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Finance Committee Report to the National Executive Committee 4 May 2012 PowerPoint Presentation
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Finance Committee Report to the National Executive Committee 4 May 2012. Approval of Minutes. Finance Committee approved minutes from its meeting on 3 November 2011. FINANCIAL MANAGEMENT PROCEDURES. CAPR 173-1 requires Wings/Regions/Units to develop Financial Management Procedures for:

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slide1

Finance Committee Report

to the

National Executive Committee

4 May 2012

slide2

Approval of Minutes

Finance Committee approved minutes from its meeting on 3 November 2011

slide3

FINANCIAL MANAGEMENT PROCEDURES

  • CAPR 173-1 requires Wings/Regions/Units to develop Financial Management Procedures for:
    • Expense approval
    • Recurring expenses
    • Credit card authorizations
    • Bank transfers
    • Travel
  • With the exception of travel, all requirements could be met using a standardized form.
  • Utilizing a standard form will simplify the financial process for units
slide4

FINANCIAL MANAGEMENT PROCEDURES

Finance Committee recommends that:

The NEC mandate use of a standardized form to eliminate the requirement for Wings/Regions/Units to develop their own Financial Management Procedures for expense approvals, recurring expenses, credit card authorizations, and bank transfers.

slide5

CASH ADVANCES

  • Cash advances are allowed per CAPR 173-1
  • Current regulation does not provide sufficient guidance on terms of the advance
  • Some advances have been treated as “petty cash”
  • Purpose for the advance changes
slide6

CASH ADVANCES

Finance Committee recommends that:

The NEC authorize a change to CAPR 173-1 to limit the term of a cash advance to 60 days and limit advances to one per member at a time.

slide7

DONATIONS

  • CAPR 173-1 currently requires units to send all donation checks to Wing HQ for deposit
  • Both Wings and Units have requested a change to the regulation to allow the Units to deposit checks locally and forward a copy of the check and supporting documentation to the Wing
  • Changing this process will still allow Wing oversight for issuance of donation letters by the Commander
slide8

DONATIONS

Finance Committee recommends that:

The NEC support a change to CAPR 173-1 to allow Units to deposit donations locally and forward a copy of the check and/or supporting documentation to the Wing.

slide9

CREDIT CARD POLICY

  • CAPR 173-1 does not provide specific guidance on the action to be taken if a cardholder fails to comply with credit card reporting requirements
  • New language in the regulation ensures corporate policies are standardized
  • New policy will also support the use of the Consolidated Financial Form which only requires a list of authorized card holders
slide10

CREDIT CARD POLICY

  • Policy details reporting requirements
    • Documentary evidence showing the amount, date, place, and essential character of each expense within 21 days after the date of the billing statement
  • Meals on travel, except for meals associated with business entertainment, are not allowed if individual elects per diem
  • Noncompliance with reporting or personal use requirements is grounds for cancelling the credit card
    • Credit card revoked upon the third such incident
slide11

CREDIT CARD POLICY

Finance Committee recommends that:

The NEC approve the revised credit card policy.

slide12

WING FINANCIAL ANALYST

  • CAPR 173-1 requires additional information on the WFA audit function to include unit audits
  • New language in the regulation will provide clarity regarding the purpose of the function of the WFA
  • WFA’s now audit all assets, including financial assets as well as supplies and equipment documented in ORMS
slide13

WING FINANCIAL ANALYST

Finance Committee recommends that:

The NEC authorize a change to CAPR 173-1 to provide additional detail on the Wing Financial Analyst’s expanded role that now includes audit of all assets including supplies and equipment recorded in ORMS as well as financial assets.

slide14

ADDITIONAL GUIDANCE

  • Due to confusion about policy requirements in CAP 173-1, additional guidance will be included in the regulation regarding:
      • W-9 reporting
      • Internal Financial Review
      • Business meals and entertainment
      • Changing reference from NovelAspect to Smart Vault
slide15

VEHICLE REIMBURSEMENTS

  • CAPR 173-3 currently authorizes reimbursement to members for “Automotive fuel and lubricants actually used while enroute to/from and while performing the mission.”
  • Vehicle lubricants, such as oil, are not mission specific.
  • Some questionable claims have been filed for lubricants.
slide16

VEHICLE REIMBURSEMENTS

Finance Committee recommends that:

The NEC authorize a change to CAPR 173-3 to eliminate reimbursements for privately owned vehicle lubricants.

Note: Reimbursement for aircraft lubricants continues. Reimbursement for aircraft and vehicle fuel continues.

slide17

USAA AGREEMENT

  • CAP’S affinity card agreement with Bank of America has expired
  • CAP/PA has been researching a replacement card for the membership
  • USAA has prepared a proposal for a new affinity card agreement
  • Proposal is on the NEC agenda for consideration
slide18

USAA AGREEMENT

Finance Committee recommends that:

The NEC approve the new USAA affinity card proposal.

slide19

SER REQUEST

Item has been withdrawn.

slide20

MEMBERSHIP DUES

Item has been withdrawn.

slide21

SOUTH CAROLINA WING ADVANCE

Item has been withdrawn.

slide22

VANGUARD FUNDS

  • Funds previously restricted by NEC to support Region Training Centers
    • NESA, Blue Beret, and Hawk Mountain
  • In FY12 NEC authorized $25,000 for volunteer staff support
  • Proposal now is to authorize in FY12 $10,000 for each region restricted to direct support of cadets and cadet program activities
  • $10,650 has also been requested for Blue Beret facility repairs and improvements
slide24

VANGUARD FUNDS

  • Total of $224,534 available after funding remaining volunteer staff support
  • Current requests
    • $80,000 – Cadet support to regions
    • $10,650 – Blue Beret facility
  • Leaving $133,884 available in FY12
slide25

VANGUARD FUNDS

Finance Committee recommends that:

The NEC approve spending $80,000 in FY12 from Vanguard funds as a $10,000 grant to each region for direct support of cadets and cadet program activities excluding expenses for any senior members.

slide26

VANGUARD FUNDS

Finance Committee recommends that:

The NEC approve spending $10,650 in FY12 from Vanguard funds for Blue Beret facility repairs and improvements as requested.

slide27

UNIT VISITS

  • 198 Units visited since 1 June 2010
  • 16% of units had no reportable issues
  • ORMS Value of total items reviewed:

Aircraft $3,414,153

Vehicle 1,181,491

Supplies & Equipment 1,126,737

Communications 2,050,205

Total Value $7,772,586

slide28

ORMS ISSUES NOTED AT UNIT VISITS

Top Five ORMS Issues at Units

Finding% of units visited

Non-tagged Items 34%

Items not found 24%

Assigned items not present 22%

Not updating ORMS timely 14%

Items on site not in ORMS 14%

slide29

FINANCE ISSUES NOTED AT UNIT VISITS

Top Five Financial Issues at Units

Finding % of units visited

Missing Finance Committee minutes 32%

No budget 12%

Budget not balanced or reviewed 9%

Year-end reporting not correct 5%

Late year-end reporting 4%

slide30

WING ACCOUNTABILITY MATRIX

As of 30 Apr 2012

slide32

FY12 CORPORATE BUDGET EXECUTION

As of 26 Apr 12

FY11FY12

BUDGET $2,421,754 $2,520,505

INCOME $ 1,392,223 $1,346,711

57% 53%

EXPENSES $ 1,093,997 $1,018,153

45% 41%

Straight Line Execution 55%

Historical 52% Revenue

Historical 42% Expenditures

Sidebar: Explanation of change to accounting procedures for dues

slide33

FY12 APPROPRIATED BUDGET EXECUTION

As of 26 Apr 12

BUDGET EXECUTED%

O&M 27,838,000 14,123,456 51

DDR 450,000 174,217 39

Straight Line Execution: 55% Historical Execution: 51%

A/C ProcurementFY10FY11FY12

Budgeted 6,406,000 2,424,000 8,990,000

Expensed 6,406,000 2,424,000 8,663,814

Balance - 0 - - 0 - 325,186

100% 100% 97%

Vehicle ProcurementFY10FY11FY12

Budgeted 1,065,855 902,000 917,000

Expensed 883,128857,640 -0-

Balance 187,727* 12,665 917,000

83% 99% 0%

slide34

FY12 APPROPRIATED BUDGET EXECUTION

As of 26 Apr 12

PROGRAM INCOME FUNDS:

CASH ON HANDEXECUTEDBALANCE

201 A/C Sales 619,843 619,843 - 0 -

202 Vehicle Sales 3,440 - 0 - 3,440

203 CMx Funds 936,995 151,515 785,480

204 Comm & IT 15,178 - 0 - 15,178*

205 ARCHER 46,375 - 0 - 46,375*

*Pending execution for SDIS/ADIS Laptop computers

slide35

FY12 Mission Execution – WMIRS vs. NAVISION

As of 30 Apr 12

NAVISIONWMIRS

(% Actually Paid) (% Spent & Obligated)

AF Missions 30% 33%

Counterdrug 4% 7%

AF Training 21% 52%

Cadet O-Flights 29% 41%

CMx Ferry Flights 42% 49%

Cadet Orientation Flight Goal - 37,300* Flights

Flights as of 30 Apr 12 -15,448 Flights

Percentage Complete - 41.4%

* 52% increase from prior year

slide36

FY12 GLIDER MX UPDATE

  • Glider budget was established to provide additional resources and ensure gliders are maintained to a national standard
  • Current budget is $140k
  • Requests for glider MX to date total $34,227
  • Balance remaining is $105,773
slide37

INVESTMENTS

  • As of 31 March 2012

RestrictedUnrestricted

Beginning Cost 177,291 5,002,376

(30-September-2011)

Interest & Dividends 3,798 116,312

Investment Fees (625) (15,434)

Realized G(L) from Sales -0-(201,531)

Ending Cost 180,464 4,901,722

Market Value 182,9675,059,230

Unrealized Gain (Loss) 2,504 157,508

slide38

INVESTMENTS

  • As of 31 March 2012

RestrictedUnrestricted

Change in Market Value 10.71% 13.38%

(Excludes Interest and Dividends)

Interest & Dividends 2.34% 2.56%

Total Return 13.05% 15.94%

(Includes Interest and Dividends)

Gain (Loss) on Sales + Fees (0.38)% (4.77%)

Net Return 12.66% 11.17%

Weighted Return of Indexes: 12.95%

(35.75% Wilshire 5000; 19.25% MSCI ACWI, ex US; 40% Barclays Aggregate; 5% Citigroup 3mo Treasury)

slide41

FY10FY11FY12FY13

(Actual $) (Actual $) (Projected $) (Projected $)

Income 2,431,950 2,452,164 2,520,505 2,538,400

% Increase from prior year 1% 1% 1%

Membership Income Projections

(Figures are based on data as of 1 Mar of full paying memberships)

FY10FY11FY12FY13

Senior Mbrs32,459 32,202 33,413 32,542

Cadet Mbrs22,89125,160 25,48825,080

55,350 57,362 57,559 57,622

FY13 CORPORATE FINANCIAL PLAN

The Historical Perspective

slide42

FY13 CORPORATE FINANCIAL PLAN

The Beginning – From Basic requests

Revenue Projection: $2,538,400

Expense Requests: $2,682.667

Opening Delta: $ 144,267

FMB Recommendations:* $ -29,200

Finance Committee Delta: $ 115,067

*moved to unfunded list

slide43

FY13 CORPORATE FINANCIAL PLAN

FMB Recommended Unfunded

  • FM – Investment Cmt/FM Summit Travel $ 5,000
  • PA – National Curator Expenses $ 2,000
  • NEC Committee Expenses $ 5,000
  • Wreaths Across America $ 2,000
  • CP - Supplies $ 500
  • CP - Summit $ 1,000
  • Nat’l Cadet Competition $ 2,000
  • Overseas Cadet O-Flights $ 9,200
  • LG - Corporate Mail-outs $ 2,000
  • LG – Mbr. packet pgrm. – Salaries & Benefits $500
  • TOTAL $29,200
slide44

FY13 CORPORATE FINANCIAL PLAN

New Initiatives & Significant Changes

  • EXPENSE INCREASES – $$ Amount of Variance($3k or greater from prior yr.):
    • Nat’l Vice Commander + $ 3,000
    • Nat’l Chief of Staff Travel + $ 4,000
    • Nat’l Staff Travel + $11,150
    • Nat’l Staff – Operating Funds* + $ 1,350
    • Nat’l Safety Officer Travel + $ 3,000
    • Dep. Ch of Chaplains Travel* + $ 4,000
    • Dep. Asst to Ch. Of Chaplains Travel* + $ 1,500
    • Chief Emeritus CAP Chaplain Travel* + $ 1,400
    • Chaplain Staff Colleges + $ 8,000
    • Sec. of the CCAC + $ 3,000

* Indicates New Initiative for FY 13

slide45

FY13 CORPORATE FINANCIAL PLAN

New Initiatives & Significant Changes

  • EXPENSE INCREASES – $$ Amount of Variance($3k or greater from prior yr.):
    • Nat’l Diversity Officer Section* +$ 22,045
    • NER CC Travel + $ 3,690
    • Corporate Development Section* + $89,450
    • Sr. Mbr Accident Medical Claims + $ 5,000
    • Misc. Bank Expenses + $ 8,000
    • Cash Reserves + $53,448
    • Nat’l Staff College + $ 4,752

* Indicates New Initiative for FY 13

slide49

FY13 CORPORATE BUDGET OPTIONS

  • Move more items to unfunded list
  • Cut expenses
  • Increase income
  • Use Vanguard funds
  • ?
slide50

FY13 CORPORATE FINANCIAL PLAN

Finance Committee Recommendations

  • Move to unfunded list:
  • Deputy Chief of Chaplains $ 2,000
  • Chief Emeritus, CAP Chaplain Corps $ 1,400
  • Secretary of the CCAC $ 2,000
  • National Diversity Officer – Supplies $ 5,606
  • National Diversity Officer – Postage $ 939
  • National Diversity Officer – Travel $ 13,500
  • Northeast Region – Travel $ 3,690
  • Miscellaneous Bank Expenses $ 8,000
  • Cash Reserve $ 60,000
  • TOTAL MOVED TO UNFUNDED $ 97,135
  • Combination of and in this order: $ 17,932
  • (1) Expense reductions from national activities
  • (2) Income increases from national activities
  • (3) Balance paid from Vanguard funds
  • _______
  • TOTAL MOVED OR FUNDED $ 115,067
  • Which balances the FY13 Corporate Financial Plan.
slide51

FY13 CORPORATE FINANCIAL PLAN

Finance Committee recommends that:

The NEC accept the proposed FY13 corporate budget and forward it to the Board of Governors for approval.