Contents

I Executive Report - Pass in Review 2

II Tactical Strategies for the Future:

FY 95 Initiatives .•.•. .•.••••••••••• ...... ••••• ••••. .•.•. .•.••... .•.••.•. 15 _

III A Quality Workforce: Trained and Ready .............•. 19

IV Financial Report - Army MWR .. ...•.... .•.••.•. 22

V Program Status Reports 27

Armed Forces Recreation Centers 32

Army Community Service 28

Army Family Team Building 27

Army Recreation Machine Program 33

Arts and Crafts 30

Automotive Skills 31

Better Opportunities for Single Soldiers 33

Bowling 32

Child Development Services 34

Clubs 35

Commercial Travel Operations 38

Entertainment (Music & Theater) 38

Food, Beverage, and Entertainment Concepts 36

Food, Beverage, and Entertainment Planning

Assessments 36

Golf 39

Guest Houses 39

Information, Ticketing and Registration 40

Libraries ~ 41

Outdoor Recreation 43

Recreation Centers (Conununity Activities Centers) 45

Recycling 40

Sports 42

World Class Athlete Program 44

Youth Services 46

VI Au dit Repo rt , 47

Notes

• All dollar figures used in text and charts are rounded to the nearest $100 thousand.

• In Section 5, throughout the Program Status Reports, labor and other operating expense percentages used in the "Anny Average Data" financial infonnation boxes are a percent of total revenue. Cost of goods sold percentages are a percent of sales.

Acknowledgements

The MWR annual report is a product of the Plans and Policy Directorate, U. S. Anny Community and Family Support Center. Compiled and edited by Abe Van Dyne. Layout designed and executed by Harriet E. Rice.

Fiscal year 1994 was a landmark for Army Morale, Welfare and Recreation. We found a downsizing Army and had to scramble to reposition rvfWR to support the future. As a result, we focused efforts on planning for the future. Installation, major Army command and Department of the Army staff met and provided input that culminated in the publication of the MWR Strategic Vision for the 21st Century. This document, complemented by the MWR Strategic Action Plan, will map our path into the next century.

Throughout the year we were forced to continually evaluate our customer services. At each turn, we were challenged to do more with less, increase efficiencies, and provide only demand-driven services. Installation commanders and MWR professionals at every level responded by closing or repositioning under-utilized services, dedicating scarce APF resources to mission essential programs, and operating the remaining MWR services efficiently with NAF. A 70 percent reduction of the NAF subsidy to child development centers, the financial turnaround of club operations, and the overall NAF financial performance are but a few of the indicators of our success.

Thanks to Army Community Service, Army Family Team Building and family support groups, deployed soldiers' families are more self-reliant and confident, and soldiers are better able to focus on their missions. Likewise, new Army doctrine ensures MWR professionals deliver leisure and recreational services to brigade-level units during deployments. We remain committed to improving quality oflife at horne, abroad and when soldiers deploy.

MWR services will remain important to the soldiers, families, civilians and retirees comprising America's Army. As a result of steps taken in 1994, we have positioned ourselves to respond to new challenges and respond we will. Our course is mapped out in our vision, individual accomplishments are steps along the path, and the zeal to serve, inherent in the MWR workforce, moves us forward. We are committed to supporting readiness and quality of life; we serve America's Army proud! y.

JOHN1~/

Brigadier General, U.S. Army Commander, Community and

Family Support Center

Salute to 1994

MWRis

40.000 employees 200. ()()() front doors

$ 1.3 billion business 1. 5 million cus tomers 15 countries

Section I

Executive Report: Pass in Review

Congress continues to support quality oflife programs with emphasis on judicious use of scarce appropriated fund resources. This means commanders must make tough decisions to provide only the services supported by genuine need.

Language in the 1995 Defense Authorization Act (Public Law 103-337) caused the Department of Defense to make changes in three specific areas which will have a significant impact on Army MWR:

• Excess nonappropriated fund monies must be consolidated at the departmental level. Section 373 directed that installation NAP bank balances in excess of current cash requirements be transferred to a single account at

Congressional Support Department of Army. A process action team of financial experts, convened in the fall of 1994, de-

fined installation operating cash requirements as a cash-to-debt ratio of 2: 1 and formulated a process for

Our armed forces art! the future cash consolidation.

best in the world and can

prevail in war today.

Sen. Strom Thurmond

• The military services must establish victim advocate programs.

Section 534 directs the services to assist members of the Armed Forces and their family members who are victims of intrafamilial sexual, physical or emotional abuse; discrimination; or other crimes.

• DoD's limited authority to accept voluntary services was expanded (section 1061) to include certain MWR settings. The services must each first successfully complete a six-month pilot program. Once the test is complete and approved by Congress, all MWR volunteers will be eligible for compensation for work-related injuries, may be reimbursed for incidental expenses, and will be protected under the Federal Tort Claims Act.

Both the Department of Defense and the Department of the Army Secretariats reinforced the support for quality oflife programs provided by Congress. They provided strong yet flexible policy and supervision that allows programs to be modified to meet unique

installation needs. They advocated for and provided increased APF to ensure key MWR services are maintained to sustain soldiers and their families whether at home, abroad, or deployed. This support is best exemplified by:

• Approval to lease the Shades of Green, Armed Forces Recreation Center in Orlando, Florida.

DOD and Army Secretariat Support

• Modification of the advertising policy to allow MWR event advertising in appropriate civilian media and sale of space for conunercial advertising in any media form produced by or for MWR.

• Increased support for the Family Advocacy Program as child and spouse abuse awareness increases in our society.

- 2 -- 1994 ,.,WR Annual Rtport ---------------------

Executive Report Pass in Review

In its first full year, the Morale, Welfare and Recreation Board of Directors assumed an active leadership role, providing vision and direction to steer Army MWR toward growth and financial stability. In one fiscal year, they mobilized to face many challenges posed by downsizing and diminishing resources. The actions

they took to meet these challenges produced the

following: Board of Directors

• Financial standards, which serve as benchmarks for MWR programs and which encourage fiscal

responsbility at all levels of operation. These standards are designed to help commanders by identifying appropriated fund levels of support for category A mission essential programs and establishing nonappropriated fund fiscal goals. These benchmarks provide a uniform method of evaluating local financial performance.

• TheArmy MWR Vtsionfor the 21st Century and TheArmy MWR Strategic Action Plan. Taken together, these two documents set forth goals, objectives, and actions designed to ensure that MWR becomes a customer-driven program managed with business-like practices.

• A standard patron survey to support the triennial needs assessment.

Over the next two years and once every three years thereafter, each insta11ation and the Army as a whole wi11 have valid marketing research data upon which to base program innovation and modification.

• Adoption of an automated information system, which will enhance the manager's ability to collect, process and store the fmancial and operational data needed to optimize programs. This computer-based system will be funded centrally at a cost of $40M and fielded at every installation in the Army.

Army MWR operating funds are comprised of the field operating nonappropriated fund instrumentalities, the Army Recreation Machine Program, and the Army Morale, Welfare, and Recreation FlUld.

In FY 94, APF and NAF support totaled $1.3B. APF and soldier dollars represent 28 and 72 percent of the total respectively. This support was used for personnel costs

(S694M, 54 percent) and other operating costs (supplies, cost of resale merchandise, etc. - $495M, 39 percent) as shown in Figurel-l. After all the operating costs were paid, S94M remained available for capitalization.

Examples of the use of funds are the FY 95 construction program, world-wide capital purchases and minor construction and central purchase of the management information system.

Financial Overview:

All Army MWR Operating Funds

19'4 MWR Annual Rtport -- 3 -

Section I

Direct APF support to MWR continued to show wide fluctuations depending on the program. Using average troop strengths, the amount of money spent per soldier on MWR programs continued to decline (FY 92 = $326; FY 93 = $298; FY 94 = $289).

Per capita expenditures for family programs, including Anny Community Service, increased from FY 93 ($246) to FY 94 ($262). Despite this positive sign, the major challenge for connnanders was still how to make up funding shortfalls in order to sustain the same programs from year to year.

In the NAF arena, Figure 1-2 shows a material improvement in Annywide operations. Despite a $20.2M reduction in revenue, operating expenses and cost of goods sold also de-

elined by $38.3M, resulting in a $16.1 M in-

MWR is Big Business - $1.3 Billion

'.30

Figure 1-1

1000

800

600

200

Figure 1-2

crease in NIBD.

In order to get a true picture of what caused the changes in the total operating results, those results must be reviewed in terms of two parts: first, Headquarters Department of Anny revenues and costs; and second, "field operations." [The remainder of this section addresses the HQDA contribution to the total picture; the next section addresses field operations.]

Total revenue increased $21.8M. This revenue was generated by the HQDA portions of the ARMP income and Anny and Air Force Exchange Service dividends as well as the interest.

Two reasons for the change were a real increase in ARMP revenue and the AAFES NAF Operating Results dividend, and the BOD decision to retain a larger

In Millions portion of both to centrally fund construction and other Annywide initiatives.

During the same period, costs associated with HQDA support services increased S2.1M. The total ofS37.1M funded the Master Training

Program. MWR Management Information Systems, the Army Soldier Show, NAF Management Trainee Program, Army Level sports and competitions, World Class

Athlete Program, and a myriad of other centra11y-fimded initiatives as well as the direct operating costs of the U.S. Army Community and Family Support Center.

When FY 94 support services costs are deducted from revenue, the resulting net income before depre-

$353

fliNN'''''_' .MlIItaJy~ .o • ...._ ...

• ~ReIw Dot!.-

$201

..

Sources ($M)

Uses (SM)

...

...

.HQNISD

OHQSup Svc.

• HQ ARM & AAFES

o Field NAFI

- 4 -- 1994 HWA Annual «eport ----------------------

NI8D

ciation is $49. 1M in positive cash flow. This represents a $19. 1M increase over FY 93, which more than offsets the $1.6M decrease experienced from field operations, and results in the $18.1 M NIBD increase for total NAF operations.

As of September 30, the Army's collective fmancial position was stable. Overall cash-to-debt ratio at year's end was 1.2: 1 versus 1.3: 1 at the end of 1993. The reduced levels of cash continue to reflect the Army's investment in capital requirements at a rate greater than the generation of cash during the year. More detailed information, including Total Army Operating Funds income statement and balance sheet, appears on pages 22-25.

As FY 94 began, MWR faced a diminished customer base, increased costs associated with base closure, the expectation of reduced AAFES dividends, and APF decremented by $40M from FY 93. The BOD challenged management at

every level to embrace fmancial standards and make tough operational decisions required to maintain fmancial stability. The BOD singled out three areas as needing special attention in FY 94 to ensure that stability;

EUOItive ~port Pass in leview

Financial Overview:

Field Operating Funds

• Club operations: make clubs profitable by first quarter FY 95.

Continued operation of non-profit-generating clubs must be justified to the BOD by the MACOM commander.

• Child Care: by end ofFY 94, reduce the nonappropriated fund subsidy to child care to less than $400 per space.

• Overhead: reduce by 10 percent.

Commanders and MWR professionals successfully met all three of the BOD special attention areas.

• Million. 110 110 UO 120 100

10 10 40 20

o

Execution by MDEP as of Sep 94

.............................................. IIIFundlng

....... _ _ ..................• Execution

Figure 1-3. Direct APF support

Clliid D.v.l. pili. nl , •• ylc ..

A y

Co wnlly

'"ylc ..

A ccomplish.ell ts FY 94

• Army Clubs showed a $3.3M turnaround from FY 93.

• Child Development Services reduced the NAF subsidy from FY 93 by $14.2M, to an average of $212 per space.

• Overhead costs decreased by 12 percent from FY 93.

1994 HWR Annu21 Report - 5 -

In FY 94, .S account and family pr0- gram accounts (Operation and Maintenance, Anny, directAPF support) were executed at $161M and $146M, respectively, or 109

.................................................. percent and 110 percent. These amounts were

$15.3M less for the .S account and $500,000 more for the Family Programs account than the actual expenditures in FY 93. Figure 1-3 shows the funding and execution of APF by

.... management decision execution package.

Total revenue generated by field NAFIs was $42M less than FY 93 (Figure 1-4). The decline in revenue is attributable to a $14.8M drop in sales combined with the collective decrease in interest, AAFES simplified

dividend, and ARM revenue. Figure 1-5 shows the decrease in nonoperating revenue. The ongoing force restructuring in U.S. Anny, Europe, influenced all components to varying degrees, since USAREUR generated $50.8M or 22.2 percent less revenue.

Figure 1-4 also reveals that net income before depreciation was $28.8M, a decrease of $1.6M from FY 93. USAREUR showed the biggest improvement in NIBD. Eighth U.S. Anny (Korea), Defense Logistics Agency, Medical Command, and Military Traffic Management Command were the only major Army commands reporting positive net income after depreciation.

Programs showing the greatest improvements (increase in NIBD or decrease in net loss before depreciation) were child development, guest houses, clubs, arts and crafts, central accounting office. and services division.

Figure 1-6 illustrates which activities generated and which consumed NAP NIBD during FY 94. The left side of the chart also reveals that 82.2 percent ($ 150.5M) of the NIBD was generated from external sources.

Only $32.1M was generated from direct program operation. The right side of the chart reveals that 79 percent of the activities consuming NIBD were

nondirect program services or overhead. This chart alone reveals why the BOD focused on reducing overhead during FY 94 and will continue that focus into FY 95.

SectiOl I

Field Operating Results In Millions

Figure 1-4

Non - Operating Revenue

$ Millions

........................................................ ,-,,_ ... _.. ----,

• FY f3 Actual

............... "" " 0 FY N Budget

• FYI" Actu.1

AAFES

ARM

Interest

Figure 1-5.

- 6 - 1994 If WI AnnUM Ilport ---------------------

Sources (in Millions)

Cl!:!ara!Ml1 Act!vIIIas

Guest Houle $10.2

Golf 9.7

AFRC 4.8

leisue TrweI 4.6

Recydilg 2.9

Clubs .4

BowIilg .1

Business Programs

Exewtivt Report Pass ill Review

Uses (in Millions)

CAO "12A

Operating ActIyItIes

sports and Rae -14.7

ChIld D6Y. SVcs. -5.2

Youth SVcs. -4.8

Unit ActMtIos -4.2

Arts and Crafts -2.4

Other -1.2

Figure 1-6

In FY 94, business programs contributed S20.4M NIBD in support ofMWR worldwide, an increase ofS2.9M

over FY 93 despite S9.7M in drawdown and base closure expenses. This is attributable to managers worldwide who improved customer service, curtailed non-demand-driven programs, and reduced operating costs. Of all business programs, guest houses were the

largest single contributor, earning SID.2M (Figure 1-7).

During FY 94, the MWR BOD accepted the findings of the Logistics Management Institute report on improving business operations. As a result, two actions became part of the MWR Strategic Action Plan:

• Transitioning clubs from traditional operations to casual theme restaurants serving a larger cross section of the targeted market. CFSC staff developed four theme concepts patterned after nationally recognized casual and family style civilian sector restaurants (see Food, Beverage, and Entertainment, pages 36-37).

• Conducting independent contractor reviews of installation food, beverage, and entertainment operations. The contractors assess an installation's market opportunities, show where competition or duplication can be eliminated, develop a plan for capturing lost market segments, and present the results to the commander.

Program Initiatives

NIBD •• Operations

OU.stHou .. $10.2

Club $OA

Golf ".7

10.1

Bowling

FY94 $20.4M

Figure 1-7.

1994 HM AnnUM JepoTt - 7 -

Section I

Family Programs

Family programs adjusted services to meet the needs of a downsizing Army, to support soldiers and families during shorter and more frequent deployments, and to reposition and restructure youth and child development programs to support special needs and at-risk youth. Significant accomplishments for the year were:

• Army Community Service restructured and implemented a new strategic plan. Phase I of the plan, launched worldwide in May, called for a Unit Outreach Program in which ACS professionals work more directly with unit commanders to provide proactive and preventive programs.

• Anny Family Action Plan Planning Conference met Oct. 25-29, 1993 (first quarter FY 94). Representing all major Army commands, the Army National Guard, and Army Reserves, 135 delegates briefed 26 new issues to the Vice Chief of Staff, Anny. The top concern was the issue of retaining commissary benefits.

There are 326,669 active duty_family units in the Army. One in three families used at least one child development services program in FY 94.

Teen Discovery Issues

• Develop sex and birth control education programs.

• Increase teen involvement in youth services activities.

• Develop programs which focus on dealing with violence in the community and improving law enforcement.

• Address cultural diversity issues in youth services programs.

• Provide substance abuse prevention and counseling _for youth.

• Army Family Team Building Program was launched to educate soldiers, civilians and family members about the Army missions and expectations, readiness responsibilities during separation and deployment, and systems available to support a more self-reliant lifestyle. Community and Family Support Center staff and volunteers trained a total of 589 AFTB Master Trainers who will, in tum, teach AFTB concepts to the family members of active soldiers, civilians and reserve components at their home station.

• CFSC and U.S. Army Training and Doctrine Command hosted the 5th annual Teen Discovery at Fort Gordon,Ga. Youth delegates from 42 installations identified their top five issues (listed at left). Selected youth brought those issues forward to the AFAP conference.

• Youth Services and Child Development staff at CFSC were reorganized to create the Child and Youth Division. This consolidation will integrate youth policy, issues, and services into one continuum from infancy to adulthood and will result in increased visibility and accountability.

• Child Development Services staff developed, published, and implemented guidance and training for special needs children in a child development setting. Staff also published "How to" guides for CDS coordinators, including the CDS Coordinator s Handbook, Orientation Training, Mobilization, and the CDS Recognition Program.

- 8 -- 1994 HWR Annual Report -----------------------

Executive Report: Pass in Review

• With the publication of "The Living Room War," (lime, May 23, 1994) an article about domestic violence, the Family Advocacy Program received high media visibility. Increased focus on prevention resulted in a decline in the number of substantiated cases from 1993 to 1994 - a four percent decrease in spouse abuse and an eight percent decrease in ehild abuse.

Recreation Programs

More than half of soldiers surveyed worldwide in spring 1994 rated recreation programs good or very good wherever they were stationed. Sports, libraries, and automotive skills - programs which serve the broadest market and have a direct impact on readiness and quality of life - continue to be supported by APF and NAF. The increased focus on customer-driven programs pressured commanders to modify delivery of marginally used or special interest programs.

Even though recreation programs operated at a net loss before depreciation of$22.4M, they improved their financial performance compared to FY 93. The loss decreased by $2.9M because managers at installations limited the hours of operation, used volunteers, or reorganized as recreation clubs in order to continue operating at a reduced cost. At other installations, managers closed recreation centers, arts and crafts, and entertainment programs.

In addition to the improvement in financial operations, significant achievements were:

• World Class Athlete Program received increased emphasis from the Chief of Staff, Army, who directed a focused effort to "recruit for gold" at the 1996 Summer Olympic Games. As a result, soldiers who qualify are assigned to CFSC with duty station at a location for training in order to prepare for and compete in national, international, and Olympic competitions (additional WCAP information appears on page 44).

• The procedures for mobilization of MWR were redesigned and published in Field Manual 12-6 (Personnel Doctrine). Mobilizing MWR for contingencies is classified as "mission-essential," establishes brigade level recreation specialists, and requires funding MWR with APF mission dollars. USAREUR piloted the first deployments of brigade recreation specialists in Rwanda.

Offduty recreation {while deployed in Haiti] was a rea! lifi! saFa If relieved stress and occupied the leisure time of mr soldiers.

Noncommisioned officer 11 th Signal Brigade

• Army Entertainment reached worldwide audiences totalling nearly 200,000 with the United States Army Soldier Show, Battle of Bands, Army Country Concert Tour, and USA Express. The 28 talented and carefully screened soldiers from seven major eommands who formed the 12th annual

1994 HWR Annual Report -- 9

Section I

Shaw of Greell OCCIIJH'IICY dlJlQ Feb-Dec 94

• 95,772 room nights available

·90,112 room nights occupied

• 94 percent occupancy rate

• 14,393 room nights referred to local hotels ·23,341 room nights on waiting list

Army Soldier Show cast and crew toured 47 installations in four and a half months. Seven soldiers of USA Express, a high-energy variety showband, will entertain troops in the Middle East during December and January ofFY 95 under the auspices of the Armed Forces Professional Entertainment Office.

• In Army Sports, soldiers won 10 of the 14 championships contested and all 12 weight divisions at the Armed Forces Boxing Championships. The Women's Softball Team brought home gold for the 10th consecutive year, and the Women's Basketball Team captured their 15th title in 17 years. Success was not limited to just armed forces championships. Army athletes won 36 medals at the Olympic festival, and a soldier was the only American gold medalist in boxing at the summer Goodwin Games in Russia.

Hospitality Directorate

CFSC expanded its role of operating Armed Forces Recreation Centers by improving old facilities and opening a new AFRC at America's favorite vacation destination, Orlando, Florida. The centralized management of the AFRCs and the ARMP ensured continuity, consistent quality, and uniformly applied policies and procedures. Cost reductions resulting from large volume operations meant savings passed on to the customer. Significant achievements in the operation of AFRCs were:

• Shades of Green on Walt Disney World· Resort celebrated its February 1994 grand opening. Sergeant Major of the Army Richard A. Kidd hosted over 750 service members, noncommissioned officers, and their families from every MACOM as well as service members representing sister services. This is the first AFRC located within the continental United States and is the only one leased from

a commercial source. Initial occupancy exceeded 94 percent, and the property is currently 61 percent booked for FY 95. Figure 1-8 shows the majority ofusers are active duty military.

Occupancy by Nlarket Segment as of Sep FY 94

Active Duty 61.6%

Civilians 10.1%

Figure 1-8

National GJard& Reserve

3.00k

• The Hale Koa Hotel expansion and Fort DeRussy development continued at a total cost ofSll0M, the largest NAF project in DOD history. When the hotel project is completed September 1995, the number of guestrooms will nearly double from 416 to 812 rooms. Sixty-six of Fort DeRussy's 72 acres win be transformed into a park.

- 10 - "94 IfW. Annual .'port ---------------------

• The Dragon Hill Lodge extension was completed, opening 22 additional guestrooms and an ultramodern fitness center. This SSM project was financed by funds received from the Korean government for the sale of a previously owned Army hotel.

• The 192-room Inn at Schofield Barracks opened in June. This is the last of three thirdparty-financed lodging facilities built on Army installations. The other two, at Fort Bliss and Fort Drum, were purchased by the Army MWR Fund and are now operated by the installations.

• Building on its success at Fort Sill, the Hospitality Directorate staffbegan to expand amusement machine operations in CONUS. Operating with strong internal controls, enhanced maintenance, and modern equipment, this initiative will significantly improve the quality of "high-tech" recreation and profits for installations. Fort Irwin and Fort Lewis have concluded agreements for amusement machine installation. The program increased total Anny net income by 5160,000 since its inception two years ago.

• The Army Recreation Machine Program fmalized an agreement by which it assumed operational control of the majority of the U.S. Marine Corps slot machine operations. This mutually beneficial agreement has more than doubled USMC profit and is projected to contribute an additional $4M annually to the Army Recreation Machine Trust Fund.

EXtmbve Report Pass in leview

Two days ago I was eating MREs in the field. Now my family is having a vacation we never thought we could afford.

u.s. AnnyRanger NCO and family

(0 nstruction

A highlight of the Construction S S· I"·

Directorate's year came when Congress upport ervlces mtlatlves

approved the entire FY 95 NAF MWR

construction program without any requests

for additional information. The directorate

staff worked with installations, MACOMs, and the Office of the Secretary of Defense to ensure the accuracy and completeness of construction information. Other FY 94 highlights were:

·1Wenty-nine MWR priorly approved projects were completed at a

cost of S62.4M. NAF major construction projects totaling S5S .6M and S30.8M were approved for FY 94 and FY 95 respectively.

• The Army's NAF design-build program has become a model for success. The U.S. Army Corps of Engineers is adapting it for use

and other services and agencies have requested assistance in adapting our process for their use.

'''4 HM Annual ~epDrt -- II -

Section I

Army and Air Force contracting personnel provided procurement support at six major trade shows in FY 94. processing 2.500 orders totalling $1 OM

• CFSC's designers and project managers were recognized by their peers when they shared the 1994 "Building America Construction Award of Excellence for Commercial Construction Over 52 Million," presented by the Kentucky chapter of the Architects Institute of America and the K.entuckiana Associated Builders and Contractors Association. The award was for the design of the Fort Campbell Sportsman's Lodge.

Contracting

The primary objective of the contracting directorate is to find ways to streamline the NAP acquisition process and make it more like "real world" commercial business practice. In FY 94, we were able to implement two initiatives supporting this objective:

• The Standardization and Consolidation Acquisition Program. CFSC, in cooperation with the Air Force, signed a memorandum of agreement creating this program. The Services will capitalize on consolidated purchases and increase bargaining leverage, saving MWR money. A newly formed Purchase Review Board will identify supplies and services that are good candidates for standardization and consolidation, keeping MACOMs and installations actively involved in the program.

• The NAP International Merchant Purchase Authority Card Program.

Currently, the credit card program is in effect at 48 installations. The program allows staff to purchase supplies up to $2,500 directly from vendors, saving costly administrative time and money spent on procurement actions.

Commercial Sponsorship

Four years after DOD permitted a one-year test of commercial sponsorship, the program continues to grow in scope and success, thanks to new interim guidance released in June. The new guidance reflects DOD policy, yet allows commanders maximum flexibility. While sponsorship must still be viewed as a business exchange, it remains an alternative funding option that enhances and augments MWR activities at all levels. In calendar year 1993, installations generated sponsorship valued at $5.7M in cash, goods, and services, an increase of nearly half a million dollars over the previous year. At Army level, examples of successful commercial sponsorships include:

• The Better Opportunities for Single Soldiers Commissary Awareness Program. Thirteen corporate sponsors donated coupons and 52,000 product samples for 3,700 soldiers who participated at 15 installations.

- 12 - 1994 HWI Annual .tport ----------------------

Executive leport Pus in le'l'iew

• The Army Country Concert Tour. Sponsored by AT&T, Miller Brewing Company and 7-Up, top-name country western acts including Martina McBride and Little Texas, toured Forts Benning, Campbell, Sill, Iackson, Carson, and Stewart. More than 100,000 fans attended these concerts.

• The 1994 All Army Boxing Championship and Trial Camp. For the third year. the Brown Fonnan Beverage company provided corporate sponsorship which funded boxers' equipment and clothing as well as celebrity visits by boxing legend Floyd Patterson. Soldiers at nine installations participated in robotic boxing tournaments; winners received prizes and cash.

The 1994 US. Army Soldier Show staged 70 performances/or more than 60,000 spectators, logging over 100,000 miles.

Information Management

When the MWR BOD approved S40M over the next three years to field the corporate management information system, the information management staffknew their work was just beginning. In addition, CFSC staff also generated several support service upgrades to help managers in the field do their jobs more efficiently:

• Child Development Automated Management System, version 2.4, upgraded previous versions over a 12-month implementation and evaluation cycle. The new version standardized all of the versions currently in the field and established a toll-free help line for program support.

• Time Labor Management System fielding was completed in aliSO states and Panama. Local national payroll systems for Germany and Korea are in the final development stages and are scheduled for installation in FY 95. Efforts to replace manual entry of payroll data with Electronic Data Exchange are ongoing.

• Local Area Network Central Control System (LCCS) and Financial Management Budget System fielding and training began at 38 installations. The LCCS is the heart of the MWR Management Information System. The main databases and software applications will reside on it and it allows users to dial in and use direct connections to access files and data. FMBS provides the NAF budget software and allows managers to construct budget estimates, develop "what if" scenarios, and record actual budget submissions.

1994 HWI Annual .epott - 13 -

---_. _

Section I

Human Resources

The CFSC Human Resources Directorate has responsibility not only for training the MWR workforce, but also for maintaining and administering the NAF Employee Benefits Program. Working toward the goal of recruiting, training, and retaining a quality workforce, Human Resources staff visited eight colleges and universities to attract young, bright recreation and business graduates into the NAF management trainee programs as well as to encourage undergraduate participation in the summer intern program.

For those already in the system, the MWR staffing and referral program helped place many career professionals, especially those affected by base closures and downsizing.

Since the CFSC Master Training plan was implemented in 1987. more than 6.500 students have been trained in residence at the CFSC Training Center. One third of those employees are still actively employed in the MWR workforce.

The director of Human Resources also has the mission to represent the commander, CFSC, as the personnel proponent for MWR Career Field 51. This means the entire MWR workforce is integrated into the Army Personnel Proponent System. In FY 94, the Army Civilian Training, Education, and Development Systems Plan for Career Field 51 was approved and distributed, a culmination of three years' work. The ACTEDS plan for MWR applies to both APF and NAF employees. It is a progressive and sequential guide for career development of employees and supervisors in the MWR workforce, which numbers in excess of 40,000 U.S. civilian and foreign national employees.

At the CFSC Training Center in Falls Church, Virginia, teams of facilitators and subject matter experts - themselves former practitioners - develop and deliver job-specific training under the MWR Master Training Program. More than 2,700 students graduated from courses at the Training Center last year alone.

Training Center staff designed the curriculum for, organized and conducted the first-ever Garrison CommanderlDPCA MWR Conference. Over 420 garrison commanders, directors of personnel and community activities, and other installation managers attended the largest MWR conference in CFSC's history. Training was held in August 1994 in Denver, Colo., in conjunction with the American Logistics Association MWR Expo. Delegates had the opportunity to visit over 800 vendors and participate in ALA-sponsored training.

- 14 -- 1994 HWR Annual Report -----------------------

Tactical Strategi es lor the F utu re: FY 95 Initi abm

Section 2

Tadical Strategies for the Future: FY 95 Initiatives

Business Programs

Food, beverage, and entertainment assessments will be conducted for the installations that were awarded venture capital to test the new theme restaurant concepts (see page 36). These assessments will be completed by the end of second quarter FY 95. The assessments will result in opening six new theme restaurants during the year. In addition, six regular installation FB&E assessments are planned.

CFSC staff are working on transitioning golf courses at two closing installations. The Army is negotiating an agreement with the National Park. Service to transfer operation of the Presidio of San Francisco golf course. CFSC is in the process of obtaining DOD approval to contract with the City of Seaside for the operation of the Fort Ord golf courses.

Family Programs

Army Community Service will publish and disseminate Operation Resources for Educating About Deployment and You materials and videos to active duty and reserve component family programs. OP-READY materials are comprehensive training modules for support throughout the continuum of mobilization, deployment, and reunion.

The Army FamilyAction Plan Installation Handbook, designed to guide the AFAP process at the installation level, will be released.

During FY 95, full-fledged school-age services will become a bridge between child development and youth services. Both child

development services and youth services personnel will staff this newly designed school-age program, which will serve an additional 5,000 children Armywide.

Owing FY 95, Phase II of the ACS Strategic plan will be implemented. HQDA, MACOM and installation ACS personnel will meet to develop the goals, objectives and tasks for an enhanced Informa-. tion, Referral and Followup system. They will also evaluate automation, standardizing resource files, and certification and training IR&F providers. Implementation is expected late in FY 95.

The Army Family Advocacy Program will develop and field a video, ''The Role of the Connnander in the FAP," and implement New

Over 84 percent of spouses and 86 percent of active duty personnel reported they well? satisfied or very satisfied with community service programs.

1993 Army Community Needs Assessment Survey

199., HWI Annual AtpOlt -- 15 -

Section 2

Parent Support Programs at Army installations.

The Family Member Employment Assistance Program will work with Anny Youth Services to assist with initiatives to expand youth employment programs. Additionally they will participate in the DoD Policy Forum of Employment for Military Spouses. During this forum, participants will develop recommendations on strategies to reduce or eliminate employment barriers confronting mobile family units both military and civilian.

Recreation

Army Entertainment's 1995 sunnner concert tour will consist of top-name entertainers perfonning two-day festivals featuring rhythm

Responding to the worldwide spring 1994 Sample Survey of Military Personnel, 23 percent of soldiers said they engage in recreation to avoid boredom, 45 percent said they wanted to have fun. and 42 percent they participated in recreation to relax and relieve stress.

and blues and country music. Concerts are planned at twelve installations: Forts Campbell, Huachuca, Carson, Sill, Stewart, Sam Houston, Bragg. Eustis, Riley, Hood, Redstone Arsenal, and Aberdeen Proving Ground.

The first Military World Games are scheduled for September 1995, in Rome, Italy, under the auspices of the Conseil International du Sport Militaire. Participants will compete for medals in 17 events in the following areas: military-oriented sports, team sports, individual sports, and combat sports. The United States expects to send a delegation of 350 military athletes and officials, including medical and administrative personnel.

Recreation personnel from HQDA, MACOM and installation level will begin work as a process action team to determine what modifications are required to carry recreation programs into the 21st century. This PAT will meet during 1 st and 2nd quarter FY 95 and will reconunend actions to the Strategic Planning Committee of the MWRBOD.

Hospitality

A plan to perpetuate operation of Shades of Green will be presented for concept and funding approval to the MWR BOD. The plan will include the price to purchase the building and prepay the land rent costs for the entire 100-year-lease term.

The Anny amusement machine initiative, operated by Hospitality Directorate staff, will expand to Forts Beruring and Bragg. Additionally, on the installations where CFSC provides amusement machines for MWR, CFSC win also provide services to AAFES facilities.

- 16 -- 1914 HWI Annual ~'Port ---------------------

Tactical Strategies for the Future: n 95 Initiatives

Human Resources

CFse Training Center staff will develop and deliver a formal course of instruction for the civilian recreation specialists selected to fill the deployable brigade recreation specialist positions. In addition, a parallel course will be developed for MWR personnel who volunteer to deploy as supplemental recreation staff during contingencies. This course will be delivered as required.

In a joint effort with the Anny Management Staff College, Training Center staff will begin delivery of a general officer installation connnander course. The 36-hom course deals extensively with MWR and will also address facility construction and maintenance, environmental issues, APF personnel, resource management and mobilization support. The course is open to GO installation commanders and MACOM staff principals with installation responsibilities.

The Professional Development and Personnel Proponency staff will build on publication of the MWRACfEDS plan released in FY 94 by educating the workforce on how it enables employees to develop career paths. Staff will also pursue MWR strategic action plan initiatives as a means of ensuring positions are filled with the highest quality individuals in the system.

These include examining the possible central management of key positions in a manner similar to AAFES Executive Management Program. Job swaps and developmental assignments are other initiatives under consideration to broaden employees' perspective and scope of experience.

Expanded participation in the NAF 401(k:) savings plan will be encouraged through an expanded marketing campaign.

Management Information Systems

The LAN Central Control System and the Financial Management Budget System fielding will continue, bringing implementation to 91 installations. RecTrac! and GoIITrac! will also be

installed and local personnel trained in their use. In FY 95, the MIS will be installed at 35 installations.

Construction

Under a new "pre-construction review board" concept, the construction review board will screen all proposed projects to select those that have a high priority and are highly competitive. Only selected projects will progress to the project validation stage of the process. This procedural change will limit the number of proj ect

1994 HM Annulliepm -- 17 -

Section 2

validation assessments - costing an average of 550,000 each - to only those projects having a reasonable chance of being approved.

In FY 95,567 million in construction will begin. This construction encompasses projects from FY 94 and prior that have been designed and contracted. CFSC's Construction Directorate will expand use of the "design-build" concept for project acquisition. Additionally, memoranda of agreement win be developed with the u.s. Army

Corps of Engineers, AAFES, and other military services to expand NAP construction options.

A design-build and NAP Construction Center of Excellence will be established at a yet-to-be-detennined Anny Corps of Engineers District. This initiative is expected to result in faster and more economical execution of high quality construction projects.

Contracting

Combining experience and foresight, the contracting staff is working to improve service to their customers. Improvements include resoliciting the Prime Vendor food service contract using lessons learned over the last few years, and awarding regional architect and engineer contracts for use by all the services.

The architectural and engineering contracts win provide a vehicle for installations to obtain those services allowing for quicker and more efficient execution of NAP construction projects estimated at under $100,000.

Approximately eight biIJio" coins wen! played in Army recreation machines to produce FY 94 1l!Venue. If those coins were stacked. they would form a column 8.000 miles high. Laid side by side, they would circle the earth almost/our times.

- 18 - 19904 HWI Annual .,port ----------------------

A Quality WorIdorte: Traiae4 an4 leady

Section 3

A Quality Workforce: Trained and Ready

A quality workforce is key to delivering effective programs. To reach this goal, CFSC continues to develop, improve, and adapt programs and systems to improve the management and effectiveness of a diverse workforce,

NAF Management Trainee Program

The NAF Management Trainee program was reinstituted in FY 94. Human Resources staffrecruits up to 10 college graduates each year to work in a variety of MWR disciplines such as club management, recreation, and marketing, based on MACOM vacancy projections. The 12 to 18-month program is centrally funded by CFSC and places the trainee/managers into permanent positions through the central referral program once training is complete. During FY 94, nine trainees were placed at Forts Hood, Lewis, Belvoir, Carson, Monroe, and Monmouth.

Summer Recreation Intern Program

This program was centralized in the Community Recreation Directorate in 1988. During the past seven years, over 400 students have worked at stateside installations and overseas. The majority of the summer internships are in overseas locations, including Japan, Korea. Okinawa, Germany, and Italy. Interns are assigned to core programs: sports, outdoor recreation, community recreation, and youth services.

Of the Army civilians in the MWR workforce, 17 percent are APF and 83 percent are NAF.

Training with Industry

FY 94 marked the beginning of a pilot TWI program for the Career Field S 1 civilian workforce. Betsy Tibbs, from Camp Zama, Japan, U.S. Army Pacific Command, was placed at a state park and conference center, Oglebay Park, in West Virginia, for seven months. Ms. Tibbs enhanced her marketing skills and met the goals of the program. The pilot program is being evaluated for improvement.

Master Training Program

The Master Training Program curriculwn continues growing to meet the needs of the Army's MWR workforce. There are 27 individual courses supporting MWR programs. Fifty-eight classes will be offered during FY 95 at skill, entry, program, and multiprogram

1194 HWR AnnUM 'tport -- 19 -

Section 1

The Continuing

management levels. Additionally, the CFSC Training Center staff participated with the Army Management Staff ColIege in delivering a garrison connnanders' pre-command course and a general officer installation commanders course.

Training Center officials made four changes to the Master Training Program:

• Implemented a memorandum of agreement with the Navy to provide all NAP contracting training for the near future.

• Asswned responsibility from the Navy for delivering all food and beverage skill-level training. Because Fort Benjamin Harrison is closing, the MWR Culinary Activities Training Site moved to Fort Lee, Va The CATS training staff is currently developing new food and beverage initiatives which meet program needs.

• Expanded availability of the Conununity and Family Support Management Course is now available through a combination of twothirds nonresident correspondence courses and one-third resident attendance at the Training Center.

• Consolidated the division chief courses - previously taught in the specialty areas of family support, community recreation, business operations, financial management and services - have been consolidated into a single integrated course for MWR division chiefs. This modification was predicated on changes in organizational structures in the field. Army downsizing, and size of the target audience. The program of instruction will be similar to the old courses and will maintain core learning objectives.

Continuing Education Units

A CEU is a nationally recognized standard unit of measurement for nonacademic education. Sponsoring agencies such as CFSC are authorized to award one CEU for each "10 contact hours" ofinstruction in a nonacademic setting. CEUs are required for national bodies such as the National Recreation and Park Association to recertify its members who are Certified Leisure Professionals. In addition, attending CEU-qualified training assures the participant and the supervisor that standards ofleaming are being met: the design includes measurable learning outcomes, qualified instructors, and a requirement to demonstrate that the outcomes have been achieved. Students earn CEUs for many courses offered at the Training Center.

Staffing and Referral

CFSC's MWR staffing office issued over 300 referral lists during 1994. Approximately two-thirds of the lists processed were for NAP positions. The average processing time for issuing NAP referral lists was one day; for APF, one and a half days. The Central Referral

- 20 - "'4 II'w. Annual Rtport ----------------------

program continues to help conunanders fill key positions and provides those who are enrolled the opportunity to relocate or broaden their work experience.

All open-continuous announcements for APF positions were revised and issued Armywide to commands and activities, and copies were mailed directly to each employee registered in the referral program.

Employee Benefits

In response to the increasing cost ofheaJth insurance for NAP employees, the Army Medical Life Fund introduced a preferred provider option as a separate line of health insurance for residents of IIWly parts of the United States. The PPO saves both the employee and the employer money by offering lower premiums, comprehensive worldwide coverage, and pre-negotiated discounts from affiliated providers.

The AMLF also introduced prescription medication by mail.

High-option and PPO participants receive their prescription medication at no cost. Low-option participants pay very low costs; for example, a 9O-day supply of medication costs $5.00 per prescription.

Anny Civilian Training, Education, and Development System

The AcrEDS plan for Career Field 51 (MWR) is based on the principles of progressive and sequential education and training at various stages of career development (entry/intern, specialist, managerial, executive/senior executive), each phase building on the previous one. The CFSC commander is the personnel proponent for Career Field 51.

The plan outlines the knowledge, skills, and abilities for MWR positions and identifies the training needed to acquire them. It identifies formal training, operational assignments, and self-development efforts which will enhance individual job perfonnance and prepare civilians for MWR technical and leadership roles. ACI'EDS plans are available for review at local civilian personnel offices.

Human Resource Management System

This database system is a management tool that supports and reinforces policy decisions about the way we project the needs of OW" workforce. Data elements for both NAF and APF MWR employees include occupational series, pay plan, grade, sex, position title, program, location, and Fair Labor Standards Act exemptions. The data are uploaded monthly from both the HQ Army Civilian Personnel and Strength database and the central NAF payroll office tapes. Now in the last stages of refinement, installation access to the system is projected for summer 1995.

A Qua~ty Workforce: Train" and keady

Open COiltinuous Annollllcelftents -Director of Community Activities

-Assistant Director, Commtmity Activities -Commumty Operations Director

-Community Recreation Director

-Sports Specialist

-Recreation Specialist

-Child Development

Management

-Training and Curriculum Specialist

1994 nWR AnnuM .'pm -- 21 -

Section 4

Section 4

Financial Report Army I1WR

Anny MWR corporate finances are the combined total performance from the field operating NAFIs, ARMP. and the AMWRF. The first section of this report describes changes in how those elements performed, in the aggregate, when FY 93 was compared to FY 94. Likewise, we reviewed field operating NAFI results. Portrayed in this section are the swnmarized balance sheet (Figure 4-1) and the summarized statement of income and expense (Figure 4-2) which support the analysis provided in the executive swnmary. The remainder of this section addresses individual Headquarters Department of the Anny funds managed at CFSC.

Figure 4-2 reinforces the fact that Army MWR as viewed in the aggregate is not generating enough NIBD to maintain the same level of capitalization as in previous years. The statement shows NIBD was S78.5M while S93.5M ofasset value was recorded as depreciation (the dollar value of equipment and buildings "used up" during the period). This imbalance prompted the MWR BOD to set the installation MWR fund NlBD standard for FY 96 at five percent and add a capital reinvestment assessment of two percent.

Summarized Balance Sheet - Army MWR Operating Funds

Aate ..

Cf.Irrent AlMa C8shllnvesbnenls Receivables Invenklrles Prepaid Items

Total Current Assem

AudAIM .. Accumulated Depreciation Book value Fixed Assets

OtherAsMIl

Axed Asset. SI .. ing Funds Separation Sinking Foods Other

Tot.lAIMIl

u.bIIltiea

Cf.Innt U.bllUM Accounts Payable Other

Total CUrrent U.blltI ..

Total Long T .. m U.blIIU ..

Total U.blitlel Fund Equity

U8b11tI8I Md Fund Equity

Figure 4-1

aoSep FY93

$355,383,936 51,674,769 38,972,122 11,835,417

457,866,244

1,371,164,087 498,564,547 872,599,540

aoSep FY94

........ . .

cta~f'I08'< .

$341,676,067 38,524,008 33,794,340 13,675,354

427,669,769

1,411,686,252 550,665,907 861,020,345

.: ::" : .: : .... :: :://H:~· ': ::::::::::>-::: < (S13.701.869),.

>(l~:~~:j:g

<1:839,937·

...• (30,196,475)

40,522.165 52;101360

• (1t:$70:US!i) ..

46,363,623 8,293,658 4,229,912

$1,389,352,977

(43,~,817'r·

...••.•..... ·.::=:r~r

. ..

(S51,4;l6,405).· .• · .• ··•

2,677,806 3,928,582 42,630,070

$1,337,926,572

$34,592,042 240,653,981 275,246,023

14,477,800 289,723,823 1,099,629,154

$1,389,352,977

" " ." .

$4;1~.~~ .. .. ···J4Ci6B4241) ..

... (36:551:006)

.7'!3,1"tU

.. . .

.,'. _(35,71'7,259) ..•.• ·(15.1)4$,~"_6» .•.

($51,426,405) •••

$38,725,277 199,969,740 238,695,017

15,251,547 253,946,564 1,083,980,008

$1,337,926,572

- 22 -- ,,,., MWI Annuli Rtpon ----------------------

Financial Report: Army MWR

Army Morale Welfare and Recreation Fund

The Army Morale, Welfare and Recreation Fund is the successor-in-interest to all Army and certain other NAFIs. The source of income to the AMWRF is the Army's share of the AAFES profit distribution. AAFES retains 50 percent of its profits for capitalization and divides the remainder between the Army and Air Force based on troop strength. The Army's share is approximately 30 percent.

Traditionally, the largest portion of our dividend share finances NAF major construction and program investment. The next largest allocation is for field services (such as the United States Army Soldier Show, Army level sports, the Army Chess Championship, Arts and Crafts, Photography, and Designer Crafts contests, and Better Opportunities for Single Soldiers) and self-sufficiency exemptions, Finally, we use dividends to support a portion of the NAF administrative budget for CFSC. Figure 4-3 shows how the AMWRF dollar was apportioned during FY 94,

This year marked the beginning of the MWR BOD's financing strategies for the modernization and replacement of the MWR NAF physical plant. These strategies yielded S25,6M to the fund, Additionally, $15 M was borrowed from the Army Banking and Investment Fund to help meet current year requirements.

Summarized Income and Expense Statement - Army MWR Operating Funds
Fiscal Year 93 FiscalYear 94 Change
Revenue
APF: Military Personnel $16,618,146 $13,244.705 ($3,373,441 )
Operations, Maintenance Army 309.733,328 317,150,398 7,417,070
Other Operating 8,341,917 6,627,199 (1,714,718)
MCA 14850000 15,800,000 950,000
Sub-total $349,543,391 $352,822,302 $3,278,911
NAF: Sales 291,404,463 276,626,906 (14,777 ,557)
Gross ARM Revenue 109,882,996 116,579,763 6,696,767
Central Fund AAFES Dividend 23,472,288 38,206,151 14,733,863
ASD/Other AAFES 104,051,766 87,222,447 (16,829,319)
Other Revenue 397,000,080 396,112,240 (887,840)
Interest Income 24,295,868 15,131,391 (9,164,477)
Subtotal $950,107,461 $929,878,898 ($20,228,563)
Total Revenue and Appropriations $1,299,650,852 $1,282,701,200 (16,949,652)
Expenses
APF: Operating Labor $142,821,777 $160,843,907 $18,022,130
Overhead Labor 48,543,418 43,259,655 (5,283,763)
Other Operating Costs 143,328,196 132,918,740 ~10,409.456)
Subtotal $334,693,391 $337,022,302 $2,328,911
NAF: Cost of Goods Sold 132,894,098 125,590,023 ($7,304,075)
Operating Labor 383,768,109 371,825,500 (11,942,609)
Overhead Labor 129,666,819 108,388,928 (21,277,891)
Other Operating Costs 243,354,646 245,555,466 2,200,820
Subtotal $889,683,672 $851,359,917 . !38,323,755)
Total Operating Expenses $1,224,377,063 $1,188,382,219 ($35,994,844)
Military Construction Army 14,850,000 15,800,000 950,000
Net Income Before Depreciation 60.423,789 78,518,981 18,095.192
Depredation 86,527,588 93,064,608 6,537,020
Net Income (Loss) ($26,103,799) ($14,545,627) $11,558,172
Figure 4-2 1994 HWR Annual Rtport -- 23 -

Section 4

Uses of an AMWRF Dollar

.CCInstrucUon and f'rognIm 1_ DField~_SoII.surndency~ • CI'SC .IPnI.w.tr.tlon

Figure 4-3.

The AMWRF ended the year with $4.3M in cash. Considering the 156 major construction projects (through program execution year 1995) with a cost exceeding $195M, this cash balance appears alarmingly low. With the MWR BOD-approved financing strategies, the proceeds of the impending cash sweep, and a consistent flow of AAFES dividends, the AMWRF will be able to maintain its program investment and field services Armywide.

Army Recreation Machine Trust Fund

The Army Recreation Machine Trust Fund was established to administer the Army's Recreation Machine operating profits and has become one of the most consistent sources for MWR financing.

While the majority of this cash has been distributed to the host communities and MACOMs, funds were also used to finance unique NAP capital requirements. Over the last nine years, the ARM Trust invested over $188M in facilities Armywide.

During FY 94, the fund received $85.7M in profit distribution from ARM operations. Major uses of cash included $61.3M share distributions, $42M for construction, and a $1 OM grant to the AMWRF. On the basis of cash used, the Trust fund declined $28.3M this year. Currently the major construction financing is devoted to the completion of the Hale Koa tower project. In FY 95, the fund will enter into

a temporary borrowing condition ($3M, one year payback) to complete current obligations with no reduction in distribution. Subsequent profit distributions win be used to routinely support the AMWRF.

Army Banking and Investment Fund

During FY 94, the Army Banking and Investment Fund provided cash management and investment services to 425 Army and DOD MWR entities. The ABIF manages a pool of U.S. government securities on behalf of its participants, and pays interest based on the earnings of that portfolio. Participants earned a compounded rate of 3.99 percent on their average deposits.

The period was marked by steady net use of invested cash; deposits fell from $529M at the start of the fiscal year, to $456M by Sep. 30, 1994. Responding to dramatic interest rate changes and anticipating continued net withdrawals to fund MWR programs and construction, the investment managers systematically shifted to more liquid, conservative investments during the year.

During FY 94. the Army Banking and Investment Fund paid its 430 depositors up to $20 million in interest income.

- 24 -- 1994 I1WR Annual Report ----------------------

Financial Report Army "WR

liquid, conservative investments during the year.

Figure 44 shows the decline in the ABIF balance over the previous four years and projections through FY 99.

The Army Central Insurance Fund showed a net income of 53.2M, contrasting with a loss

of 53.8M in FY 93. Reserve requirements and loss experience contribute significantly to income or loss. During FY 94, workers' compensation losses were less than anticipated while unemployment compensation costs continued to hold steady at SSM annually. The property program did not suffer any catastrophic losses because of natural disasters, but money and securities and fidelity bond losses were slightly higher than in previous years. The general and vehicle tort programs experienced significant losses because of several large claims that were filed near the end of

Army Central Insurance Fund

Army Banking and Investment Fund Depositors' Balances

in Millions

700

600

500

400

300

200

100

o

91 92 93 a. 95 96 97 98 99

the year. The program continues

to provide insmance protection for NAF assets at the lowest possible cost.

Figure 4-4

Army Central Retirement Fund

The ACRF represents the results of employer and employee contnbutions and investment earnings for the u.s. Army NAF Employee Retirement Plan along with the plan's assets and liabilities.

As of Sep. 3D, 1994, the actuarial present value of accumulated plan benefits equaled S262.1M, compared to $241.4M on Sep. 3D, 1993. The market value of plan assets was $277.3M as of Sep. 3D, 1994, compared to S278.1M a year earlier. The plan's funded ratio declined 9 percentage points to 106 percent at year end.

While these data represent the retirement plan's status were it to tenninate on Sep. 30, 1994, it is more realistic to approximate future liabilities and assets expected to be available. CFSC contracts for an annual actuarial evaluation of the fund, The total actuarial accrued liability as of Sep. 30, 1994, was S307.9M, compared to $283.6M the

1994 HWI Annualltport -- 25 -

Section 4

During FY 94.unemploymelll compensation paid to former NAP employees totaled $5 million. The NAF Risk Management Program insured over $1.6 billion in NAFassets.

year before. The unfunded actuarial accrued liability was $33.4M as of Sep. 30, 1994, compared to $22.5M a year ago.

Amortization of this unfunded condition is reflected in the rates charged employees and their NAFI employers. Accordingly, a decision was made during FY 94 to increase the employer contribution from two percent to 6.5 percent in an effort to bring the plan's contribution stream to a level required for it to remain fully funded. Amortization of this unfunded condition is reflected in the rates charged employees and their NAFI employers.

Army Medical/Life Fund

The Army offers health, dental and life insurance benefits to its NAF employees. The Army Medica1/Life Fund collects premiums from employers and employees based on eligible employees' voluntary participation in one or more options for health care, dental care and life insurance. Alternatively, employees may elect to obtain health care benefits through HMOs. Claims expenses are satisfied through payments to employees and health care providers for those who participate in the the self-insured health and dental care components of the program. The fund also pays death claim benefits to beneficiaries of deceased participants of the life insurance program.

During FY 94 the self-insured health benefits component of the program experienced a significant rate increase due primarily to the rising costs of health care and the decreasing pool of participating employees. In an attempt to counteract the impact of escalating health care costs, CFSC implemented an aggressive cost-control system. The plan also initiated a lower premium PPO in many geographical areas; the PPO provided participants lower cost care in return for using health care providers who had agreed to prenegotiated rates for standard medical treatments.

The Army Medical/Life Fund's income during FY 94 was $26.5M, and its expenses were $25.IM. The small surplus generated by the fund during FY 94 will serve as a hedge against future cost increases that otherwise would have to be passed on to plan participants and employers.

Army 40 I (K)Plan

Since its inception in 1991, the USA NAF 401(k) Plan has generated significant interest among many employees, although participation - currently 25 percent of those eligible - has not risen to anticipated levels. Nevertheless, assets of the plan continue to grow as participating employee salary deferrals and employer matching contributions flow into the plan and accumulate investment earnings.

As of Sep. 30, 1994, the plan had assets available for benefits (total ofindividua1401(k) account balances) of $24.9 M, an increase of $8.4M over the same date last year.

- 26 -- "94 HWI Annual ~IPQrt ---------------------

Section 5

Program Status Reports Army Family Team Building

This program was designed to provide training for soldiers. civilians and family members that allows them to

better cope with the stress created during deployment and

family separation. Often family members expect the Anny to

provide special treatment for them during these times. This expectation creates disparity between individual needs and institutional systems and has a negative impact on overall military readiness and individual soldier performance,

1Wo years ago, a diverse working group representative of America's Army, convened to examine options that might

correct this situation. They recommended soldiers, civilians and family members be trained in expectations as well as their individual responsibilities for self and family preparation. This concept, called Army Family Team Building, was approved in February 1993 by the Army Chief of Staff. The program has three purposes:

• To improve overall readiness of the force by teaching and promoting personal and family readiness through progressive and sequential education.

• To assist America's Army in adapting to a changing world (reduced resources, downsizing, etc.).

• To respond to family issues using lessons learned from recent deployments.

Soldier AFTB training was introduced into the TRADOC school system in November 1993; training for civilians was instituted in April 1994. Family member training (for active, guard, reserve, and civilian family members) commenced in June 1994; by November 1994,589 family member volunteers and support staff will have graduated as AFTB master trainers. During FY 95. these master trainers will go forth and train family members at installations, camps, and stations and by the end of the year AFTB will be institutionalized across the Army.

Successful implementation of AFTB ensures all members of America's Army are better informed about Army missions and expec-tations, readiness responsibilities during separation and deployment, and systems available to support more self-reliant, independent, and self-sufficient lifestyles.

--

In a six-momh period, CFSC trained oller 550 master trainers. In FY 95, these master trainers will graduate over 2,000 AFTB instructors.

1994 HKt AnnUM leport - 27 -

Army Community Service

Support for ACS remained strong as demonstrated by the

$37 .IM APF programmed in FY 94. This represented a $900,000 increase over the execution level for FY 93. The overall obligation of APF for FY 94 was actually $34.1M, which equates to an obligation rate of91.6 percent, slightly higher than in FY 93.

In addition, the Family Advocacy and Relocation programs obligated S30.1M and S5M DOD money, respectively. Figure 5·1 shows how APF dollars were spent; an additional $1.5M ~AF subsidy was used to support food lockers and to reimburse volunteer expenses.

The challenge for commanders and ACS professionals is continuing to deliver quality services that meet customer needs, maintain DOD·mandated programs and services, and keep adequate staff.

ACS served as the DOD executive agent for support to the

Since FY 90, the Family Member Employment Assistance Program helped place over 58,000 family members in jobs, adding $219 million in income to Army households.

American Red Cross. Coordinating through CFSC, the ARC deployed civilian staff to Somalia, Rwanda, Haiti, and other locations where military personnel were deployed. ACS centers also redoubled efforts to provide predeployment and deployment counse1ing, crisis counseling, and assistance to families of deploying soldiers.

During FY 94 ACS conducted unprecedented training for its staff to better serve America's Army now and in the future. In April, they coordinated the first DOD-wide spouse/family-member managers' training. The exceptional family member program manager also coordinated training with other military services.

Family Advocacy Program

Educating the military chain of conunand continued to be a major focus as a primary prevention tool to combat family violence. During FY 94, over 15,000 copies of the FAP Commanders Desk Guides were distributed. ACS also developed an NCO Leader Guide, which will be distnbuted during FY 95.

Exceptional Family Member Program

In FY 95, CFSC published a revision to the EFMP regulation and disseminated canmand briefmg kits worldwide. The Vice Chief of Staff, Army requested CFSC conduct an in-depth study ofEFMP following the Department of the Army Inspector General review of the program. The DAIG identified several problems, including lack of program standardization in DOD and significant staff shortages.

- 28 -- "14 ifWI' Annual .,port ----------------------

Program Status leports

Consumer Affairs and Financial Assistance Program

Demand for prevention education, fmancial counseling, and debt liquidation assistance for soldiers and families continued to increase. The increase is caused by more frequent deployments, new liberal credit programs, and a change in public law that allows garnishment of soldiers' and civilians' wages for commercial debts.

CAFAP participated in the establishment of a national credit education program sponsored by the U.S.-Office on Consumer Affairs, U.S. Department of Agriculture Extension Services and American Express. Under this program, training modules and videos on managing credit were developed and distnbuted to ACS worldwide.

Relocation Assistance Program

In FY 94, installation relocation staff implemented the Standard Installation Topic Exchange Service, or SITES, a quarterly updated data base of installation information which complements relocation counseling at ACS centers and helps reduce lost duty time for soldiers,

Family Member Employment Assistance Program

The FMEAP staff continued to provide services that place family members, including youth, in jobs that significantly add income to Army families. This program aggressively advocates and delivers skill-building training and employment opportunities.

Total Operating Costs

OSDFAP $30.1

OMA FMEAP

$2.2

OMA InforRef & Follow Up

$2.7

OMA

Relocation $2.2 OSD location $5.0

OMAFAP

$17.0

$3.4 OMAEFMP

OMA BASE & Outreach-' Includes $1.4M in Outreach

Figure 5-1

1994 HM AnnUM .tport -- 29 -

SeeDOR 5

Arts and Crafts

NIBO WO Closure

In spite of decreased revenue of $IM, the overall trend in Arts and Crafts between FY 93 and FY 94 shows NAF NLBD improving by S2.1M. The decrease in revenue and NLBD can be attributed to downsizing and management efforts to control operating costs. Likewise, the $2.1M decrease in APF also resulted from downsizing and command decisions to curtail or close programs.

In FY 94, a larger portion of the Arts and Crafts program was funded with NAF (53 percent). That trend is expected to continue in the future. With the shift in funding, successful Arts and Crafts programs are focusing more on

delivering goods, services, and activities tarfiiYiil geted to specific market segments and supported

............ ~ by customer demand. Examples include classes, craft fairs and exhibits, and custom services such as trophies, plaques, and framing.

Successful progranuning depends on early

identification of industry trends. Managers must constantly update program knowledge through membership in industry associations and by reading trade publications. They must assess changing markets, plan programs that capitalize on trends and implement those programs early during the trend cycle. An example is Fort Riley's success with its

$-3.7 -2.2

NAF Operations in $ (M)

fA

FY93 FY84

NIBD

Figure 5-2

Nationally, 90 percent 0/ all US. households have at least one family member engaged in crafts/hobbies.

Hobby Industries of America, 1994 Consumer Study

six computer stations, where customers, including soldiers from units, can design and produce graphic products from business cards to posters.

Total Operating Costs

Figure 5-3

COGS Labor

Other Op. Exp.

65.6% 84.7% 18.7%

62.9% 70.3% 20.2%

Financial Information Army Averoge Data

FY93 FY94

Figure 5-4

- 30 -- '914 HWI Annual 'tport ---------------------

APF support for Automotive Skills decreased only $200,000 compared to FY 93. NAF operations generated a $600,000 increase in total revenue and a $1 M turnaround in

NIBD. The turnaround resulted from increased use and major reductions in labor cost.

This financial performance supports patron survey data; the program is one of the five most desired by MWR customers. For an average fee of $2 per hour, soldiers are afforded the opportunity to perform repairs and maintenance on their vehicles, with advice and mentoring provided by a staff of trained instructor technicians. Demand for this program is expected to rise in FY 95.

Successful Automotive Skills program managers ensured their technicians and instructors attended technical training, procured state-of-the-art equipment, and provided entry-level, skillbuilding patron training, either through formal classes or hands-on assistance to patrons.

During FY 94, CFSC sponsored and conducted the first jointservice technical training for

Total Operating Costs 145 managers and techni-

cians in Germany, Korea and

at Fort Sam Houston, Texas. The primary focus of the training was the use of diagnostic tools and meters to test automotive computer

Automotive Skills

52%

Figure 5-6

P rog ram S la Ius Re po rts

NAF Operations in $ (M)

$-.4 .3

Revenue

NIBD

Figure 5-5

Automotive skiffs center users save an average of $40 per hour. Soldiers saved over $/70M by using this program 4.3 million hours during FY 94.

sensors.

Financial Information Army Average Data

FY93 FY94
COGS 72.0% 74.6%
Labor 84.7% 70.3%
Other Op. Exp. 18.7% 20.2%
Figure 5-7 1994 HWR Annual Report -- 31 -

Armed Forces Recreation Centers

AFRC use remains consistently high with a worldwide average

occupancy rate of91.4 percent. The high occupancy rate, combined with the opening of Shades of Green at Walt Disney Wor1<I- Resort, resulted in a S19.5M increase in total revenue during FY 94. While Shades of Green accounted for S 11 M of the increase, the other three AFRCs (Germany, Korea, and Hawaii) generated an additional S8.5M despite the continued troop strength reductions in Europe.

Financial performance, as reflected in the ~ chart, reveals that NIBD increased S 1M. This

M increase is very impressive considering the reduction of appropriated fund support to AFRC-Europe, disrupted operations at the Hale Koa Hotel during construction of the new tower, and startup costs for

the inaugural year of operations at Shades of Green.

Occupancy, total revenue, and NIBD will continue to grow during FY 95 as a result of the opening of 396 new rooms at the Hale Koa, expansion of facilities at Dragon Hill Lodge, stabilization of operations in Europe, and the first full year of operation of Shades of Green at Walt Disney Worlde Resort.

Army bowling centers generated $129,000 NIBD in FY 94, compared to $4.5M in FY 93. Base closure expenses had a significant impact on the bowling program in FY 93 and FY 94; costs associated with closing totalled S2.5M and S6.6M respectively. Excluding these

costs, NIBD from bowling operations stayed relatively constant for the two fisca1 years.

Successful bowling managers focused efforts on

expanding their revenue base while controlling fixed costs. Strategies for success included increased open bowling, focused marketing to sustain leagues, and expanded family and youth programs.

The MWR BOD approved the development of bowling center manager certification. Working in concert with bowling industry representatives, CFSC officials will implement this program in FY 95, and [iFViil they are confident certification will improve the quality

~ and professionalism of bowling center managers.

The annual Joint Services Bowling Workshop offered the latest information on bowling operations and provided specific training for improving food service operations. Revenue from food and beverage operations at bowling centers was $18.1M, 42 percent of total bowling revenue.

NAF Operations in $ (M)

•

HlaD

Figure 5-8

Bowling

NAF Operations In $ (M)

FY93 FYIM

Figure 5-9

$7.0 6.7

- 32 -- 1194 "WI Annual 'rport --------------------

Pro gram S ta tu s Re po rts

Army Recreation Machine Programs

The Army Recreation Machine Program (ARMP) continues to be the largest contributor to MWR besides AAFES. The program has provided $65DM to MWR since its inception. Despite drawdowns, program benefits exceeded $1 DOM in fiscal year 1994. ARMP success is based on continually upgrading equipment and game programs in order to offer the newest and most entertaining games to the customer. The Army's program is so successful, in fact, that we are now running machine operations for the Marine Corps and the Navy not only netting major increases in income for those Services, but also adding additional revenue to Army MWR because of the distribution formula.

Better Opportunities for Single Soldiers

The BOSS program made tremendous strides as CFSC staff conducted and participated in a variety of events. During May 1994, a Commissary Patron Awareness program was launched at 15 installations with the intent to familiarize young soldiers with the savings they can realize by shopping at their commissaries. CFSC staff conducted formal BOSS training for 180 soldiers at 12

installations.

Fort Carson hosted the 4th Annual Army-wide BOSS training conference in November 1993. During this event, CFSC and civilian instructors trained over 120 soldiers, senior NCOs, and civilian program managers. At the end of September 1994, BOSS programs were in operation at all installations with a garrison population of more than 50 single soldiers.

Many installation BOSS council members no longer limit themselves to working MWR issues but are now involved in issues related to barracks living and total quality oflifc. Early BOSS initiatives guaranteed single soldier representation on installation quality of life councils. At some posts, the program became so important the command established a full-time position for a soldier BOSS administrator. Future initiatives include:

• A 1995 Commissary Patron Awareness program at 30 installations.

• A video promoting single soldier recreational opportunities at Shades of Green on Walt Disney World \>. Resort.

• Developing a communication network and writing a BOSS standing operating procedure.

1994 HWR Annual Report -- 33 -

Child Development Services

Through sustained efforts at all levels, Child Development Services showed a dramatic turnaround in NAF operations. The NAF subsidy was reduced by 73 percent from $19.4M in FY 93 to

$5.2M in FY 94. This improvement resulted from a S4.5M increase in NAF revenue, large reductions in NAF operating costs as shown in Figure 5-12, a $2.9M increase in APF support, and implementation of the Installation Child Care Availability Plan Letter of Instruction, which addressed effective use of manpower and funding.

CDS executed $90.2MAPF; $77.3M was progranuned - a 117 percent execution rate. CDS continues to build on the program cornerstones of affordability, availability, and quality with the follow-

Section S

NAF Operations in $ 1M)

--_ .. , NlED 'NO ctltI.n

FY93 $-18_8

" " "" '" FY94 - 5.2

..,._ NBD

Figure 5-10

ing initiatives:

• Implementation of a $35-a-week per child fee at child development centers for families with incomes under $18,000.

• DOD certification of 120 of 134 CDS

programs.

• Accreditation of 67 of 185 CDCs by the National Academy of Early Childhood Programs.

• National recognition of Anny CDS programs in the highly publicized Carnegie Report on Young Children, in private sector adoption of the CDS Education Specialist Hand-

book, and in a PBS documentary.

• Inclusion of special needs children in CDS settings.

Total Operating Costs

FYIM~ "" Figure 5-11

• Continued diversification of child care options to meet demand through CDC, Family Child Care, and Supplemental Programs and Services.

• Implementation of the SPSIFCC course, which graduated 150 installation and major Anny command personnel.

Financial Intormatien Army Avemge Data

FY93 FY94

Labor 119.6% 96.5%

Other Op. Exp. 15.8% 12.2% D' 5 12

~ ~c·~ure -

- 34 -- "9., HWI Annual .fport -----------------------

Anny clubs continue to show improvement in financial performance and their ability to provide demand-

driven programs for soldiers and their families. This year, clubs earned NIBD of$.4M, compared to FY 93 NIBD loss of 52.9M. Club revenue and NIBD are shown in the two

figures at the right. The FY 94 operating results include 52. 1M in base closure costs.

The 53.3M club turnaround resulted from continuing efforts to reduce costs, improve food quality and service, and provide demand-driven programs. This turnaround is even more dramatic considering that total revenue during the period decreased $12.7M.

The Prime Vendor program contributed to the turnaround through product savings and a rebate initiative. In addition, the MWR

BOD approved sweeping changes for clubs including:

• A requirement that clubs be profitable by Jan. I, 1995 unless the MACOM connnander justifies, at the spring 1995 BOD meeting, a nonprofitable operation as mission essential.

• Conducting installation food, beverage, and entertainment assessments to quantify consumer demand, validate the need for existing facilities, and identify missed market opportunities to improve services and increase revenue.

• Eliminating in-house charge systems.

• Consolidating installation catering facilities.

• Moving away from membership clubs where appropriate and instituting theme restaurants or concessionaire operations as alternative food operations.

With the move away from membership clubs, installations are beginning to offer market-driven programs such as theme restaurants, social lounges and high-energy nightclubs and sports bars. Regardless of the methods used to provide the program (traditional, theme, concessionaire, or private venture) demand-driven concepts will ensure success for the future.

aubs

P«Jram Status Reports

NAF Operations ... Revenue in $ (M)

Figure 5·13

NAF Operations ... NIBD in $ (M)

$ .2 2.5

~---------I HIBD we Closure eo,t

NCO

Figure 5·]4

1994 NWR AnnUM 'tport - 35 -

Section 5

Food, Beverage and Entertainment Planning Assessments

The MWR BOD approved CFSC to contract with Landauer Realty Advisors for a review of the FB&E operations at as many as five installations. The goal was to identify the installation's key market opportunities for FB&E services, suggest restructuring to capitalize on these opportunities, and develop an implementation plan.

The assessments consisted of extensive demographic research, consumer preference surveys, operational/financial analysis, facilities review, focus group sessions, off-post competitive review, market share analysis, and facility manager interviews. From the data collected. Landauer developed a FB&E decision matrix they presented to the installation commander and MWR staff.

Landauer completed assessments at Aberdeen

Proving Ground, Fort Carson, and Fort Lcc. The results were well received by the commands. At the three installations, FY 93 food sales totalled $16.1 M. The chart above shows AAFES capturing 65 percent of the available market and MWR 35 percent. The review also showed that per capita dining expenditures by military were on a par with local area population. The chart below shows amounts spent on-post versus off-post. Recommendations focused on how to increase market share through improved food quality and customer service.

Landauer identified food quality and customer service as major problems facing MWR food operations. Corrective actions include revising existing food and beverage training, refocusing on customer service training, and increasing the food service skills and expertise of installation personnel worldwide. Installations will also test Hospitality Satellite television, a direct service that allows managers to net-

work and train employees in the facilities where they work.

Food & Beverage Sales Market Penetration Analysis

Figure 5-15

Spending Per Capita (Authorized Patrons)

MWR

35%

37%

Food, Beverage and Entertainment Concepts

To increase MWR market share, CFSC developed the following four themed dining concepts based on research in the civilian sector:

Primo's Italian Restaurant, an Italian family style restaurant

Acme Food Factory, a fun family-style restaurant offering American food favorites

Authorized Patrons Spending Average of $634 Figure 5-16

- 36 -- 1994 HWR Annual Report -----------------------

Program Status Reports

Sam's Roadhouse, 40's/50's restaurant with rustic decor Reggie" Beverage Company, a neighborhood pub and gathering place.

These themes are patterned after nationally recognized casual. and family-style civilian sector restaurants, a $76.3 billion industry. For entertainment, the sports arena concept serves as the ultimate interactive sports recreation facility, featuring continuous broadcasts oflive sporting events on big-screen televisian monitors.

In the Camp Humphreys area in Korea, MWR opened four successful theme restaurants: Harley's, Jacki B's, Hard RO.K. Cafe, and Club nsvme. These nontraditional, market-driven, themed establishments provide soldiers with quality food, beverages and entertainment on their terms and bring a slice of "Americana" to Korea.

The MWR BOD approved $lM in "seed" money to fund new FB&E ventures. MACOM food and beverage representatives participated in a review of installation nominations submitted to fund new FB&E ventures.

~-- ..

Primo's Italian Qestaurant

Funding criteria was developed based on the following factors:

Armywide applicability, perceived market potential, financial indicators, project cost, current environment, FY 95 execution, new or existing FB&E concept, and overall impact.

The CONUS projects initially approved for funding include Forts Benning, Stewart, Myer, Belvoir and Hood; OCONUS approved are Schofield Barracks, Hawaii; Mannheim, Germany; Camp Casey. Korea. Project validation assessments will be conducted and a formal MOU will be signed between MACOM and CFSC before projects are implemented.

"94 HWI Annual Irport -- 37 -

SeeD. 5

Entertainment (Music and Theater)

Total NAF revenue fell $300,000 while the APF expended in support of the program decreased $1.8M from S4.9M spent during FY 93. The decrease in NAF revenue was caused by downsizing. The reduced APF support is the result of downsizing and installation connnanders decisions to close their entertainment programs or shift APF to other programs.

Despite reduction in APF and NAF revenue, managers controlled NAF operating expenses and decreased r;i'iii1 labor. This effective management of expenses nearly offset ~ the reduced revenue and resulted in a NLBD ofS1.4M.

This year's NAF subsidy for operations was SI00,ooO higher than in FY 93.

As the

pressure to make NAF MWR operations more efficient grows. installations are moving away from a traditional music and theater to a non-facilitybased program where the staff provides entertainment support for all MWR programs and also serves as coordinator for special events.

Commercial Travel Operations

era concession fees to Army IMWRFs in FY 94 were $5.4M, a drop of 13 percent from S6.2M in FY 93. Most of the change occurred in USAREUR. where fee payments dropped from S2.7M to $1.9M. The decrease in OCONUS fee payments more than

offset a small increase in CONUS ero fees.

Defense Travel Regions In FY 95, four of six CONUS travel regions

-_ 9S ~ (shown on map) and USAREUR will transition to

J r'" J \ new travel contracts. The new contracts raise

] ) \ ---- concession fees and emphasize marketing and

l L_' I - __ ON' pro~otion. The active parti~pati~n of ~e con-

-_ ~ ~-_--y- -- atlonal tracnng officer's representatives IS required to

[ W Capital

- -~ Region assist the eros in .their .mark~ng efforts. .

~ \ Several locations, including Forts Belvoir,

r, ~ .J Benning, and Campbell, will open new travel

OTR 3· SATOTRAVEl \.__

OTR 1,2,4 & NCR. offices in high traffic areas. Design guidance for

Carlson.Wagonlil Travel state-of-the-art travel offices is published in the

Army Leisure Travel Model Facilities Guide.

NAF Operations - NlBD inS (M)

Figure 5-17

Figure 5-19

Total 0 peratlng Costs

'YNAPP 41%

13.1.

Figure 5-18

- 38 -- 1"4 IfWR Annual ',port ---------------------

NIBD for the golfprogram was 59.1M in FY 94, compared to $10.1M in FY 93. The decrease in NIBD was attnbutable to temporary closures and costs associated with major construction at several installations. In total these unusual situations had a 52.2M impact on operating performance for FY 94.

In FY 94, the MWR BOD approved two actions for the golf program that should help increase revenue: revise local golf annual fee structures where appropriate and establish maintenance fees where feasible, A number of installations have eliminated annual fees, and others are charging daily mainte-

nance foes. This trend is expected to continue. In ....... n ..

concert with adjusted fees and charges, plans call for a concentrated effort to improve course maintenance, conditions and playability during FY 95.

As a test program, three golf clinics were held Forts Bliss, Hood and Sam Houston during FY 94. These instructional clinics given by PGA Master teaching professional Jim McLean, were well received by over 450 participants and will be repeated in FY 95.

Golf course food and beverage operations generated S8M in revenue, but netted only $441,000 before depreciation. Increasing food service NIBD will be a major focus in FY 95.

The Anny Guest House program generated $1 O.2M NIBD in FY 94, a $4.3M increase over FY 93. Although the increase in NIBD appears dramatic, in actuality the figures represent a return to normal. NIBD during FY 93 was severely reduced because of downsizing, fewer PCS moves and the impact of Operation Desert Stann. Expenses resulting from base closure in FY 94 were SlM, compared to only S13,OOO in FY 93.

Questims regarding a unified policy for the guest house program within ooD caused Congressional leaden to withhold approval of guest house construction. Four projects at Forts Campbell, Knox, and Buchanan, and at Walta' Reed Anny Medical Centa' were recentJy given the go-ahead and are now in the design phase of the construction cycle.

CFSC and the Assistant Chief ofStaft' for Installation Management, Facilities and Housing Directcnte are worlcing together to develop a comprdlensive standards package foc transient housing/guest house operations. Intensive training for facility managers and supervisors will be conducted jointly by CFSC, Anny Housing. and private industry experts. Assistance teams will visit facilities to assess compliance with standards.

Golf

Guest Houses

Program Status Reports

NAF Operations - NIBD In S 1M)

$10.1 9.1

.. -- --- FY93

FY94

Figure 5-20

NAF Operations - NIBD In S (M)

---.----.- .. --.- .... '- FY93

FY94

S 5.9 11.2

Figure 5-21

"'4 IfWR Annual Report - 39 -

Section 5

Information, Ticketing and Registration

ticket services, added one new ticket vendor in FY 94 and plans to add two more in FY 95. Installations that participate in CTP enjoy volume discounts on tickets and pay only when tickets are sold, avoiding costly administrative overhead. The

ITR passes savings on to customers and generates increased revenue for local installation MWR funds. In FY 94, CTP issued 200,000 tickets and saved an estimated $l.lM in administrative overhead.

Recycling generated an NIBD of$2.9M from MWR-operated recycling programs and transfers of a portion of income from public works-operated programs. The decrease was caused by delays in transfers of monies to MWR, reduced deposits from sale of materials by local Defense Re-utilization and Marketing Offices, and transfer of several MWR-operated recycling programs to installation public works.

Policy changes in FY 94 affected recycling operations. For example, installations were granted the authority to sell recyclable materials that were normally sold by the local DRMO. This may allow greater earnings and more rapid return of funds to installations. Additionally,

DOD clarified its policies so operators could ensure that scrap metals were, in fact, recyclable. A new DOD Recycling Guide is expected to give installations the flexibility they need to further improve their recycling operations.

NAF Operations in $ (M)

17,4

R ........ nu.

N!BD

Figure 5-22

Recycling

NAF Operattone - NIBD in $ (M)

7

6 ' 5 " 4 " 3 "

2

N!BD

Figure 5-24

The ITR program continued a trend of increased efficiencies and reduced dependence on appropriated funds. In the field, ITR staff reduced NAF labor costs by 33 percent in FY 94. The program NLBD was reduced from $246,800 in FY 93 to $17,300 in FY 94, a difference of93 percent.

The new Commercial Travel Office contracts provide commanders the option of transferring local tour and ticket functions from the ITR to the CTO contractor, if they determine it best serves customer and installation needs. Fifteen installations will transfer their ITR functions to the contractor in FY 95.

The Consolidated Ticket Program, a CFSC-operated support function

for installation ITR Total Operating Costs

FY 94 APF 9%

Figure 5-23

- 40 -- 1994 I1WR Annual Report -----------------------

Downsizing and base closure and realignments resulted in a decrease of $3. 7M in FY 94 APE NAF subsidy to libraries decreased by $200,000. The NAF

subsidy - 7 percent of the total operating cost - funds local national technicians overseas and some stateside part-time evening employees, many of whom are soldiers.

Even with decreased funding, libraries continued to provide value-added service to the military conmnmity. Soldiers and spouses who responded to official surveys conducted by the Anny in the past five years consistently ranked libraries in the top five MWR programs most used and requested.

Current trends in library management include cooperative efforts with other onpost agencies, consolidation of similar installation library operation, and incorporation of modern library technology to increase efficiency. This technology includes CD-ROM services, e-mail networks and integrated library systems with automated card catalogs and circulation. While several larger libraries have already acquired this technology, for many it remains a goal in FY95.

Libraries

Total Operating Costs

Figure 5-26

Program Stacus leporcs

NAF Operations In S (M)

O.S

Figure 5-25

In FY 94, Army librarians in the field handled more than half a million information requests over the counter. From CFSC. Army libraries provided 296,900 paperback books in 11,876 recreation book kits to 979 isolated units. including those in Haiti and Kuwait.

J 994 "WI Annual Itport -- 41 -

Section 5

Sports

A decline in funding affected the quality of installation sports

programs. In FY 94, NLBD decreased S1.6M to SlO.OM. Owing the same period, APF support decreased S9.5M. This combined reduction of SII.IM in funding meant staff professionalism and customer satisfaction in sports suffered.

While installations continue to offer sports programs,

...,--..........,=----=--:---4 NI80 WIO CIoIun!I c:o.t

funding constraints are affecting the quality of the proS-10.2

- 8.8 grams. To continue the program at some locations, com-

.__----,----' manders designated military units to operate facilities; at

other installations borrowed military manpower operated gymnasiums, Additionally, installations used volunteer fiFYiil officials or required units to provide game officials.

_ __JE-_-"l ~ Despite funding constraints, the sports and fitness

program still meets the leisure needs of soldiers and families. It provides a broad range of services that include

intramural and individual sports,

fitness and weight training, and specialty aerobics activities. The key to success is retention of professional sports specialists that have the skills to develop and supervise diverse customerdriven services that comprise a viable program.

NAF Operations· NIBD In s 1M)

Figure 5-27

Total Operllting CcMIa

PY .. - 1ft.

Figure 5-28

Financial InfonnatioD Anny Average Data

The MWR BOD directed

category A programs be fully funded at authorized levels prior to providing any APF to category B. Commanders must fund the program and staff must ensure they use scarce resources efficiently. Sports is another program identified in numerous Army surveys as in the top five in importance to soldiers and families.

FY93 174.7% 75.5%

FY94 160.4% 61.6%

Labor

Other Op. Exp.

Figure 5-29

Army Sports afforded 680 soldiers the opportunity to attend All Army trial camps in 12 separate sports. Two hundred Anny athletes advanced to 16 Armed Forces championships. Eighty soldier athletes advanced to national level championships.

- 42 -- '''4 HWI Annual .eport ----------------------

While managers at every level met with success in controlling NAF operating costs, they could not overcome the revenue lost from base closures and realignment in USAREUR. As

as result, Outdoor Recreation total revenue fell by $3.1 M. How well NAF operating costs were controlled is shown in Figure 5-32. The resulting $l.4M NlBD for FY 94 represents a decrease of $600,000 over FY 93. These results were achieved despite a $5.9M decrease in APF support. Managers also successfully minimized shifts of APF costs toNAF.

The reduced revenue camouflages the steady growth of Outdoor Recreation programs at stabilized installations. This growth is attributable to program diversification and expanded opportunities for participation by youth, females, families, and single soldiers. Many installation staffs insti-

tuted week-long adventure programs for youth, introductory and advanced rock climbing and rappelling instruction, mountain-bike competitions, and instructional kayak and white water rafting outings.

Construction projects resulted in unique facilities that attract new

40'(0 customers. For example, Fort

Belvoir's Alpine Tower provides a venue to teach

climbing and forty other individual and team outdoor adventure skills; and Fort Carson's multi-purpose equip-

ment checkout center now boasts a 30-foot indoor

climbing wall for beginner and advanced rock climbing.

During FY 94, the policy regarding "stay limits" at Army recreation camp areas was delegated to the local commander. This change allows installation staff to consider their population, campsite availability, and location when setting limits on how long customers may

stay in campgrounds.

Outdoor Recreation

Total Operating Costs

FY!W NAF 60'(0

Program Status Reports

NAF Operations - NIBD in $ (M)

.. FY 93 FY 94

s 5.7 3.3

NIBD

Figure 5-30

Financial Information Army Average Data

COGS

FY93 FY94
55.8% 54.8%
42.1% 42.1%
29.4% 27.9%
Figure 5-32 Labor

Other Op. Exp.

Outdoor Recreation oversees over 1,600 areas and facilities including travel camps, lakes. parks. ski slopes. equipment checkout centers. marinas, and riding stables.

1994 HWR Annual Report -- 43 -

World Oass Athlete Program

In FY 94, two years before the 1996 Summer Olympics, the World Class Athlete Program enjoyed an infusion of support from senior Army leadership, spearheaded by the Chief of Staff, Army.

With a goal of recruiting quality soldier-athletes to capture gold at the 1996 Summer Olympics in Atlanta, CFSC initiated several changes to make the WCAP program more attractive to soldiers: a new assignment policy, career plans, athlete contracts, and selection board language for WCAP soldier athletes. In addition, reserve components were included.

As a result, the number of soldiers enrolled in WCAP increased from 31 to 81, compared to 28 soldiers in the WCAP just prior to the 1992 Summer Olympics.

These are significant accomplishments ofWCAP soldiers:

• Twelve boxers and wrestlers are nationally ranked.

• Army coach Sgt. 1st Class Tony Thomas was voted the Greco-Roman Outstanding Coach of the Year, and the Army team, combined with the other services, won the national championship.

• At the US. Olympic Festival, soldiers won 36 medals, more than the other three services combined.

SediOll S

• Pfc. Beth Coats, a 28-year-old medic assigned to the Colorado National Guard, won the US. National Biathlon Championship. Coats was a member of the 1992 and 1994 U.S. Winter Olympic biathlon team. She entered the WCAP program as a cyclist and says her goal is to make the 1996 Summer Olympics in mountain biking and the 1998 Winter Olympics in biathlon.

• The U.S. National Shooting team currently includes 25 soldiers from the active duty Army, Reserves, and National Guard.

• Five Army boxers and two coaches were selected to participate in the 1995 Pan American Boxing Trials. Leading the Army contingent will be Spc. Benjamin McDowell, Fort Bragg, N.C., who was voted the Army and Armed Forces Male Athlete of the Year and who was selected as the 1994 Amateur Boxer of the Year.

- 44 - 1994 JlWJ AnnUM .'Port ---------------------

Recreation Centers (Community Activity Center)

Recreation centers experienced a $2.8M reduction in APF su~ port in FY 94. This reduction is attributed to downsizing and transfer ofMWR resources to other programs. Although revenue remained nearly constant, the NAP subsidy increased by $2.1M to make up most of the $2.8MAPF shortfall. Authorized 100 percentAPF, this category A program is now funded by a mix ofNAF (47

percent) andAPF (53 percent).

As the mandate to generate revenue continues, staff must replace traditional single facility-based programming with mobile, integrated, customerbased programming. Where recreation center operations are successful, staff deliver programs in a multitude of installation facilities serving both soldiers and the community as a whole.

Other installations consolidated several programs into one building, calling it a community activities center. The services and programs offered in a CAC may be as diverse as food and beverage, educational and special classes, reading rooms, arts and crafts, amusement machines, table games, and other directed/selfdirected social activities such as Better Opportunities for Single Soldiers functions,

Despite the changing mission and reduced APF support, recreation centers must be maintained as the hub for MWR during mobilization and deployment. In FY 95, additional action will be taken to further integrate MWR and

installation mobilization plans with community activity

Total Operating cost.

centers.

Program Status leports

NAF Operations - NIBD In S (M)

S·H -2.8

Figure 5-33

Financial Information Army Average Data

FY93

72.9%

59 %

FY94 92.2% 50.8%

Labor

Other Op. Exp.

Figure 5-35

"94 HW. AnnuM «,port - 45 -

During the year in which Youth Services celebrated its 25th anniversary, APF support remained nearly constant with a S.5M decrease, to S21.2M. The NAF subsidy decreased by S2,4M from FY 93 and total revenue remained constant at $11.1 M. The reduced NAP subsidy indicated that managers were more effective in controlling operating costs. However, the drastic $1.4M reduction in labor could be cause for concern as it may have meant some activities lacked professional supervision.

Youth Services staff focused on repositioning from primarily a sports and recreation program to one involving the whole community in providing safe, affordable ~ options to fin youth's free time. National youth-at-risk

~---7 statistics, internal DOD and Army studies, and com-

~~--------------------~-----------------r

manders' concerns regarding youth violence drove the

need to improve and expand programs. A $13.9M increase in APF for FY 95 reflects that concern.

In FY 95, staff can look forward to training in conflict resolution and at-risk behaviors. Staff will receive innovative program materials and technical assistance that will help them build on fundamental programs

and transition to new concepts. Plans include computer labs, homework centers, youth employment and sponsorship

initiatives.

The network of installation wide services shown in Figure 5-38 will allow youth to acquire skins that cross program boundaries and develop life skills they need to make positive life choices. This embodies the concept, "It takes a whole community to raise a child."

Sedion S

Youth Services

NAF Operations. NIBD In S (M)

s~." -4.7

Figure 5-36

Sport. &

Figure 5-38

Total Oper.Ung Co ...

Figure 5-37

'YM_ 51'1

Financial Infonnation Army Average Data

Labor

Other Op. Exp.

FY93 108.8% 44.1%

FY94 96,4% 41.3%

Figure 5-39

- 46 -- 1194 h'WJ Annuv AtPDrt ----------------------

Audit Findings

Section 6 Audit Findings

Independent commercial auditors audited the balance sheets, statements of operations, changes in fund balance, and cash flows for the year ended September 3D, 1993. An unqualified audit opinion was rendered for the Army Morale Welfare and Recreation Fund, NAF Employee Retirement Plan, Central Insurance Fund, Banking and Investment Food, Medical!Life Fund, Hospitality Management Fund, NAF Employee 401(K.) Savings Plan, Billeting Fund, Recreation Machine Trust and Operations Fund, and the Armed Forces Recreation Centers in Europe, Korea, and Hawaii These audits are required annually by DOD Instruction 7600.6.

Auditing standards issued by the comptroller general of the United States require that the auditors plan and perform these audits to obtain reasonable assurance that the financial statements are free of material misstatement. These audits include examining ~ on a test basis - the evidence that supports the amounts and disclosures in the financial statements. The audits also assess the accounting principles used and significant estimates made by management and evaluate the overall financial statement presentation. The auditors believe their audits provide a reasonable basis for their unqualified opinion.

Financial audits for FY 94 are in progress. Some of the significant results of separate audits conducted during FY 94 were briefed to the MWR Board of Directors Audit Committee:

• MACOM MWR personnel strength and related cost. A review of the FY 90-94 CFSClMACOM MWR personnel strength indicated a decrease of25.7 percent in strength and 21.8 percent in personnel costs including fringe benefits.

• Guest house room rates. Results of the audit indicated that installations are in compliance with Anny policy, i.e., guest house room rates for temporary duty/transit lodging allowance travelers are the same as for permanent change-of-station customers.

• Anny NAF excess cash. U.S. Anny Audit Agency conducted a "quick reaction audit" of the Anny's NAF cash reserves. Results show that FY s 93/94 are within acceptable limits of cash-to-debt ratios, but FY s 95-98 cash balances will be below sound financial limitations.

• NAF Pay Banding. U.S. Anny Audit Agency conducted an audit of the NAF Pay Banding System. Results were that the system was implemented in accordance with higher level guidance. Personnel actions were proper and employee rights were protected. There were

1914 HWA' Annual leport - 47 -

FY93

Section , inconsistencies in rewarding performance. No significant increases in labor costs were detected.

• Audit of installation NAF contracting. The Prime Vendor Program provides high-quality items to the Army, Navy and Marines at competitive prices. Improvement was needed in the supervision and training

MWR Audit Work Years for contracting personnel. CFSC

provides mandatory training for installation NAF contracting officers. CFSC and the Contracting Support Agency periodically review installation contracting operations .

• USAAA • Time spent auditing MWR pro-

lIlnternal Review grams. The accompanying chart

o Total shows auditor work years expended by U.S. Army Audit Agency and Army internal review offices. MWR audit time dedicated by U.S. Army Audit Agency declined between FY

93 and FY 94, from 18 to 12 work years. Installation internal review offices' audit time remained steady at 52 and 53 work years in FY 93 and FY 94, respectively.

FYU

- 48 -- I"" ItWR Annuilleport ----------------------