrollments resulting in a 59 percent reduction in the
number of units below standard in fiscal year 1977 compared
with 1976 (36 versus 87 units, respectively).

     DOD did not agree with our recommendation that the serv-
ices be directed to deactivate immediately all units not
meeting prescribed minimum standards. DOD said that while
the reasons for retaining some unproductive units may seem
vague and subjective, it is imperative to note that a unit's
value may lie more in its capability to ileet such levels.
Further, it said that the increasing reouirements of the
services for special scientific and technical skills or for
improved minority composition may override numerical produc-
tion.    It also said that   i.thout providing reasonable opportun-
ity for units to recover from enrollment declines, the programs
would require continual and costly restructuring.

     We are encouraged by the Army's progress in reducing
the number of nonviable units during the current school year.
Yet the fact remains that over 10 percent of the Army's units
are still substandard and have been in some cases for many
years. We believe the services can meet their needs for
special skills and increased minority participation by other
means than retaining low producing units. For example, the
large number of scholarships awarded each year can be used
to attract these types of students who could then be placed
in viable units at other colleges.

     DOD agreed that its instructions need to be revised and
have begun a reappraisal.




                                  6
                           CHAPTER 3

                IMPROVEMENTS STILL NEEDED IN UNIT

                  STAFFING AND COST REPOPTING


     In our February 1973 report, we advised the Secretary
of Defense of the lack of uniform staffing criterion and
program cost reporting.  DOD agreed to develop a staffing
guide for all services and to revise budget formats to
provide comparable cost data.  We found that the Army and
the Air Force do not currently use DOD:s staffing criterion
because they determined that the guide was too liberal.   No
uniform cost reporting system has yet been developed.

UNIT STAFFING

     At the time of our previous review, ratios of ROTC
staff to enrolled students ranged from 1:2 to 1:85 principally
because the Air Force and the Army based their staffing levels
on the types of programs offered and the number of students
in each unit, while the Navy based its staffing levels on
the types and number of courses taught at each unit.  After
agreeing that uniformity was desirable, DOD officials isscad
a staffing guide for all POTC units which was to be effective
during the 1975-76 school year.

     Neither the Air Force nor the Army have used the guide-
lines because such use would result in higher staffing
levels than their own. The Army estimated that using DOD's
guidelines for the 1974-75 school year would have recuired
an additional 570 personnel (308 officer, 173 enlisted, and
89 civilians).  Similarly, Air Force officials estimated
that they would reauire 31 additional military personnel
in school year 1974-75 by using DCD's quideliner in lieu of
staffing standards developed by the Air University.

     The Navy, which has adopted DOD's guidelines, reports
a resulting elimination of five officer Positions. Sixty-
three enlisted positions have also been downgraded.  However,
Navy ROTC officials believe DOD's guide to be inadequate
and have asked Navy staffoower officials to make a study of
unit staffing. The study was not complete at the time of
our review.

OP?ORTUNITIES FOR MAKING MILITARY
SUPPORT POSITIONS CIVILIAN

     The services assign a large number of enlisted personnel
to PnTC units and headquarters to perform operational and
support functions; most functions are in the latter role.
Army and Navy units also employ civilians in support posi-
tions. The table below shows the number of enlisted and
civilian personnel authorized for fiscal year 1977:
    Service                 Enlisted      Civilians
     Army                    1,084           628
     Navy (note a)             226            84
     Air Force                 507          b/39

a/Includes Marine Corps personnel.

b/All are assigned to Air Force ROTC Headouarters.

     Support functions performed by military personnel
include:

     -- Administrative duties, including typing
        correspondence, reports, and instructional
        materials; filing; and maintaining student
        personnel records.

     -- Supply duties, including managing the units,
        inventory of uniforms, textbooks, and office
        supplies.
ROTC officials agreed that these functions could be per-
formed by civilians, but some enlisted personnel were needed
to supervise office work, counsel, and interact with students.

     Our view is supported by the findings of other reports
which conclude that generally, civilian personnel are less
costly than military personnel. For example, in our report
entitled "Financial Operations of the Five Service
Academies" (FPCD-75-117, Feb. 6, 1975), we identified
savings of $1.6 million annually by civilianizing about 500
military support positions, a savings of about $3,000 for
each position.
COST REPORTING

     In our February 1973 report, we advised DOD of the
deficiencies of ROTC cost reporting by the services. We
stated that the reporting wes inadequate for either DOD
or the Congress to make necessary judgments on the program's
effectiveness because each service used different methods to
compute average costs per graduate. DOD agreed that there
were variances and consequently formed a tri-service committee
to recommend standardized cost reporting.


                              8
     In August 1973, the tri-service committee proposed a
uniform system of cost reporting.  Budget format and the
definitions of various terms were jointly developed by
representatives of each service. Neither the proposal of
the tri-service committee nor any alternative has been
adopted by DOD. The services, therefore, are reporting
program costs in essentially the same inconsistent manner
they were using at the time of our previous report.
     Army officials told us that they are now considering
implementing a new cost accounting system because they have
difficulty in identifying total program costs. They have
discontinued using average officer production costs which
could, if accurate, be used to determine program effectiveness.
     The Air Force has developed and proposed a cost account-
ing system which tracks students and costs through each
year in the program. DOD has not accepted this proposal.
CONCLUSIONS AND RECOMMENDATIONS
     The services' dissatisfaction toward the uniform
staffing guide is perplexing, considering the tri-service
participation in their formulation. While minor objections
to rigid student-to-instructor ratios might be expected, it
would seem reasonable to expect the services to at least
agree on a common methodology for determining staffing
requirements. We believe that this circumstance requires
DOD to take the initiative to develop practical and real-
istic staffing standards and insist upon their use by the
services.
     There are large numbers of military personnel occupying
support positions which could be filled by civilians at
reduced cost. The services should carefully review these
positions and convert those where military personnel are
not required, without delay.
     The formulation of a usable cost reporting system for
ROTC is a matter of urgency if program evaluation is to be
meaningful. While the services have studied the matter and
made proposals, none have been adopted by DOD. Without
uniform cost reporting, neither DOD nor the Congress can
make judgments on the effectiveness of the services' programs.

     We recommend that the Secretary of Defense, without
further delay

     -- develop a practical and realistic staffing guide
        to be used by all the services,



                              9
     --diLect the services to identify and convert military
       support positions which can be filled by civilians,
       and

     -- develop and   implement a uniform cost reporting
        system.


AGENCY COMMENTS AND OUR EVALUATION

     DOD observed that other than serving as the upper limit
for ROTC staffing, the practicality of a common staffing
guide for use by all services is questionable.   DOD said
that it believes each se.vice should retain its own stand-
ards with the condition that aggregate staffing does not
exceed that indicated by the guide.  It also said that the
present staffing guide appears adeouate subject to periodic
assessment of (1) the rationale underlying the guide and
(2) whether the guide may be too liberal in allocatina
staffpower.  DOD promised to reassess the guide.

      We believe that the guide should be revised because the
Army and the Air Force found it to be too liberal and the
Navy believes it is inadeauate for determining unit staf-
fing.

     DOD agreed that there may be military support Positions
which can be filled by civilians and have asked the services
to identify these positions and to civilianize as soon as
practical those where military personnel are not recuired
and it would be more cost effective to do so.

     DOD said that it is acutely aware of the need for
uniform costing of ROTC and has formed an interservice
committee to develop a uniform costing methodology.
DOD expects this committee to have a product for review
by May 1977.




                               10
                         CHAPTER 4

                  RECOUPING INVESTMENT IN

                      PROGRAM DROPOUTS


     Many ROTC participants:  supported by full scholarships
or monthly stipends during their junior or senior years,
discontinue their enrollment in the program each year.
We noted in our previous report that very few, who dropout
prior to completion, are subject to an active duty require-
ment and that the Governmrent, therefore, receives no bene-
fit in return for the invested resources. We pr.zviously
suggested that scholarships be converted into loans for
participants who voluntarily do not complete their active
duty requirements.   DOD officials concurred with our sugges-
tion but concluded that it would require statutory authoriza-
tion. Nevertheless, they agreed to seek such iegislative
authority.
     At the time of our review, the services had not agreed
on a legislative proposal. Concurrently, they have relaxed
their previous policy of enforcing active duty commitments
which most program participants incur upon entering their
junior year.  Their reluctance to enforce active duty
obligations is, according to them, founded primarily on
the premise that such a practice would be inconsistent
with the All-Volunteer Force concept.

     Students may withdraw from the program any time during
their first 2 years without obligation. Upon entering the
advanced program (the last 2 years), students are required
to sign a contract obligating them to serve 2-years' enlist-
ed service should they withdraw from the program without
a valid reason. The Army's policy has been to ignore the
active duty obligation unless officials are convinced
that the student was willfully attempting to evade the
contract. While more than 800 participants withdrew
during the 1974-75 school year, only 2 were ordered to
activc duty. The Air Force's policy allows any student
to withdraw from the program without serving on active
duty regardless of contractual liability. The Navy ordered
60 students to active duty during the 1975-76 school year.

     The services experience the greatest loss of scholarship
students during the students' first 2 years and especially
at the end of their second year, which is prior to incurring
the service obligation.



                              11
      The following table shows the dropout rate of Navy
 scholarship students during the past 4 fiscal years: 1/


Academic year          1973    1974    1975    1976
Freshman                215     266     155     23i
Sophomore               594     548     428     403
Junior                  176     207     170     185
Senior                   95      84      75      77

DOD LEGISLATIVE PROPOSAL

      DOD agreei with our previous recommendation that the
scholarship expenses of voluntary dropouts should be re-
covered.   In May 1973, DODt officials said they were
working on a legislative proposal.    Again in July 1974,
DOD officials assured the Congress that they were consid-
ering a legislative proposal authorizing them to recover
educational expenses.   Air Force officials who were re-
sponsible for coordinating the proposal told us in August
1974 that it would be forwarded to the Congress in early
1975.

     Since that time, the proposal has undergone several
revampings which altered both its specificity and its
applicability, but the services still had not Some into
agreement.  At the time of our review, the Secretary of
Defense had not exercised his preogative to go forward,
despite complete concurrence, since officials of all three
services agree in principle on the need for legislation.

CONCLUSIONS

     Each year, over 2,000 scholarship participants and
others in the advanced program drop out of ROTC after the
Government has invested millions of dollars in their educa-
tion and training.  Since the services have relaxed their
previous policy of enforcing active duty commitments, there
is no longer a deterrent to withdrawing from the program.
The services believe that their prior policy is inconsistent
with the All-Volunteer Force concept; we believe tha: an
effective alternative is needed.



1/Comparable data   is not readily available for the other
  services.


                               12
RECOMMENDATION TO THE CONGRESS

     Notwithstanding DOD concurrence more than 3 years ago
concerning the need for legislation to permit recouping the
Government's investment in program dropouts, no proposals
have been submitted to the Congress. We recommend that the
Congress enact legislation which permits the services to
require reimbursement for education and training costs as an
alternative to active duty. A legislative proposal developed
by DOD is provided in appendix I.
     The proposed legislation covers participants in other
officer acquisition and training programs because the services
believe that (1) the provisions are eaually applicable to those
programs and (2) the ROTC program should not be singled
out for special treatment.

AGENCY COMMENTS AND OUR EVALUATION
     DOD agrees on the need for such legislation and said
that an identical proposal will be submitted as part of its
legislative program for the 95th Congress.

     We noted that DOD will i'ged to revise ROTC regulations
concerning the time when a £   vice obligation is incurred
in order to realize the full uenefits of this legislation.
Presently, students in the first 2 years of the program
incur no obligation. The revised regulations should also
provide for uniform application by the services.




                             13
 APPENDIX I                                          APPENDIX I
                    LEGTSLATIVF PPOPOSAL

                         A   E I L L
 To amend chapter 101 of title 10, United States Code, to
      authorize the Secretaries concerned to recuire an
      applicant for certain advanced education sponsored
      by the armed forces to agree to serve on active duty
      for a specified period or reimburse the United States
      for the apportioned costs of the education.

 1                Be it enacted by the Senate and House of
 2         Represnntativ-s of he Unifed States in Congress
 3         a-ssemb--eda-, T-a
                            nl    t       of title 10-,Unite
 4         States Code, is amer,:     -y adding the following new
 5         section and a correspojiuing item in the analysis;
 6         "S2005. Advanced education: active duty agreement
                  provisions; reimbursement of costs
 7             "(a) The Secretary concerned may require an
 8        applicant for advanced education by or with the
 9        assistance of an armed force to agree in writing as
10        provided in this section.
11             "(b) An agreenent under subsection (a) of
12        this section may provide that --
13                   "(1)  if his application for advanced
14              education by or with the assistance of an
15              armed force is approved, the applicant will
16              complete specified educational requirements
17              and serve on active duty for a specified period;
18                  "(2)  if the applicant does not complete
19             the educational requirements specified u'nder
20             clause (1) of this subsection, he will serve
21             on active duty for a specified period;
1                    "(3)  if the applicant does not serve
2              on active duty for the period specified under
3              clause (1) or (2) of this subsection, he will
4              reimburse the United States for the percentage
5              of the cost of the education which the period
6              not -n active duty is of the specified
7              period;
8                   "(4)  terms in the agreement have the
9              same meaning as in this section; and




                                14
 APPENDIX I                                      APPENDIX I

10                  "(5) the applicant agrees to other
11             provisions not inconsistent with this section.
12             "(c) Unless a different period of active
13        duty is prescribed by another law, the period
14        of active duty in an agreement under this section
15        shall be as prescribed by regulation of the
16        Secretary concerned.
17             "(d)    In this section --

18                  "(1)  'advanced education' means
19             education (whether or not completed) at a
20             level above high school --

21                       "(A) from an agency of the United
22                    States, if the education is directed
23                    toward an academic degree or pro-
24                    fessional certificate; or
 1                       "(B) from a source other than an
 2                    agency of the United States.
 3                  "(2)  'assistance' includes any payment
 4             of the cost of education to or on behalf of
 5             the applicant from funds appropriated for
 6             an armed force; and
 7                  "(3) 'cost of education' means those
 8             costs which are, under regulations prescribed
 9             by the Secretary concerned and consistent
10             with generally accepted accounting practice,
11             directly attributable to the education of
12             the appointee, but does not include pay or
13             allowances under title 37 or a stipend
14             under section 2121 of this title.
15             "(e) Subject to subsection (f) of this
16        section, the obligation to reimburse the United
17        States under an agreement under this section is
18        a debt owing the United States for all purposes.
19             "(f) The Secretary of a military department
20        under regulations prescribed by the Secretary of
21        Defense, or the Secretary of Transportation, as
22        the case may be, may waive in whole or in part
23        a debt to the United States arising out of an
24        agreement under this section, if the Secretary




                                 15
APPENDIX I                                APPENDIX I
1        concerned determines that recovery would be
2        against equity and good conscience, or against
3        the public interest."




                             16
   APPENDIX II                                                           APPENDIX II


                       ASSISTANT SECRETARY OF DEFENSE
                                WASHINGTON. D. C. 20301



 MANPOWCI   AND                                      February 23, 1977
RSBERVIV ASfAIRS




          Mr. H. L. Krieger, Director
          Federal Personnel and Compensation
            Division
          U.S. General Accounting Office
          Washington, D.C. 20548

          Dear Mr. Krieger:

          This is in reply to your letter to Secretary Rumsfeld regarding the
          General Accounting Office draft report, "Reserve Officers' Training
          Corps: Management Shortcomings Still to be Corrected, " dated
          December 3, 1976 (OSD Case #4487).

          We agree that some of the problems uncovered in the February 28, 1973
          report (B-146947) still remain. However, as noted in the comments be-
          low, considerably more progress has been made in resolving them than
          is indicated in the draft report. Following are our comments in each
          area of concern:

          Retention of Unproductive Units

                              GAO Concern and Recommendations

              The Services continue to operate numbers of unproductive ROTC
          un ta contrary to DoD instructions. Considerations which are seemingly
          vague and subjective are used to avoid disestablishing these units. The
          Navy's practice of allowing all enrollees to complete training at an
          institution before closing its unit is uneconomical and inefficient. The
          Secretary of Defense should (1) direct the Services to deactivate without
          delay all units not meeting prescribed minimum production levels, and
          (2) revise the DoD instructions to (a) c?~arly identify reasons fo: ex-
          ceptions, (b) require DoD approval of any exception, and (c) prescribe
          consistent and expeditious procedures for deactivating units which do
          not meet prescribed criteria.




                                            17                              ok5 V)
APPENDIX    II                                                   APPENDIX      II


                                Comments

        Within the past year there has been a significant reduction in the
 number of unproductive ROTC units. Faced with a need to more than
 double its p -sent ROTC production by 1980, the Army has worked in-
 tenrively to increase its enrollment in all of its units and, particularly,
 in those which have had low production in the last several years. The
 result of this effort is apparent in the 59% reduction in the number of
 units below the DoD viability standard in FY 1977 compared with that of
  'Y 1976 (36 versus 87 units, respectively). Of note is that four Army
 ana four Navy unproductive ROTC units are expected to close as of
 FY 1977. This is reflected in the FY 1978 President's Budget.

         We disagree with the recommendation that the Services be directed
  to deactivate immediately all units not meeting prescribed minimum pro-
  duction levels. While the reasons for retaining some of the unproductive
  units may seem vague and subjective, it is imperative to note that a
  unit's value may lie in more than its capab/lity to meet such levels. The
  increasing requirements of the Services for special skills, such as the
  scientific and technical specialties needed by the Navy and Air Force, or
 for improved minority composition, may override numerical production.
 Also, third-year strength as an index of production potential should not
 be used as the sole basis for deactivating unitE since first- and second-
 year enrollments may promise near-term viabil'ty. Without providing
 reasonable opportunity for units to recover from enrollment declines,
 the ROTC programs would require continual and- costly restructuring.

       We agree that ;he DoD instructions need revising and have begun
 an appraisal of DoD Directive 1215. 8, "Policies Relating to Senior Re-
 serve Officerst Training Corps (ROTC) Programs. " The resulting re-
 visions are expected to provide for the three specific GAO recommen-
 dations in this area.

 Unit Staffing

                      GAO Concern and Recommendation

       DoD has promulgated a uniform guide for ROTC unit staffing. But
both the Army and Air Force elected not to use the guide because it would
have increased their staffing levels. The dissatisfaction of the Services
toward the uniform staffing guide is perplexing considering the tri-Service
participation in its formulation. It seems reasonable to expect the
Services to agree, as a minimum, on a common methodology for deter-
mining staffing requirements. The Secretary of Defense shouid immedi-
ately develop a practical and realistic staffing guide to be used by all the
Scrvicos.



                                      18
APPENDIX II                                                      APPENDIX II


                                 C omments

         The DoD staffing guide has been of value in setting maximum aggre-
  gate rlanning for the ROTC program of each Service. It should be to the
  credit of the Services that they have been able to operate eithe? at or
  below this maximum. Other than serving as the upper limit for ROTC
  staffing, the practicality of a common manning guide for use by all
  Services is questionable since the guide can never be attuned to the actual
  and varying workloads at each of the 493 ROTC units. Therefore, we
  believe that each Service should retain its own unit staffing standards with
  the condition that aggregate manning of each ROTC program does not ex-
  ceed that indicated in the guide. For setting an aggregate manning stan-
  dard, the present DoD staffing guide appears to be adequate subject to
  periodic assessment of (1) the rationale underlying the formulae for
  determining makimum manning strengths, and (2) whether the guide may
  be too liberal in allocating manpower. We shall insure that the guide is
  so assessed.

  Opportunities for Making Military Support Positions Civilian

                     GAO Concern and Recommendation

        There are large numbers of military personnel occupying support
  positions which could be filled by civilians at reduced cost. The Secretary
  of Defense should immediately direct the Services to identify and convert
  military sr pport positions which can be filled by civilians.

                                 C omments

         We agree that there may be military support positions which can be
  filled by civilians. We have asked the Services to identify these positions
  and to civilianize as soon as practical those where military personnel are
  not req dired and it would be more cost-effective to do so.

  Cost Reporting

                     GAO Concern and Recommendation

        Formulation of a usable uniform cost reporting system for ROTC is
  a matter of urgency if program evaluation is to be meaningful. While ,e
  Services hive studied the matter and made proposals, none has been
  adopted by DoD. Without uniform cost reporting, neither DoD nor the
  Congress can make judgments on the effectiveness of the Services, pro-
  grams. The Secretary of Defense should immediately expedite develop-
  ment and implementation of a uniform cost reporting system.



                                      19
APPENDIX II                                                     APPENDIX      II

                                Comments

       We are acutely aware of the need for uniform costing of ROTC and
 have formed an interservice committee which is charged with developing
 a uniform costing methodology based upon an Air Force cost accounting
 model. The committee is expected to have a product for OSD review by
 May 1977.

 Recouping Investment in Program Dropouts

                     GAO Concern and Recommendation

        Thousands of scholarship participants withdraw from ROTC without
 incurring any active duty obligation. Few dropouts with active duty com-
 mitments are ordered to active service. In either case, the government
 has incurred considerable expense and the dropout has received tangible
 benefits. The Services have yet to agree on a legislative proposal to
 recover educational expenses incurred for volitional program dropouts
 even though one has been under consideration for several ) ears. GAO
 (1) recommends that the Congress enact legislation which permits the
 Services to require reimbursement for education and training costs as
 an alternative to active duty, and (2) includes suggested legislative
 language with its report.

                               C omments

        As a part of the DoD legislative program for the 95th Congress, we
 have submitted a proposed legislative amendment (DoD 95-54) to Chapter
  101, title 10, United States Code, which is in substantial agreement with
 the GAO suggested proposal. It would authorize the Secretary concerned
 to require an applicant for certain advanced education sponsored by the
 Armed Forces to agree to serve on active duty for a specified period or
 reimburse the United States for the apportioned costs of the education.


                           [See GAO    note]

 The GAO report concerning the management of ROTC has been very helpful
 and we appreciate your assistance.

                                    Sincerely,




Enclosures

GAO note:     The deleted comments relate to matters which were
              discussed in the draft report but omitted from
              this final report.
                                      20
APPENDIX III                                              APPENDIX III


                       PRINCIPAL OFFICIALS
                  RESPONSIBLE FOR ADMINISTERING
               ACTIVITIES DISCUSSED IN THIS REPORT

                                             Tenure of off.ce
                                             From          To
                         DEPARTMENT OF DEFENSE
Secretary of Defense:
  Harold Brown                               Jan. 1977      Present
  Donald H. Rumsfeld                         Nov. 1975      Jan. 1977
  James R. Schlesinger                       July 1973      Nov. 1975
Deputy Secretary of Defense:
  Charles W. Duncan, Jr.                     Jan. 1977      Present
  William P. Clements                        Jan. 1973      Jan. 1977
Assistant Secretary of Defense:
  (Manpower and Reserve Affairs)
  David P. Taylor                            July 1976      Present
  John F. Ahearne (acting)                   Mar. 1976      July 1976
  William K. Brehm                           Sept. 1973     Mar. 1976

                       DEPARTMENT OF THE ARMY
Secretary of the Army:
  Martin R. Hoffman                          Aug. 1975      Present
  Norman R. Augustina (acting)               July 1975      Aug. 1975
  Howard H. Callaway                         May 1973       July 1975

                       DEPARTMENT OF THE NAVY
Secretary of the Navy:
  J. William Middendorf II                   Apr. 1974      Present

                      DEPARTMENT OF THE AIR FORCE
Secretary of the Air Force:
  Thomas C. Reed                             Jan. 1976      Present
  James W. Plummer (acting)                  Nov. 1975      Jan. 1976
  John L. McLucas                            May 1973       Nov. 1975




                                   21