oversight

Defense Infrastructure: Funding Risks in Services' 1999 Central Training Programs

Published by the Government Accountability Office on 1999-02-24.

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

                  United States General Accounting Office

GAO               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
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   National Security and
                   International Affairs Division

                   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.


                   Our analysis shows that total funding for central training was projected to
Results in Brief   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

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



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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



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             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.


             DOD  stated in its May 1997 Report of the Quadrennial Defense Review
Background   (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.




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                                           DOD’s 1998 FYDP projected a 1-percent increase in funding for central
Army Funding                               training between 1999 and 2003, while the 1999 FYDP projected a
Changes Account for                        2.5-percent decrease in funding for the same period. The total decrease in
Largest Share of                           funding between the two FYDPs was $8.4 billion. Figure 1 compares the
                                           annual funding levels for the two FYDPs.
Projected Decrease
Figure 1: Comparison of the 1998 and
1999 FYDPs’ Funding for Central
Training in Billions of Fiscal Year 1999    Dollars in billions
Dollars                                     24



                                            22



                                            20



                                            18



                                            16



                                            14
                                                       1999              2000             2001              2002            2003
                                                                                        Fiscal year

                                                                                    1998 FYDP      1999 FYDP

                                           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




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                                         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)
Dollars in billions
 0.5



  0



-0.5



  -1



-1.5



  -2
              1999                2000                 2001                   2002               2003
                                                    Fiscal year

                         Air Force    Army        Marine Corps        Navy        Defense-wide


                                         Source: Our analysis of DOD FYDP data.




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                                             The 1998 FYDP projected that Army central training funding would remain
Army Budget Is                               relatively stable over the 1999-2003 period, while the 1999 FYDP projected a
Smaller Primarily Due                        decline of $7.2 billion over the same period. The most significant
to Errors in 1998                            reductions in the Army’s budget were in four categories—training of new
                                             personnel, professional and skill training, aviation and flight training, and
FYDP                                         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 category                   FYDP                1999             2000              2001        2002          2003         Total
Training of new personnel           1998              $1,390           $1,410           $1,448       $1,480        $1,465        $7,194
                                    1999                 654              620               605         618           614         3,112
                                    Change              –736             –790              –843        –862          –851        –4,081
Professional and skill training     1998                2,718           2,709             2,706       2,742         2,756        13,631
                                    1999                2,572           2,476             2,461       2,457         2,458        12,425
                                    Change              –146             –233              –245        –285          –297        –1,206
Aviation and flight training        1998                 561              594               622         640           597         3,015
                                    1999                 423              401               405         412           414         2,056
                                    Change              –138             –193              –218        –228          –182          –959
Installation support for training   1998                1,493           1,424             1,399       1,385         1,419         7,120
                                    1999                1,422           1,407             1,289       1,323         1,244         6,684
                                    Change               –71              –17              –110         –62          –175          –435
Total Army central traininga        1998              $7,305           $7,243           $7,304       $7,342        $7,345       $36,540
                                    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.




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Training of New Personnel   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      The 1999 FYDP programmed $1.2 billion less in total for this category than
Training                    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




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



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                      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 Initiative6 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.

Aviation and Flight   Total funding for aviation and flight training was projected to be about
Training              $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.



                      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.



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                           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   Funding for installation support for training was projected to be about
Training                   $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.




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                                             Although both the 1998 and 1999 FYDPs projected a net decrease in Navy
Changes in Navy                              central training funding, there were some substantial changes within
Funding Primarily                            several training categories in the 1999 FYDP. The most significant changes
Due to Surge in New                          between the two FYDPs were in four categories—professional and skill
                                             training, aviation and flight training, command managed training, and
Recruits, Personnel                          installation support for training. These changes were primarily due to
Reductions, Planned                          personnel reductions, planned savings from training initiatives, deferred
                                             real property maintenance, planned savings from changes in the
Savings From Training                        procurement profile for trainer aircraft, higher flying-hour costs, and
Initiatives, Deferred                        planned savings from competitive sourcing and regionalization initiatives.
Maintenance, and                             Table 2 lists the amounts programmed for the four categories that changed
                                             the most between the two FYDPs.
Higher Flying-Hour
Costs

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 category                   FYDP                1999             2000              2001            2002          2003         Total
Professional and skill training     1998               $1,743          $1,771           $1,750           $1,727        $1,705        $8,696
                                    1999                1,779           1,783             1,686           1,653         1,659         8,561
                                    Change                36                12              –63             –74           –46          –135
Aviation and flight training        1998                 985            1,053             1,061           1,042           964         5,105
                                    1999                1,041           1,089             1,011             982           854         4,977
                                    Change                56                35              –50             –60          –109          –128
Command managed training            1998                1,265           1,239             1,256           1,251         1,248         6,258
                                    1999                1,313           1,305             1,308           1,301         1,298         6,525
                                    Change                48                66                52             50            51           267
Installation support for training   1998                 693              751               684             697           675         3,499
                                    1999                 680              683               692             672           619         3,345
                                    Change               –13              –68                     8         –25           –56          –154
Total Navy central training         1998               $5,413          $5,543           $5,475           $5,436        $5,309       $27,175
fundinga
                                    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.




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Professional and Skill   Projected total funding for professional and skill training shows a
Training                 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      Total funding levels for aviation and flight training were projected to be
Training                 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.



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Command Managed            Total funding for command managed training was projected to be
Training                   $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   Total funding levels for installation support for training were projected to
Training                   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.


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




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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 category                   FYDP                1999             2000              2001         2002          2003         Total
Professional and skill training     1998               $1,528          $1,465           $1,499        $1,474        $1,478        $7,444
                                    1999                1,483           1,385             1,382        1,361         1,361         6,972
                                    Change               –45              –80              –117         –113          –117          –472
Aviation and flight training        1998                 968              994             1,016        1,036         1,124         5,139
                                    1999                1,017           1,034             1,033        1,108         1,202         5,394
                                    Change                49                40                17          71            78           255
Installation support for training   1998                 786              797               833          850           866         4,132
                                    1999                 828              830               879          905           939         4,381
                                    Change                43                33                46          55            73           250
Total Air Force central training    1998               $5,942          $5,948           $6,087        $6,051        $6,192       $30,221
fundinga
                                    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                       Total funding for professional and skill training was projected to be
Training                                     $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



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                           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        Total funding for aviation and flight training in the 1999 FYDP was projected
Training                   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   Funding for installation support in the 1999 FYDP was projected to be
Training                   $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



                           Page 14                                     GAO/NSIAD-99-56 Defense Infrastructure
                  B-281814




                  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.


                  Funding for central training in the 1999 FYDP was projected to be
Conclusions       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.


                  In written comments on a draft of this report, DOD concurred with the
Agency Comments   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.


                  To compare the funding levels for central training, we analyzed funding
Scope and         data from the 1998 and 1999 FYDPs for 1999-2003. We did not test DOD’s
Methodology       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



                  Page 15                                   GAO/NSIAD-99-56 Defense Infrastructure
B-281814




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.


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.




Page 16                                   GAO/NSIAD-99-56 Defense Infrastructure
B-281814




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




Page 17                                   GAO/NSIAD-99-56 Defense Infrastructure
Appendix I

Central Training Categories


               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.




               Page 18                                    GAO/NSIAD-99-56 Defense Infrastructure
Appendix I
Central Training Categories




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.




Page 19                                   GAO/NSIAD-99-56 Defense Infrastructure
Appendix II

Comments From the Department of Defense




(701145)      Page 20       GAO/NSIAD-99-56 Defense Infrastructure
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