NPP – “Back to Basics from a Base/Wing perspective”

CANADIAN FORCES NON-PUBLIC PROPERTY BIENS NON PUBLICS DES FORCES CANADIENNES

NPP – “Back to Basics from a Base/Wing perspective”

Comptroller Forum 23-24 Oct 12Shirley Tang-Jassemi, DGPFSS CFO Michel Landry, Director of Accounting

CANADIAN FORCES NON-PUBLIC PROPERTYBIENS NON PUBLICS DES FORCES CANADIENNES

Agenda

• CFPFSS/DGPFSS and Finance Division Organization Charts• Scale of Operations• CFPFSS/DGPFSS Delivery Model• Defence Team• National Defence Act (NDA)• NPP Governance• NPP at the Base/Wing Level• NPP Accountability Framework• NPP Financial Authorities• Compliance and Assurance Common Observations• NPP Contracting• Current Issues and Projects• Questions?

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MilitaryFamily Services

Program

Quality of LifeFamily Services

(DQoL)

Pers Fin Svcs(Pres SISIP

Financial Services)

CFPFSS/DGPFSS Organization Chart

Retail Svcs(Pres CANEX/

NATEX)

Casualty SupportManagement

(DCSM)

ChiefMilitary

Personnel

NPP Fin (CFO)

NPF HR (VP HR)

NPP IM/IT(CIO)

CEONPF

Chief of theDefence Staff

ManagingDirector

NPPDGPFSS

Pers Support Prog(C PSP)

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Finance Division Organizational Chart

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Effective 1 Sep 2012

Special Advisor to CFOSarah Myrer

Acctg Pol & Proc AnalystGreg MacKenzie

Snr Mgr Compliance AssuranceRené D'Amours

Compliance Assurance AnalystJohn Davison

Compliance Assurance AnalystJerry Pond

Compliance Assurance AnalystLynn Gutoskie

Jr Compliance Assurance AnalystDave Roberts

Jr. Compliance Assurance AnalystPO1 Alain Paré

Chief Financial OfficerShirley Tang-Jassemi

Executive AssistantCarol Parnell

Director of FinanceAlain Doucet

Snr Mgr Bus. Pl. & BudgetJim Clarke

PSP Mgmt AcctAnthea Abaloo

Financial AnalystAnne Barton

Deanna OisTravel Services Mgr

Christina LegaultTravel Coordinator

Corporate Mgmt AcctJuanita Maillet

Corporate Acctg AsstRachel Deault

Corporate Acctg AsstNicole Richard

CANEX Mgmt AcctMohamed Laroussi

SISIP FS Mgmt AcctGuylaine Deck

CIP ManagerJanice Bisko

Director of AccountingMichel Landry

National Acctg MgrRob Polem

NFRO MgrSelina Zhu

NFATO MgrLine Robitaille

NARO MgrWendy Britnell

NAPO MgrLisa Frye

Deployed Ops Acctg AnalystFernand Déry

Senior Manager, ProjectsTrevor Cloney

Senior Project Mgr DOLAndré Brière

Regional Acctg. Mgr (Eastern)René D'Amours - 9 Bases

Regional Acctg Mgr (Central)Linda Roorda - 8 Bases

Regional Acctg Mgr (Western)Ashley Morrison - 7 Bases

Regional Acctg Mgr (Europe)Peg Proctor

ABACIS Db Apps Support MgrTony Levesque


Scale of Operations

• Managing Director of NPP• CEO of Staff of the NPF, CF• As a CMP Level 2

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Defence Services Program

CFPFSS/DGPFSS Delivery Model

Staff of the NPF, Canadian Forces

Non-Public Property

Personnel Support Programs (C109)

CasualtySupport

+Military FamilyServices (C108)

(Public Delivery)

(NPP Delivery)

NPP M&WPrograms

Employee BenefitsAnd Pension Funds,

Human Res.

Publicly FundedPrograms

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The Defence Team

60,000 RegularCF Personnel20,000 Reservists

20,000 MinistryCivil Servants

5,600 NPFCivil Servants

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Back to Basics - NDASection 2 of NDA“non-public property”« biens non publics »

– “non-public property” means(a) all money and property, other than issues of materiel, received for

or administered by or through messes, institutes or canteens of the Canadian Forces,

(b) all money and property contributed to or by officers, non-commissioned members, units or other elements of the Canadian Forces for the collective benefit and welfare of those officers, non-commissioned members, units or other elements,

(c) by-products and refuse and the proceeds of the sale thereof to the extent prescribed under subsection 39(2), and

(d) all money and property derived from, purchased out of the proceeds of the sale of, or received in exchange for, money and property described in paragraphs (a) to (c);

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Back to Basics – NDA • NPP is a separate type of Crown Property• The money component is referred as NPF• NPP can only be used for the benefit of CF personnel

and their families, former members and families or for any other purpose designated by the CDS

• The FAA does not apply to NPP• Access to Information Act, the Privacy Act and the

Official Language Act apply to NPP• The Federal Real Property and Federal Immovable Act

does not apply to NPP owned real property• NPP of each unit or other element of the CF (other than

disbanded Units or Units in altered circumstances) is vested in the Commanding Officer of that unit or other element of the CF and may only be used for the purposes set out in the NDA

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Back to BasicsNPP Governance

National Governance

• NDA prescribes that the CDS is responsible for the governance of NPP

• National governance is through the NPP Board• The board meets at least twice a year• Other committees in support: NPP Audit Committee, NPP

Investment Committee, NPF Pension Board and the MFF Committee

Base and Wing Governance

• CFAO 27-6 outlines that Base and Wing Commanders are required to establish a Base/Wing Fund with specific membership and duties

• Base/Wing Commanders are also responsible and accountable for the governance of messes and museums located at their unit

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Back to BasicsNPP at the Base/Wing Level

• Base/Wing Fund– Source of Fund– Use of Fund

• Base & Wing Fund Subsidiaries– Golf Courses– Marina

• Messes– Obligation to belong– Cannot subsidize sale of alcohol

• Museums– Self financed and operates independently, not MW

Program• Units Funds, Kit Shops• MFRCs – not NPP – 3rd Party• CANEX and SISIP – managed centrally

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Back to Basics NPP at the Base/Wing Level

• Unregulated activities – at the Base/Wing level activities are either Public or NPP

• CANEX First Right of Refusal

• Transfer of NPP Goods from CANEX to the Public

• Security of NPP is the same as Public – see QR&O 21.72 and 21.73 for reporting

• Representational Expenses • Restriction on use of NPP – Alienation and misuse

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Back to BasicsNPP at the Base/Wing Level

• Role of Public Comptrollers, Regional Accounting Managers (RAMs), Non-Public Accounting Manager (NPAM) and CFO HQ Staff

• A-PS-110-001/AG-002 Morale and Welfare Programs in the CF – Volume 1 Public Support for Morale and Welfare Programs and NPP – identifies maximum public support. For shared Public/NPP programs NPP is not to be used to make up for a the lack of Public support, in these cases program needs to be adjusted. NPP is not to be used to fulfill a public responsibility

• Annual requirement to complete a “Report of Public Support to Morale and Welfare and NPP”

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Back to BasicsNPP Accountability Framework

• National and local governance• CDS Delegation of Authorities for the Financial

Administration of NPP supported by a requirement to pass a NPP Certification Course

• NPP Letter of Financial Management Attestation• NPP Contracting Policy• NPP Travel and Relocation Policy• HR Policy, Accounting Policy, Sponsorship and

Donation Policy, etc….• National entities are externally audited

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Back to Basics NPP Accountability Framework

• CRS is responsible for the audit of NPP within the CF

• Compliance and Assurance Team

• Consolidated Insurance Program

• NPP Fraud Prevention Handbook and Questionnaire

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Back to Basics NPP Financial Authorities

Three main Components

Authority to Make Financial Commitments and Enter into Contracts

Authority to Approve Invoices and Other Obligations for Payments

Authority to Requisition Payment

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Back to BasicsNPP Financial Authorities

Base Commanders – Table 5 of the CDS Delegation of Authorities for Financial Administration of NPP applies

Key points• Full PO&M authority

• PO&M for Single Event/Activity is limited to $250K if indebted to CFCF only$50K

• Capital – no authority if CFCF financed, $250K if self financed, $50K ifindebted to CFCF

• Travel outside Canada and Continental USA limited to CFSU(E) only

• Representational Expenses up to authorized level

• Write-off - $250K, $50K if indebted to CFCF

• Sponsorship and Donations17


Back to Basics NPP Financial Authorities

Key points:

• No authority for IM/IT procurement

• Sub-delegation

• Withdrawal and Restrictions

• Incumbent acceptance form

• Mandatory NPP Course Certification

• Unencumbered –current cash balance less current liabilities– Base/Wing Fund and subsidiaries as an aggregate– Messes (individually)– Museums/Other Unit Funds (individually)

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Back to Basics NPP Compliance and Assurance Common Observations

• Segregation of Duties & Cash Controls • CANEX First right of refusal for ATMs• Contracting Policy – lack of contract, management of

contracts • CDS Delegation of Financial Authorities for the Administration

of NPP – processing of transaction without proper authority• Fixed assets verification not carried out• Compliance with Sponsorships and Donation Policy• Inadequate financial planning over large single event• CBA Overdraft• Little or poor review over financial statements by stakeholders

Note that NPP is not immune to theft and fraud so we need to be vigilant

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Back to BasicsNPP ContractingPolicies and Principles

• Reflect the values and ethics of the GoC and, wherever feasible consistent with the public;

• Responsive to the unique nature and requirements of NPP organizations;

• Based on a set of principles rather than detailed regulations and procedures;

• Contracts are to be awarded on a competitive basis;• Primary importance – operational requirements of NPP Programs

and activities;• Activities are to be conducted with care, fairness and honesty;• Reflect best business practices;• Contracts are to provide value for money; and• No direct or indirect personal benefit.

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Back to BasicsNPP Contracting

Sole Sourcing• NPP contracts are to be competitively tendered. However,

competitive tendering may not be required when one or more of the following circumstances apply:– Pressing emergency/urgency and delay would prevent the

contracting authority from meeting operational requirements of NPP programs and activities;

– The nature of the work is such that the solicitation of bids would not reflect best business practice;

– There is only one supplier capable of providing the required goods or services or capable of performing the work; and

– The competitive tendering process would not result in obtaining the best value for money.

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Back to BasicsNPP Contracting

• Prior written approval of DGPFSS is required to enter into any contract that does not meet one or more of the above noted criteria or exceeds the limitations imposed by the CDS Delegation of Authorities for Financial Administration of NPP for directed or non-competitive contracts which have been set as follows:

– B/W Commanders and DGPFSS Division Heads $50K

– Others: Up to delegated authorities not to exceed $10K

• CANEX has first right of refusal for any new NPP re-sale and consumer service activities contemplated at any CF base/station location

• NPP Programs and activities shall, whenever practical, obtain their goods for re-sale by messes and other NPP organizations, from/through CANEX

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Current Issues

• Staff of the NPF, CF – no longer have access to Public acquisition cards

• Staff of the NPF, CF – public financial delegated authorities limited to FAA Sec 32 and 34

• Staff of the NPF, CF – access to Claims-X is now being reconsidered

• Staff of the NPF, CF – access to AMEX ITC is now being reconsidered

• Use by NPP of the DND PST Tax exemption under the RTA

• Accounts payable and accounts receivable between Public and NPP

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Current Projects

• Reserve Accounting Project • Accounting Information System Project (ABACIS

Replacement)• BMO Details on Line (DOL) for corporate

purchase card

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Reserve Accounting Project

• Focus on Army Reserve units• Currently 64 Army reserve units are accounted by the

Finance division and approx 286 units are not• Project concept approved by DGPFSS and Comd CA• The project will be completed in five distinct phases• Soon will be working with NAVRES HQ for Naval units

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Reserve Accounting Project

• Phase 1: Survey the reserve units NPP operation scope and requirements – 90% response rate

• Phase 2: Based on the survey result, formulating service delivery models – work in progress, target completion by Oct 2012. The goal is to ensure that the NPP model will support the Reserve Force NPP operations. The approved service delivery models will be presented to Comd CA for endorsement

• Phase 3: Initial trial – FY 2013/14• Phased 4: Full implementation – FY 2014/15• Phased 5: Post implementation review – FY 15/16

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Accounting Information System Replacement

• Why replacement:

– ABACIS was developed over 30 years ago and is expensive for software developments

– Costly to interface with other software systems – The software owners will be retiring within next 5

years, thus poses significant continuity risks – The hardware will become unserviceable within 10

years– Limited reporting capabilities

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Accounting Information System Replacement

• Solution is to find a replacement system• Target date for a replacement system is FY 13-14

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BMO Details on Line (DOL) for Corporate Purchase Card

• Leverage BMO DOL software to allow managers and cardholders to review transactions, enter financial coding and manage approval on line

• Increase efficiency on accounting process and move toward paperless

• Issue a policy to NPP entities to use the Corporate Credit Card for all purchases when accepted by supplier

• Entities receive rebate of 1.46% on purchases• Since Oct 2012 – account statement on line• Dec 2012 to March 2013 – Training roll out• BMO DOL will be implemented by April 2013

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QUESTIONS?

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NPP – “Back to Basics from a Base/Wing perspective”

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