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NPP – “Back to Basics from a Base/Wing perspective”. Comptroller Forum 23-24 Oct 12 Shirley Tang-Jassemi, DGPFSS CFO Michel Landry, Director of Accounting. Agenda. CFPFSS/DGPFSS and Finance Division Organization Charts Scale of Operations CFPFSS/DGPFSS Delivery Model Defence Team

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npp back to basics from a base wing perspective

NPP – “Back to Basics from a Base/Wing perspective”

Comptroller Forum 23-24 Oct 12

Shirley Tang-Jassemi, DGPFSS CFO

Michel Landry, Director of Accounting

agenda
Agenda

CFPFSS/DGPFSS and Finance Division Organization Charts

Scale of Operations

CFPFSS/DGPFSS Delivery Model

Defence Team

National Defence Act (NDA)

NPP Governance

NPP at the Base/Wing Level

NPP Accountability Framework

NPP Financial Authorities

Compliance and Assurance Common Observations

NPP Contracting

Current Issues and Projects

Questions?

cfpfss dgpfss organization chart
CFPFSS/DGPFSS Organization Chart

Chief of the

Defence Staff

Chief

Military

Personnel

Managing

DirectorNPP

CEO

NPF

DGPFSS

NPP Fin

(CFO)

NPP IM/IT(CIO)

NPF HR (VP HR)

Pers Fin Svcs

(Pres SISIP

Financial Services)

Retail Svcs

(Pres CANEX/

NATEX)

MilitaryFamily Services Program

Casualty Support

Management

(DCSM)

Quality of Life

Family Services

(DQoL)

Pers Support Prog

(C PSP)

scale of operations
Scale of Operations

Managing Director of NPP

CEO of Staff of the NPF, CF

As a CMP Level 2

cfpfss dgpfss delivery model
CFPFSS/DGPFSS Delivery Model

Defence Services Program

Non-Public Property

Publicly FundedPrograms

(Public Delivery)

NPP M&WPrograms

CasualtySupport

+

Military FamilyServices (C108)

Staff of the NPF, Canadian Forces

Employee Benefits

And Pension Funds,Human Res.

Personnel Support Programs (C109)

(NPP Delivery)

the defence team
The Defence Team

5,600 NPFCivil Servants

60,000 RegularCF Personnel

20,000 Reservists

20,000 MinistryCivil Servants

back to basics nda
Back to Basics - NDA

Section 2 of NDA

“non-public property”

« biens non publics »

  • “non-public property” means

(a) all money and property, other than issues of materiel, received for or administered by or through messes, institutes or canteens of the Canadian Forces,

(b) all money and property contributed to or by officers, non-commissioned members, units or other elements of the Canadian Forces for the collective benefit and welfare of those officers, non-commissioned members, units or other elements,

(c) by-products and refuse and the proceeds of the sale thereof to the extent prescribed under subsection 39(2), and

(d) all money and property derived from, purchased out of the proceeds of the sale of, or received in exchange for, money and property described in paragraphs (a) to (c);

back to basics nda1
Back to Basics – NDA

NPP is a separate type of Crown Property

The money component is referred as NPF

NPP can only be used for the benefit of CF personnel and their families, former members and families or for any other purpose designated by the CDS

The FAA does not apply to NPP

Access to Information Act, the Privacy Act and the Official Language Act apply to NPP

The Federal Real Property and Federal Immovable Act does not apply to NPP owned real property

NPP of each unit or other element of the CF (other than disbanded Units or Units in altered circumstances) is vested in the Commanding Officer of that unit or other element of the CF and may only be used for the purposes set out in the NDA

back to basics npp governance
Back to BasicsNPP Governance

National Governance

NDA prescribes that the CDS is responsible for the governance of NPP

National governance is through the NPP Board

The board meets at least twice a year

Other committees in support: NPP Audit Committee, NPP Investment Committee, NPF Pension Board and the MFF Committee

Base and Wing Governance

CFAO 27-6 outlines that Base and Wing Commanders are required to establish a Base/Wing Fund with specific membership and duties

Base/Wing Commanders are also responsible and accountable for the governance of messes and museums located at their unit

back to basics npp at the base wing level
Back to BasicsNPP at the Base/Wing Level

Base/Wing Fund

Source of Fund

Use of Fund

Base & Wing Fund Subsidiaries

Golf Courses

Marina

Messes

Obligation to belong

Cannot subsidize sale of alcohol

Museums

Self financed and operates independently, not MW Program

Units Funds, Kit Shops

MFRCs – not NPP – 3rd Party

CANEX and SISIP – managed centrally

back to basics npp at the base wing level1
Back to Basics NPP at the Base/Wing Level

Unregulated activities – at the Base/Wing level activities are either Public or NPP

CANEX First Right of Refusal

Transfer of NPP Goods from CANEX to the Public

Security of NPP is the same as Public – see QR&O 21.72 and 21.73 for reporting

Representational Expenses

Restriction on use of NPP – Alienation and misuse

back to basics npp at the base wing level2
Back to BasicsNPP at the Base/Wing Level

Role of Public Comptrollers, Regional Accounting Managers (RAMs), Non-Public Accounting Manager (NPAM) and CFO HQ Staff

A-PS-110-001/AG-002 Morale and Welfare Programs in the CF – Volume 1 Public Support for Morale and Welfare Programs and NPP – identifies maximum public support. For shared Public/NPP programs NPP is not to be used to make up for a the lack of Public support, in these cases program needs to be adjusted. NPP is not to be used to fulfill a public responsibility

Annual requirement to complete a “Report of Public Support to Morale and Welfare and NPP”

back to basics npp accountability framework
Back to BasicsNPP Accountability Framework

National and local governance

CDS Delegation of Authorities for the Financial Administration of NPP supported by a requirement to pass a NPP Certification Course

NPP Letter of Financial Management Attestation

NPP Contracting Policy

NPP Travel and Relocation Policy

HR Policy, Accounting Policy, Sponsorship and Donation Policy, etc….

National entities are externally audited

back to basics npp accountability framework1
Back to Basics NPP Accountability Framework

CRS is responsible for the audit of NPP within the CF

Compliance and Assurance Team

Consolidated Insurance Program

NPP Fraud Prevention Handbook and Questionnaire

back to basics npp financial authorities
Back to Basics NPP Financial Authorities

Three main Components

Authority to Make Financial Commitments and Enter into Contracts

Authority to Approve Invoices and Other Obligations for Payments

Authority to Requisition Payment

back to basics npp financial authorities1
Back to BasicsNPP Financial Authorities

Base Commanders – Table 5 of the CDS Delegation of Authorities for Financial Administration of NPP applies

Key points

Full PO&M authority

PO&M for Single Event/Activity is limited to $250K if indebted to CFCF only

$50K

Capital – no authority if CFCF financed, $250K if self financed, $50K if

indebted to CFCF

Travel outside Canada and Continental USA limited to CFSU(E) only

Representational Expenses up to authorized level

Write-off - $250K, $50K if indebted to CFCF

Sponsorship and Donations

back to basics npp financial authorities2
Back to Basics NPP Financial Authorities

Key points:

No authority for IM/IT procurement

Sub-delegation

Withdrawal and Restrictions

Incumbent acceptance form

Mandatory NPP Course Certification

Unencumbered –current cash balance less current liabilities

Base/Wing Fund and subsidiaries as an aggregate

Messes (individually)

Museums/Other Unit Funds (individually)

back to basics npp compliance and assurance common observations
Back to Basics NPP Compliance and Assurance Common Observations

Segregation of Duties & Cash Controls

CANEX First right of refusal for ATMs

Contracting Policy – lack of contract, management of contracts

CDS Delegation of Financial Authorities for the Administration of NPP – processing of transaction without proper authority

Fixed assets verification not carried out

Compliance with Sponsorships and Donation Policy

Inadequate financial planning over large single event

CBA Overdraft

Little or poor review over financial statements by stakeholders

Note that NPP is not immune to theft and fraud so we need to be vigilant

back to basics npp contracting
Back to BasicsNPP Contracting

Policies and Principles

Reflect the values and ethics of the GoC and, wherever feasible consistent with the public;

Responsive to the unique nature and requirements of NPP organizations;

Based on a set of principles rather than detailed regulations and procedures;

Contracts are to be awarded on a competitive basis;

Primary importance – operational requirements of NPP Programs and activities;

Activities are to be conducted with care, fairness and honesty;

Reflect best business practices;

Contracts are to provide value for money; and

No direct or indirect personal benefit.

back to basics npp contracting1
Back to BasicsNPP Contracting

Sole Sourcing

NPP contracts are to be competitively tendered. However, competitive tendering may not be required when one or more of the following circumstances apply:

Pressing emergency/urgency and delay would prevent the contracting authority from meeting operational requirements of NPP programs and activities;

The nature of the work is such that the solicitation of bids would not reflect best business practice;

There is only one supplier capable of providing the required goods or services or capable of performing the work; and

The competitive tendering process would not result in obtaining the best value for money.

back to basics npp contracting2
Back to BasicsNPP Contracting

Prior written approval of DGPFSS is required to enter into any contract that does not meet one or more of the above noted criteria or exceeds the limitations imposed by the CDS Delegation of Authorities for Financial Administration of NPP for directed or non-competitive contracts which have been set as follows:

B/W Commanders and DGPFSS Division Heads $50K

Others: Up to delegated authorities not to exceed $10K

CANEX has first right of refusal for any new NPP re-sale and consumer service activities contemplated at any CF base/station location

NPP Programs and activities shall, whenever practical, obtain their goods for re-sale by messes and other NPP organizations, from/through CANEX

current issues
Current Issues

Staff of the NPF, CF – no longer have access to Public acquisition cards

Staff of the NPF, CF – public financial delegated authorities limited to FAA Sec 32 and 34

Staff of the NPF, CF – access to Claims-X is now being reconsidered

Staff of the NPF, CF – access to AMEX ITC is now being reconsidered

Use by NPP of the DND PST Tax exemption under the RTA

Accounts payable and accounts receivable between Public and NPP

current projects
Current Projects

Reserve Accounting Project

Accounting Information System Project (ABACIS Replacement)

BMO Details on Line (DOL) for corporate purchase card

reserve accounting project
Reserve Accounting Project

Focus on Army Reserve units

Currently 64 Army reserve units are accounted by the Finance division and approx 286 units are not

Project concept approved by DGPFSS and Comd CA

The project will be completed in five distinct phases

Soon will be working with NAVRES HQ for Naval units

reserve accounting project1
Reserve AccountingProject

Phase 1: Survey the reserve units NPP operation scope and requirements – 90% response rate

Phase 2: Based on the survey result, formulating service delivery models – work in progress, target completion by Oct 2012. The goal is to ensure that the NPP model will support the Reserve Force NPP operations. The approved service delivery models will be presented to Comd CA for endorsement

Phase 3: Initial trial – FY 2013/14

Phased 4: Full implementation – FY 2014/15

Phased 5: Post implementation review – FY 15/16

accounting information system replacement
Accounting Information System Replacement

Why replacement:

ABACIS was developed over 30 years ago and is expensive for software developments

Costly to interface with other software systems

The software owners will be retiring within next 5 years, thus poses significant continuity risks

The hardware will become unserviceable within 10 years

Limited reporting capabilities

accounting information system replacement1
Accounting Information System Replacement

Solution is to find a replacement system

Target date for a replacement system is FY 13-14

bmo details on line dol for corporate purchase card
BMO Details on Line (DOL) for Corporate Purchase Card

Leverage BMO DOL software to allow managers and cardholders to review transactions, enter financial coding and manage approval on line

Increase efficiency on accounting process and move toward paperless

Issue a policy to NPP entities to use the Corporate Credit Card for all purchases when accepted by supplier

Entities receive rebate of 1.46% on purchases

Since Oct 2012 – account statement on line

Dec 2012 to March 2013 – Training roll out

BMO DOL will be implemented by April 2013