fmwrc annual report 2001

8/9/2019 FMWRC Annual Report 2001

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MWR FY 2001 Annual Report1

Army

Morale, Welfare, and Recreation

Fiscal Year 2001 Annual Report


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Preface

This is the 10th annual report regarding the

Armys Morale, Welfare, and Recreationprograms and related activities.

This report reflects operating results forFiscal Year 2001. It is designed to providean overview of these programs to ourconstituent commanders and customerswho are the recipients of these services andfrom whom revenues are derived.

The nonappropriated fund financial datareported is compiled from audited andunaudited operating results of fieldoperating and Headquarters NAF activities.The U.S. Army Audit Agency and commandInternal Review elements periodically testfunctional financial components of field NAF

activities. Audits of Headquartersnonappropriated funds are conductedannually by commercial auditors.


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Many things have changed since last year. First andforemost, our nation is at war. Soldiers are deployed toprosecute that war, to secure our installations and militaryfacilities, and to support homeland security. Soldiers arealso deployed in a host of other missions from humanitar-ian assistance and disaster relief, to peacekeeping. Every

day our soldiers deeds in far-flung lands illustrate theArmy core values of loyalty, duty, respect, selfless service,honor, integrity, and personal courage. Every day thefamilies of those soldiers and the Army civilians thatsupport them exhibit the same dedication to service.

Other things have not changed. The Army continues totransform itself, an evolutionary process that will takeyears of focused effort. Through all of this, we continue toprovide for the well-being of soldiers and families. ArmyMWR programs are critical partners in well-being andreadiness for the transforming Army. With the nation atwar, MWR is even more important.

After the September 11th terrorist attacks on our Nation,MWR professionals across the Army mobilized programs to

accommodate heightened security and increased operat-ing tempo. In the National Capital Region, Fort MyersArmy Community Service established a Family AssistanceCenter within hours of the attack on the Pentagon. Later,the Community and Family Support Center and Fort MyersACS team led the way to establish the Joint PentagonFamily Assistance Center. With MWR already supportingmore than 9,000 service members deployed to theBalkans with fitness, library, and recreation services, nowwe are ramping up to support soldiers deployed toOperation Enduring Freedom. We have sent ForceProvider recreation modules and paperback book kits tothe theater, pre-positioned other kits in the region, andplan to distribute small unit sports and recreation kits toforward-deployed units. Since 1995, 200 MWR personnelhave voluntarily deployed downrange to promote

physical fitness and provide recreation, social, and othersupport services. MWR operations are a readiness enablerfor our warfighters. We will continue to seek new andinnovative ways to sustain this readiness enabler.

In conjunction with major Army Commands, we aredeveloping plans to manage MWR under the Transforma-tion of Installation Management initiative. On 1 October2002, the Army will implement a new regional organiza-tional structure that will focus on centralized managementof installations. This structure will strive for equity amonginstallations and enable the Army to resource to stan-dards. Army MWR is included in the installation manage-ment services that will transition to the regions. Wewelcome this initiative.

Nonappropriated fund financial results in fiscal year 2001exceeded fiscal year 2000s. We expect to do well in2002, but not as well as we did in the past two years.MWR operations produced net income before depreciationof $117.1M, or 14.7 percent of net revenue (adjusted toremove MWR Utilization, Support, and Accountabilityfunding). We exceeded the minimum standard of eightpercent set by the MWR Board of Directors, largely due toa $3.3M reduction in overhead expense between FY00 andFY01. However, we are projecting NIBD of between $80Mand $90M in FY02. Our projections assume no increase inthe use of NAF to perform appropriated fund missions andno reductions to the approved levels of APF support. Oursenior Army leaders are fully aware of this situation.

Antonio M. TagubaBrigadier General, U.S. ArmyCommanderU.S. Army Community and Family Support Center

In keeping with the Army vision of People, Readiness, andTransformation, MWR has aligned strategic planningefforts with the 1993 Government Performance Results Actand the Total Army Quality program by using criteria fromthe Army Performance Improvement and Baldrige NationalQuality Award programs. In partnership with the Alliance

for Continuous Improvement, MWR validated a newstrategic action plan. The BoD approved new MWR goalsand objectives to better define our millennium corporatestrategic direction. Through a continuous improvementplanning cycle, MWR will communicate its value tosoldiers, family members, retirees, DoD civilians, and ourcivilian communities at large.

Army MWRs principal missions are to support OperationEnduring Freedom/Operation Noble Eagle and the ongoingcontingency operations in Bosnia and Kosovo. We expectArmy operating tempo to remain high in the future.Soldiers and families need MWR programs to relievestress, reduce the conflict between duty and parentalresponsibilities, and help maintain contact betweendeployed soldiers and their families. Installations have

activated family assistance centers and expanded servicesin programs from fitness to child and youth to clubs tomatch the increases in operating tempo across the Army.This level of increased service has a cost. Our seniorArmy leaders have been made aware that resourcing MWRprograms with contingency operations funds remains apriority for base operations at home and in supporting theglobal war on terrorism. We must quantify the effect ofoperational and funding decisions on MWRs ability toserve soldiers and their families.

Army MWR has gone from success to success over thepast several years. Our reasons for success are no secret.We developed and enforced standards, reduced overheadat every opportunity, listened to our soldiers and familiesand provided the programs they deserve, institutionalized

methods to respond to deployments, and have takenevery opportunity to remind leaders of MWRs importanceto readiness and well-being.

Our mission is paramount. Let us maintain vigilance athome and abroad. Our country is at war against terror-ism, and MWR plays a key supporting role. Thank you forkeeping pace with MWR mission requirements and for thegreat job you are all doing always.

First Choice!

Introduction


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Dollar figures used in the text and charts arerounded to the nearest $100 thousand.

Throughout this report, $M designates millions,and $K designates thousands.

Publication of the:

U.S. Army Community and Family Support Center4700 King Street

Alexandria, Virginia 22302-4419

For information or additional copies, contact theStrategic Planning and Policy Directorate:

Mr. George A. GallagherDirectorPhone 703.681.7432

Mr. Tim WhyteChief, Strategic Planning DivisionPhone 703.681.7425

Mr. Joseph TrebingStrategic Planning DivisionPhone 703. 681.7424

Notes


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5

EXECUTIVE SUMMARY 6

Congressional Support 6

DOD and Army Leadership 6Financial Overview 10Construction 11Future Plans 11

AUDITS 12

Process 12

Work Years 13

FINANCIALS 14

Total MWR Operating Funds 14Army Operating Funds 16Balance Sheet 18Income and Expense Statement 19

WORKFORCE 20

White Plume Awards 20NAF Employee Benefits 21Career Development Programs 22

MANAGEMENT SUMMARIES 24

Family ProgramsChild and Youth Services 24

Army Community Service 25

Community RecreationEntertainment 30World Class Athlete Program 31Sports and Fitness 32Community Recreation Centers 32Better Opportunities for Single Soldiers 33Information, Ticket, and Reservation 33Outdoor Recreation 34Libraries 34Arts and Crafts 35Automotive Skills 35

Business ProgramsFood and Beverage Operations 36Golf 36Bowling 37Events 38Recycling 38Army Recreation Machine Program 39

Armed Forces Recreation Centers 39Army Lodging 40

NAF Contracting 41

Public-Private Ventures 41

Strategic CommunicationsMarketing 42

Corporate Sponsorship and Advertising 42Public Affairs 43

Management Information Systems 43

Contents


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CON GRE SSION AL SUPPORT DOD AN D ARMY LE ADE RSH IP

The Congress has consistently supported Army Morale,Welfare, and Recreation programs, providing both operat-ing and capital funding for the programs authorizedappropriated funds. The Congress also identifies areas ofinterest, and the House Armed Services Committee has aspecial oversight panel for MWR charged with monitoringthe services programs and providing guidance.

At the April 2001 MWR Panel hearing, Chairman Congress-man Roscoe Bartlett identified program standards as anarea of interest to the panel. Chairman Bartlett noted inhis remarks, While funding levels are important tomeasure, any discussion of funding is of little valuewithout a good understanding of the standard of service

that should be provided on each base, and how thatstandard of service is defined by each service.

In his statement, BG Antonio Taguba, Commander of theU.S. Army Community and Family Support Center,reported on Army MWRs implementation of baselinestandards. General Taguba noted, Our development afew years ago of fiscal standards to help lower overheadand gain efficiencies continues to pay large dividends.Similarly, we believe establishment of program standardsis essential, not only to help us meet our goal for consis-tent, predictable, quality programs across the board, butalso to determine the resource requirements necessary tomeet the standards. We began developing these programstandards two years ago, and we are well on our way toseeing them adopted and accepted across the Army as the

benchmark for how we deliver our MWR programs.

The Armys military construction request for FY02, sent tothe Congress in January 2001, included $55.7M for fourfitness centers and $19.4M for three child developmentcenters. The Congress provided $55.7M for four fitnesscenters (Wiesbaden, Bamberg, Camp Carroll, and FortMcNair) and $22.9M for four child development centers(Wiesbaden, Fort Riley, Fort Meade, and a Congressionaladd at Rock Island Arsenal).

Army Regulation 215-1, Morale, Welfare, and RecreationPrograms and Nonappropriated Fund Instrumentalities,contains policies, procedures, and responsibilities for ArmyMWR programs, lodging programs, and NAFIs (includingsome DoD NAFIs). Revision of AR 215-1 began in 1999,and comments from the field and Secretariat have beenincorporated into a draft to be sent to the Office of TheJudge Advocate General for legal review in spring 2002.Publication is planned for fall 2002.

In 1999, the Secretary of Defense directed MWR programs

to implement Executive Order 13058, Protecting FederalEmployees and the Public from Exposure to TobaccoSmoke in the Federal Workplace by December 2002. Theimplementing Department of Defense Instruction directsthat workers cannot be required to enter rooms wheretobacco smoke is present and also directs that indoorsmoking areas be enclosed and exhausted to the outside.Installations were advised of these requirements andletters were sent to employee labor unions advising themof personnel policy revisions needed to implement theDoDI. The Assistant Secretary of the Army for Manpowerand Reserve Affairs (Civilian Personnel Policy) will incorpo-rate policy and facility requirements into Army regulations.

The Assistant Secretary of Defense for Force ManagementPolicy has disseminated new policy for MWR support to

military missions in foreign countries (including securityassistance and defense attache offices, military liaisonteams, and technical assistance and field training person-nel). Effective in FY03 support will be provided by area ofresponsibility instead of by specific country: the Army forEuropean Command, Southern Command (to includeMexico), and Korea; the Air Force for Central Command,Russia, and Canada; and the Navy for Pacific Command(minus Korea) and Joint Forces Command.

Executive Summary

Policy Update


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MWR FY 2001 Annual Report

7

Uniform Resource Expanded Program >UREP merges APF and NAF to provide MWR services (exclud-ing Army Community Service) using NAF rules and proce-dures. The BOD approved proceeding with the developmentof an implementation plan, subject to final Army and DoDapproval. Forecast to begin in FY04, UREP will requireenacting legislation; a package has been forwarded by DoD tothe Office of Management and Budget for review. UnderUREP, there will be no forced conversions of APF GeneralSchedule civilians to NAF.

Career Management and Staffing Program >In development since January 1997, the CMSPs goal is tocreate a NAF personnel management system similar to theOfficer Personnel Management System. The CMSP willencourage senior manager mobility by centralizing PCS andpersonal pay rate provisions, will promote selection of themost qualified candidates for vacancies, and will enablecommanders to link pay with performance. Implementationwill be phased starting with an interim plan for FY0104funded by $2.8M from the AMWRF.

Cash Mitigation Strategy >The BOD limited FY02 AMWRF-funded NAF major constructionto $5M, approved a MACOM self-funded NAFMC program of$48.9M, increased the AFRC capital reinvestment assessment

from 2 to 3 percent in FY02, and called for a constructionprocess action team. CPMC guidance was revised fromMACOM CPMC may not exceed NIBD to Armywide CPMCand self-funded NAFMC payments may not exceed ArmywideNIBD in any one fiscal year. The October 2001 BOD willreview options for AMWRF repayment of the field NAFI loanbalance and changes to financial management parameters.

Enterprise Management System >The BOD approved acquisition of an EMS expected to cost$14.7M. The system will be funded by the AMWRF and theorganizations that will benefit from EMS applicaton.

The MWR Board of Directors is composed of the AssistantSecretary of the Army for Manpower and Reserve Affairs;the four-star commanders of U.S. Forces Korea, U.S. ArmyForces Command, U.S. Army Training and DoctrineCommand, U.S. Army Europe and Seventh Army; U.S.Army Materiel Command; the U.S. Army Pacific com-mander; and the Sergeant Major of the Army. Majordecisions in FY01 included:

Changes to Commanders Mission Box >

The BOD approved two new standards:

Appropriated Fund Execution:The former standard applied only to Category Aprograms and was evaluated on a pass/fail basis.The new standard applies to all direct APF support forMWR and family programs and measures execution atthe end of 3rd and 4th quarters. Green ratings willequal 65 and 90 percent execution, respectively;amber at 60 and 80 percent; and red at less than 60and less than 80 percent.

Club Net Income Before Depreciation:The Army MWR Strategic Action Plan required an FY01NIBD standard for food (seven percent), bowling (16percent), and golf (16 percent). The club standardwas previously NIBD greater than zero. The new FY02standard is eight percent NIBD as assessed by theinstallation club program. The food standard will be

deleted once the club standard is effective.

Armed Forces Recreation Center-Europe and Shades of GreenConstruction >To finance construction of a new AFRC-Europe and expansionof the SOG, the BOD approved a strategy to seek a $135Mcommercial loan with no cash from or liability to the ArmyMorale, Welfare, and Recreation Fund. When the projects arecomplete, AFRCs will pay debt service, fund capital purchaseprogram minor construction needs, and could potentiallycontribute 20 percent of combined net income beforedepreciation to the AMWRF.

MWR Board of Directors

E very day young m en and women d on our nations uniforms to

preser ve our way of life. With little fanfare and much sacrifice,

they steadfastly serve their country enduring hardship, long

separat ions from family, and personal risk to secure our freedom

and our prosperity. America today enjoys a vibrant standa rd ofliving that is the envy of t he world. At significant person al

sacrifice, American soldiers guarantee t hat way of life by serving

at home and abroad, on point for the nation.

Gen. Eric K. Shinseki, CSARemarks at the Macarthur Award Ceremony23 May 2001


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Well-Being

The Army Well-Being Program was launched in September2001 by the Army Well-Being Council of Colonels. TheArmy well-being program is an integral part of the ArmyVision and the transformation of the Army as set forth bythe Chief of Staff. Well-being is the human dimension ofthe Army transformation the personal, physical,material, mental, and spiritual state of Soldiers (active,

reserve, guard, retirees, and veterans), civilians, and theirfamilies that contributes to their preparedness to performthe Armys mission. Well-being will integrate andsynchronize processes, programs, issues, and initiativesacross the Army to assist senior leaders in makingdecisions on priorities and funding. The Armys well-beingaction plan is in final draft, and a laboratory test will belaunched at selected installations in the spring of 2002.MWR and family programs are an integral part of well-being, and the USACFSC supports well-being initiatives.

Installation Status Report

The Installation Status Report 2001 data call ran from

January-May 2001. For ISR 1 (Facilities), the aggregateCommunity rating (most MWR and family programfacilities) was assessed C3 for quality and C3 for quantity.The ISR 3 (Services) aggregate MWR rating was C2 forquality (no quantity rating). Some performance metricsused in MWR baseline standards were adopted for use inthe ISR 3 at a July meeting attended by installation,MACOM, Office of the Assistant Chief of Staff for Installa-tion Management, and USACFSC functional proponents.Commencing 2002, data from the annual baselinestandards assessment for Army Community Service, Childand Youth Services, and Fitness, Libraries and Recreationwill be top-loaded into the ISR 3 on behalf of installations.

MWR Baseline Standards

Baseline standards ensure efficient use of funding bydefining common installation resource requirements forkey MWR/Family programs funded with APF. Annualinstallation assessments focus on staffing, availability,accreditation, and equipment. Standards define a green,

amber, or red status for rated elements and identifyfunding needed to achieve a standard (in addition toactual FY execution).

The FY00 assessment identified a $120M requirement tobring programs into compliance with standards. TheUSACFSC presented funding requirements to the Installa-tion Program Evaluation Group that validated unfinancedrequirements for Libraries, Fitness, and Recreation; totake child care to 80 percent of demand and youth to 35

percent of participation; and for ACS staffing. After theFY00 assessment, baseline standards adopted ISR UnitStatus Report codes, refocused performance criteria onprimary cost drivers, and standardized cost factors.

The FY01 assessment, with 130 installations reporting,identified a shortfall of $153.6M in APF funding needed toimprove red (C4) and amber (C3) program elements togreen (C1/C2), a 22 percent increase from FY00. Thisshortfall is added to $432M that MACOMs executed inFY01. The USACFSC continues to crosswalk assessmentsto future years defense programs to identify requirementsthat support baseline standards and prepare justificationsfor needed funding.

1st Lt. Thomas Babbett kisses his wife Brigdet and daughter Meggoodbye as elements of the 25th Infantry Division Light depart forBosnia.

- Photograph by George F. Lee

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Figure 1-1

Demographics

The demographics of the Armys soldiers and familymembers are at Figure 1-1.


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MWR Research

The USACFSC uses many channels to obtain demographic,social-psychological, and community findings. Significantquality of life findings are summarized below:

Quality of Life >According to the Fall 2000 Sample Survey of Military Person-nel, satisfaction with MWR Programs remains high compared

to 50 QOL areas such as availability of government housing,basic pay, or retirement benefits.

Better Opportunities for Single Soldiers >According to the Fall 2000 Sample Survey of Military Person-nel, single soldier participants in the BOSS program have fun,develop esprit de corps, and are active in community service.Twelve percent of officers and 38 percent of enlisted respon-dents participate in installation BOSS programs and half ofenlisted and officer participants were satisfied with theirinstallation BOSS program.

Community Recreation Centers >The Spring 2000 SSMP reports that 61 percent of officers and56 percent of enlisted personnel (or their family members)participated in Community Recreation Center programs orservices in the last 12 months. The majority reported that

expectations had been met and they were satisfied with theprograms. Officers reported that they had fun entertain-ment, relaxed or lowered stress level, or saved money.Enlisted personnel reported that they had fun entertain-ment, reduced boredom/loneliness, or relaxed/loweredstress level. These findings will help the Army develop abenefits-based recreation program.

Media Myths and Army QOL >Research on Army families debunks media myths about thestability of Army marriage, family life, and child rearing.Army divorce rates are half of comparable civilian rates andhave not increased in the 1990s. Soldier-initiated familyabuse also decreased in the last decade due to familyadvocacy programs. Community MWR resources prevent orreduce violence against spouses and children. Army informa-tion and training programs (newcomers briefings and ArmyFamily Team Building) get soldiers and families settled at newduty stations, reduce PCS stress and lost duty time, andimprove the ability of families to cope with serious problems.

MWR and Readiness >The USACFSC is updating a 5-year-old literature review toidentify studies and databases linking MWR to readiness. TheUSACFSC is also comparing the Army with individual Americanstates as a good place to raise children. Initial comparisonson ten indicators found that Army did better than virtually allstates as the best place to raise children.

Survey of Army Families IV >A joint effort of the USACFSC and the U.S. Army ResearchInsitute, the SAF provides a baseline with which to measurewell-being initiatives and identify trends and emerging issuesfacing Army families. The SAF IV was mailed to a stratifiedrandom sample of spouses of active duty soldiers in April2001. Survey results will be available in FY02.

MWR Contingency Operations

For soldiers and commanders deployed around the globein support of Army missions, MWR support is a priority.MWR sustains a ready force and provides relief fromstress. More than 200 Army MWR civilian professionalshave voluntarily served in the Balkans since 1995 topromote physical fitness, provide recreation, entertain-ment, sports and fitness programming, manage procure-

ment, distribution and repair of equipment, and operateMWR facilities. Currently 38 DoD civilian MWR specialistsin the Balkans manage multiple recreation programs atbase camps and remote locations. Contracted localnational employees supplement MWR specialists to allowfor 24 hour operation of services and facilities.

A study conducted on behalf of the Senate Armed ServicesCommittee concluded that Army quality of life servicesmet or exceeded soldier expectations. The survey ofsoldiers in Bosnia, Kosovo, and Macedonia reported thatthe most important quality of life factors for soldiers werehousing (62 percent), communication with family andfriends back home (58 percent), food services (46percent), and recreational facilities (27 percent). Over 96percent of respondents were satisfied with MWR, and 66

percent used MWR activities and programs daily. The topfive MWR activities were sports facilities (69 percent),recreation centers (40 percent), post exchanges (35percent), rest and recuperation trips (21 percent), andcommercial telephones (18 percent).

For Task Force Eagle (Bosnia), three primary base camps(Eagle, McGovern, and Comanche) offer formal recreationprograms run by Army MWR professionals. MWR alsosupports six remote sites and Camp Connor. For TaskForce Falcon (Kosovo), Army MWR supports two primarybase camps (Bondsteel and Monteith) and US troopsassigned to NATO HQ at Pristina, Kosovo and Sarajevo,Bosnia. Camp Able Sentry (Macedonia) is staffed withMWR specialists and serves as the support center for MWRin the Kosovo Force. Camps typically have fitness, aerobicand recreation equipment, running trails, ball fields,entertainment programs, free Internet access with VTC

capability, libraries, TV viewing, and movie theaters.

In February 2001, the MWR BOD approved a program tosupport contingency operations with professional MWRpersonnel. The Army Emergency Essential Civilian MWRProgram designates 100 MWR positions as emergencyessential civilians. This number is based on a cadre of 25positions to support a division-sized deployment. Thedistribution of the number of positions is in proportion tothe MACOM/agency percentage of the Armys MWR civilianstrength in the required series and grade. The MWR EECsare available for short term deployment for any contin-gency operation. Designation of positions is in progress.

Scott Past (in bunny suit) leading the Bunny Run at Camp Bondsteel, Kosovo.- Photograph courtesy of USAREUR MWR


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All Army MWR Operating Funds

Field operating MWR programs and NAFIs, the ArmyRecreation Machine Program, and the Army MWR Fundcomprise Army MWR operating funds. Collectively, $1.4billion in total APF and NAF funding supported FY01operating and capital requirements worldwide a $48Mdecrease over FY00. For APF, a $9M increase resultedfrom a $24M increase in Operation and Maintenance, Armyoffsetting declines in Military Construction, Army and otheroperating accounts. For NAF, revenue was down $57Mfrom FY00, primarily due to the transfer of Guest Housesto Army Lodging and the separation of SupplementalMission Funds from MWR Operating Funds. The Army and

Air Force Exchange payments to the Army in FY01 were up$3M from the FY00 distribution.

Figure 1-2 shows total funding support and uses in FY01.The ratio of APF to NAF support was 36 percent to 64percent, respectively. The APF share rose two percentagepoints compared to FY00. The major use of fundscontinues to be personnel; at 52 percent of the total, thisexpense is up one percentage point from FY00. Afteroperating costs, $184M was available for capital require-ments $25M less than FY00 primarily due to lower MCAfunds for FY01.

DOD Funding Metrics

Since 1995, DoD fiscal standards for MWR have requiredthat, regardless of category, 100 percent of authorizedcosts are funded with APF. Metrics to measure thesestandards allow for incidental program related resaleoperations that are not authorized APF. The metrics focuson the relationship of APF and NAF operating support forCategory A (Mission Sustaining Programs) and Category B(Basic Community Support). They exclude costs of goodssold and depreciation. For Category A, the minimumstandard is 85 percent APF and 15 percent NAF. ForCategory B, the minimum ratio is 65 percent APF and 35percent NAF.

The Army supports these standards. MWR long-rangefiscal planning is based on matching the right fundingsource with APF/NAF requirements, and the MWR BODestablished tracking mechanisms to ensure properexecution. MWR is now in its seventh year of monitoringthese standards. Figure 1-3 illustrates FY01 results.Army MWR reported steady improvement, with Category AAPF maintaining a 90 percent ratio and Category B risingfrom 65 percent in FY00 to 66 percent in FY01.

Critical Indicators

The MWR BOD uses many tools to monitor MWR operatingfunds and evaluate the programs collective health. Twomajor critical indicators are the cash-to-debt ratio of thecollective funds and the relationship of the outstandingAMWRF loan to the Army Banking and Investment Fundwith field NAFI cash deposits. For the cash-to-debt ratio,the BOD reviews the total Armys cash in the ABIF,excluding the loan, versus liabilities due and payablethroughout the fiscal year.

As of 30 September 2001, the Armys collective MWRoperating cash to current field liabilities was 1.2:1. This isup from the 0.9:1 ratio reported in FY00, primarily due tostrong results from operations and lower constructionpayments. The AMWRF loan ratio to field cash depositswas 48.6 percent, down 7 percentage points from 30

September 2000, reflecting a lower loan balance coupledwith higher field balances. While these indicators stillreflect a less healthy position than desired, the BODanticipated this condition and will closely monitor thecritical FY02-03 periods to allow the Army to executeplanned capital expenditures while maintaining solventoperations. Detailed financial information, including aSummarized Balance Sheet and Summarized Income andExpense Report for the Army Operating Funds, is pre-sented in Section 2 of this report.

FIN ANCIAL OVERVIEW

Sources Uses

$900

$503

$72

$228

$184 $8

$427

$484

NOTE: NAF is net of USA funding: $97.8M

NAFPersonnel

MilitaryPersonnel

GSPersonnel

CapitalReinvestment

OtherExpenses

APF

NAF

MWR is Big Business - $1.4 Billion

FY01 ($M)

USA Personnel

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MWR Construction Program

$162

26

$115

31

$157

45

0

20

40

60

80

100

120

140

160

180 Dollars ($M)

Number of Projects

Category A Category B Category C

FY99 - FY03

In FY01, Army MWR delivered 13 NAF major constructionprojects valued at $49M and 21 Capital Purchase andMinor Construction design and renovation projects valuedat $1.8M to the MWR community. Army MWR has 36construction projects ongoing at 28 installations inCONUS, Hawaii, Europe, and Korea. Additionally 57design/minor construction support project are active at 43installations Armywide.

Five PublicPrivate Venture projects are already inoperation, and eleven more projects are in the approvalstage. These projects represent a total cost avoidance of$35.9M.

The Army is in the fifth year of systematic upgrades to theArmed Forces Recreation Centers.

Army MWR also supports other services for the executionof construction projects on a reimbursable basis. TheArmy received $530K for support to the Navy, NavyExchanges and Commissary, and Marine Corps for FY01.

Congress approved 14 NAF major construction projectswith a total value of $49.7M for the FY02 program.

Figure 1-5

CONSTRUCTION

In January 2001 Secretary of Defense Donald Rumsfelddirected an across-the-board review of quality of life andmorale issues. This review, conducted by Retired AdmiralDavid Jeremiah for the Rand Institute, determined pastpractices no longer address todays issues, much lessfuture needs. The 2001 Quadrennial Defense Reviewnoted the need for the Department of Defense to establisha new compact with service members and their families.The DoD assembled functional teams to identify strategiesfor meeting 21st century needs and published results in ANew Social Compact, a Reciprocal Partnership between theDepartment of Defense, Service Members and Families.

The Jeremiah Study and Social Compact provide

strategic direction for Army MWRs look to the future. Thedocuments note the changing demographics of the force,heightened operating tempo, increasing reliance onReserve Components, transformation, greater stresses onservice members and their families, and growing expecta-tions of the younger generation coming into the service.Base realignment and closure, long-range basing strate-gies in Europe and Korea, transformation of installationmanagement, and Army Well-Being focus these concernsfor soldiers and their families. Operation enduringFreedom and the war on terrorism appear to be facts oflife for some time to come.

To continue to deliver First Choice MWR programs andservices, installation MWR professionals will have tobecome even more attuned to the needs and desires of

soldiers and families and stay abreast of issues affectingforces deployed from their installations. They will have toleverage resources through cooperative efforts with theother Services, DoD, and the civilian community. TheCommunity and Family Support Center is reinforcing theseefforts by making the case for additional appropriatedfunds for MWR. Our Strategic Communication Plan,designed to communicate our future intentions to all ofour stakeholders, is the capstone for these efforts as wellas the strategic efforts discussed throughout this annualreport. These efforts will raise the consciousness of thebenefits of and need for MWR among the members of theuniformed services.

FUTURE PLANS

An Army lodging facility completed in Summer 2001 in Stuttgart,Germany.

- Photograph courtesy of USACFSC Construction

A recreational lodge under construction at Fort Story, Va.- Photograph courtesy of USACFSC Construction


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Auditing standards issued by the Comptroller General ofthe United States require that auditors plan and performaudits to obtain reasonable assurance that financialstatements are free of material misstatement. Theseaudits include examining - on a test basis - evidence thatsupports the amounts and disclosures in the financialstatements. The audits also assess accounting principlesused, significant estimates made by management, and theoverall financial statement presentation. The auditorsbelieve their audits provide a reasonable basis for theiropinion. Selected audits are performed in accordance withDoDI 7600.6 and ARs 11-7, 36.2 and 215-1.

Audits of the HQDA nonappropriated funds are conducted

annually by commercial auditors.

Audits of Fiscal Year 2000 results have been completedwhich resulted in unqualified audit opinions for the ArmyMorale, Welfare, and Recreation Fund (AMWRF) ; ArmyCentral Insurance Fund (ACIF) ; Army Banking andInvestment Fund (ABIF); Hospitality Cash ManagementFund (HCMF); NAF Employee 401(k) Savings Plan; ArmyLodging Fund (ALF) ; Army Medical Life Fund (AMLF);Army Recreation Machine Trust (ARMTF) and ARMPoperations Fund; Armed Forces Recreation Center-Europe,Hale Koa Hotel, Shades or Green and Dragon Hill Lodge.

A qualified audit opinion was issued for the NAF EmployeeRetirement Plan because of a material weakness. Theaccuracy of the NAF participant database could not be

verified. Corrections to data base will be completed priorto commencing the annual Retirement Plan ActuarialValuation. There will be no effect on the payment of anyannuitants retirement.

Commercial audits of Fiscal Year 2001 results are ongoing.

PROCESS

Audit

The following audits were reported to the MWR BODSAudit and Executive Committees:

DoDs Family Support ProgramThe General Accounting Office objective was to determinefamily needs, supporting information, and how informationfrom needs assessments affects family program fundingallocation. The GAO focused on Air Force programs with alimited amount of work with the Army. The GAO recom-mended that DoD require needs assessments using bench-marks; use the results to support resource allocations; andintegrate information on off-base family support resources.Army concurred in principle but noted that flexibility is neededto meet service requirements and unique community needs.The Army has several mechanisms that meet the intent of the

recommendations: Chief of Staffs Well-being Strategic ActionPlan, Survey of Army Families, Sample Survey of MilitaryPersonnel, Leisure Needs Survey, Army Family Action Plan,family programs annual reporting process to DoD, and themajor construction program process.

Quality of Life in BalkansThe GAO objective was to assess quality of life for soldiersdeployed to the Balkans. Survey results showed that Armyefforts met or exceeded soldier expectations. The mostimportant issues were housing, communications with family,and food services. Also highlighted were Exchange andrecreational facilities, medical and dental, educationalopportunities, and laundry. Army is addressing barracks,work hours, and telephone call costs.

NAF PayrollThe Army Audit Agency objective was to evaluate NAF payrollprocedural accuracy, effectiveness, and efficiency. Nomaterial weaknesses were found in CONUS. Improperpayments were identified at one installation, and pay relatedactions were recommended. In Korea, management controlswere generally adequate; however, local national employeeautomated systems need improvement. In USAREUR, nomaterial weaknesses were found and the command concurredwith findings and recommendations.

Installation MWR FundsVarious financial control audits were performed on singlelocation installation MWR funds. No audit trend report hasbeen issued by USAAA, but site reports indicate the need forbetter financial internal controls.


14/46


13

Time spent by USAAA and Army Internal Review officesauditing NAF decreased from FY00 to FY01 from 48 to 47work-years.

Internal Review audit time remained the same, andUSAAA time decreased from 19 to 18 work-years.

19

29

48

18

29

47

0

20

40

60USAAAInternal ReviewTotal

NAF Audit Work Years

FY99 FY00

AUDIT WORK YEARS

Gen. Eric K. Shinseki, CSATestimony to the Senate Armed Services CommitteeSeptember 27, 2000

Th e Army is people, and the soldier remains the centerpiece

of our formation. Th e Army remains a values-based

institu tion, where loyalty, duty, respect, selfless service, honor,

integrity, and personal courage are the cornerstones of all

that we do.


15/46


Execution by Management Decision Package

MWR 91% Youth 101% CDS 98% ACS 106%

234.3

212.8

50.948.2

129.0131.5

39.2 39.5

Funding

ExecutionFamily

$ Millions

Community/Morale Support Activities & Family Programs As of September 2001

Total MWR NAFI Worldwide NIBD/NIAD

FY 00 NIBD FY 00 NIAD FY 01 NIBD FY 01 NIAD

99.1

116.7

-3.3

20.0

117.1115.0

-2.6

-11.5

Budgeted

Actual

$ Millions

TOTAL MWR OPERATING FUNDS

Army MWR corporate finances are the combinedtotal performance from field operating NAFIs, theARMP and the AMWRF. Section 1 of this report

shows how these elements, taken in the aggregate,performed from FY00 to FY01. Section 2 reviews fieldoperating results for the same period.

The .L account and family program accounts obligated at95.4 percent of funding in FY01. The .L account executed$213M, or 91.0 percent of funding, in support of Commu-nity and Morale Support Activities (i.e., military MWRprograms). Family programs (Child Development, YouthPrograms and Army Community Service) executed $219M,or 100 percent of funding. On a dollar basis, this was$8M more than actual FY00 execution for the .L accountand $8M more for family program accounts. The FY01approved level of total program funding was $14M greaterthan FY00. Total execution increased by $16M compared

to FY00.

Figure 2-1 displays FY01 execution by ManagementDecision Package. For the fourth year in a row, .L accountexecution (MWR) was less than the initial funding levels.This clearly demonstrates the difficult decisions command-ers face to match scarce resources with priority require-ments.

Figure 2-1 Figure 2-2

Direct Appropriated Fund Support

Financials


16/46


15

AAFES ARM Interest

87.684.7

88.3

5.75.13.8

43.7 42.641.8

FY 00 Actual

FY 01 BudgetFY 01 Actual

Non-Operating Revenue

$ Millions

FY 00/01 Budget vs. Actual

For FY01, NIBD was $117.1M or 14.7 percent of netrevenue. For FY98 through FY01, supplemental missionfunds are broken out of installation MWR funds per therequest of the MWR BOD. Figure 2-2 reflects FY01 NIBDwith a slight increase over FY00. While not on this chart,net revenue decreased by $19.6M, primarily due to thetransfer of the guesthouse program to the Army LodgingFund. The impact of this decrease on NIBD was reducedby swift management actions to identify and documentNAF used for authorized APF expenses and to seekreimbursement through the MWR USA practice.

Figure 2-5

Nonappropriated Funds

Figure 2-3

Figure 2-4

Figure 2-6

Yours is truly a noble calling. It is very special. With

your fellow men and women, members of the Armed

Services all across th e globe, you stan d watch for liberty.

Secretary of Defense Donald H. RumsfeldAddressing the soldiers of Camp Bondsteel, KosovoJune 5, 2001

The Army has exceeded MWR BOD standards for sixconsecutive years (Figure 2-3). For NAF functionaloperating results (Figure 2-4), category A and B programsremained constant with a category C decrease due mainlyto the transfer of guesthouse operations to the ALF (ALFrepayment for the value of transferred fixed assetscontributed to an increase in external revenue). Nonoper-ating revenue continued to increase and exceed budgetprojections (Figure 2-5). Installations remain dedicated tomeeting BOD standards and show the potential and abilityto reach even higher goals (Figure 2-6).

stluseRgnitarepOFANlanoitcnuFataDegarevAymrA erusolCesaBrofdetsujdA

M$ 89YF* 99YF 00YF 10YFsrotareneGemocnI

smargorPCyrogetaC 1.85 8.46 8.17 0.55euneveRlanretxE 2.121 8.921 4.641 8.951

latotbuS 3.971$ 6.491 2.812$ 8.412$sresUemocnI

smargorPAyrogetaC 2.8- 2.5- 1.4- 2.4-smargorPByrogetaC 9.2 7.3 9.6 9.6

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tnemssessA8.41- 1.51- 8.51- 2.51-

latotbuS 4.211$- 0.601$- 5.101$- 7.79$-*DBIN 9.66$ 6.88$ 7.611$ 1.711$euneveRlatoTfo% %3.8 %4.11 %3.41 %7.41

stnemtsujdamargorpretnisedulcni*

DBINdradnatS

latipaCtnemtsevnieRtnemssessA

hsaCnoitareneGdradnatS

hsaClautcAdetareneG

YFfo%sAeuneveRlatoT

fo%sAeuneveRlatoT )ARC+DBIN( %

7991 %5 %3 %8 %9.118991 %7 %2 %9 %8.89991 %8 %2 %01 %4.110002 %8 %2 %01 %3.411002 %8 %2 %01 %7.41

YFDOBRWMdradnatSDBIN DBINlautcA$

latoTteN%euneveR)ASUsseL(

7991 %5 M8.57$ %9.88991 %7 M9.66$ %8.89991 %8 M6.88$ %4.110002 %8 M7.611$ %3.411002 %8 M1.711$ %7.41


17/46


ARMY OPERATING FUNDS

This section addresses individual Headquarters, Depart-ment of the Army funds managed at the USACFSC andpresents a summarized balance sheet and statement ofincome and expense.

Army Morale, Welfare, and Recreation Fund

This is the MWR Board of Directors eighth year of financ-ing strategies to modernize the MWR NAF physical plant.The long-range plan redirects field NAFI revenue to theAMWRF for worldwide application and authorizes borrow-ing from the Army Banking and Investment Fund. InFY01, this extremely aggressive capitalization plan paid

out $36M for regular construction. While the largestportion of the AMWRFs cash finances capital require-ments, the fund also invests in other Armywide programs,such as master training, interns, patron surveys, andmarketing research. The next largest allocation is for fieldexemptions and services, such as self-sufficiency exemp-tion dividends, capital purchase and minor constructiongrants, Army sports, and BOSS. The fund also supports aportion of the NAF administration budget for USACFSC.Figure 2-7 shows how the AMWRF dollar was allocated forFY01.

Army Central Insurance Fund

The Army Central Insurance Fund provides comprehensiveproperty and casualty insurance, including coverage forterrorism, through a self-insured program for all NAFprograms. During FY01, the trend of catastrophic lossescaused by fire, flood, ice and windstorm continued,resulting in claim payments for damage to NAF buildings

and contents totaling $1.4M. Accidents causing damageto NAF operated vehicles resulted in losses of $399K.Employee dishonesty claims are on the rise, totaling$245K. The cost of general and vehicle tort claims forbodily injury and property damage due to negligenceamounted to $583K. The increased cost of workerscompensation claims resulted in an increase in the ratecharged to CONUS installations for FY01. But decreasedclaims expense in the unemployment compensationprogram resulted in a reduced rate. The ACIF had a netoperating income of $2M for the year. The ACIF continuesto emphasize safety and loss prevention as the keys toreducing losses and claim payments.

Army Recreation Machine Trust Fund

The Army Recreation Machine Trust Fund administers theArmy Recreation Machine Program operating profits. InFY01, the ARMTF received $74.4M in profit distribution, a$0.9M increase over FY00. Major uses of cash in FY01, ona cash flow basis (which includes cash on hand at thebeginning of the year) were $71.3M in shared distributionsand $8M for internal ARM operations capital expenditures.

Army Banking and Investment Fund

The Army Banking and Investment Fund manages a poolof U.S. Government securities on behalf of participantsand pays interest based on portfolio earnings. DuringFY01, the ABIF provided cash management and invest-ment services to 400 Army and DOD entities. Participantsearned a compounded rate of 5.97 percent on theiraverage deposited balance. During the year, the ABIFdistributed $19.1M as interest income, up from $14.5M inFY00. Invested cash rose from $302M to $368M fromFY00 to the end of FY01.

Uses of an AMWRF Dollar

Construction and ProgramInvestment

56%

Field Services andSelf-Sufficiency

Exemptions

30%

USACFSCOperations

14%

Army Banking and Investment FundDepositors Balances Net of AMWRF Loan

'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04

529

456

351

268 274

348337346

382

302

244251

$ Millions

Projections



18/46


Army Central Retirement Fund

The ACRF represents total employee and employercontributions and investment earnings on those contribu-tions for the U.S. Army NAF Employee Retirement Plan.Plan assets are in a trust fund that can only be used tobenefit participants as authorized by the plan. Fivetrustees control the trust and invest assets in authorized

investments such as stocks, bonds, real estate, andgovernment instruments. The fund pays accrued benefitsto participants and their survivors as determined by aformula based on salary and years of service. In FY01,the plan paid NAF retirees and their beneficiaries $22.6Mincluding a 2.5% cost of living increase on 1 April 2001.

As of 1 October 2000, the date of the last actuarialvaluation, the value of benefits participants earned to date(actuarial present value of accumulated plan benefits) was$432M. This is the amount required to satisfy all planobligations if it were terminated today. The market valueof assets available on 1 October 2000 was $632.6M (afunded ratio of 146 percent).

A more important measure of the plans financial health is

its ability to meet future benefit obligations. The totalactuarial accrued liability as of 1 October 2000 was$470.6M, with the actuarial value of assets at $547.4M,representing continued fund strength despite generallyunfavorable investment markets.

On 30 September 2001, the market value of the plansassets totaled $518.1M. These assets were invested asshown in Figure 2-9. The return on investment for theseassets for the year ending 30 September 2001 was -18.1percent.

Army Medical/ Life Fund

The Army offers health, dental, and life insurance benefitsto regular NAF employees participating in the DoD UniformHealth Benefit Plan. The AMLF collects premiums fromemployers and employees based on participant enrollmentin the health benefits options. Alternatively, employeesmay elect health benefits coverage through health

maintenance organizations in some locations. Claimexpenses for the DODHBP are satisfied by direct disburse-ments to affiliated medical service providers after the plantakes its discounts. When services are provided fromoutside the network or for any dental claims, participatingemployees are reimbursed directly. In order to preservethe tax-preferred status of life insurance benefits, theAMLF reimburses a contracted insurance carrier forbenefits paid to beneficiaries of deceased participants inthe life insurance program.

401(k) Savings Plan

The US Army NAF 401(k) Savings Plan continues to be a

valuable benefit for employees who are working to achievefinancial security. The total individual 401(k) Savings Planaccount balances were $132.3M, a decrease of $8.3Mfrom the previous year. This decrease was a direct resultof the stock market decline during the year. Figure 2-10shows investment returns for the seven funds available toemployees as investment options. Participation in the USArmy NAF Employee 401(k) Savings Plan continues togrow at a rapid rate. As of September 30, 2001, therewere 10,246 participants, up from 9,472 on September30, 2000. This 8.2% enrollment increase reflects theefforts of personnel managers in promoting participationin the plan.


FANymrASUdnuFtnemeriteR

ssalCtessA M$tnuomA %tnecreP

kcotSnommoC 8.772$ %6.35

stnelaviuqEdnahsaC 1.901 %1.12

serutnebeDdnasdnoB 2.77 %9.41

latipaCerutneV 0.03 %8.5

seitiruceStnemnrevoG.S.U 0.42 %6.4

latoT 1.815$ %001

FANymrASUdnuF)k(104eeyolpmE

snruteRlatoTlaunnAegarevA

10peS03gnidnEdoireP

raeY1 sraeY5 dnuFfoefiL

dnuFtnemtsevnI

dnuFtekraMyenoMtnemeriteR %01.5 %83.5 %45.5

dnuFxednIdnoB.S.U %58.21 %99.7 %35.8

dnuFreganaMtessA %96.31- %24.9 %61.11

dnuFemocnI&htworG %12.81- %84.01 %19.51

dnuFynapmoChtworG %70.94- %28.9 %06.51

dnuFsaesrevO %60.33- %60.2 %39.21

dnuFxednIytiuqE.S.U %67.62- %10.01 %12.31


19/46


Below are the summarized balance sheet (Figure 2-11)and the summarized statement of income and expense(Figure 2-12) that support the analysis in the executivesummary. The remainder of this section addressesindividual Headquarters, Department of the Army fundsmanaged at the USACFSC.

The Army Operating Funds for FY01 have beenreconfigured to exclude Guest Houses that have trans-ferred to Army Lodging and Supplemental Mission NAFIsthat have been separated from the operating fundscollective reporting. The declines in Assets and CurrentLiabilities and Equity are largely due to these transfers.

Summarized Balance Sheet

sdnuFgnitarepORWMymrA:teehSecnalaBdezirammuS

00YFpeS03 10YFpeS03 egnahC

stessA stessAtnerruC

stnemtsevnI/hsaC

selbavieceR

seirotnevnI

smetIdiaperP

stessAtnerruClatoT

816,378,462

630,098,95

607,702,72

663,975,32

627,055,573

318,828,252

692,197,95

472,976,32

340,371,22

624,274,853

)508,440,21(

)047,89(

)234,825,31(

)323,604,1(

)003,870,71(

stessAdexiF

noitaicerpeDdetalumuccA)sseL(

stessAdexiFeulaVkooB

194,799,980,2

301,046,239

883,753,751,1

165,059,450,2

674,570,859

580,578,690,1

)039,640,53(

373,534,52

)303,284,06(

stessArehtO

sdnuFgnikniS/tnemtimmoClatipaC

sdnuFgnikniSnoitarapeS rehtO

205,088,01

025,553,2 676,897,96

558,624,71

552,143,2 314,791,8

353,645,6

)562,41( )362,106,16(

stessAlatoT 218,249,516,1$ 430,313,384,1$ )877,926,231($

seitilibaiL seitilibaiLtnerruC

elbayaPstnuoccA

rehtO

seitilibaiLtnerruClatoT

858,174,73

111,077,231

969,142,071

884,580,63

251,895,721

046,386,361

)073,683,1(

)959,171,5(

)923,855,6(

seitilibaiLmreTgnoLlatoT 587,156,251 663,053,331 )914,103,91(

seitilibaiLlatoT

ytiuqEdnuF

457,398,223

850,940,392,1

600,430,792

820,972,681,1

)847,958,52(

)030,077,601(

ytiuqEdnuFdnaseitilibaiL 218,249,516,1$ 430,313,384,1$ )877,926,231($

The decline in Long-Term Liabilities is primarily due to thepaying down of the AMWRF loan to the Army Banking andInvestment Fund by $12M. The remaining decline is dueto the lodging transfer.

The overall position of the Army Operating Funds was

sound as of 30 September 2001. Current assets hold a2.2:1 ratio over current liabilities with an acid test ratio of1.9:1.

Figure 2-11


20/46


Figure 2-12 illustrates the statement of FY01 APF and NAFoperations compared with FY00. NAF revenue andexpenses exclude MWR Utilization, Support and Account-ability funding. This precludes overstatement of APF andNAF resources.

Total APF support increased $8.8M compared with lastyear. There was a $24M increase in Operations Mainte-nance, Army, that offset decreases in other operatingaccounts and Military Construction, Army. The amount ofmilitary personnel reported working in MWR also declinedfrom FY00.

NAF revenue decreased by $56.7M from FY00, with lowersales (-$18.2M) and other revenues (-$43.4M) due largelyto the transfer of guest house and supplemental missionNAFIs out of the MWR Operating Funds report. Increasesin AAFES payments, Army Recreation Machine revenue,and interest income helped to offset the decline. The NAF

expenses reflect an 8 percent reduction. There was,however, a 3 percent increase in NAF overhead labor,excluding USA supported positions. As a percentage ofNAF revenue, operating labor increased 1.3 percentagepoints.

Cash generated from operations totaled $170.3M for FY01,an increase of $6.9M from FY00.

Summarized Income and Expense Statement

sdnuFgnitarepORWMymrA:tnemetatSesnepxEdnaemocnIdezirammuS

00YF 10YF egnahC

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:FPA

lennosrePyratiliM

AMO

gnitarepOrehtO

DoD/ALD

ACM

556,798,11

162,825,934

437,319,6

047,735,01

000,005,52

943,273,8

575,340,364

117,594,6

460,680,21

000,002,31

)603,525,3(

413,515,32

)320,814(

423,845,1

)000,003,21(

latotbuS 093,773,494$ 996,791,305$ 903,028,8$

:FAN

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euneveRMRAssorG

viDSEFAAdnuFlartneC

SEFAArehtO/DSA

*euneveRrehtO

emocnItseretnI

393,095,442

769,055,121

267,193,35

011,785,78

465,022,344

409,898,5

235,153,622

506,746,321

356,706,45

094,403,88

530,458,993

867,987,6

)168,832,81(

836,690,2

198,512,1

083,717

)925,663,34(

468,098

*latotbuS 007,932,659$ 380,555,998$ )716,486,65($

snoitairporppA&euneveRlatoT 090,716,054,1$ 287,257,204,1$ )803,468,74($

sesnepxE:FPA

**robaLgnitarepO

**robaLdaehrevO

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stsoCgnitarepOrehtO

002,967,281

650,538,94

084,381,35

456,980,381

010,048,681

163,561,05

517,909,17

316,280,181

018,070,4

503,033

532,627,81

)140,700,2(

latotbuS 093,778,864$ 996,799,984$ 903,021,12$

:FAN

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*robaLgnitarepO

*robaLdaehrevO *stsoCgnitarepOrehtO

716,904,701

466,194,253

707,869,301548,869,822

090,954,69

256,265,343

767,404,701603,408,181

)725,059,01(

)210,929,8(

060,634,3)935,461,74(

*latotbuS 338,838,297$ 518,032,927$ )810,806,36($

sesnepxEgnitarepOlatoT

ymrAnoitcurtsnoCyratiliM

322,617,162,1

000,005,52

415,822,912,1

000,002,31

)907,784,24(

)000,003,21(

noitaicerpeDerofeBemocnIteN

noitaicerpeD768,004,361

324,531,431

862,423,071

757,303,221

104,329,6

)666,138,11(

)ssoL(emocnIteN 444,562,92$ 115,020,84$ 760,557,81$

Figure 2-12

* Net of USA revenue: FY00 - $72,831,792; FY01 - $97,793,358

** Includes General Schedule, Foreign Nationals, Wage Grade, and Military Personnel, Army


21/46


For the 35,000 employees who deliverMWR worldwide, the Army provides a widemenu of services from referral, training,

benefit management and administration to careerfield management.

WHITE PLUME AWARDS

The White Plume was established in 1982 by The AdjutantGeneral of the Army to recognize outstanding service andcontribution to MWR and family programs. It is theArmys highest medal for achievement in support of ArmyMWR. Winners of the White Plume (Figure 3-1) representtrue service to the soldier, the Army, and the nation.

sdrawAemulPetihWRWM1002

daerllAnhoJ RUERASU

nworBynohtnA AMSU

ceibeDyelnatS RUERASU

eohonoDniboR CSFCASU

sttevEsemaJ saxeT,notsuoHmaStroF

nessnarFmailliW CODART

nosrekciHaicirtaP.neG.jaM RUERASU

redloHtrautS.jaM.tgS CSFCASU

enaLddoT CODART

redurgaM.W.neG.tL MOCSROF

eduaMyhtomiT.neG.tL )suomuhtsoP(REPSCD

naeLcMnhoJ saxeT,notsuoHmaStroF

onazzaPallicsirP CSFCASU

notlehSyrreJ MOCSROF

knamiSyrraL RUERASU

iksnamyzSsicnarF RUERASU

enyDnaVnyliraM CMTM

Figure 3-1

Workforce


22/46


21

Benefit programs for NAF employees continue to improveand expand direct support to employees. Highlights ofFY01 initiatives included the following:

DoD Uniform Health Benefit Plan >The DoD Uniform Health Benefit Plan continues toprovide quality, affordable health benefits to Planparticipants in an environment of dramatically increas-ing costs. A pretax health insurance premium programreduced both employee and employer cost for theHealth Benefit Plan.

401(k) Savings Plan >

Service enhancements now allow 401(k) Savings Planparticipants to communicate directly with FidelityInvestments for payouts, hardship withdrawals, andother services, improving responsiveness to customersand eliminating time-consuming administrativefunctions for Civilian Personnel Offices. A new PlanSponsor Workstation allows staff to directly access the401(k) Plan system to accomplish on-line processing ofdeath claims, Qualified Domestic Relations Orders, andother transactions.

Group Life Insurance Plan >In response to the events of September 11th, theUSACFSC amended the Group Life Insurance Plan toeliminate the war exclusion clause and ensure contin-ued coverage of deployed employees and those calledto active military duty. The Plan now offers optional

additional coverage for dependents and family mem-bers of employees.

Retirement Plan >The USACFSC and NAF CPOs screened 17,000 person-nel records to review retroactive retirement servicecredit and correct cases where employees may havebeen denied participation in the NAF EmployeeRetirement Plan. Based on this review, 1,400 person-nel were identified as eligible to buy back retirementcredit. An audit of creditable service data for Planparticipants also began.

Systems Improvements >A new benefits system data base now links to programproviders and automates many transactions, includingroutines to verify data from the old system. Phase I ofthe NAF Benefits On-Line System was also fielded,allowing CPOs to process open season transactionsthrough the Internet into the benefits system. Thebenefits web site now includes links to programprovider companies to provide better information andsupport to NAF Employees.

NAF EMPLOYEE BENEFITS

In our profession, from the most junior to the most senior

member in our chain of command : character matters; high

moral standards matter; honesty matters; integrity matters;serving our country m atters.

Gen. (Retired) Bernard RogersGeorge C. Marshall medal acceptance speechOctober 13, 1999


23/46


The USACFSC assisted commanders in filling MWRvacancies (APF and NAF) at grades GS-9/NF-4 and above.A total of 407 referral lists were issued in CY01. Refine-ments continue to the MWR Referral System. The on-lineresume builder was upgraded and is more user-friendly,with 3,554 resumes currently in the automated system.Referrals are now sent by e-mail, significantly reducingturnaround time for filling positions and eliminating FEDEXfees. The system notifies employees when their resumesare referred, e-mails employees 90-days before theirresume needs to be updated, and notifies employeesselected for positions to update their resumes to beeligible for other vacancies.

Development efforts continued on the Career Managementand Staffing Program. The CMSP is a long-term strategyto develop and institutionalize MWR manager successionplanning. During FY01, USACFSC contracted with Logis-tics Management Institute to develop certification stan-dards, which will serve as the basic foundation forevaluating CMSP applicants qualifications for movementinto MWR leadership positions.

The centrally funded NAF management trainee programplaces college graduates with degrees in certain specialtiesinto MWR positions. In FY01, six trainees were recruitedinto the program: two personnel specialists; one in childand youth services; one in lodging; one in outdoorrecreation; and one in marketing. Regional training sitesfor these positions are located at West Point and FortsMcCoy, Sam Houston, Leonard Wood, and Lewis. During2001, five graduates from FY 99/00 programs completedon-the-job training and moved into permanent placementpositions. In an effort to overcome recruiting challenges,the USACFSC tested an on-line job-posting site to adver-tise available management trainee positions. Responseswere overwhelming -- three of the six trainees hired in

FY01 were found through the on-line recruiting site. Theon-line job-posting site will continue to be used as arecruiting tool for the program.

NAF Management TraineeCareer Development and Staffing

CAREER DEVELOPMEN T PROGRAMS

NAF management trainees for 2001: Richard J. Evangelista, (West Point),Brian W. Guinn (Fort Lewis), and Christopher A. Morris (Fort Leonard Wood).

- Photograph courtesy of the MWR Academy


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The MWR Academy, located in Falls Church, Virginia,offers First Choice courses for the Army and its sisterservices. Academy courses support the MWR MasterTraining Plan, training entry-level managers throughgeneral officers serving as installation commanders.

Web-based training remains at the forefront of planningefforts. The basic management and NAF basic contract-ing courses will be web-based in FY03.

Since 1988, the MWR Academy has trained 17,072students. In FY01, the Academy trained 2,418 Army,Marine, Navy, Army Reserve, Army National Guard, andAir Force reserve students. The MWR Academy delivers

27 percent of its training at installations, 34 percent atthe Academy, 25 percent by correspondence, 7 percentby contract off-site, and 7 percent at the MWR CulinaryAcademy in Ft. Lee, Virginia.

The American Council on Education evaluates MWRAcademy courses and recommends college credit formany offerings. Neither the ACE nor the MWR Academygrants college credit, but ACE recommendations encour-age colleges and universities to award credits tostudents participating in applicable degree programs.

Master Training

CAREER DEVELOPMENT PROGRAMS

Students at the MWR Academy can choose from an extensivelist of program-specific or managerial courses.

- Photograph courtesy of the MWR Academy

Figure 3-2


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The Army serves more than 450,000 eligible children andyouth (ages 4 weeks to 18 years old) at 127 locations in28 States, the District of Columbia, and nine differentcountries and territories.

Efforts to improve Armywide CYS communications and toestablish an e-business framework for child and youthoperations began in FY01 with the implementation of theCYS Forums and the development of ArmyFCC.com. TheCYS Forums are internet-based bulletin boards that allowsubject matter expert groups of CYS employees to

network and exchange ideas. The ArmyFCC.com websitewill serve as a referral system for Army Family Child Careproviders to describe their programs and vacancy informa-tion and for Army patrons to preview potential placementlocations for their children.

Operation Enduring Freedom required updated CYSmobilization and contingency plans. The USACFSC issuedprocedural guidance on extending operating hours,adjusting regulatory requirements where needed, extend-ing DoD certification where travel restrictions delayedcommand inspections, and other operational and fundingconsiderations resulting from extraordinary contingencyconditions. The Army CYS website was the central pointof information and new materials in support of installationCYS activities.

In 2001, the Army set up several pilot sites to test theconcept of Support for Expanded Child Care Services andYouth Program Services for Dependents under the aegis ofPublic Law 106-65, Sec. 584. This legislation authorizesthe Army to expand and enhance current CYS programsthrough interaction with local civilian communities wherein the best interests of the government. Lessonslearned from the tests will be integrated into futureoperational guidance as Army CYS programs take advan-tage of better integrating children from military familiesinto local civilian communities.

The CYS Pioneer Award acknowledges significant contribu-tions by individuals who made Army child and youthprograms a model for the Nation.

Other program accomplishments for FY 2001 included:

Certification of 100 percent of Army child development andschool age programs by the DoD.

Accreditation of 98 percent of Army child development centersby the National Association for the Education of YoungChildren (compared to 8 percent in private industry).

Certification of over 3000 youth sports and fitness coachesthrough 70 active chapters of the National Youth SportsCoaches Association of the National Alliance for Youth Sports.

Monitoring 200,000 Promise Passport volunteer hours constituting the Armys contribution to the communityinvolvement goal of the Americas Promise program.

Connecting more than 76 percent (124 of 163) of youthcomputer labs to the internet.

Conducting an Armywide CYS space census to develop datathat supports each installations allocation of spaces for theDoD child care demand goal and the Armys youth utilizationgoal.

Releasing the Secondary Education Transition Study andmonitoring school system signatories to a memorandum ofagreement implementing recommendations to improvemilitary students transition between schools.

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Figure 4-1

Child and Youth Services

FAMILY PROGRAMS

Management Summaries


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25

We must restore faith with our Soldiersthey are burdened with too few

personnel, aging equipment, and poorly maintained homes and facilities.

America today enjoys a vibrant standard of living that is the envy of the world.

At significant personal sacrifice, the American Soldier guarantees that way of

life, but he and his family do not share in it fully. Our Soldiers are proud and

capable and honorable. Th ey perform every mission that we ask of th em professionally and at a high stand ard. They are a tremendous bargain for the

nation American Soldiers have provided far more in readiness than we have

paid for. But we should not expect such selfless devotion to include the sacrifice

of their families well being.

Gen. Eric K. Shinseki, CSACongressional Testimony28 September 2000

Army Community Service

In FY01, $48.2M OMA was programmed for ACS, a sevenpercent increase over FY00 programming. Overall FY01OMA execution was $50.9M, a 105.57 percent executionrate compared to a 98 percent obligation in FY00. InFY01, the Family Advocacy and Relocation programsobligated $38.6M and $4.6M in OSD funding, respectively.

Figure 4-2

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Delegates preparing for the AFAP conference report-out.- Photograph by Don Parker


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A family member of a victim who was killed during the September 11th

terrorist attack on the Pentagon holds yellow roses and an American flag inrememberance of his loved one. Family members visited the Pentagon onSeptember 15th and were allowed to see the impact site.

- Photograph by SSG John Valceanu

Following the terrorist attack on the Pentagon andthroughout Operations Noble Eagle and Enduring Freedom,ACS provided extensive support services. Drawing uponthe experiences gained in training through mobilizationexercises, family assistance center operations throughOperation Desert Storm, Bosnia, and Kosovo and Armydisasters and natural catastrophes, ACS personnel in theMilitary District of Washington and throughout the Armyresponded with caring and commitment.

Within hours after the attack on the Pentagon on Septem-ber 11th, the Fort Myer, Va., ACS staff established a FAC torespond to questions and provide information. Commu-nity volunteers, to include the Army ACS headquarters

staff, joined the Fort Myer ACS staff. In the first two daysof operation, they fielded more than 4,500 calls fromaround the world with informationand referral services.

On September 12th, the CFSCassisted the Department of Defensein standing up the Joint PentagonFamily Assistance Center to provideassistance, information, and sanctu-ary to families of victims. The joint-service staff of 190 responded to7,000 calls and assisted 170 walk-infamilies (out of 184 who had afamily member killed in the attack).

The Joint Pentagon Family AssistanceCenter served as a hub to coordinatecasualty affairs and rescue andrecovery operations with localofficials, to collect medical anddental records and DNA samplesneeded to identify victim remains,and to provide accurate informationto families through daily briefings.

Forty-one Federal, state and local government agencies,nonprofit organizations, and corporations came togetherat the Joint Pentagon Family Assistance Center to helpfamilies, aided by voluntary donations of food, money, cellphones, blankets, flowers, and teddy bears. Scholarshipfunds were also established for children of victims.

After the Pentagon Memorial service on October 11th, theJPFAC scaled back operations to focus on follow-upassistance to victims families. The Army took the lead toestablish an Interagency Services Family AssistanceWorking Group to provide support during this period.

As Operation Enduring Freedom commenced, ACS centers

responded quickly. Within the first month of operations,FACs were operating at 7 installations and 114 National

Guard locations, and many ACS centersextended operating hours. The supportcontinues today: Fort Stewart hascoordinated more than 2,600 videoteleconferences since September 11th;USAREUR is providing additional supportto Reservists assigned overseas; TRADOCinstallations conducted family readinessround-ups and FAC exercises; and AMCrefocused services to support additionalsoldiers assigned to duty throughout thecommand.

The events of September 11th also

presented new challenges. In addition toongoing support for soldiers and families,ACS must now support multiple missionsand simultaneous operations. Homelandsecurity and increased force protectionmeasures at Army posts require out ofthe box thinking to deliver assistanceand information services to families intimes of emergencies.

9-11

The Joint Pentagon Family Assistance Center.- Photograph by Photographers Mate 1stClass Cheryl Sterk


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Army Family Team Building is the Armys primary familymember readiness training program. AFTB consists ofstandardized training that provides family members ofactive and reserve components the information, knowl-edge and skills to be self-reliant. The strength of theprogram resides in its strong volunteer and senior spouseinvolvement. During FY01, AFTB introduced training toLatin American family members as part of a U.S. militaryand Latin America cooperation initiative. A total of 81family members from Guatemala, Ecuador, and Bolivia

were trained.

Since 1994, AFTB has trained 4,450 volunteers fromactive and reserve components as Master Trainers, orabout 550 annually. The demographics of these MasterTrainers reflects 3,418 active and 1,032 reserve compo-nent personnel. Since 1994 and the adoption of an activetrain-the-trainer approach, AFTB Master Trainers havetrained 150,000 family members worldwide.

For the 18th year, grassroots delegates fromthe active, National Guard, and Reservecomponents convened AFAP conferences atinstallations, regional locations, andMACOMs to assess Army standards of living.Soldiers, family members, retireees, and DAcivilians reviewed Army well-being issues

and submitted the most critical to theworldwide AFAP conference. These issuespinpoint well-being concerns of soldiers andfamilies and help Army standards of livingkeep pace with the changing times. Thefocus of AFAP issues in 1984 was on family day-to-dayliving. For the last 5 years, medical and dental issuesdominated, but in 2001 the focus shifted to soldierissues, such as assignments, deployment medication, andmilitary savings pay (Figure 4-2).

The FY01 National Defense Authorization Act providedmany benefits advanced through the AFAP process:military participation in the Federal Thrift Savings Plan;chiropractic services at selected locations; elimination ofTRICARE Prime copayments and expansion of TRICARE

Prime Remote to active duty family members; reduction ofthe catastrophic cap for retiree health care from $7,500 to$3,000; TRICARE for Life for seniors over 65; and retireeaccess to retail and national mail order pharmacies. Policychanges also resulted from AFAP issues, such as allowingsoldiers to request tour stabilization if they have agraduating high school senior.

In FY01, funding was approved for joint AFAP/AFTBpositions at power projection/support platforms andforward deployed installations. Training for these person-nel was conducted in USAREUR, USARPAC, and FORSCOM,and future training is available upon request. Positions atother installations will be funded within two years.

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Army Family Action Plan

Baseline standards for AFAP were a first step in measuringprogram effectiveness. An AFAP accreditation checklistbuilds on those standards by enumerating components ofan effective program and the indicators that will ensureconsistent and high quality programs. AFAP accreditationwill be tested in FY02 and formally launched in FY03.

Program initiatives for FY01 included a strategic actionplan, outcome measures, and an AFAP regulation. Goalsin the strategic action plan call for developing and sustain-

ing a professional and volunteer work force, integratingAFAP into the Reserve component, and increasing Armyconstituent awareness and involvement in AFAP.

AFAP provides the voice for families and remains thepreeminent means for commanders to seek solutions tothe concerns of their communities. The programseffectiveness is seen in the results to date: 69 changes tolegislation, 130 policies revised or established, and 127improvements to programs or services.

The HQDA conference scheduled to begin in October 2001was rescheduled to March 2002 due to the events ofSeptember 11th. The normal AFAP cycle resumes with theFall conference scheduled for 18-22 November 2002.

The involvement of all participants is criticial to program success.- Photograph by Don Parker

Army Family Team Building

Figure 4-3


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Family Advocacy Program

Family violence statistics in the Army continue to decline,with 2,601 substantiated cases of child abuse in FY01compared to 3,494 in FY97. Given child population forFY97 (450,519) and FY01 (450,046), the Army rate ofsubstantiated child abuse decreased from 6.7/1,000 to5.1/1,000 (based on initial substantiated cases) muchless than the 14/1,000 in the civilian community reportedby the National Committee for the Prevention of ChildAbuse.

There were 4,060 substantiated spouse abuse cases in

FY01 compared to 6,698 in FY97. Comparing the popula-tions of married persons (soldiers and spouses) for FY97(595,094) and FY01 (527,688), the rate of substantiatedspouse abuse declined from 9.4/1,000 in FY97 to 6.5/1,000 in FY01. Comparisons with the civilian sector arenot possible, as there is no central database for spouseabuse.

Transitional Compensation for Abused

Dependents

To reduce deterrents to report abuse, in FY94 Congressestablished the Transitional Compensation program forabused dependents of military personnel. This legislation

authorizes temporary payments at the rate specified forDependency and Indemnity Compensation for families inwhich the soldier is discharged administratively or by courtmartial for a dependent abuse offense. Payments are fora minimum of 12 months or until the soldiers ETS date,whichever is longer, but may not exceed 36 months.Applications and documentation are completed throughthe installation ACS Family Advocacy program and StaffJudge Advocate staffs, then forwarded to CFSC for legalreview and approval prior to initiation of benefits. InFY01, 168 families received $2.6M in benefits.

Employment Readiness

In FY01, Employment Readiness served 267,143 patronsat an average cost per customer of $11.00. The programmade 45,503 job referrals and helped secure paidemployment for 7,750 family members, bringing inrevenues of $155M to Army households a high return onArmy dollars compared to total program funding of only$2.97M. The program provided job search and career

assessment counseling to 37,950 clients (6,623 soldiers,19,918 family members, 5,657 DoD civilians, 3,748retirees, and 24,307 other) and job skills training to14,908 clients.

The services developed a joint strategic action plan at the2000 DoD Spouse Employment Summit. The Armysimplementation plan includes measures to standardizeservices and policies needed for accreditation; to ensureresources are sufficient to sustain the program as part ofthe Armys Well-Being Plan; to develop a broad spectrumof partnerships with private companies and organizationsto provide employment opportunities for spouses that fitthe nomadic military lifestyle; and to develop an Armynetwork of employment readiness program managers whowill can link spouses to new duty stations to start the job

search process prior to PCS moves.

Exceptional Family Member Program

The Exceptional Family Member Program works with othermilitary and civilian agencies to provide communitysupport, educational, medical, housing, and personnelservices to families with special needs. In FY01, 43,000sponsors and 54,000 family members were enrolled in theprogram. The program provided education, training andbriefings for 76,427 individuals, conducted recreation andcultural programs for 36,625 individuals, and made 761respite care placements.

Domestic Violence Task Force

The Defense Task Force on Domestic Violence waschartered by Congress to address domestic violence in themilitary (P.L. 106-65, Defense Authorization Act for 2000).Task Force work groups focused on community collabora-tion, education, training, offender accountability, victimsafety, and program management. An initial report basedon fact-finding visits to military installations was sent toCongress in November 2001. The Army and DoD sup-ported 57 of the 68 recommendations made in the report.A second report from the Task Force was submitted toDoD in February 2002 with an additional 87 recommenda-tions, but has not yet been forwarded to Congress. A finalreport is due to Congress in January 2003.

N ew Parent Support Program

The Armys New Parent Support Program is a child abuseand neglect prevention and education program mandatedby Congress. The program is part of a DoD effort toprevent and treat family neglect and abuse by using homevisitation to promote positive parenting and healthyfamilies. The NPSP teams consist of licensed socialworkers and nurses who supplement existing programs.The NPSP teams primary duties are home visitations toallow role modeling and one-on-one parent education.

Family Advocacy programs provide parents with skills that foster goodrelationships.

- Photograph by Anne Sellmansberger


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Financial Readiness

The Financial Readiness Program assists commanders inestablishing educational and counseling programs forpersonal financial affairs. Through classes on moneymanagement, credit, financial planning, insurance, andconsumer issues, the program teaches soldiers self-sufficiency, reduces indebtedness, and lessens demand foremergency financial aid. Personal financial counseling was

received by 12,781 individuals, reducing soldier debt by$7.4M.

Program services include mandatory financial readinessfor first-term soldiers through classes on money andcheckbook management, banking, debt liquidation, credit,saving and investing, financial planning for deployment,budget development, and record keeping. Other servicesinclude consumer complaint resolution, public informationand outreach, income tax assistance, emergency foodassistance, holiday food basket and toy program, andutility waiver assistance. Future initiatives include familysubsistence supplemental allowance, staff certification, afinancial distance learning program, and a financialplanning for a PCS video entitled Moving and Money.

Mobilization and Deployment Support

Commanders identify family readiness as a critical needthrough predeployment, sustainment, and post deploy-ment. Family readiness efforts in many units havebecome more sophisticated since Operation Desert Storm,with MDS available to family members at or near theirhometown or installation. The goal is to encouragefamilies to function successfully within the Army supportnetwork at a time when lengthy deployments are com-mon. Self-reliant families use Army support programs andcan handle the challenges of both planned and unplannedseparations.

Operation READY (Resources for Educating About theDeployment and You) materials on the Army MWR websitehave been translated into German, Spanish, and Korean.

Relo

fmwrc annual report 2001

Documents