SECTION SIX – NON-PUBLIC PROPERTY (NPP ... - CFMWS - SBMFC



SECTION SIX – NON-PUBLIC PROPERTY (NPP) ACCOUNTING8.6-1GeneralThe Canadian Forces Morale and Welfare Services (CFMWS) is responsible, on behalf of the CDS, for the management and administration of NPP, except in ships. In some theatres of operations CFMWS personnel will be on the ground and performing all tasks related to NPP activities. Notwithstanding this, the TF Comd still retains control of the NPP profits and operational control of the warehouse/employees. As such, there are guidelines to be followed by the TF J8 in their role of providing advice to the TF Comd. In all, these policies have been developed for a wide range of missions with differing scopes and scales but nonetheless the requirements and guidelines apply to all missions, regardless of size.NPP books of account and all in-theatre NPP transactions are to use the same currency used by the TF for public funds. This facilitates the settlement of mess dues/bills and TF store accounts. A separate bank account should be maintained for local NPP operations if practical. Financial statements shall be produced in Canadian dollars using the Director Military Pay and Accounts Processing (DMPAP) official rate of exchange in effect on the 1st of the month for transactions from the 1st to the 15th of the month inclusive; for transactions for the 16th to the end of the month and balance sheet items shall be actioned at the 16th of the month rate available at: . In circumstances where the currency is not posted on the DMPAP website, the rate of exchange to be used is the Bank of Canada Rate; available at: the exception of authorized goods sold by kit shops, all other sales of goods or services (e.g. barber / stylist services, etc.) are TF non-public fund operations with any profit accruing to the TF Fund. Public Support - A-PS-110-001/AG-002, Morale and Welfare Programs in the Canadian Forces - Public Support to Morale and Welfare Programs and Non-Public Property Manual, contains all the Public and NPP statutory, financial and regulatory authorities regarding Morale and Welfare (MW) and NPP. Deployed Operations support contributes to operational readiness and effectiveness, by providing a wide range of MW programs that enhance the morale and well-being of deployed personnel. 6.Deployed Operations support is provided centrally IAW CJOC orders, instructions or directives such as the CDIO series. Actual public support levels are subject to an approved business plan and are affected by the size and scope of operations and the operational environment.8.6-2Service Level Agreements1.A service level agreement (SLA) has been established between CFMWS and CJOC to clarify and ensure the standard of in-theatre support provided by CFMWS. Cases or instances where it is believed that the support being provided by CFMWS is not in accordance with the SLA, and which cannot be resolved informally between the TF J8 and CFMWS personnel in theatre, are to be referred to CJOC J8 for further investigation and resolution.8.6-3Internal Controls and Security of NPPThe principle of segregation of duties must be followed as far as personnel limitations may allow. As an example, the person who maintains the books of account and posts journal entries must not also act as NPP Cashier. Similarly, the Cashier must not be the person opening the NPP mail. If the number of staff makes it impossible to segregate duties, internal controls, such as frequent verification, must be established.All source documentation must have a signature or minute authorization for the NPP Clerk to post/process the transaction (e.g. all journal vouchers (JVs) are to be approved by the TF J8 or the NPP Accounting Manager). The TF J8 must maintain a current list of personnel who have been delegated (NPP) financial signing authority in the format prescribed at Annex B to the CDS Delegation of Authorities for Financial Administration of Non-Public Property. These individuals must have taken the NPP Certification course within the last three years. Refer to CDIO articles 8.6-4 and 8.6-5 below for more details. Terms of Reference (TORs). TORs are to be developed and amended as required by the TF J8/NSE Welfare Officer for the NPP accounting clerk, Warehouse Supervisor/staff and imprest holders. TORs are to be reviewed and signed by incumbents.Standard Operating Procedures (SOP). SOPs are to be developed and amended as required by the TF J8/NSE Welfare Officer to document local procedures in accordance with this directive and A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting. Where unique local scenarios are not adequately addressed in these publications, advice should be obtained from CFMWS/Chief Financial Officer (CFO) when drafting the SOPs.Cash Control. Adequate cash control is mandatory. Cash, cash vouchers and accountable documents must be secured in approved containers and imprest holders should replenish their imprests with merchandise as frequently as practicable to avoid excessive cash accumulation. All cash received by the warehouse from sales (imprest replenishments) is to be deposited to the NPP Accounting Office daily. Where local suppliers require cash payment, the NPP Accounting Office will issue, and record as an account receivable, a temporary advance to the warehouse supervisor. The receipted invoice(s) and the remaining cash advanced are to be returned without delay to the NPP Accounting Office in order to clear the advance and record the purchase.Further information on this and other internal controls are contained in A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting, Chapter 5 (Principles of Internal Control), Chapter 7 (Security of Non-Public Funds) and Chapter 18 (Cash and Other Receipts).The TF J8 and/or the NPP Accounting Manager must be actively involved in these controls.Adequate security of NPP money and other assets is of great importance. Cash accumulation is to be kept to a minimum through frequent sales deposits to the NSE cashier and/or the local bank. Sufficient security for funds held and in transit is mandatory. 8.6-4Delegation of AuthoritiesThe “CDS Delegation of Authorities for Financial Administration of Non-Public Property”, sets out the policy and standards and identifies those positions that are delegated (NPP) financial signing authority by the (CDS). 8.6-5NPP CertificationThe e-course “The Fundamentals of NPP” provides NPP awareness training required by those who have been delegated financial signing authorities. This course is mandatory for Base/Wing/Unit Commanders (including the CO National Support Element (CO NSE) during deployment) and for CFMWS Division Heads. The e-course “The NPP Financial Delegated Authorities and Contracting Course”, provides individuals with the essential knowledge to discharge their NPP signing authority responsibilities without delving into the fundamentals that senior NPP decision makers require. This course is a mandatory certification prerequisite for any individual who by virtue of their job description needs NPP delegated financial signing authority and who is not mandated to take “The Fundamentals of NPP”. “The NPP Financial Delegated Authorities and Contracting Course” is a direct extract from “The Fundamentals of NPP”.Effective 1 October 2012 any individual who occupies a position that has delegated authority must complete the applicable course before they are eligible to have NPP financial signing authority. The requirement to complete the applicable course may be waived by CFMWS/Director of Accounting based on a risk assessment of duties performed.Recertification is required every three years to continue to exercise NPP financial signing authorities. These certifications are available on the Defence Learning Network (DLN)?via the DWAN, at: and via the internet, at: . For technical issues related to the DLN, please contact?the DLN Helpdesk: dln-rad@forces.gc.ca.8.6-6Financial RecordsRecord Keeping. All transactions must be supported by the appropriate documentation/forms and approvals prior to being entered into the accounting records. Accountable document controls are to be implemented in accordance with A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting, Chapter 6 (Control of Accountable Documents). NPP accountable document holdings are to be verified quarterly and documented using the format at Annex C to Chapter 6 (i.e. for a six month rotation, at the end/start and at mid-roto).Accounting System Structures and Retention. There are various possible accounting system structures. The simplest method is the Synoptic Journal. TF NPP Accounting Sections with a desktop computer capability will maintain the TF NPP accounting records using "SAGE” accounting software. This software will be procured for the TF by CJOC through CFMWS from Canadian commercial sources. All original finance source documentation and financial statements are to be retained in theatre. Documentation for previous rotations is to be stored in archive boxes that are to be appropriately labelled for easy access for information retrieval, audit and inspection. Documentation is required to be maintained for seven (7) years.8.6-7Reports and ReturnsThe following reports and returns shall be submitted as indicated:Beginning of Rotation. A copy of the TF Fund approved budget shall be forwarded to the CFMWS/Deployed Operations Accounting Analyst within 2 weeks of Rotation start up;Weekly. If the SAGE accounting program is used, backup of the SAGE accounting data files will be sent to CFMWS/Deployed Operations Accounting Analyst as a DND email attachment. Alternatively, a disk/flash drive copy must be kept in a different building; andMonthly / End of Rotation. Financial statements are to be sent in electronic format to TF Comd, TF J8, TF Committee, CJOC J8 and CFMWS/Deployed Operations Accounting Analyst monthly and at the end of each rotation. Hard copy statements are not required if SAGE accounting data files are sent via email. Financial Statement Format. The financial statement format will be that prescribed in A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting, Chapter 14 (Financial Statements) or as provided by the SAGE Accounting software. The number of General Ledger (GL) accounts used will vary with the size and complexity of the operation. The following are considered to be the minimum GL accounts to be used:Balance SheetAssets. Petty Cash/Change Funds, Cash on Hand, Local Bank, A/Receivable, Inventory at Cost;Liabilities. CFCF Line of Credit, A/Payable CFCF Levies, A/Payable Suppliers, Trust Accounts (e.g. charity trusts) as necessary, Reserve for Inventory Loss, CFCF Loan Payable (if applicable); and Equity. Opening Retained Earnings, Net Income/Loss, Closing Retained Earnings, Contributed Capital.Income StatementRevenue. Outlet Sales, specific other revenue accounts as required (e.g. barber / stylist services), Miscellaneous Revenue;Cost of Goods Sold. Outlet Purchases; andGeneral Expense. CFCF Levies (0.5%), Reserve for Inventory Loss (1%), COs Representational Expense, Cash (Over)/Short, (Gain)/Loss on Exchange, End of Tour Gift, other specific expense accounts as required, Miscellaneous Expense, Final Profit Distribution.CFCF Levies - As per as per CDIO article 8.6-18 below, TF Fund bar, food and retail sales and kit shop sales are subject to Canadian Forces Central Fund (CFCF) levies of 0.5% as a premium for coverage under CIP. Services such as barber / stylist services are not subject to CFCF levies. Financial Statement Review/Analysis - Actual financial results shall be monitored closely against the budget on a monthly basis and material variances investigated/evaluated and if necessary, budget amendments made and action taken to address any shortfalls in projected net profits or increases in expenditures; including limiting future expenditures such as reducing the amount budgeted for End of Tour Gifts and/or entertainment functions. Conversely if net profits exceed budget and/or expenditures are lower than forecasted, funds allocated to End of Tour Gifts (within the maximum of 100 C$ per person), or entertainment functions, or other morale and welfare activities may be increased.8.6-8Reserve for Inventory Loss During withdrawal or especially during rapid redeployment when there is little lead-time, units may not be able to sell the remaining inventory and/or may have incurred expenses in anticipation of earning revenues that are not going to be realized. To mitigate such losses, each TF will set aside 1% of sales in an account entitled "Reserve for Inventory Loss". TF Fund bar, food and retail sales and services such as barber / stylist services are subject to a charge of 1% of sales for the Reserve for Inventory loss. Kit shops are independent of the TF Fund thus kit shop sales are not subject to charges for Reserve for Inventory Loss.Based on the TF Fund’s inventory levels, their unencumbered cash balance (cash plus bank less current liabilities) and the anticipated mission duration, the sufficiency/insufficiency of the Reserve for Inventory Loss balance for each mission shall be reviewed by CFO CFMWS annually in the month of January and a recommendation made to CJOC to maintain the status quo, adjust rates or cease assessments if the value of the Reserve for Inventory Loss is equal to or exceeds the total value of the average inventory at cost and unencumbered cash is considered sufficient to cover any forecasted expenditures and potential losses on currency exchange. In turn, by 1 March each year, CJOC shall advise each mission of their assessment rate to be in effect on 1 April of the current year and, if applicable, include a brief summary of the circumstances supporting a rate change or ceasing assessment. Prior to, or at the time of a TF withdrawal, the warehouse management, is to explore all possible methods of selling the remaining inventory (even if below cost) to keep write-offs to a minimum. Losses due to selling inventory below cost or due to inventory which cannot be sold will be written-off, with CFMWS/CFO approval, to the Reserve for Inventory Loss account (See Note:). Any resulting debit balances will be absorbed by the current roto - the CFCF bears no responsibility in this regard. The fact that the Reserve for Inventory Loss account may have funds exceeding the amount of the potential inventory loss should not reduce the effort taken to minimize losses. Note: Any losses attributable to inventory values in excess of that required to support 45-days of sales (at cost) shall be recovered from the profit of the current Roto i.e. not written off against the Reserve for Inventory Loss Account.When the TF remains but there is a unit rotation, the balance that has accumulated in the Reserve for Inventory Loss account will remain on the TF books and continue to accumulate with the next rotation. It should be noted that ongoing losses due to pilferage, spoilage, overstocking or stocking items that are unsellable (merchandise for which there is no demand/market) are within the control of in-theatre management. Any write-offs of inventory for these reasons or stocktaking shortages are to be charged against the outgoing rotation's profits.8.6-9TF Fund CommitteeResponsibility. Administration of the TF Fund is the responsibility of the TF Comd. To advise and assist the TF Comd in the management and supervision of the assets of the TF Fund, a TF Fund Committee shall be established and a TF Fund constitution developed (to be approved by the TF Comd). In turn the TF Fund Committee is responsible to the TF Comd for the operation of all TF Fund activities. In this regard it shall convene meetings at a minimum at the start, mid and end of each rotation to approve budgets and expenditures and to conduct other business. As per CDIO article 8.6-7 above, a copy of the approved budget shall be forwarded to the CFMWS/Deployed Operations Accounting Analyst within 2 weeks of Roto start up. TF Standing Orders (TFSOs) promulgating NPP activities’ policy and procedures shall be developed and amended, as necessary, by subsequent rotation TF Fund Committees in response to Command Comptroller Inspection (CCI) observations, CFMWS/CFO direction and/or local policy changes.Representational Expenses. The TF Comd will be authorized, in accordance with PSP Policy Manual, PART 10, Chapter 10-2 Base Funds – Regular Force paragraph 12 to expend a limited amount of TF Funds for representational expenses not covered by public funds. The maximum amount that may be spent by each Roto is prorated based on the Roto length as a proportion of the annual amount authorized by the DGMWS representational expense message, converted to the local currency.For example:Based on an annual rate of $1,260; a six month Roto’s entitlement in CDN $ would be $630.00 ($1,260 x 6 / 12 = $630.00) and a 4 month Roto’s maximum entitlement would be $420.00 ($1,260 x 4 / 12 = $420.00) converted to the local currency.Mark-Up/Selling Price. In consultation with CFO CFMWS, the TF Fund Committee shall set the mark-up and, therefore, the merchandise selling prices for all TF locations. The mark-up must cover all warehouse costs such as spoilage/breakage, currency exchange losses, CFCF levies, the reserve for inventory loss and meet profit objectives as detailed below at CDIO article 8.6-11. Charity Trusts - Alienation of Non-Public Funds. In accordance with A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting, Chapter 2 (Financial Concepts) A grant or transfer of TF Funds to a charitable or other organization that is not specifically part of TF Fund personnel support programs constitutes alienation of Non-Public Funds and is prohibited. This does not preclude the establishment of a trust account to administer funds donated by individuals for a specific purpose or obtained from fund raising events or activities held for that purpose.8.6-10Rest and Recreation (R&R)All TF Comds are authorized Public Rest and Recreation (R&R) funding of$60 per member per month in order to enhance the morale, improve the wellbeing, and add to the quality of life of deployed members. Funding can be used to purchase (MW) goods and services, or to offset the cost of Compensatory Time Off (CTO) authorized activities at an approved R&R centre. In accordance with CDIO 1000 series direction on the use of R&R funding, 10-40% is recommended to purchase goods and/or services and 60-90% to offset CTO expenditures. Eligible CTO expenditures are accommodation, transportation, meals, and other eligible expenses such as entrance fees to cultural, sporting or entertainment activities or to pay entrance fees to recreation areas. R&R may be paid from the TF Public Standing Advance. See CDIO article 1.4-11, Annex E for further details on R&R.TF Fund amenity programs are largely supported by public R&R funds. NPP profits may be used in conjunction with Public R&R funds for the support or subsidy of in theatre amenity programs. The following are specific examples of how the profits that are generated during a rotation should be used in-theatre:to subsidize in theatre R&R or Home Leave Travel Assistance (HLTA) when public funds do not cover all reasonable expenses (must be supported by receipts);to provide members with mementos or souvenirs of the operation (end of tour gifts). End of tour rotation mementos are for personnel leaving a special duty area, based on equitable criteria applicable to all personnel serving in that special duty area, and funded through the NPP operations at that special duty area. The TF Fund committee will determine the type and value of mementos (up to a maximum of 100 C$ per person) based on the wishes of the various units and the projected Roto profit. For example, one unit may choose a jacket and another unit may choose a different item of similar value;to finance organized tours of local attractions;to provide access to recreation facilities (e.g. golf courses, beaches, etc.);to support TF Fund or unit barbecues or similar entertainment functions; orto hire or purchase equipment in support of in theatre activities. For example, the TF Fund Committee may decide to purchase a stereo system for each of the units to use. Such equipment shall remain the property of the TF Fund and will remain in theatre when the units rotate. Disposal direction can be found at 8.6-22 para 2(f).Compensation in lieu of R&R or HLTA. Individuals who do not partake in the R&R or HLTA shall not receive the monetary value of the subsidy in some other form. Similarly, should the member not want the memento(es) approved by the TF Fund Committee, they shall not receive the monetary value in some other form. Under no circumstances are payments to be made to a member directly or in lieu of the use of any amenity program.8.6-11Profit Generation and DistributionProfits generated by TF resale operations during rotations should be minimal but sufficient to absorb currency exchange losses, provide funds for the reserve for inventory loss, and other TF Fund expenses such as the Commander's Representational Expenses, end of tour gifts and any additional in theatre TF Fund sponsored amenity programs. Deployed operations are not to be used as a means of raising large sums of money for regimental and/or unit funds. As detailed in CDIO article 8.6-17 below, Line of Credit / TF Fund Account overdrafts must be cleared within 30 days of the Unit’s return from deployment. Profit Distribution. Any profit remaining at the end of a Roto will be equitably distributed by CFMWS/Finance Division through transfer vouchers or cheques, as applicable. To distribute profits, the CFMWS/Finance Division will require a list of all TF personnel, their units, unit UICs, unit addresses, the unit base, the UIC of the parent Base fund, and the amount of profit to be distributed as per the NPP financial statements. This list shall be forwarded to CFMWS/Deployed Operations Accounting Analyst with the outgoing rotation's final set of financial statements. CFMWS/Deployed Operations Accounting Analyst shall calculate the profit distribution based upon the following:30% to participating units - for personnel who are part of a formed unit (e.g. battalion, squadron, etc.);30% to the base fund of the member’s supporting base (for Reserve Force personnel 30% will be distributed to the member’s unit fund);30% to next Roto’s TF Fund (as contributed capital) to support programs for troops in theatre;10% to CFCF to partially offset mission closure costs and current/future mission financing costs. In circumstances where the monetary value of the distribution to CFCF exceeds the combination of mission closure costs and current and projected future mission financing costs, (as determined by CFO CFMWS) surplus funds shall be redistributed to the supporting base funds of the units deployed throughout the life of the mission; and when it is considered not to be cost effective to distribute some profits i.e. when, based on their pro-rated distribution share, the profit distribution amount to a recipient would be less than $50, the particular recipient will be removed from the distribution list and profit share amounts recalculated for the remaining recipients based on the revised distribution list; and once the profit distribution amount(s) has been determined by the DOAA, a listing of the recipients and amounts due shall be forwarded to J8 requesting authority to distribute the funds and to pay the amount owing for CFCF levies. In turn J8 shall forward the approved document to the DOAA who will initiate the profit distribution and payment of the CFCF levy amount due.8.6-12Imprests/ Accounts Receivable Inventory ControlsAn imprest account is a fixed amount of cash or inventory used for the operation of each TF store, canteen or other NPP retail activity. An imprest account can be used regardless if a TF warehouse exists. The TF Fund Committee shall approve a fixed imprest level for each imprest commensurate with the level of activity of the entity. Merchandise held in an imprest account should generally be of a consumable, fast moving nature and accounted for at retail (selling price). An Imprest account should be maintained as small as possible in order to promote regular purchases from the warehouse and avoid the accumulation of dead stock. At any given time, the value of the merchandise at selling price and cash on hand from sales will equal the imprest amount for that store/outlet. The imprest will be replenished with merchandise sold to the imprest in return for cash from sales made.Imprest accounts issued are to be recorded individually in the appropriate general ledger. Imprest account holders shall acknowledge in writing, the receipt of the funds and the rules governing their use; (see A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting, Chapter 31 (Accountable Advances), along with written acknowledgement of their responsibility for the handling of cash, recovery of NPP shortages/financial losses using the format at A-FN-105-001/AG-001, Chapter 18 (Cash and Other Receipts) Annex D (Recovery of NPP Shortages/Financial Losses). Imprest holders are not to issue sub-imprests. Imprest Stocktaking. Imprest stocktaking will be conducted on handover from/to the outgoing/incoming imprest holders, and a supervised independent stocktaking conducted at least once every three months and on handover to temporary holders when the primary holder proceeds on HLTA or extended periods of absence. The latter handover is considered to be an official stocktaking and may replace the three month stocktaking where appropriate. Upon handover between Rotos, the imprest of merchandise/cash need not be physically returned to the warehouse/NSE cashier. However, accounting entries must be made in both the outgoing and incoming Roto’s accounting records as directed in section 8.6-21 below.Imprests do not include sales revenues from such things as barber / stylist services, ticket sales, etc. Separate controls and SOPs are to be developed for these types of revenues, but such revenue is to be accounted for as part of the TF Fund.8.6-13Petty Cash and Change Funds1.Petty cash and change funds are issued on the authority of the TF Fund Committee and are recorded individually in the appropriate general ledger. Petty Cash/Change Fund holders shall acknowledge in writing the receipt of the funds and the rules governing their use (see: A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting, Chapter 31), along with written acknowledgement of their responsibility for the handling of cash, recovery of NPP shortages/financial losses using the format at: A-FN-105-001/AG-001, Chapter 18 (Cash and Other Receipts) Annex D (Recovery of NPP Shortages/Financial Losses).8.6-14TF Warehouse1.As part of the TF Fund, the NPP Warehouse shall be under the control of the TF Fund through the Canadian TF Welfare Officer. Where sub-warehouses are used, they shall also be under the control of the TF Fund through personnel appointed by the dispersed unit COs. Regardless of where the operational or administrative control lies, the accounting documentation for all TF Fund warehouse(s) and retail activities must be processed by the NPP Accounting Manager on behalf of the TF Comd, and shown on the TF Fund finance statements. The TF J8 is required to maintain oversight.8.6-15Inventory LevelsGeneral. Inventories are to be restricted to merchandise that meets basic personal requirements of the members in both quantity and nature - the benefits of maintaining minimum inventory levels are many: cash requirements are reduced; the potential losses due to fire, theft, unexpected withdrawal, and time expired goods are reduced; rotation of stock, particularly in the warehouse, is easier; stocktaking counts are more accurate and counting time is reduced; and the space required for warehouse and store inventory is reduced. Inventory levels, therefore, must be monitored closely by the TF J8 and NSE Welfare Officer, but will be managed by the NPP Warehouse Officer and the NPP Accounting Manager. The maximum inventory level authorized in theatre (including both the warehouse and imprest) is that required to support 45 days of sales (at cost). It is suggested that 15 days of inventory should be maintained at the store level and 30 days in the warehouse, however, this may vary depending on delivery transit times between the supplier and the warehouse and the warehouse and the stores. When determining whether inventory levels are in line, the value of inventory at cost on the balance sheet must be converted to inventory at selling price using the cost multiplier (cost of goods sold divided by total sales).Losses. Losses relating to inventory values in excess of that required to support 45-days of sales (at cost) shall be recovered from the profit of the current Roto.8.6-16Funding of InventoryThe in-theatre inventory level, established at a maximum of that required to support 45 days of sales (at cost), may be funded as follows:an interest-free CFCF Line of Credit, (maximum of that required to purchase inventory sufficient to support 45 days of sales (at cost) from in theatre suppliers) may be approved as per CDIO article 8.6-17 below; supplier credit from in theatre suppliers (e.g. NATO Exchange (NATEX)) who may offer credit up to 30 days; and merchandise may be obtained/transferred from CANEX – a CF 603 (Merchandise Requisition) is to be raised/processed by the CANEX Management Accountant to record the transaction.8.6-17CFCF Line of Credit (LOC) Application Procedures and Terms of UseCFCF LOC Application Procedures - An application for a CFCF LOC (maximum of that required to purchase inventory sufficient to support 45 days of sales (at cost) from in theatre suppliers) may be submitted to the CFMWS/CFO through the appropriate chain of command - TF J8 through the TF Comd to the CFMWS/CFO using the format at, A-FN-105-001/AG-001, Chapter 10, Annex C (Unit Deployment Line of Credit Request). CFMWS/CFO in turn will advise the TF when (and if) the LOC application has been approved. Cash advances against the LOC may be required since many suppliers in UN theatres of operation do not extend credit. CFCF LOC Terms of Use - A CFCF LOC will permit account holders to overdraw their (NPP) TF Fund account during deployments with no interest charges. CFCF LOCs provided to TF Funds must be established for each Roto and LOCs must be cleared within 30 days of a Unit’s arrival date back in Canada. Deployed units with LOCs are to advise the CFMWS/CFO upon their return from deployment and confirm that their LOC will be cleared within 30 days of their arrival date. If the LOC is not cleared within the 30-day timeline, interest charges and/or penalties may apply. Specific circumstances resulting in non-compliance are to be forwarded to the CFMWS/CFO without delay. Each situation will be dealt with on a case-by-case basis. Where the account holder is deemed not to be at fault, no interest charges or penalties will apply.8.6-18Consolidated Insurance Program (CIP)The NPP CIP provides property insurance (including inventory) coverage for all Deployed Operations NPP activities of the CAF (Regular and Reserve) (for further details see: A-FN-105-001/AG-001, Policy and Procedures for NPP Accounting, Chapter 11). Note: Third party liability coverage is a Public responsibility. All TF Fund bar, food and retail sales and all kit shop sales are subject to Canadian Forces Central Fund (CFCF) levies of 0.5% as a premium for coverage under the CIP. Services such as barber / stylist services are not subject to CFCF levies.8.6-19Kit ShopsGeneral. In larger TFs, entire units may be deployed. Where such units operate unit kit shops, TF store and kit shop inventories and sales receipts/imprest must be separated both physically and administratively (i.e. separate rooms and different salespersons/managers). Where facilities and/or personnel resources are not sufficient for both operations, the TF Warehouse/Stores shall have priority allocation. For security, kit shop cash should be deposited into a TF Fund trust account. Orders for kit shop merchandise should be made directly with the normal supplier(s) by the Kit Shop manager. The NPP section may issue cheques for these orders if requested. Kit Shop sales are not subject to the 1% charge for Reserve for Inventory Loss, however, as per CDIO article 8.6-18 above, all kit shop sales are subject to CFCF levies of 0.5% as a premium for coverage under the CIP.Permissible Merchandise. In accordance with PSP Policy Manual, Chapter 10-4 Branch Regimental and Group Funds, kit shops may only sell specialized merchandise unique to the regiment/unit and items prominently marked with the regimental/unit crest or depict a regimental/unit theme. Kit shops are not to offer merchandise of a general nature or otherwise enter into competition with the TF store.In larger TFs, each of the in theatre units are predominantly manned by a specific Canada based unit. It is, therefore, appropriate that such kit shops may sell some items with in-theatre unit crests with or without their Canadian regimental/unit crest. In order that TF Fund profits are not excessively reduced, the range of such items, however, must be limited. Kit shops are authorized to sell, in addition to those items indicated above, t-shirts and sweat shirts with crests/logos. These latter items may or may not also have the unit crest and will be procured by, sold by and are the responsibility of the kit shops. The TF Fund will have no liability for losses due to unsold merchandise.8.6-20NPP Fixed Assets (FA)Most FA (including Furniture & Effects (F&E)) purchased for deployed NPP activities will be funded from the public (Physical Fitness Maintenance Grant (PFMG) or R&R funds). The use of TF Fund profits should not be required. Regardless of the source of funding, these assets are to be placed on and controlled under a public DA. Some FA may be on loan from NPP activities at other CAF units (e.g. NATEX provided display cases) or from local suppliers. This FA is not placed on a public Distribution Account (DA), however, for control purposes, the particulars of such FA are to be recorded in a file maintained by the NPP Accounting Manager, with oversight provided by the NSE Welfare Officer and the TF J8. This FA must be verified and signed for on rotation and/or on change of holders. The file is handed over to the incoming NPP Accounting Manager on rotation.8.6-21Handover of NPP Accounts on Unit RotationThe steps below shall be followed for the rotation of units on operations:the outgoing TF J8, NSE Welfare Officer and Warehouse Supervisor shall brief the respective incoming personnel on their areas of responsibility and pass copies of the current SOPs and TORs to them;stocktaking shall be conducted on handover with any shortage/overage charged against the outgoing unit;the incoming unit shall review inventory on hand and determine if any is spoiled or unsellable (merchandise for which there is no demand/market). Merchandise deemed to be spoiled or unsellable shall be written-off against the outgoing unit's profit and shall be supported by the proper authorized documentation;Note: TF J8 assisted by the NSE Welfare officer shall witness the destruction of unsellable merchandise.the outgoing unit shall return all inventory imprest, petty cash and change funds. Should a resale outlet continue to operate under the incoming rotation, the physical inventory need not be moved. However, appropriate bookkeeping entries to return the imprest in the outgoing rotation's books are required to ensure that the outgoing unit does not realize profit that belongs to the incoming rotation;if applicable, the incoming TF J8 shall review and accept the list of NPP FA on loan to the TF Fund. Any discrepancies are to be resolved by and/or written-off by the outgoing rotation. The incoming holder must sign for the FA; if applicable, the outgoing unit must clear their CFCF LOC as directed in CDIO article 8.6-17 above; if required the incoming unit shall apply for a CFCF LOC as per CDIO article 8.6-17 above; the incoming TF J8 shall review and accept or reject all balance sheet items. Any discrepancies are to be resolved by and/or written-off by the outgoing rotation;all outgoing rotation transactions, including any write-offs, are to be processed and the Income Statement closed to Retained Earnings. A final balance sheet and income statement will be generated;if applicable, save and backup all outgoing rotation SAGE Accounting data files;send the following to CFMWS/Deployed Operations Accounting Analyst:the final financial statements, including a Closing Inventory Worksheet (CIW) if SAGE Accounting is not used. If applicable, all SAGE Accounting data files for the rotation are to be sent by DND email attachment or diskette /flash drive. Hard copy statements will not be required by CFMWS/Deployed Operations Accounting Analyst in this case;a list of all TF personnel, their units, unit UICs, unit addresses, the unit base, the UIC of the parent Base Fund and the amount of profit to be distributed per the NPP financial statements. An electronic data file (e.g. Excel, etc.) may be sent via email attachment or diskette/flash drive; anda Working Capital Fund (WCF) cheque, payable in Canad0ian dollars and deposited using the current official exchange rate, supported by a schedule detailing the breakdown of the following:the profit to be distributed by CFMWS/Finance Division;CFCF levies due; andall accounts payable – CFCF for merchandise purchased through CFMWS/NATEX. As the invoices for this merchandise are payable in Euros and the payables may be recorded in the TF Fund books in another currency, this will ensure that any gains/losses on exchange are charged to the outgoing rotation;create a new set of books for the incoming rotation using the old rotation's final balance sheet amounts. The income statement will have zero balances; andrecord the imprests for the new holders.8.6-22Mission ClosureAs soon as the mission closure has been announced, the TF J8 assisted by the NSE Welfare Officer shall:forward to CFMWS/Snr VP PSP listings showing item condition/ serviceability and recommended disposal action (e.g. destroy, ship to 3 CSU for future deployments, or sell locally), of FA purchased with TF Fund monies and/or PFMG funds. CFMWS/Director Deployment Support, Recreation and Messes shall provide disposal instructions;ensure that merchandise inventories are minimized; ensure that local currency levels are minimized;settle, as much as possible, all outstanding receivables and payables; andliaise with CFMWS/Deployed Operations Accounting Analyst (DOAA) for additional instructions, as required.At the time of closure, the TF J8 assisted by the NSE Welfare Officer or equivalent shall:settle all accounts receivable and accounts payable (except for those to the CFCF);conduct a stocktaking and charge any overage/shortage, as well as any write-offs for spoiled or unsellable merchandise (merchandise for which there is no demand/market), against the rotation profits; Note: TF J8 assisted by the NSE Welfare Officer shall witness the destruction of unsellable merchandise.return all imprest; if applicable, the outgoing unit must clear their CFCF LOC as directed in CDIO article 8.6-17 above;process all Income Statement transactions, print the Income Statement and close to Retained Earnings;dispose of FA as directed by CFMWS/Senior Vice President Personnel Support Program. Any proceeds from the sale of capital assets and PFMG F&E are to accrue to the CFCF;deposit any unexpended PFMG funds to the Receiver General as a deposit to the Contingent’s WCF using the applicable Public Fund revenue coding;dispose of the remaining merchandise inventory. Options include selling to TF members for return to Canada (note that duty is payable by the member on goods over personal exemptions), returning merchandise to local suppliers, selling merchandise to foreign contingents remaining in theatre and write-off and subsequent disposal. Losses due to selling inventory below cost and/or losses due to write off of inventory which cannot be sold may be actioned to the Reserve for Inventory Loss account with CFMWS/CFO approval;Note: As per CDIO article 8.6-15 above, losses relating to inventory values in excess of that required to support 45 days of sales (at cost) shall be recovered from the profit of the current Roto.closeout and reconcile all local NPP bank accounts;issue a WCF cheque, payable to the CFCF in Canadian dollars using the current official exchange rate, for the cash on hand. Produce a schedule indicating the breakdown of the cheque (e.g. CFCF Loan Payable, Accounts Payable – CFCF for merchandise purchases, Profit Payable – CFCF for distribution to units, Closeout Revenue – CFCF, Reserve for Inventory Loss, etc.);produce a full set of financial statements; andsend to CFMWS/Deployed Operations Accounting Analyst:WCF cheque with a breakdown of the cheque amount;Final Financial Statements. Full details of any outstanding balance sheet items must be provided. If applicable, all SAGE Accounting data for the rotation are to be sent by DND email attachment or disk/flash drive. Hard copy statements will not be required by CFMWS/Deployed Operations Accounting Analyst in this case; anda list of all TF personnel, their units, unit UICs, unit addresses, the unit base and UIC of the parent Base Fund and the amount of profit to be distributed per the NPP financial statements. An electronic data file (e.g. Excel, etc.) may be sent via e mail attachment or disk/flash drive).All NPP accounting documents, including unused NPP serially numbered forms and, if applicable, the SAGE Accounting backup files (USB stick) for the rotation are to be boxed, labelled and sent to CFMWS/Deployed Operations Accounting Analyst. If applicable, the original SAGE Accounting software and manuals are to be returned to CFMWS/Deployed Operations Accounting Analyst. ................
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