ARMY CIVILIAN WELFARE FUND
FY09
FINANCIAL MANAGEMENT, OPERATING AND BUDGET GUIDANCE
This information applies to all Army and Department of Defense Agency Civilian Nonappropriated Fund Instrumentalities (NAFI). It is to be noted that certain information present in the annual IMCOM/FMWRC FY09 Operating and Budget Guidance is also applicable.
This FY09 Civilian MWR NAFI Financial Management Operating / Budget Guidance may be accessed on the World Wide Web Army Civilian Welfare Fund (ACWF) Homepage at http://www.hqda.army.mil/ACWF/ under the Budget Guidance section.
Civilian NAF Financial Management Operating Guidance and Accounting Policy and Systems Memoranda that were not incorporated into AR 215-1, AR 215-7, DOD 7000.14-R Volume 13 NAF Policy and Procedures are still valid. These memoranda may be accessed on the World Wide Web ACWF homepage as listed above, under the Financial Management Section.
MAJOR BUDGET/OPERATING CHANGES:
· All FY 09 budgets for civilian field operating NAFIs are to be prepared using the Financial Management Budget System (FMBS) version 2.0.
· All PRF and CWF budgets are forwarded electronically through FMBS to the ACWF. All budget submissions are to be received by the ACWF NLT September 1, 2008.
· All PRF and CWF budget packages will include: 1) A “Strategic Plan” with a “Description of Activities and Services” Appendix. Include NAFI’s current approved Position Requirement Document (PRD). 2) Commanders Approval Letter. 3) Council Meeting Minutes endorsing budget approval. 4) FMBS input of an Annual Operating Budget (AOB), APF/NAF Five Year Financial Plan, Capital Purchase Minor Construction (CPMC) Budget, Cash Budget. 5) Direct Operated PRF Activities: Current Menu Price List with annual proposed price increases.
· All PRFs and CWFs considering ACWF financial assistance during FY 09 must submit intentions to the ACWF by September 1, 2008 for consideration.
· Budgeted labor is to encompass a minimum 4% overall increase beginning in January to account for the annual pay adjustment and estimated employee benefit package changes.
· The minimum NIBD for PRF’s is eight percent of total manual food service revenue. Income from concessionaires or other operations including Vending BPA agreements, interest income and Bingo will not be included in the determination of the eight percent standard. Administrative expenses will be allocated IAW GAAP.
· Due the volatility of the commodities market, PRF managers must change pricing, products and menu mix quarterly.
· Catering revenues are derived from events in which at least fifty percent of the revenue is derived from food and beverage sales.
· CWFs are authorized to expend no more than 25% of the funds total revenue on NAF employee salaries.
· All CWF business operations must be self-sufficient. Operational fees and charges will be sufficient to meet continual operational expenses, capital requirements and capital improvements.
· Fully contracted PRF operations will not utilize a Regular Full Time (RFT) NAF employee or equivalent for the restaurant officer/manager, custodian or COR positions. Total labor hours allocated to the PRF will not exceed 20 per week from all NAF sources.
· CWF and PRF budgeting and financial reporting is to follow standardized General Ledger Accounting Codes (GLAC) and Departmental Guidance.
· All PRF’s must participate in the Joint Service Prime Vendor program. Exceptions to this requirement may be granted if requesting installation documents overall lower pricing on 85% of items delivered via other vendors. Submit proof of compliance with the strategic plan. If using alternate vendors, submit a detailed price comparison analysis with the budget package. Quarterly comparison analyses are also required to be forwarded to the ACWF, no later than 20 days after the end of the quarter.
Focus attention on providing excellent customer service and reducing fund losses by curtailing losing operations and programmed activities. All PRFs will utilize the performance targets prescribed by FMWRC for Club Operations.
The dividend distribution policy will remain at a maximum of 50% of NIBD for PRFs that own fixed assets and 95% for those that do not. The ACWF will continue to receive five percent of each PRF’s NIBD. All special dividends will be identified in the Strategic Plan, AOB and cash flow budget. All special dividends of any amount must be approved by the ACWF.
All CWFs will continue to budget for positive cash flow. The CWFs that are expected to incur a Net Loss Before Depreciation in FY 08 must budget for a NIBD in FY 09 in an amount that will offset the expected loss unless the amount was of the loss was due to a nonrecurring special event.
CWF business operations must be self-sufficient. Operational fees and charges will be sufficient to meet continuing operational expenses, capital requirements and capital improvements. CWF business operations include, but are not limited to, the following: Bowling alleys, Cabins, Recreation Lodges and Pavilions, Rod and Gun Clubs, Flying Clubs, Fitness Centers, Golf Courses and Driving Ranges, and Recreational Fields. These operations are not authorized to be subsidized by PRF dividends.
All CWF golf operations will budget for a NIBD of fifteen percent.
Additional ACWF budgeting details and responsibilities can be found in AR 215-7, Section 2-6.
Civilian MWR NAFI Budget Requirements and Submission Procedures:
Preparation: The utilization of the Financial Management Budget System (FMBS) Version 2.0 is required.
Civilian NAFI custodians are responsible for initial preparation of all required budgets, including coordinated planning of dividend requirements by the CWF and capabilities of the PRF. Due to the dependency of the CWF NAFI on the PR NAFI for financial support, there must be assurance that the CWF budget is realistic and that the PRF can generate the projected dividend amounts.
Submission: Each Army Civilian NAFI budget package will be submitted to the ACWF. DOD Agency budgets will be submitted directly to the ACWF. The budget packages must be received at the ACWF on or before September 1, 2008. The budget package will consist of the following elements:
- Command approval letter, Commander or appointed representative’s signature required.
- Strategic Plan that includes the following:
a.Organizational Values, Purpose, Vision and Mission statement with supporting Goals and Objectives.
b.Discussion of significant trends and command factors influencing operations, activities and civilian support.
c.Evaluation of current status of operations and services provided.
d.Discussion of variances of more than 10% from prior year actual and or budget for the following areas: Sales/COGS, Income (proposed changes in rates, etc.), Labor expenses (to include proposed changes in staffing), other expenses (including use of NAF for items authorized APF and any planned cost savings and/or overhead reductions).
e. Discussion of CPMC items in terms of replacements, and new additions.
f.Proof of participation in JSPVP or required documentation described above.
3. Description of Activities and Services:
a. Description of operations, facilities, services, programs and activities offered and planned.
b. Days and hours of operations.
c. Discussion of most recent renovations, recommendations, and results.
d. Most recent copy of approved fund PRD, with number of staff, position titles, full-time, part-time, flex.
e. Direct operations only: Current Menu Price List with annual proposed price increase, along with month of implementation.
4. Council Meeting Minutes endorsing budget approval.
5. Annual Operating Budget (AOB)
a. Ensure projections are realistic, submit justifications if variances are unusual or significant from prior year actuals.
b. Ensure overall manual food service operations of PRFs meet 8% NIBD standard with out the inclusion of interest income, concessionaire commissions, bingo programs and BPA vending services.
c. Ensure Golf programs meet 15% NIBD standard.
d. Gear operations towards meeting benchmarks (See Business Programs Guidance Section).
1. APF/NAF Five Year Financial Plan
a. Five year financial plans can be projected by increasing AOB data by 3-5%. Out years are revised as they draw near through each FY AOB submission.
2. Capital Purchase Minor Construction (CPMC) Budget
a. Ensure tangible fixed assets are budgeted to be capitalized (not expensed in the AOB) and depreciated IAW AR 215-7, p. 4-12.
b. Annual and Five year APF/NAF Budgeting for capital requirements to adequately reinvest in civilian funds is essential.
c. CPMC that reflect APF authorized expenditures will not be approved. These items must be identified as an APF requirement.
d. If APF authorized expenditures have been identified as an APF requirement and funding is not available, submit certification from the Command Resource Management office of the non-availability of funds throughout FY09.
e. All CPMC items will be specifically identified and funded separately.
f. All purchases of $1K or greater items will be procured via SNACS through the ACWF competitive bid process.
3. Cash Budget
a. Enter beginning cash. The AOB and CPMC data transfers automatically into the cash budget. Enter liabilities taken from the most recent balance sheet or use a projected amount by Oct 1, enter that figure all the way across in FY08 and the out years.
b. Increase to cash line is typically used to budget for anticipated receipt of financial assistance.
c. Decrease to cash line is typically used by PRFs to document outgoing local CWF and ACWF dividends, based on council approved percentage of NIBD.
d. No Civilian NAFI is to budget for a negative cash flow.
e. Ensure the cash flow budget reflects fund solvency. Following integration of the AOB and CPMC budgets, print the cash budget report and review line 18, ensure the acid test ratio remains greater than or equal to 1:1 throughout FY08 and the out-years.
4. NAF Major Construction Budget
a. Major Construction Projects include amounts greater than or equal to $750,000.
1-4. The due date for all items is September 1, 2008.
FAX: COM 703-325-3524 or DSN: 221
Headquarters Department of the Army- DAPE-CPZ-WF
2461 Eisenhower Ave, Hoffman Bldg. I, Room 148
Alexandria, VA 22332
Email:
5-9 Above must be entered into the FMBS and submitted electronically.
Review and Approval:
Each Fund Council will review and approve budgets prior to submission.
The installation or agency command will approve budgets prior to submission.
The ACWF has final budget approval authority; FY09 NAFs will not be expended until budgets are approved by the ACWF.
CWF/PRF Financial Guidance:
Acquisition planning must be made part of the CPMC and FY budget process. Advance planning will require the efforts of all personnel responsible for an acquisition to be coordinated and integrated through a comprehensive plan for fulfilling the NAFI’s needs in a timely manner, at a reasonable cost and with the appropriate authorized APF support. A clear crosswalk and reference to the cash flow budget will complete the planning cycle and ensure capital will be available. During this process, the needs of the requester should be developed and specified in a manner that will promote competition and will ensure that the NAFI receives the best overall value, while including the utilization of APFs where authorized. Requesting activities should give the Contracting Office and the ACWF sufficient procurement lead-time to meet their required delivery schedule. Proper acquisition planning is the key to successful procurement.
All current department codes, and GLAC codes are listed at enclosure 10.
Overhead Cost Allocation: A direct reduction in overhead costs to Civilian MWR operations is required through proper operation allocation.
Directly charged services. These are services provided by the Central Accounting Office (CAO), Civilian Personnel Office (CPO), and the Risk Insurance Management Program (RIMP). The CAO costs are allocated based on the documented cost incurred to record transactions for Civilian MWR funds. The CPO costs are normally allocated based on the percent of the total active personnel files being serviced. The RIMP insurance is billed directly to the NAFI based on the coverage provided. These expenses are reported using GLACs 685 – CAO Expense, 682 – CPO Expense, 733 – Insurance Premiums Expense, and 734 – Buildings and Contents Insurance Expense. These costs are to be charged to the appropriate funds administration department (G1).
Installation Military MWR Fund (IMWRF) overhead services provided to Civilian MWR funds. When the IMWRF provides support services to civilian funds, the cost may be equitably apportioned to PRFs or CWFs. Any charges of IMWRF administrative/overhead costs are to be negotiated (agreed upon as to which and how much of the overhead program services will support civilian funds) between IMWRF and the civilian funds on the installation. Also, Civilian Funds may provide services to the IMWRF when it is determined that it is most efficient to do so. The support agreement is to be documented in a MOA and approved by the ACWF. The MOA will list the services provided and the charging methods used. Any cost allocation is to reflect services necessary and work actually performed. The IMWRF expenses charged to civilian funds are not to include Department Code GL – APF Support (Normal Operations).
Maximum charges for overhead support. Costs allocated will be based on actual expenses incurred to provide these services. In no case will the charges for support or services provided to Civilian MWR Funds be more than the PRF’s or CWF’s proportionate share of the total of all expenses of the IMWRF and Civilian Funds combined (not including the expenses of the overhead programs to be allocated nor any Department Code GL – APF Support (Normal Operations). The shared and overhead cost allocations should be reviewed and reconciled to actual expenses incurred twice each fiscal year, and if necessary, adjusted to ensure that they are appropriate.
Environmental Issues. Indirect support services authorizes APF use for all categories of MWR for the purposes of environmental compliance. APF funds are earmarked for these uses and a statement of non-availability of APF funding must be obtained before NAFs are used for this purpose.
Installation Internal Review Offices will be requested to review the allocation of costs to ensure appropriateness. Army-wide review of the charge by allocation is anticipated to be one of the U.S. Army Audit Agency’s functional audits.
Reporting Personnel Strengths and Labor Costs. A review of personnel strength reports versus financial statements indicates there are discrepancies between the location codes on NAF employee work center codes and the location codes cross-referenced in the accounting system. All managers should reconcile the location code shown within the work center codes shown on each employee’s timecard with the location code association currently in use in the accounting system. Any discrepancies found can be rectified through a correction in the employee’s personnel record or through a notification to the accounting office of a need for a change to the cross-reference table used in the accounting structure, as applicable.