OPM Revolving Fund:

OPM Sets New Tuition Pricing Policy

GGD-94-120: Published: Apr 6, 1994. Publicly Released: May 13, 1994.

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Pursuant to a congressional request, GAO reviewed the Office of Personnel Management's (OPM) tuition setting methods for training courses funded through its revolving fund, focusing on: (1) how tuition charges are set; (2) whether the tuitions of individual courses are reasonably related to their costs; and (3) how excess tuition income has been used.

GAO found that: (1) it could not evaluate OPM tuition-setting methods because OPM set the tuition for many courses long ago and did not retain the documentation; (2) OPM is supposed to adjust tuition charges to recover projected cost increases or decreases per course, but OPM uses across-the-board adjustments on a nonannual basis; (3) the OPM accounting system makes it difficult to verify revolving fund costs; (4) OPM does not allocate indirect costs to individual training courses, but it allocates indirect costs proportionally to a course's direct costs; (5) course revenues vary from 25 percent to 257 percent; (6) OPM officials state that the income from some courses offset the losses from other necessary courses; (7) before fiscal year (FY) 1989, the OPM training activity as a whole generated net income, but it incurred annual losses that resulted in a cumulative deficit of $7.7 million by FY 1992; and (8) OPM has developed a new training course pricing policy to ensure that prices would cover all direct and indirect costs, pricing methods would be documented, and differences in pricing practices would be reduced.

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