EEOC - Payment for Training of Managment Interns

B-257977 Nov 15, 1995 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The Equal Employment Opportunity Commission (EEOC) requested an advance decision on whether it could pay the entire cost of a two-year management intern training program at the beginning of the program. GAO held that EEOC could pay the entire training cost in advance, since the training was not a severable service and EEOC would only benefit at program completion. View Decision Matter of: EEOC - Payment for Training of Managment Interns File: B-257977 Date: November 15, 1995 The Equal Employment Opportunity Commission may obligate its fiscal year funds in advance for the full cost of the two-year training program that the Office of Personnel Management (OPM) operates for the Presidential Management Intern (PMI) program. Since under the PMI program an agency can hire an intern noncompetitively only if the intern completes the full two-year program, the OPM training may be viewed as an entire, nonseverable undertaking. It is thus a bona fide need of the fiscal year in which EEOC appoints an intern under the program. DECISION The Director of the Financial Management Division of the U.S. Equal Employment Opportunity Commission requested an advance decision concerning whether the Commission should pay a bill from the Office of Personnel Management under the Presidential Management Intern program. Specifically, the Director questions whether the Commission may pay the entire cost of an intern's two year training program at the beginning of the program. For the reasons indicated below, we conclude that the training of interns under the Presidential Management Intern program is an entire, nonseverable undertaking and that the Commission may pay the full costs of the training in advance. Background The Presidential Management Intern program (PMI) is a recruitment and career development training program designed to attract individuals with graduate or professional degrees into federal service. Under the program, universities nominate students who then submit applications to the Office of Personnel Management (OPM). The successful candidates are referred to participating agencies that may then appoint them as interns. Upon acceptance of an agency offer, interns begin a continuous two-year career development training program. During this period, interns receive training from their employing agency as well as centralized training from OPM. The training is designed to expose interns to governmental issues and to assist them in applying management tools within their specific work environment. Interns who successfully finish the full two-year program are eligible to be considered for permanent employment by their agencies. The two-year training program must be completed by each individual intern. Substitution of one individual for another may not be made during the two-year period. OPM carries out its coordination of the PMI program and its training of interns under the authority of Executive Order 12364, 47 Fed. Reg. 22931 (May 24, 1982), [1] and the Training Act, 5 U.S.C. Secs. 4101-4118. It finances the program through its revolving fund established by 5 U.S.C. Sec. 1304(e)(1). Prior to 1993, OPM charged each agency participating in PMI on a yearly basis for each intern the agency hired. In May 1993, however, OPM informed participating agencies that in the future they would each be required to pay for the costs of both years of the program in advance. Each agency was billed accordingly. Discussion The Director questions whether the Commission may, consistent with the bona fide need rule, obligate its one year appropriation to cover training and related services being provided by OPM over a two-year period. The bona fide need rule provides that an agency may obligate a fiscal year appropriation only to meet a legitimate, or bona fide, need arising in the fiscal year for which the appropriation was made. 70 Comp.Gen. 296 (1991); 64 Comp.Gen. 359, 362 (1985). Consistent with this rule, delivery of goods or performance of services in a fiscal year subsequent to the year in which a contract is executed does not necessarily preclude charging earlier fiscal year funds with the full cost of the goods or services. 70 Comp.Gen. at 297; 65 Comp.Gen. 741, 743 (1986). The test is whether the goods or services meet an immediate need of the agency, regardless of when the work is actually performed. Id. As a general rule, service contracts are viewed as chargeable to the appropriation current at the time the services are rendered. 71 Comp. Gen. 428, 429 (1992). However, a need may arise in one fiscal year for services which, by their nature, cannot be separated for performance in separate fiscal years. Id.