The Army Morale, Welfare, and Recreation
Financial Management Plan
Part 1— Development Process

Background

MWR VISION

MWR STRATEGIC ACTION PLAN

MWR FINANCIAL OBJECTIVES

Army MWR Funding

APPROPRIATED FUNDS

NONAPPROPRIATED FUNDS

STRUCTURE OF NAF INSTRUMENTALITIES

MWR Organization and Financial Responsibilities

Army MWR Financial Planning Process

CFSC PLANNING REQUIREMENTS

NEW INITIATIVES

KEY ASSUMPTIONS

Execution of the MWR Financial Plan

KEY FINANCIAL INDICATORS

MANAGEMENT ACTIONS

UNANTICIPATED REVENUE

Responsibility for This Plan

Appendix A

References

Appendix B

Tiered Responsibilities

Appendix C

Description of Critical Financial Indicators

Appendix D

Explanation of Terms

Appendix E

Acronyms

Part 1 of The Army Morale, Welfare, and Recreation Financial Management Plan is a manual describing the process used to develop the Army's MWR financial management plan. It discusses the organization of and key financial indicators for the interacting components in the total MWR system, and it articulates the MWR financial management responsibilities, at various levels within the Army, for safeguarding appropriated funds (APF) and nonappropriated funds (NAF). This manual also specifies options for the appropriate actions to take should circumstances necessitate changes to spending priorities or availability of resources. References required for the development of the financial plan are listed in Appendix A, and tiered responsibilities are defined in Appendix B. Appendix C describes the critical financial indicators, and Appendix D explains terms. Acronyms used throughout this manual are defined in Appendix E.

Following the process described in Part 1 results in a series of guidance, financial, and assessment documents. Found in Part 2 of The Army Morale, Welfare, and Recreation Financial Management Plan, this series of documents constitutes the MWR financial plan. Part 2 is maintained, and periodically revised, by Headquarters, Community and Family Support Center (CFSC). The bridge between this Army-wide financial plan and individual installation strategic business plans is provided by major Army command (MACOM) strategic action plans. Use of this comprehensive system of plans will enable the Army to maintain a strong financial position for its MWR programs.

BACKGROUND

The Army MWR strategic vision for the 21st century is derived from the strategic vision for the entire Army and complements the Army's vision for installations. It contributes to the readiness of Army forces by providing MWR programs that enhance the quality of life of America's Army.

The Army MWR Vision for the 21st Century states the strategic vision as follows:

America's Army, committed and ready, is served by responsive MWR programs that enhance quality of life, contribute to communities of excellence, enrich living and working environments, and foster a sense of community.

MWR Strategic Action Plan

The Army's MWR Board of Directors (BOD) developed a strategy to ensure that MWR programs continue to meet the institutional and individual needs of America's Army. The Army MWR Strategic Action Plan is the vehicle to implement that strategy. It outlines actions (including assignment of the responsible agency, delivery date, principal coordination, and range of costs) necessary to achieve goals and objectives that are key to transforming the MWR program and shaping the MWR vision.

The guiding principle behind MWR financial management actions is stated as follows: "The MWR system will be managed consistent with business-like practices."

The Army MWR Strategic Action Plan lists six Army MWR goals. Goals One and Four are central to the accomplishment of the Army MWR financial objectives:

¨ Strategic Goal Number One: Corporate leadership provides vision, policy, and direction to plan and operate MWR programs.

¨ Strategic Goal Number Four: The financial management function provides management with financial systems, policies, and controls for accountable, auditable, and properly resourced programs.

MWR Financial Objectives

The strategic financial management goal for Army MWR is supported by three general objectives:

¨ Develop guidance and implement policies that meet MWR requirements.

¨ Improve budget planning and management.

¨ Optimize APF and NAF financial management systems and structures for MWR.

APF and NAF operating, capital, and cash budgets are developed in support of the funding authorizations identified in Department of Defense Instruction (DoDI) 1015.10, Programs for Military Morale, Welfare, and Recreation (MWR). Programming and budgeting cover two time periods:

¨ Long-range (beyond 5 years). Programming guidance is provided in the Program Objective Memorandum Program Development Instructions (Document 1 of Part 2) and in The Army MWR Strategic Action Plan.

¨ Short and mid range (1 to 5 years). Programming guidance is provided in the Program Budget Guidance for appropriated funds (Document 2) and in the Annual NAF Budget Letter of Instructions (Document 3).

The resulting budgets represent the detailed financial plans that support the basic objectives outlined above, DoD and Army MWR fiscal standards, and local adaptations of The Army MWR Strategic Action Plan. At the major Army command (MACOM) and installation levels, the mechanisms to coordinate these financial plans with The Army MWR Strategic Action Plan are the MACOM and installation MWR strategic action and business plans. Close coordination of these plans is imperative.

ARMY MWR FUNDING

The MWR program is divided into three categories: Category A-Mission-Sustaining Programs; Category B-Community Support Programs; and Category C-Revenue-Generating Programs. DoD specifies how programs are categorized in DoDI 1015.10. Generally, functions that are related directly to mission readiness, such as libraries and physical fitness centers, are in Category A. Category B represents programs that satisfy the basic physiological and psychological needs of military service members and their families. These programs encompass the community support systems that, to the extent possible, make installations temporary hometowns for a mobile military population. Examples of Category B programs are arts and crafts, outdoor recreation, child development, and youth programs. Category C programs reflect MWR business programs that are highly desirable as a means of providing recreational activity as well as improving morale and generating revenue. Examples include golf, bowling (13 lanes or more), food, beverage, entertainment, and membership clubs.

The programs within the three categories are funded with APF, NAF, or a combination of both funds. The authorization policy regarding APF and NAF support is determined by DoD, while the Congress provides oversight through the House National Security Committee MWR Panel and the Senate Armed Services Committee. Detailed guidance concerning APF and NAF authorizations is outlined in Appendices D and E to Army Regulation (AR) 215-1. Mission-sustaining programs (Category A) are funded primarily by APF. Category B programs are sustained with a mix of APF and NAF, while revenue-generating programs (Category C) are primarily supported through NAF. Figure 1 provides an overview of the MWR funding process.

Notes: AAFES = Army and Air Force Exchange Service; AMWRF = Army Morale, Welfare, and Recreation Fund; APF = appropriated funds; ARM = Army Recreation Machine; CRA = Capital Reinvestment Assessment; DOD = Department of Defense; HQDA = Headquarters, Department of the Army; IMWRF = Installation MWR Fund; MACOM = major Army command; MCA = Military Construction, Army; MPA = Military Personnel, Army; NAF = nonappropriated funds; OMA = Operation and Maintenance, Army; and RDT&E = research, development, test, and evaluation.

APF are funds authorized and appropriated by Congress to provide the basic support to MWR. Stringent rules governing the use of APF can be found in Defense Finance and Accounting Service (DFAS) 37-1 and AR 215-1. The rationale for APF support is to provide facilities and services that are deemed mission essential or are normally available to a civilian community from the tax base. Operation and Maintenance, Army; Research, Development, Test, and Evaluation; and Military Personnel, Army are the primary APF sources supporting operations. Military Construction, Army supports authorized major construction requirements in accordance with Appendix E of AR 215-1.

Nonappropriated Funds

NAF are funds generated by MWR and family programs (through sales, fees, income from concessions, or charges at local installations) or received through revenue-sharing agreements with the Army and Air Force Exchange Service (AAFES). Additional funds may be generated by public-private ventures. NAF are separate and distinct from monies appropriated by Congress; however, they are entitled to the same protection as funds of the U.S. Treasury. Chapter 3, Section II, of AR 215-1 provides for individual fiduciary responsibility for properly using NAF and preventing waste or loss.

At the local level, each installation MWR director is responsible for programming and managing his or her installation's MWR NAF through a NAF instrumentality (NAFI). NAFIs fund all NAF installation expenses. NAF dollars are provided to installation NAFIs from the following sources:

¨ Operating profits from sales of goods and services and from fees collected for the use of MWR programs (such as golf and bowling) and for family programs (such as child care). Almost all of these revenues are kept by the installation at which they were originally collected. A small percentage is transferred to the Army Morale, Welfare, and Recreation Fund (AMWRF).

¨ Installation-generated shares of AAFES dividends and Army Recreation Machine (ARM) profits. A significant portion of AAFES and ARM profits generated at Army installations remains with the installation MWR. The rest goes to the AMWRF.

¨ Army Banking and Investment Fund (ABIF) interest income. The ABIF maintains separate bank accounts for each Army NAFI. Funds not immediately required are invested in a portfolio of secure, short-term U.S. government securities, and interest earned on these funds is paid to depositors.

At Headquarters CFSC, NAF are generated from the following sources:

¨ AAFES dividends and ARM profits.

¨ Capital Reinvestment Assessment (CRA) contributions. Installations are assessed a percentage of their gross MWR revenues to support BOD-approved requirements of the AMWRF and the mandate of Congress to consolidate monies at the Department of the Army level.

¨ ABIF interest income. The AMWRF earns interest on its funds on deposit with the ABIF.

¨ Loans from the ABIF, commercial sources (in accordance with AR 215-1, paragraph 11-9), or other sources.

Structure of NAF Instrumentalities

NAF are programmed and managed through NAFIs, which are Army MWR businesses operating on installations, at MACOMs, and Headquarters, CFSC. Generally, these NAFIs are collectively referred to as Army Operating Funds. Additionally, special-purpose NAFIs, referred to as nondiscretionary funds, have been established to administer certain programs such as NAF employee benefits, retirement, and risk management.

Army Operating Funds are found at three levels:

¨ Installation. Installation commanders manage and operate their NAFIs based on mission requirements, community needs, and MACOM direction. Installation-level plans for operations and minor capital improvements are approved by MACOM commanders.

¨ MACOM. MACOM-level NAFIs may be established to administer MACOM-wide NAF businesses or to fund MACOM NAF administrative budgets. MACOM commanders approve budgets supporting these NAFIs. These budgets-combined with installation-level plans-are submitted annually to CFSC and aggregated for MWR BOD review. Available MACOM funds serve as the primary Successor-In-Interest to their installation NAFIs, in accordance with AR 215-1.

¨ CFSC. CFSC NAF budgets are approved by the Commander, CFSC, in accordance with the overall strategy and direction approved by the MWR BOD. Several operating funds exist at this level:

¨ AMWRF, operated by Commander, CFSC, finances major capital/program investment needs, support services for the Army, and also a portion of the NAF administrative budget for CFSC. It is the ultimate Successor-In-Interest to all Army and selected DoD NAFIs.

¨ Hospitality Directorate Funds exist for administration and capital requirements of the Armed Forces Recreation Centers.

¨ ARM Operations Fund and ARM Trust Fund exist for operating and administering the recreation machine program.

Special-purpose nondiscretionary NAFIs, also administered by CFSC, include the following:

¨ Army Medical/Life Fund, Army Central Insurance Fund, Army NAF Retirement Trust Plan Fund, NAF Employees 401(k) Savings Plan Fund, and Army Billeting Fund exist as nondiscretionary, self-sustaining NAFIs.

¨ ABIF manages the Army's NAF banking and investment services.

MWR ORGANIZATION AND FINANCIAL RESPONSIBILITIES

Within the Army, each echelon-installation, MACOM, and Headquarters, Department of the Army-has a responsibility to ensure that financial plans are prepared, coordinated, and executed in the best interests of the government and military service members. Detailed tiered responsibilities are outlined in Appendix B.

ARMY MWR FINANCIAL PLANNING PROCESS

The Assistant Chief of Staff for Installation Management (ACSIM) has delegated to CFSC the responsibility for developing Army MWR APF and NAF budget guidance. CFSC works through the MWR BOD committees and in coordination with the Assistant Secretaries of the Army for Manpower and Reserve Affairs and for Financial Management and Comptroller to obtain review and approval of the guidance. This guidance addresses DoD and Army fiscal standards and The Army MWR Strategic Action Plan. On behalf of the BOD, the Commander, CFSC, has the lead responsibility for ensuring that plans are coordinated and support the Army MWR vision. Therefore, MACOM guidance must complement The Army MWR Vision for the 21st Century, The Army MWR Strategic Action Plan, and The Army Morale, Welfare, and Recreation Financial Management Plan.

CFSC Planning Requirements

The CFSC is responsible for establishing and implementing an MWR financial planning process in order to enhance the BOD's ability to exercise its key responsibilities. Each fiscal year, CFSC develops a 5-year financial plan for the AMWRF (Document 4). The 5-year period covers the current fiscal year and the next 4 fiscal years. (For example, the plan developed during FY97 will cover FY97 through FY01.) The financial plan is consistent with all relevant DoD and Department of the Army policies, directives, instructions, and guidance. The sources of funds addressed in each year of the plan should include the following:

¨ CRA revenues (Document 5).

¨ Army share of dividends from AAFES, less any BOD-established adjustments. AAFES provides a 5-year forecast of the Army's share of AAFES dividends. CFSC reviews the 5-year forecast and may use it or substitute its own independent estimate of AAFES funds (Document 6).

¨ Profits from the ARM program. ARM profit projections and internal capital expenditure requirements are constructed in accordance with CFSC guidance (Document 7).

¨ Loans from the ABIF or other sources (Document 8).

¨ ABIF interest income and other sources of funds, if any (Document 3).

The AMWRF 5-Year Financial Plan (Document 4) should cover the following types of fund uses:

¨ NAF major construction

¨ Program investment

¨ Field support and services

¨ All other uses determined by the BOD, including repayment of ABIF and commercial loans (Document 8). The plan displays other uses in sufficient detail to allow effective management and oversight.

Having estimated the sources of AMWRF income and uses (expenses), the final step in preparing the AMWRF 5-year plan is calculating the estimated cash balances carried over to the beginning of each fiscal year covered by the plan.

The MWR BOD reviews and approves the AMWRF 5-year financial plan in coordination with MACOM-approved financial plans. When combined, these plans result in the Army MWR Operating Funds Cash Flow Forecast (Document 9), which provides the cash flow plan for Army-wide MWR NAF. The appropriated fund portion of the Army MWR operating forecast ( Document 10) is developed by CFSC from numerous OSD budget exhibits.

New Initiatives

Financial planning is routinely conducted on a fiscal year basis to provide a standard sequence, from programming through submission to approval, during the annual budget process. New initiatives for expenditures from the AMWRF should be planned, programmed, and endorsed by the appropriate BOD committees and the BOD during the annual budgeting process. Requests are written and include a full description, cost estimate, and justification (normally including a cost/benefit analysis) for each initiative. Requests are formally coordinated for comment from all appropriate and affected organizations. BOD endorsements are formally identified in their meeting minutes and approved by the Secretariat.

In extraordinary circumstances, a new initiative may develop that requires more immediate review and approval to take advantage of a timely opportunity. Although development of advantageous initiatives is encouraged and supported, when circumstances require their consideration outside of the annual planning cycle, special care must be taken to ensure that out-of-cycle initiatives receive timely, accurate, and rigorous review, similar to what they would receive had they been considered during the annual budgeting process. In addition to the routine requirements described above, out-of-cycle requests must identify previously budgeted offsets of a value equal to or greater than the requested initiative.

Requests for review and approval of new initiatives outside the annual budget cycle are prepared for approval at the level required by Army regulations and budget guidelines.

Key Assumptions

In preparing and executing the Army MWR financial plans, the Army makes several key assumptions that limit the degree of variance attributable to unknown factors. Generally, these assumptions can be categorized as either internal or external to the MWR organization.

Internal assumptions include the following:

¨ MWR programs will continue to play a key role in retention and readiness.

¨ Customers will be value driven: price, service, and convenience.

¨ MWR will continue to be called upon to provide service to troops deployed on peacekeeping and humanitarian missions.

¨ Budget and work force projections are current and reasonable.

¨ Major base closures and realignments will occur as planned.

¨ Troop strength will remain stable.

External assumptions include the following:

¨ Legal interpretations of existing policy will support continued operations.

¨ Legislation will support present MWR programs.

¨ Economic environment will remain stable.

¨ Catastrophic events will not seriously impact planned expenditures.

¨ The Office of the Secretary of Defense and Congress will continue to foster a cooperative joint venture climate.

Should one or a combination of the assumptions prove incorrect, the MWR plan could be significantly affected.

EXECUTION OF THE MWR FINANCIAL PLAN

Experience suggests that budget estimates for the Army MWR financial programs are subject to uncertainty, some of which is associated with the assumptions listed above. Changes to the financial plan are inevitable for the current and future fiscal years. Given this uncertainty, the Commander, CFSC, monitors the status of total Army MWR resources and keeps the BOD committees informed accordingly.

Key Financial Indicators

The BOD uses several key financial indicators to monitor systematically the financial status of the installation-, MACOM-, and headquarters-level MWR program resources. These indicators are explained in the Annual NAF Budget Letter of Instructions (Document 3) and displayed in the Commander's MWR Standards Assessment (Document 11) and the Critical Financial Indicators briefing (Appendix C and Document 12). The Commander, CFSC, will ensure the financial strength and solvency of the funds under his control.

MACOM AND INSTALLATION PROGRAM RESOURCES

Key financial indicators for monitoring the MWR program resources at MACOMs and installations include the following:

¨ Authorized APF support. The BOD ensures that the Army MWR programs use APF, rather than NAF, for obligations that have been authorized and appropriated by Congress.

¨ Solvency ratio. The solvency ratio is calculated by dividing cash on hand by current debt. The resulting ratio indicates the ability of the total MWR NAF structure and its major components to meet financial obligations in the short term.

¨ Net income before depreciation (NIBD). The BOD uses NIBD as a gauge of financial performance. While it establishes acceptable levels for NIBD, the BOD recognizes that not all MWR programs are intended to make a profit and that some will not contribute to NIBD.

¨ Budget variance. The BOD uses variance from planned spending to monitor budget programming and management. Actual spending within a specified range of budgeted spending indicates adequate budgeting processes.

¨ Capital purchase/minor construction (CPMC) execution. CPMC execution is an indicator of adequate contract planning and execution. The BOD uses a percentage of execution as its benchmark.

ARMY OPERATING FUNDS

Key financial indicators for monitoring Army operating funds are as follows:

¨ Ratio of AMWRF outstanding loan balance to field operating cash

¨ Changes in AAFES dividends to the AMWRF

¨ Ratio of Army operating funds cash to field current debt (solvency ratio)

¨ Ratio of Army operating funds cash to total Army current debt.

SPECIAL-PURPOSE NAFIS

Key financial indicators for special-purpose, nondiscretionary funds are as follows:

¨ Ratio of assets to liabilities

¨ Evidence of operational self-sufficiency

¨ Actuarial forecasts and studies as appropriate.

Management Actions

RESPONSIBILITIES

CFSC routinely monitors all MWR financial indicators. The Commander, CFSC, will expeditiously bring to the BOD's attention any instances of substantial deviations from the benchmarks established for the key financial indicators.

The BOD is responsible for establishing and maintaining a strong and stable financial condition for the Army MWR program resources. At a minimum, the BOD will take appropriate action when

¨ indicators reflect a potential ratio of Army operating fund cash to field current debt of less than 1:1 over a 3-month period of time or

¨ the outstanding loan balance of the AMWRF is projected to exceed 50 percent of the aggregate field NAFI cash balances.

When circumstances indicate that pledging of NAFI assets may be beneficial, the BOD will review and endorse the action. After Secretariat approval, OSD and Congress will be notified.

In the event that exigent circumstances occur without the opportunity to address a regularly convened meeting of the MWR BOD, the Commander, CFSC, is empowered to direct the most prudent actions feasible and inform the chairman of the BOD at the earliest opportunity. At the next regularly convened meeting of the BOD, the nature and circumstances of all facets of the condition shall be explained fully and reviewed in detail.

CONTROLS

Actions available to the BOD for ensuring the financial strength and stability of the MWR program include raising MWR revenue and reducing expenses:

¨ Raise revenue

¨ Assess installations

¨ Modify local revenue-sharing arrangements

¨ Authorize the AMWRF to borrow from the ABIF or commercial sources

¨ Sell assets

¨ Reduce expenses

¨ Reduce or terminate dividend and grant programs

¨ Defer or cancel purchases

¨ Defer or cancel unexecuted NAF major construction projects

¨ Defer or cancel MWR programs

¨ Freeze hiring

¨ Reduce staff.

Over the long term, the BOD could establish sinking fund reserves to provide financing for potential significant outlays.

PRIORITY OF PAYMENT

Army MWR financial planning shall ensure that sufficient funds are available to pay all liabilities when they are due. In the unlikely event of a shortage of funds to pay liabilities, payment will be made in the following order of priority:

¨ Minimum essential NAFI personnel

¨ Debt service obligations to entities outside DoD (Document 9) lists those currently in force)

¨ Contractors, vendors, and other parties external to DoD

¨ DoD entities.

Unanticipated Revenue

If actual revenues are higher than anticipated, the BOD allocates resources for meeting unfunded requirements based on recommendations of their supporting committees. Examples of unfunded requirements include the following:

¨ Prepayment of ABIF or commercial loans

¨ Reduction of unfunded pension obligations

¨ Creation or augmentation of sinking fund reserves

¨ Investments to generate operational efficiencies

¨ Repair and alteration of existing facilities

¨ Construction of new facilities

¨ Initiation of new programs

¨ Improvements to current programs.

RESPONSIBILITY FOR THIS PLAN

The Commander, CFSC, is responsible for maintaining this plan and revising it as necessary.

Chairman, MWR Board of Directors		Commander, CFSC

Appendix A
References

Army MWR Board of Directors Charter and Bylaws

The Army MWR Vision for the 21st Century

The Army MWR Strategic Action Plan

DoDI 1015.10, Programs for Military Morale, Welfare, and Recreation (MWR)

AR 215-1, Nonappropriated Fund Instrumentalities and Morale, Welfare, and Recreation Activities

DFAS 37-1, Financial and Accounting Policy Implementation

SECRETARY OF THE ARMY

¨ Establishes, maintains, and disestablishes Army NAFIs. This authority is delegated within the Army as provided for in AR 215-1 and other pertinent regulations.

¨ Designates ACSIM as Army Staff proponent and focal point for MWR and NAF activities.

¨ Designates financial oversight of APF and NAF to the Assistant Secretary of the Army for Financial Management and Comptroller and responsibility for MWR programs, personnel, and contracts policy to the Assistant Secretary of the Army for Manpower and Reserve Affairs.

ASSISTANT CHIEF OF STAFF FOR INSTALLATION MANAGEMENT

¨ Serves as the Army Staff proponent for MWR and related programs, NAF management, and Army-wide MWR and NAF policy.

¨ As proponent of AR 215-1, delegates authority to Commander, CFSC, to promulgate policy and to approve exceptions to policy consistent with controlling law and regulation.

MACOM COMMANDERS

¨ Exercise budget oversight of MWR program operations and NAF financial management by assigned units and installations.

¨ Review and perform oversight of MWR programs and ensure that APF and NAF are used as authorized.

INSTALLATION COMMANDERS

¨ Manage and operate MWR programs based on mission requirements, community needs, and HQDA requirements.

¨ Ensure that operations are conducted in accordance with approved plans.

COMMANDER, CFSC

¨ Promulgates Army policy to implement DoD policies and other guidance upon approval of ACSIM for the management and administration of MWR programs and NAFIs.

¨ Continually reviews the Army MWR program and researches, tests, evaluates, and establishes alternative business strategies.

¨ Develops financial management practices for the management of MWR and NAF resources (issues MWR budget guidance, provides NAF financial oversight, etc.).

¨ Promulgates and implements MWR construction policy and provides program oversight.

ARMY MWR BOARD OF DIRECTORS

¨ Is responsible to the Secretary of the Army, through the Chief of Staff of the Army, for identifying required policy changes for Army Staff development and Secretary of Army approval. The Assistant Secretary of the Army for Manpower and Reserve Affairs acts on behalf of the Secretary of the Army.

¨ Is responsible to the Secretary of the Army, through the Chief of Staff of the Army, for approving major management strategies, plans, and programs pertaining to Army MWR.

¨ Approves MWR goals, management initiatives, and programs; reviews and approves implementing strategies; and evaluates performance for goal attainment.

Critical financial indicators, which appear in Document 12, are determined as follows:

Army Operating Funds Cash. Combined ABIF cash balances of the AMWRF, ARM Fund, and Field Operating NAFIs.

Cash On Hand. NAFI cash deposits in the ABIF, change funds, petty cash funds, etc., reported on NAFI financial statements.

Current Debt. Same as current liabilities listed on NAF financial statements and includes payables, accruals, unearned income, and the portion of loans payable within the next 12 months.

Field Current Debt. Current debt for Field Operating NAFIs.

Field Operating Cash. Cash on hand at Field Operating NAFIs. Field operating cash may be reported as either the balance in accounts of the ABIF (as used in the MWR Critical Financial Indicators report-Appendix C) or the balance in NAFI financial statements (used in the Commander's MWR Standards Assessment solvency standard).

Field Operating NAFIs. All Army NAFIs (and those DoD NAFIs that come under the executive agency oversight of the Army) at installation and MACOM level, except billeting funds, chaplain funds, civilian post restaurant funds, and civilian welfare funds.

Nonappropriated Fund Instrumentality (NAFI). A business organized and operated within DoD for a specific purpose. A NAFI makes sales or collects revenues, has operating expenses, and makes a profit or loss. As with any business, it has assets, liabilities, a bank account, a manager, etc. A financial statement is produced for each NAFI.

Special-Purpose Nondiscretionary Funds. Those NAFIs established for specific restricted purposes and whose funds may not be otherwise used. Includes the Army Medical/Life Fund, Army Central Insurance Fund, Army NAF Retirement Trust Plan Fund, NAF Employees 401(k) Savings Plan Fund, and Army Billeting Fund.

Successor-in-Interest. A NAFI that provides financial support and assistance to another NAFI, as required, and assumes all outstanding liabilities or receives the residual assets of that NAFI following its dissolution. A MACOM, in the exercise of successor-in-interest assistance, may have to direct that the financial resources of one or more NAFIs provide assistance to another NAFI.