Transcript Slide 1

NEC
Finance Committee Report
29 APRIL 2011
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
FY 11 Budget Execution
FY11 Restored Appropriated Budget
Financial Plan/Impact of CRA
FY12 Corporate Financial Plan
Cadet Uniforms
Vanguard Training Center Funds
CD Funds
Investments Update
ACMX Maintenance Fund Balances
Wing Use of ACH/EFT Payment
XI.
XII.
XIII.
XIV.
XV.
XVI.
XVII.
XVIII.
Partial Payment of Membership Dues
Overpayment of Membership Dues
Unit Internet Reimbursement
Document Scanning Requirement
Training/Orientation Flight Budgets
Travel Vouchers/Meals and Entertainment
Unit Visits Update
Risk Matrix Update
FY11
APPROPRIATED BUDGET
Budget
Expended
%
27,048,000
12,052,157
45
425,000
122,532
29
Aircraft (3-yr funds)
2,424,000*
707,867
95
Vehicle (3-yr funds)
902,000*
O&M
DDR
-0-
0
697,104
53
*Full funding has not been received yet.
Program Income
1,344,087
FY11
CORPORATE BUDGET
FY10
FY11
Budget
2,510,333
2,438,755*
Income (YTD)
1,206,881
1,103,665
921,043
837,162
Expenditures (YTD)
48%
46%
37%
35%
*While membership revenue has increased, the projected revenue for
conferences & special events and ad sales was projected lower which
explains the net decrease in overall revenue between the years.
Straight Line
50%
Historical
Historical
49% Expenditures
40% Revenue
Diversity Committee (New Initiative)
+ 30,000
Cadet Med. Exp. Coverage(New Initiative)
+ 44,700
Total Unfunded Initiatives
+ 74,700
TOTAL CORPORATE UNFUNDED $128,522
(Corporate Unfunded List provided in Finance Cmte Folders)
FY12
CORPORATE
FINANCIAL PLAN
FY10
(Actual $$)
FY11
(Projected $$)
FY12
(Projected $$)
Income
2,431,950
2,421,755*
2,445,426
*While membership has increased, projected revenue for conferences &
special events and CAP Magazine ad sales was lower which explains the net
decrease from FY10 - FY11
Membership Income Projections
(Figures are based on data available on 1 March of full paying membership) Total
membership is 61,119.
Senior Mbrs
Cadet Mbrs
FY10
32,459
22,891
55,350
FY11
32,202
25,160
57,362
FY12
32,370
24,450
56,820
FY 12 INCOME
$2,445,426
FY-11 INCOME
$2,380,955
7%
2%
51%
50%
8%
2%
39%
41%
Cadets
Cadets
Seniors
Seniors
Special Events
Special Events
Interest & Misc. Income
Interest & Misc Income
FY11- EXPENSES
$2,380,955
FY12 – Expenses
$2,445,426
2%
15%
4%
7%
15%
8%
7%
13%
33%
19%
Cadets/Summer Activities
Seniors
A.C.E. Program
PA & Mbrship Dvpmt
Special Events
Contingency & Cash Rsv
Corporate Travel
O & M NHQ
3%
7%
13%
35%
14%
Cadets/Summer Activities
Seniors
PA & Mbrship Dvpmt
Special Events
Contingency & Cash Rsv
Corporate Travel
O & M NHQ
Initial Projected Funding:
2,445,426
Initial Requests/Input:
2,689,217
Financial Plan Shortfall
243,791
REVENUE:
Reduction of Picture ID Card
- 8,500
EXPENSES:
New Initiatives:
Diversity Committee Travel
Safety Officer College
Cadet Medical Expense Coverage
Total New Initiatives
30,000
4,500
50,000
84,500
EXPENSES:
Significant Changes - INCREASES:
Allocation Salary & Benefits
Credit Card Expense
Cash Reserves
Prof. Svcs – AMS System (25% of increase)
Electronic Media
Mbrshp Card Production
A.C.E. Pgrm Supplies
(>4K from Pr Yr)
+35,000
+27,000
+ 7,595
+ 7,250
+ 5,000
+ 20,000
+ 14,500
EXPENSES:
Significant Changes – DECREASES: (4K/40% or more from Pr Yr)
Prof. Legal Services
Interest Expenses
-
5,000
4,500
FY 12 FINANCIAL PLAN SHORTFALL
$243,791
GENERAL ACROSS THE BOARD REDUCTIONS
NEC Travel funded at FY11 levels
- 18,955
Region CC Tvl funded at FY11 levels
-11,034
NCSA & Prof. Development
funded at FY11 levels
-31,800
New FY11 Unfunded Initiatives
remain as unfunded for FY12
- 80,000
Total Savings from Adjustments
141,789
ADDITIONAL REDUCTIONS
EX Dept (Leases & Telephone)
FM Dept (Travel & Cash Reserves)
PA Dept
- 3,302
- 32,500
- 46,800
(AMS, Travel, Exhibits & Promo, Magazine & Mbrship cards)
AE Dept (Travel)
Ops Dept (NESA & CISM)
LG Dept (Oshkosh Tng Ctr)
- 10,000
- 6,400
- 3,000
FINANCIAL PLAN BALANCED
The Finance Committee recommends the NEC
endorse the FY12 Corporate Financial Plan as
presented and forward to the Board of
Governors for approval.
The Finance Committee recommends the NEC
review in full session the possible modification to
the Cadet Accident insurance program and the
unfunded nature of that program and make a
determination of how to move forward on this
issue.
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Costs allocated to the Cooperative Agreement
must be reasonable, allowable, and allocable
Cadet uniforms are allowable per the Statement
of Work and expenses may be allocated to
appropriated funds
Analysis of cadet uniforms in relation to
retention brings into question the
reasonableness of the cost
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CAP has expended in excess of $2M on cadet
uniforms since 2006
FY09
FY10
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Uniforms
6,824
6,767
Cost
$409,723
$449,291
Approximately 50% of cadets do not renew
their membership after the first year
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CAP should consider appointing a committee
to review the cadet uniform policy
Further, CAP’s annual appropriation may be
seriously reduced due to Congressional
budget restraints
Potential savings would be used to maintain
other program elements
The Finance Committee recommends to the
NEC that a special uniform committee be
appointed to review the cadet uniform policy.
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Vanguard Funds balance is currently $101,914
FY11 Vanguard commissions are estimated to
be approximately $130k
FY10 expenditures:
NESA
Hawk Mt
Oshkosh
Vehicle Wrap
$67,642
$17,500
$ 9,678
$ 2,666
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Hawk Mountain has requested funds to remodel the
kitchen at the facility
Kitchen is inadequate to support
to support the activities
Hawk Mountain manages an
ongoing fund raising campaign to enhance the facility
All buildings have volunteer “sweat equity”
contributions to defer costs
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HMRS requires an electrical
service upgrade to complete the
building project
CAP members can not perform
electrical upgrade
Hawk Mountain has raised over
$14,500 in funding and supplies
for this project in the past year
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Hawk Mountain is one of the only facilities owned by
Civil Air Patrol
Vanguard Training Center
funds would enhance the
experience of cadets who
attend Hawk Mountain
The Finance Committee recommends Hawk Mountain
receive Vanguard Region Training Center funds in the
amount of $75,000 for the purpose of kitchen and dining
facilities upgrade.
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Under the Counter Drug program prior to FY05
CAP Wings were paid 15% of the mission cost
Several Wings have remaining accumulated
“CD Admin Fees”
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Funds are restricted to use within the CD program
Admin fee payments eliminated after FY04
NC
$6,759
KY
$3,128
WA $4,482
Finance Committee recommends to the NEC
that the remaining CD balances, as reported, be
drafted back by NHQ to be utilized as CD
mission funding by those units who have
accumulated the funds.
Wings bought into CMX program which currently
have tail number balances remaining, but
limited resources to remit reimbursement:
Arkansas
Hawaii
Washington
$44,146
$10,876
$11,211
Total
$66,233
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AR Wing will pay $100 monthly from dues
rebates
Flying rate for corp missions will be increased
by $5 per hour
AR Wing and NHQ will meet annually to review
plan to determine if a modification to the plan is
feasible
1.
2.
NCR will be refunded the amount paid for IA
Approve 50% write off of all amounts
outstanding and/or currently being paid; all
remaining balances would require a payment
plan.
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Member dues are frequently overpaid by small amounts
CAP has been refunding overpayments by issuing
checks
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Overpayments are generally less than $15
Many refund checks issued are not cashed
Most organizations noted at the Personify user
conference that they record overpayments as
contributions due to cost (time, postage) of refunding
The Finance Committee recommends to the
NEC that dues payments that exceed the proper
dues amount by less than $15 be recorded as
contributions and that members be notified of
the policy.
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NHQ provides access to dialup internet service via EarthLink
Where EarthLink access is not available reimbursement up to $15.95 toward the
cost of internet service is offered. Total expenditure in FY11 was just over $38k
■
Dial-up service almost inadequate for eServices and WMIRS
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Initially over 1,000 accounts - today fewer than 200 units (<15%) participate
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Workload to process receipts and reimbursement payments for NHQ and wing
administrator staffs is considerable and exceeds value of reimbursement
Requirement is not established in any Air Force, CAP or board-approved policy
The Finance Committee recommends to the NEC
cancellation of the Internet service reimbursement
program, effective 1 Oct 11 and application of funds
to be directed to training or other programs.
■
Ten Wings have implemented procedures to scan
all documents into QuickBooks utilizing a utility
called SmartVault
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Wings which have implemented SmartVault vary in size
All Wings now have scanners
Scanning financial documents supports National
Board proposal to adopt paperless processes
Allows auditors, WFA’s and Finance Committee to
review documents
The Finance Committee recommends to the
NEC that all Wings implement SmartVault by 1
September 2011.
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Executed 100% of our budget for the last four years never received funding this late before
Most wings now have plans in place to execute
budgets
Must now fly 60+% of budget in the last 3rd of the
year
By 1 August, Regions/Wings need to identify funding
for training and orientation flights that will not be
executed by 14 September
The Finance Committee recommends that the
NEC authorizes NHQ an early recovery of
unobligated funds for FY-11in WMIRS on or after
1 August 2011.
■
Wings have begun to utilize online banking for
bill payments
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Online bill pay
EFT/ACH Payments
Process saves time and is more efficient
CAPR 173-1 lacks guidance to ensure internal
controls are in place
The outcome from the FM Summit will develop
guidance to include in CAPR173-1 to provide for
procedures and internal controls for online
banking.
Beginning Cost
Restricted
188,131
Unrestricted
4,897,175
(30-September-2010)
Interest & Dividends
Additions
Withdrawals
3,317
-0(8,095)
114,974
100,653
(55,095)
(2,641)
(261,429)
Scholarships
Realized G(L) from Sales
Ending Cost
180,712
4,796,278
Market Value
182,168
4,891,420
1,456
95,142
Gain (Loss)
Restricted
Change in Market Value
Unrestricted
0.77%
1.94%
Interest & Dividends
1.76%
2.35%
Total Return
2.54%
4.29%
(Excludes Interest and Dividends)
(Includes Interest and Dividends)
Dow Jones Industrial Average:
14.18%
S & P 500:
15.95%
■
IRS requires documentation to support travel
expense and meals and entertainment
■ WFA and auditor review has indicated most
travel is not being fully documented
■ Lack of consolidated travel voucher is
especially common if the individual holds a
credit card
■ Entertainment expenses are also not being
documented
FM Summit will develop in language to include in
CAPR173-1 to provide clarification of the documentation
required to ensure compliance with IRS requirements.
■
80 Units visited since 1 June 2010
■
Sample of units is too small to project trends
■
19% of units visited had no reportable issues
■
ORMS Value of items reviewed:
Aircraft
504,814
Vehicle
290,794
Supplies & Equipment 676,514
Communications
847,000
Total Value
$2,319,122
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Non-tagged items—41%
Items not located—25%
Not updating ORMS timely—18%
Items on site not in ORMS for unit—16%
Items assigned to individuals not present at audit—13%
Improperly tagged items—8%
Non-expendable purchases not in ORMS—6%
Incorrect Serial Number in ORMS—5%
No property number assigned in ORMS—5%
Personal storage at unit—1%
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No budget—23%
Missing finance committee minutes—19%
Not receiving timely reports from Wing—8%
Late in submitting year end reporting to wing—5%
Incorrect year end reporting—5%
No finance officer—4%
Not submitted list of approvers to wing—3%
Not providing credit card receipts to wing—3%
No finance committee/incorrect members—3%
No credit card policy—1%
Fundraising for Booster club in CAP uniform-1%
35
30
25
20
15
10
5
0
Low
Successful
High
QUESTIONS

The NEC approve $26,000.00 from the
Vanguard account toward the purchase of a
new winch for PCR glider program