N9G “TOOLBOX”

What is the N9G Tool Box?

• • • The N9G tool box provides the field with helpful information on a wide range of subjects.

The tool box provides information to CNIC Regions & Installations; keeping them “audit-ready” at all times.

We have provided each of you with a tool box, just make sure as we provide you a tool monthly, you keep it in your tool box!

• • • • • • •

Topics that will be filling your Tool Box Monthly

Cost of Goods Sold developed by Inez Holt Cash & Cash Handling developed by Dierk Jaeger Managers Financial Review developed by Connie Milton NAF Personnel developed by Sandy New Contracts developed by Dierk Jaeger Reconciliation Assets Inventory November December January February April May June

Contracts Catering, Marina, & Vehicle Storage

In keeping with the overall role of MWR to provide free and discounted recreation to military personnel and their families, it is the responsibility of MWR management to ensure positive internal controls are maintained.

Contracts Catering, Marina, & Vehicle Storage

The facilities provided or available vary from Installation to Installation.

Three of the areas that provide discounted services to all authorized patrons are: • • • Catering and Conference Centers for command functions, weddings, festivities etc.

Marinas for boat rentals, wet slip berthing, and off season storage facilities.

Auto vehicle storage for working on your vehicle long term or keeping your vehicle in storage while on deployment or other reasons.

All of these areas present their own unique differences; however, they all require contracts for

Positive Internal Controls

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Contracts

Internal Controls

• • •

Internal control is a system of policies and procedures that operate within accounting.

These internal controls protect MWR from fraud, waste, and abuse Ensures that the financial records are timely and accurate, Above all……………….

Ensures that all legal and regulatory requirements are being met.

Contracts

Internal Controls

Five key elements of internal controls play a vital role, without all of these elements present; the internal control system simply will not work. This is the foundation for all other standards.  Environmental control refers to the attitude and behavior of management and employees.

 It is the responsibility of management to enact the policies and  procedures that will drive employee behavior and attitude.

Management sets the example; if upper managers are lax about adhering to policy, then employees will tend to follow suit.

An important piece of environmental control is independent oversight whether from a board of directors or an audit committee.

Contracts

Internal Controls

 Internal control should provide for an assessment of the risks MWR faces from both external and internal source  This is where the “What would happen if” needs to be asked  Risk assessment generally falls under the purview of management, but can be integrated with day to day analysis from employees

Contracts

Internal Controls

   Control procedures are the policies and procedures that are put in place for carrying out the environmental controls, the risk assessment, the monitoring, and the communication necessary to keep the internal control system functioning. When properly enacted, control procedures can reduce the chance for procedural errors and decrease the threat of theft or fraud. By implementing policies that segregate duties and require independent verification, management can create a series of checks and balances that will keep operations running smoothly and efficiently.

Contracts

Internal Controls

 Internal control monitoring should assess the quality of performance over time and ensures that the findings of audits and other reviews are promptly resolved.  If MWR doesn't properly monitor its internal control system, it has no way of knowing whether or not the system is working  With proper monitoring, problematic control procedures can be readily identified and retooled, replaced, or eliminated to keep the internal control system (and operations as a whole) running smoothly.

Contracts

Internal Controls

 No internal control system can function without the communication of vital information  Communication should flow downward within each department, laterally between departments, and upward to management  The checks and balances put in place by the internal control procedures ensure that each department will provide information that is timely, accurate, and complete.

Contracts

Contracts are a primary tool used to protect MWR, NGIS, CMWR, its employees, and authorized patrons.

Benjamin Franklin coined the proverb:    This holds especially true when it comes to our business within MWR & NGIS for contracts. Within MWR operations, written contracts are the ounce of prevention that help reduce costly disputes. Written contracts are pre-serialized formal documents generated from an automated software program or manual documents.

Contracts

A carefully drafted and written contract will always spell out the entire arrangement between you and your authorized patron. For convenience, MWR has, for the most part, prepared standard contracts to use with all patrons especially for catering events through the use of CATEREASE. For other required contracts, marina, vehicle storage etc. each installation could or should tailor these standard contracts to specific requirements and installations as needed for the exact services to be performed, the products to be furnished, time of performance, and the cost.

Contracts

Basic Reasoning for contracts:  The parties must be competent.  The parties must be authorized patrons so as to be binding on both parties.  The contract must provide for an obligation-an exchange of something that is of value. The action must be offered and accepted.  The contract action(s) must be lawful.  All terms must be included in the contract, including the date of effect. Contracts Bind the Parties  MWR requires their agreements to be in writing to benefit from enforcement and collection of outstanding receivables if necessary.

Contracts

Know Who You Are Dealing With    Contracts are binding between MWR and individuals. It is important that management and/or employees of MWR facilities sign contracts to be binding (part of the competency test). Parties doing business for another must identify the person signing the contract.

Contracts

“Catering”

IAW CNICINST 7000.3 and DOD 7000.14R, volume 13:

 Catering contract controls shall exist to ensure that all transactions, including private party/event contracts, have been properly processed.  It is important to ensure that any new process (i.e., manual or automated) includes a  system of internal controls that properly accounts for all contracts.

Only a limited number of catering software packages are approved for use in MWR activities; CATEREASE is widely used throughout MWR. CNIC HQ (N946) should be contacted for further information and directions.

Catering Contracts

Navy MWR food and beverage activity managers are responsible for maintaining complete schedules for all programmed private and catered functions.

 A private party log (computerized or manual) will reference all functions by a pre-numbered private party contract; numbering will ultimately be controlled by:  The accounting office if manual contracts are used  Electronically generated if using catering software  The log will be made available to the accounting office, fiscal oversight, and internal review staff for verification with receipts due and received as a result of private/catered functions.

Catering Contracts

All scheduled private/catered parties and group functions require the proper completion and execution of a pre-numbered private party contract.  The contract will be signed and dated by the MWR food and beverage activity manager or designated representative and the party sponsor, who must be an authorized patron of the MWR food and beverage activity.  The party or function should not be made definite without a signature; the signature can be physical, electronic, or email if the patron specifies that he/she is agreeing to all terms of the contract.  Management will advise the patron signing the contract that he or she will be held responsible for meeting the total costs agreed upon and will ensure that the status of personnel attending is per the signed contract.

Catering Contracts

However the following rules should be understood for deposits:  Deposit requirements must be stated either on the contract and or within  the locally generated Catering SOP Deposits must be specified as refundable or non-refundable; also state who must pay and who is waived o If nonrefundable establish a time frame i.e. 50% if cancelled within 60 days or more of event date, 25% if cancelled 30 to 60 days; no refund if o o cancelled less than 30 days prior to event date etc. Specify who is authorized a refund Specify when deposit must be made and conditions of tentative and definite booking dates  If command functions are not required to pay deposits – specify such – ensure it is understood what a command function is, i.e. training, GMT, CO’s Call. Retirements and change of command are not command functions if ANY catering of food and or beverages or MWR support is required.

Catering Contracts

 Local policies should be established regarding event cancellation and refund of deposits. When a cancellation is made and accepted by the MWR food and beverage activity, and no expenses are incurred by the activity as a result of the cancellation, management may exempt the sponsor from all charges. Otherwise, all expenses incurred, as a result of preparation for the function will be charged to the sponsor.  The MWR activity must account for contracts prior to the function to ensure adequate safeguard and separation of the administrative and financial functions.

 Catering manager should not be the sole person entering contracts, administrating contracts (making changes), accepting cash, making deposits etc.

Catering Contracts

 Once management activates a contract (i.e., once a contract is assigned to a patron), one copy will be immediately forwarded to the business office along with a copy of the DAR, and or payment receipt.

 If any changes are made to the contract that modifies the total dollar value, authorization must be received from the patron via signed updated contract or an email from the patron specifying and authorizing the modifications. This updated contract along with any and all supporting documentation will be forwarded to the accounting office for tracking.

Catering Contracts

 After the function has taken place, management will forward a second copy of the contract with a Daily Activity Report (DAR) or for SAP/AIMS locations, the automated Daily Activity Report may be used. This policy pertains to SAP/AIMS locations that are equipped with a Point of Sale (POS) System that automatically interfaces the daily accounting information into the SAP/AIMS Financial System to the MWR support services business office. MWR Support Services Business Office will monitor numerically sequenced contracts. Any discrepancy will be brought to the attention of the MWR Food and Beverage Manager for resolution. Further investigation may be required by the MWR Base Program Director.

Marina Contracts

MWR Marina programs are available at certain locations and provide services such as slips, moorings, and storage facilities. Marina patrons are required to meet applicable local, State, National/Federal requirements, safety standards, licensing, and/or certification, insurance and registration.

Marina Contracts

   Marina contracts are to be pre-serialized by someone other than the marina employees or marina management; preferable accounting or generated by the marketing department in numerical sequence Management monitors the daily transaction logs, questioning all reversals, credits, voids, and refunds. Someone other than the cashier walks the perimeter of the marina validating the wet slip occupancy against the daily occupancy report.

 This will ensure that all patrons have paid in advance of their stay and  collect from anyone that may have come in after hours. This will also make it very difficult for someone to collect cash and dispose of the contract. (pocketing the $)

Marina Contracts

Specific requirements for Marina Boat Mooring and Storage Contracts include but are not limited to the following:    Marine insurance including hull and machinery and $100K/$300K minimum liability coverage throughout this lease Boat and trailer registration as required by the state of mooring or storage Coast Guard certification of worthiness as required by state of mooring

Marina Contracts

Contracts and Agreements

  The provisions of the contracts and agreements provided by CNIC HQ (N922E) will be the minimum used by all commands responsible for recreational boating and sailing Marinas financially supported in whole or part with NAF. The purpose of these agreements is to record and acknowledge the rights and liabilities of all patrons and guests using MWR or other recreational boats and sailing facilities, and to protect the government’s interest in any incident involving a possible claim. It must be understood that although the patron signs the agreement stating that he/she is responsible to maintain updated information on file (insurance, registration) it is also the responsibility of management to track the requirements along with payments needed or made.

Contracts Vehicle Storage

As with marina contracts, auto or vehicle storage contracts require the same level of control and tracking to prevent the possibility of waste, fraud and abuse.

Contracts Vehicle Storage

Storage contracts are to be pre-serialized by someone other than the Auto Hobby Shop or designated storage management, employees; preferably accounting or a contract generated by the marketing department in numerical sequence if available.  Management monitors the daily transaction logs, questioning all reversals, credits, voids, and refunds.

 At the end of each month management should run the Household Trial Balance report for their specific location. This will show who is outstanding (AR) as well as show possible conflicts in the billing process  Someone other than the cashier walks the storage facility on a weekly basis validating the occupancy against the locally maintained or in-house daily report. This will ensure that all patrons have paid in advance of their stay and collect from anyone that may have come in with a friend or stored vehicles/trailers not actually listed. This will also make it very difficult for someone to collect cash and dispose of the contract. (pocketing the $)

Contracts Vehicle Storage

Vehicle insurance and registration used to be the responsibility of base security however, with the removal of base decal requirements that responsibility falls on the member.

 It is MWR’s responsibility to ensure all drivable vehicles placed or stored within the storage lots have a valid vehicle registration and required insurance coverage.  The following are requirements for base driving privileges IAW OPNAV 11200.5D, Military Police Motor Vehicle Traffic Supervision, Chapter 2, Para 2-1: o Driving a Government vehicle or POV on military installations is a privilege granted by the installation commander. o Persons who accept the privilege must be a lawfully licensed operators and not under suspension or revocation

Contracts Vehicle Storage

o Comply with laws and regulations governing motor vehicle operations on any military installation o Comply with installation requirements - possess, while operating a motor vehicle, and produce on request by law enforcement personnel, the following;  Proof of vehicle ownership or State registration if required by the issuing State or host nation  Valid State, host nation, overseas command, or international driver's license and/or OF 346 (U.S. Government Motor Vehicle Operator's Identification Card), as applicable to the class vehicle to be operated, supported by a DD Form 2 ACT (Armed Forces of the United States Geneva Convention), Common Access Card (CAC), or other appropriate identification for non Department of Defense (DOD) civilians

Contracts Vehicle Storage

 Valid record of motor vehicle safety inspection, as required by the State or host nation and valid proof of insurance if required by the State or locality for all vehicles in drivable condition  Proof of valid insurance - Proof of insurance consists of an insurance card, or other documents issued by the insurance company, that has a policy effective date and an expiration date.

Contracts

 The design and implementation of control activities should be a coordinated effort spearheaded by management along with designated employees.  Collectively, this cross section of the organization should be able to address all of the identified risks, design and implement the control activities, and ensure that the techniques used are adequate to prevent fraud from occurring in accordance with MWR’s risk tolerance.  The ongoing success of any fraud prevention program depends on its continuous communication and reinforcement.  Stressing the existence of a fraud prevention program through a wide variety of media — posters on bulletin boards, flyers included with invoices and vendor payments, and articles in internal and external communications — gets the message out to both internal and external communities that the organization is committed to preventing and deterring fraud.