Contents

Commander's Message 1

Executive Summary: FY 95 Pass in Review ••.•.•.••.• 2

Strategies for the Future: FY 96 and Beyond •.•.•. 18

A Quality Workforce: Trained and Ready ..•.•.••.•. 22

Financial Report: Army MWR 24

Program Status Reports ...•.•.••.•.•.••.•.............•.••••.••• 30

Army Family Team Building ,., l1li111 ,. ".",. ,. ,. '111'111 30

Army Community Service i111i111 i111I11 ,. ,. ,. 31

Arts and Crafts ,.,,. l1lil1li ,., ,. l1lil1li ,., l1lil1li.l1lil1li •• l1li111. 33

All tomotive Skills l1lil1li ,., ,. ,. l1li111 ,. ,. ,. 34

Armed Forces Recreation Centers 35

Bowling l1lil1li .. l1lil1li l1li111 ,. ,., ,. ,. ,.,,, .. ,.,,., ,., ,. 35

Army Recreation Machines 36

Better Opportunities for Single Soldiers 36

Child Development Services ..................••.••..•...•..•........................•...•..••..•..•..... 37

Clu bs .. ,.,,. ,. ,., •• ,.,,., ,., ,.,,., ,., ,. ,., ,., 38

Food, Beverage and Entertainment Concepts 39

Entertainment (Music and Theater) 40

Recycling ,.,,., .. ,.,,., ,. ,., ,. ,.,,. ,. 40

Golf ,., ,. ,.,,.,. ,., ,. ,.,,. ,. ~ ,., ,.,,. ,.,,. ,. 41

Guest Houses ,.,,.,..,.,,., ,.,,. ,. ,.,,., ,.,,. ,. ,., ,.,,. ,., ,. ,. 42

Leisure Tra vel ,., ,., ,. ,.,,, ,. ,., ,.,,. ,., ,. 43

Libraries ,.,,.,.,.,,., ,., ,. ,., ,. ,., ,.,,. ,. ,. 44

S ports ,. ,.,,.,,., .. ,.,,., ,., ,. ,.,,., ,.,,. ,. ,.,,. ,., ,.,,. 45

Outdoor Recreation ,., ,.,,. ,. ,. ,., ,. ,. " 46

World Class Athlete Program 47

Recreation Centers (Community Activity Centers) 48

Youth Services ,.,,. ,. ,. ,., ,. ,. 49

Audit Results ••.•.•.............••••.•.••••.•................•.••.•.•••• 50

Notes

All dollar figures used in the 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 "Average Army Data" financial information boxes are a percent of total revenue. Cost of goods sold percentages are a percent of sales

Acknowledgments

The MWR annual report is compiled by the Strategic Planning and Policy Directorate, U.S. Army Community and Family Support Center. For information or additional copies, contact Abe Van Dyne at (703) 325-9297.

Salute to FY 95

Army Morale, Welfare and Recreation continued to meet the challenge of providing quality programs and services while repositioning itself to fulfill the future needs of America's Army. We began the change process by piloting new program delivery strategies in Army Community Service and Recreation; at the installation, we delivered the first prototypes for new food and beverage concepts; and most important, we embarked on a new central financing strategy for the future. Our FY 95 focus remained finding more effective ways to deliver our programs and services.

After completing a mandated Department of the Army consolidation of excess installation operating cash, the MWR Board of Directors levied a two percent capital reinvestment assessment on installations beginning in FY 96. This assessment ensures sufficient cash flow to fund MWR BOD central initiatives such as NAF major construction, management information system procurement and the master training program, and to provide cq uitable M WR programs across a diverse Army. The cash "swept" in FY 95 will be used to meet pledges for installation-funded construction projects, upgrade health benefits for nonappropriated fund employees, and execute the $29M central construction program.

The progress we made in meeting our financial standards continued in FY 95. Child development services reduced its NAF subsidy by an additional 15 percent. club net income before depreciation improved $3.2M over FY 94 and recreation programs reduced their net loss before depreci arion by $7. 7M during the same period. Managers at every level implemented operational efficiencies, executed authorized APF more effectively, and revamped services that were no longer customer driven.

Department of Defense quality of life initiatives generated a much-needed boost in appropriated fund support. This fundi ng was used to ex pand youthat-risk programs, increase school-age youth services, implement family violence reduction programs, and improve the availability of fitness and recreation programs.

More frequent deployment of soldiers caused Army Commun ity Services, Army Family Team Building and family support groups to accelerate their education efforts. Early results from an independent survey indicate that trained family members are more confident, self-reliant and better able to cope during spouse absences. As the Army implemented the Brigade Recreation Specialist program, MWR services became more available to deploying units. Under this program, MWR staff deploy with their assigned unit to assist commanders wi th del i very of lei sure, fitness and recreation services.

FY 95 initiatives adjusted the direction already established in The MWR Strategic Action Plan and provided a foundation to launch MWR for the 21st century. Only with the continued support of commanders and MWR professionals can we continue to provide customer-focused programs that have a significant impact on readiness, retention and quality of life.

~.~~~

Brigadier General, U.S. Army Commander, Community and Family Support Center

".MllR programs in the Department ojDejense are a critical element in our efforts to reduce the stress inherent ill military communities. "

- Frederick Pang, Assistant Secretary oi Defense (Force Management and Policy)

Section 1

Executive Summary:

FY 95 Pass in Review

"ll"e must provide a quality (~l li/t' for our men and women ... which recognizes their dedication and sacrifice ."

. Congressman JJ . ./01111 McHuKh (SYJ Chair. Jlll'R Panel (~l the House Committee 011 National Secu rity

Congressional Support

Congress continued its unwavering commitment to military quality oflife by providing appropriated fund support from a declining Army budget. At the same time, oversight for MWR programs continues to increase under guidance from the MWR Panel of the House National Security Committee and the Personnel Subcommittee of the Senate Armed Forces Committee.

Congress has been particularly supportive of spouse and child abuse programs. services for exceptional family members, relocation assistance, and quality, affordable child care. In FY 95 Congress provided appropriated funds in excess of the Department of Defense budget request for these family-oriented programs. The Child Development Services plus-up was used to fund additional child care spaces. The FY 96 Authorization Act, when passed, will continue this trend. adding additional funding for programs designed either to prevent military family violence or help victims. Further demonstration of this support is shown by the $16.8M authorized in the FY 96 Military Construction Appropriation for child care centers.

In their oversight role, the Congressional Committees continue to emphasize the judicious use of both APF and nonappropriated fund resources. They challenged leaders at every level to ensure MWR services support genuine need, are privatized where feasible, and maximize customer value received from the expenditure of scarce resources.

Implementation of the FY 95 Defense Authorization Act (Public Law 103-337) required excess installation NAF to be consolidated at Department of the Army level. As a result, cash in excess of 2: 1 cash-to-debt ratio was transferred to DA, generating $74.6M to fund Army-wide MWR requirements.

DOD and Army Leadership Support

Quality of life programs, including MWR, received additional support from both the Department of Defense and Department of the Army Secretariats. Leaders at both levels increased their emphasis on the importance of QOL for soldiers and families and strengthened the link between MWR, QOL and readiness. Policies and guidance from both offices focused on best use of resources, meeting congressional mandates and making delivery of MWRlQOL more efficient in the future. The support provided is best exemplified by:

- 2 -- 1995 MWR Annual Report

• Funding increases from DOD targeted to improve child care availability, enhance family violence prevention and counseling programs, and enrich recreation programs and services. Direct Army funding equates to $22M per year over six years.

• Designation of a Defense Science Board task force to study and make recommendations for increased effectiveness, efficiency and benefit to soldiers of vital QOL programs.

• Formation of the Quality of Life Executi ve Committee comprised of Defense and Joint Service Secretariat personnel. This group's mission is (0 develop an ovcrarching plan that will operationalize Secretary of Defense Perry's commitment "to put people first" and improve QOL.

• Renewed emphasis on joint service cooperative efforts under the auspices of the DOD Executive Resale Board. This group identified 45 initiati ves for possible joint service cooperation. Many of these ha ve the potential to reduce costs and improve support for front -I i ne MWR operators.

• Development of a common set of goals and measures for QOL programs for use by all services. Once staffed and approved at service secretariat and DOD levels, these goals will establish a common direction among the Services and provide benchmarks to measure progress.

MWR participated in an Army-wide functional area assessment of how to redesign organizations and reengineer processes to support Force XXI. the Army of the 21 st century. The MWR FAA process examined and challenged the current MWR mission, vision and direction. and is currently causing MWR staff to review new methods ofdelivering program services. al ternati ves for reengineeri ng common support. and strate gi es to overcome the impacts of dual APF and NAF funding.

While the MWR FAA review will carry forward into FY 96. the MWR Board of Directors recommended an option acknowledging that MWR IS:

Already pursuing consolidation of common support services and empowering line managers to improve operating performance and customer service.

• Awaiting Congressional approval to test the unified resource concept of operating MWR.

• Already committed to decentralized execution that provides maximum install ation flex i bi I ity for improved MWR de I i very systems.

Excel/til'c SUn/mao': FY 95 Pass in Review

"Name me any Fortune 500 company that worries about housing, child development centers, youth centers, fitness center'; ... they don 'to ll'(' may l1eW·T have all tile resources to girt' the quality oflife we think our people so richly deserve. but it'« not for lack o] tryi IIg. "

- (leu. john A-t. Shalikashvili Chairman, joint Chief. o] Staf]

1995 MWR Annual Report -- 3

Section 1

Board of Directors

The MWR Board of Directors maintained its active leadership role in the management and operation of the Army MWR programs. These senior leaders used their acumen and experience to focus direction for MWR while retaining the flexibility to meet major command and installation unique operating requirements. Several of the significant BOD accomplishments in FY 95 include:

• Revitalized the financial standards that ensure fiscal responsibility at all levels. The major change in standards raises the installation MWR fund target from breakeven before depreciation to a net income before depreciation of seven percent. A second change reduced the N AF child development services subsidy goal from $400 to $200 per space.

• Approved implementation of a pre-Construction Review Board process, whieh will reduce project validation assessment expenditures for NAF construction by scrubbing projects having a limited potential of being funded.

• Oversaw execution of the Congressionally directed "cash sweep" that consolidated $74.6M for Army-wide MWR use.

• Approved implementation of a Capital Reinvestment Assessment to be levied against total installation revenue at a rate of two percent in FY 96. This assessment is designed to avoid mandated cash sweeps and provide a consistent cash flow to support Army central funding requirements.

• Endorsed the purchase of the Shades of Green Armed Forces Recreation Center in conjunction with the Army Secretariat and the Chief of Staff, Army.

Financial Overview: All Army MWR Operating Funds

Army MWR operating funds are compri sed of fie ld operating nonappropriated fund instrumentalities, the Army Recreation Machine Program, and the Army Morale, Welfare and Recreation Fund.

MWR is Big Business -- $1.3 Billion

$912

In FY 95, APF and NAF support totaled $1.3B. APF and soldier dollars represent 30 and 70 percent of the total, respectively. This equates to a two percent shift in APF cost for the MWR program over the FY 94 level. Figure 1-1 highlights this shift and details how this support was u sed. A fter the operati ng costs were paid, $57M remained available for capitalization. Examples of the uses of these funds are the FY 96 construction program, continued purchase of the management information system and world wide capital purchases and minor construction.

$393

--- -~

• NAF Palllonn.1

= Military Palllonn .. 1 • GS Personnel

, • ca pltal R .. lnv '

: ~ Other Ex .... n_~"

Sources ($M)

Uses ($M)

Figure 1-1

- 4 -- 1995 MWR Annual Report

For the first time in several years, direct APF support to MWR increased. Total execution for FY 95 was $331 M compared to $307M in FY 94 and $321 Min FY 93. The FY 95 execution equals a 7.3 percent increase over the FY 94 level. Considering the 5.7 percent decrease in troop strength, direct major Army command funding per soldier equaled $315 for.S account and $316 for family programs.

In the NAF arena, Figure 1-2 reflects a slight decrease in FY 95 Army-wide operations when compared to FY 94. Total revenue decreased $18M, while operating expenses and cost of goods sold increased $5.8M. The combination of the decrease in revenue and increase in expenses yielded a S23.8M decrease in net income before depreciation over the FY 94 level.

In order to get a true picture of the causes for operating result changes, we must review the two parts:

Headquarters, Department of the Army revenue and costs; and "field operations." The remainder of this section addresses the HQDA contribution; the next section addresses field operations.

Executive Summun"; FY 95 Pass ill Review

NAF Operating Results in Millions

94 95 94 95 94 95

R&v&nu& E~pensesiCOGS NIBD

$800.0

$400.0

$200.0

.HQNIBD

. L HQ Sup Svcs

• HQ ARM & AAFES oFlold NAFI

The HQDA revenue decreased by $17.9M, the primary causes being a decline in Army and Air Force Exchange System dividends to the central fund and the MWR BOD's decision to eliminate the interest strategy as a source of cash to the AMWRF. In that strategy, field non appropriated fund instrumentalities were allowed to retain interest on principle balances up to one million dollars. Interest earned on amounts over one million dollars was directed to the central fund. In FY 94, seven million dollars resulted from this strategy. Concurrent with declining revenue, central funding costs increased SIO.7M. According to plan, HQDA initiated phase II of the MWR Management Information System. This caused the lion's share of the increase along with the MWR BOD's approval to finance the food. beverage and entertainment assessments. The combination of reduced revenues and increased investment and research/analysis costs resulted in NIBD for HQDA being $28.6M less than the FY 94 level.

As of Sep 3095, the Army's collective MWR financial position was stable. Overall cash to debt declined from Sep 30 94 ratio of 1.2: I to 0.7: I. The reduction is attributed to lower cash balances and increased long-term debt due to the AMWRF loan to the Army Banking and Investment Fund. This loan is authorized by the MWR BOD and is one of the financing strategies for improving the MWR physical plant. More detailed financial information, including the Summarized Balance Sheet and Summarized Income and Expense Statement for Army MWR Operating Funds, is presented in section 4 of this report.

Figure /-2

1995 MWR Annual Report -- 5 --

Sec/ion /

Execution by MDEP As Of September 1995

$MIllions

$200

1SS

In FY 95, .S account and family programs accounts (Operation and Maintenance, Army) were executed at $165.4M and $165.9M, or 106 and 114 percent of allocations, respectively. These amounts were $4.7M more for the .S account and $19.8M more for family programs accounts than the actual expenditures in FY 94. Figure 1-3 shows the funding and execution by management decision execution package.

Financial Overview: Field Operating Funds

$175

--------iI·Funding Il Execution

$150

$125

87 101 ----------1

$100

$75

$50

$25

$0

Youth Services Child

Development Services

Army Community Services

Total revenue generated by field NAFIs was only $100,000 less than in FY 94 (Figure 1-4) and was $8.9M more than was budgeted. This nearly constant revenue was achieved despite significant decreases in ARM income ($2.9M). AAFES Simplified Dividend ($11.1 M), and sales ($5.7M).lnterest income showed an upturn of$3.8M and other operating revenues increased $IO.9M. Figure 1-5 depicts the changes in non-operating revenue.

MWR

Figure 1-3

Field Operating Results ($ in Millions)

1000/ $343.1 $843.0

• .> -- --------$814.iia09.5

900 (

Revenue

Expenses/ COGS

NIBD

Figure '-4

Non-Operating Revenue

$ Millions 100/ 87

FY 94 Actual

• FY 9S Budget

• FY 9S Actual

60< 40('

20k

ARM

Interest

AAFES

Figure 1-5

-- 6 -- 1995 MWR Annual Report

Figure 1-4 also reveals that FY 95 NIBD was $33.5M, an increase of $4.8M from FY 94, although significantly under the budgeted NlBD of$54.3M. Relative to total revenue, this level of NIBD is 4.0 percent compared to 3.4 percent for FY 94. The FY 95 NIBD, adjusted for base closure costs, was $41 M versus FY 94 adjusted NIBD of $42.9M, or NIBD levels of 4.9 and 5.1 percent of total revenue, respectively. On a net income/loss basis (after depreciation), a net loss of $61M or 7.2 percent was sustained. The only MACOMs recording net income were Eighth United States Army and Defense Logistics Agency. This means field operating NAFIs in the aggregate were unable to generate the net income to cover the cost of the fi xed assets apportioned to FY 95. Since this has now occurred consecutively for several years, field N APIs are using up reserve cash balances and may in the future be unable to provide for adequate capital purchases and

minor construction programs.

Total cash to debt ratio as of Sep. 30, 1995 was 1.82: I which gives the overall field operating NAFIs a green rating for the solvency standard with a positive NIB 0 and a cash to debt ratio of between 1.0: I and 2.0: 1. This compares to a 2.58: I cash to debt ratio as of Sep. 30,.1994.

Programs showing the greatest NAF improvement (increase in NIBD or decrease in net loss before depreciation) were outdoor recreation, clubs, recycling, recreation centers, bowling, and sports,

Executive Summaty: FY 95 Pass in Review

Sources

Figure 1-6

Income Generators $178.8

Non-Profitable Activities -145.3

Cash Generated From Operations $33.5M

($ in Millions)

56.6

Other O'Head ·5C1.l

CAO ·512.0

Operating ActiYitiH

$38 .•

·515.0

O"".-ing Acliv_ GUe5IHouse

Golf

Rac)lckil

Clubs & Oth Bowling

leisure Travel Othor

Uses

Setvi:ce.s Division

IMWRF Admin

.$11.CI

operating Activities -$35.1

Marketing -$8.8

Qperatioo Activltu sports & Rec

Child DIlllIoJ 8~cs. Youth Svco

Unk AclNIties

Arb & CndI. P"'II",mO'H_

-$10.7 ".5 ".7 -3.4 ·J.O ·9A

$10.2 1.S 5.7 3.2 2.6 H 4.J

Figure 1-6 illustrates which activities generated and consumed NAF NJBD during FY 95. The left side of the chart also reveals that 78.5 percent of the NIBD was generated from external sources. Only $38.4M was generated from direct program operation. The right side of the chart reveals that 75.4 percent of the activities consuming NIBD were nondirect program services or overhead. This chart alone reveals the importance of the continued effort to improve operations and reduce overhead.

PROGRAM INITIATIVES

Business Programs

In FY 95, business programs contributed $24.2M NJBD (Figure 1-7) to MWR worldwide, an increase of $3.8M over FY 94 despite $4.3M in base closure expenses. Managers worldwide continued to curtail non-demand-driven programs, reduce operating expenses, and improve customer service.

During FY 95, business programs focused attention on training catering managers, continuing the club turnaround, and developing theme restaurants. Four catering conferences provided over 300 catering managers with new ideas and innovative techniques that will allow these programs to compete for customer loyalty and repeat business. Industry leaders presented topics on exceeding customer expectations, creating effective brochures and producing creative theme event".

BP NIBD Operations

FY95 , $24.2M

Guest House $10.2M

In September, headquarters U.S. Army Forces Command and Fort Hood signed a memorandum of agreement incorporating the Fort Hood Primo's Italian Restaurant into the CFSC theme restaurant program. Headquarters U. S. Army Europe and 26th Area Support Group also entered the program when their Mannheim-based old west steakhouse with a rockand-roll spin. Provisions, opened in August.

Figure 1-7

/995 MWR Annual Report -- 7

Secrion ]

Twelve Food, Beverage and Entertainment Assessments have been conducted. These contracted assessors reviewed over l51) locations and surveyed 464,{)OO customers. Tell percent o] the food. beverage and entertainment dollar goes to ,HllR. while ;\;,-tFRS get. .. 20 percent; the remaining 70 percent goes off-post.

The MWR BOD funded contract assessments of food and beverage operations at Aberdeen Proving Ground. Fort Carson, Fort Lee, Fort Leavenworth, Fort Lewis, Fort Bragg, Fort Campbell, Fort Hood, Fort Irwin, Fort Meade, and Vicenza, SETAF. In a joint study information drawn from these assessments shows that MWR should re-look fine dining, increase efforts to attract catering business, move toward themed food and beverage activities and concentrate on quick service programs.

Continuing the positive trend from FY 94, the club program generated S3.7M NIBD, a S3.2M improvement over FY 94 results. Significant in this turnaround is the improvement in club food NIBD. Continued efforts to reduce costs, increase food quality, and provide demand-driven programs have positively affected clubs.

Family Programs

"From its early beginnings 3() years ago. /11'111)' Community Service lias grown to a complete social services organization, oa(~rillg a [ull range o] services 011 virtually el'ery t\ rmy installation ill the world. A CS staffand volunteers are enabling tile Army to keep [aitli with the 111('11 and women who defend our gnat nation ."

- William Iefferson Clinton President of the United States

- 8 -- 1995 MWR Annual Report

In order to respond to the needs of the Army for the 21 st century, family programs adjusted services to support soldiers and families during more frequent deployments, increased education programs (0 stem family violence, and expanded youth-at-risk and quality, affordable child care programs. Significant accomplishments for the year include:

• Army Community Service continued implementing its unit service strategy. With the new service delivery system, commanders reported a more responsive ACS that helps them develop programs tailored to their unit needs. Soldiers and family members reported more concern by unit leaders. ACS staff reported unit leaders are quicker to seek help for soldiers in need.

ACS celebrated 30 years of service to America's Army. In addition to installation celebrations, a special birthday luncheon was held in conjunction with the July ACS directors' conference. At that luncheon, representatives from 112 ACS centers worldwide participated in a ceremony to honor seven recipients of the Emma Baird Award for Outstanding Volunteer Service.

The Army Family Action Plan Planning Conference was held in the first quarter FY 95. Representing all major Army commands, the Army National Guard. and Army Reserves, 138 delegates briefed 27 new issues to the vice chief of staff, Army. The top concern was military pay as diminished by inflation.

Army Family Team Building Program, now in its second year, educated soldiers, civilians and family members about the Army missions and expectations, readiness responsibi I i ties duri ng separation and deployment, and systems available to support a more self-reliant lifestyle. Staff and volunteers trained a total of 830 AFTB master trainers and 1,800 instructors who will, in tum, teach AFTB concepts to the family members of active soldiers, civilians and reserve components at their home stations.

- _ .. __ ... _------------

£Xf!cltlil'e Summan: FY Y5 Pass ill Rn'iew

• Youth Services hosted the first Army teen panel where selected teens brought their top issues to the Army staff.

• CFSC conducted the sixth annual Teen Discovery in Eatonton, GA Youth delegates from 86 installations focused on leadership and teamwork skills, Army-wide issues, program ownership, problem solving and communication, Teens identified the ir top five issues (I i sted at right). Selected youth brought these issues forward to the world wide AFAP conference, where they became the top issues for the youth panel.

• Army wide CDS staff conducted a four-week survey of the availability of hourly care and found there were few "turnaways." Staff developed, published and implemented a CDC Fee Marketing Package, Center Risk Assessment Tool, and Family Child Care Provider Training Manuals,

Teen Discovery Issues

• The latest information in child abuse shows a continued decline in incidents that has outpaced the 5,7% decline in the child population. The child abuse rate (cases per 1,000 children) dropped a full point from 7.4 to 6.4. Following a slight downturn in FY 94, spouse abuse cases and the spouse abuse rate rose slightly this past year from lOA in FY 94 to 10.9 in FY 95,

Need for separate space for teens Concan about rise in teen pregnancy Inadequate resources fur teen programs Lack of tan employment

Improved relations between teen and law enforcement officials

• The first Department of the Army worldwide Relocation Assistance Managers Training was held in Aug 95, with 117 attendees. The RAMs received up-to-date instruction on relocation issues and are now better prepared to provide high quality service to relocating soldiers, civilian employees and their families.

Recreation Programs

Community Recreation received a challenge to relook the traditional delivery system for recreation programs. A process action team met in December 1994 to begin work on alternatives to the standard delivery system. The concept was refined during further PAT meetings. The MWR Working Group and the EXCOM approved the concept for testing at three locations and funded $150,000 per installation for implementation. The three installations selected from the 14 nominated were Fort Myer, Fort Knox, and 34th ASG, Yongsan, Korea,

The U. S. Army Soldier Show, with a cast and crew of 28 active duty soldiers, toured 55 installations, entertaining over of 75,000 soldiers and family members. The USA Express, a soldier show band, upheld the Army tradition of soldiers entertaining soldiers, touring seven countries, performing for multiservice audiences in Southeast Asia and Haiti throughout the holiday season,

1995 MWR Annual Report -- 9 --

Section /

"Quality of I~fe is a responsibility I lake rety seriously. and I will devote a tremendous amount (~r energy to making sure we do everything we can ill that area. "

• Gen. Dennis ./. Reimer Chief of 5;tajj; Army

In FY 95/96, Army libraries will benefit from the central purchase of computer workstations featuring multi-disk changers and CD ROM reference material. The central purchase enables libraries to provide access to a wider range of up-to-date reference materials. such as world news indices and full text and full image reference periodicals.

The Army fielded implementing guidance, personnel policy, and recreation kit procurement directions for recreation support to uni ts deployed for war and operations other than war. U.S. Anny Europe piloted implementation. They trained their personnel, identifed them as emergency essential, and assigned them to a brigade to be deployment ready. The Army joined elements of the Navy, Air Force, Marines and the J-l staff to coordinate future Joint Service deployment policies.

World Class Athlete Program soldiers captured a total of 183 medals at Armed Forces, national, and international competitions. During FY 95, the WCAP received 132 applications; 122 soldiers were accepted into the program. Throughout the year 33 soldiers were released. The remaining 89 encompass 12 sports and train at 19 locations throughout the United States in preparation for Olympic trials.

This year saw an Army-wide Better Opportunities for Single Soldiers training conference inN ash vi lie, TN. Fort Campbell served as the host for 300 attendees from over 100 different locations. For the first time, the top five issues identified by single soldiers at the BOSS conference were included in the Army Family Action Plan Planning Conference. Of the fi ve, the u ni fonni ty of BOSS for si ngle soldiers' programs and procedures, and the standardization of the Army barracks policies, were briefed as two of the top three issues from a working group. Both have become active AFAP issues.

This year's Army Chess Championship featured 12 of the best players in the Army. Competition in the Army championship enabled them to display their mental skills from individual study into logical and strategic thinking at the Army's highest level of competition. The top six winners represented the United States in the sixth NATO World Chess Invitational Tournament held in Gausdal, Norway. The U.S. delegation at this international, interservice competition was composed of exclusively Army participants. The 1995 Army Team captured fourth place.

Hospitality Directorate

The Hospitality Directorate's year was one of challenge and opportunity as the Armed Forces Recreation Centers and the Army Recreation Machine Program adjusted operations to deal with closure and re-opening, expansion, and continued high patronage. Despite the changing environment, their focus remained on customer service, value-oriented programs and services, and quality facilities and equipment. Significant accomplishments were:

- 10 -- /995 MWR Annual Report

------ ..... _-_ ...

• AFRC-Europe began to renovate facilities to reopen operations in Chiernsee. This project, funded by USAREUR, includes new furnishings in the gucstrooms, a state-of-the-art fitness center, renovated lobby and public areas, and redesigned food and beverage outlets. When Chiemsee re-opens in FY 96, property management for Berchtesgaden will be transferred to USAREUR for final disposition.

• Major efforts were underway at Dragon Hill Lodge to enclose the swimming pool adjacent to the state-of-the-art fitness facility; expand parking areas; and reconfigure the retail, concession, and services areas. At the same time, CFSC and the hotel staff began work on a preliminary feasibility study and design for an Eighth U.S. Anny proposed 84-room expansion. This study was based on historic data which revealed DHL turned away almost

160 potential guests per night.

• Hale Koa Hotel underwent a dramatic renovation, successfully opening the new 396-room Maile Tower and a I JOO-space parki ng garage, and reconfiguring food and beverage operations. The first guests checked into the Maile Tower in August, and comment cards were highly positive. The garage opened in November 1994. Also included in the renovation project was the conversion of the remainder of Fort DeRussy into a park. HKH now assumes property management for 66 of Fort Dekussy's 72 acres.

r.xeculive Summary: FY 95 Pass in Re\'iev.'

• Shades of Green, the only AFRC located in the continental United States, continued to prove its customer appeal. FY 95 occupancy was 96 percent. After refinements to reservation procedures occu-

pancy between February and September climbed to 98.5 percent. During the same period and without a room rate increase. Shades of Green generated positi ve cash flow from operations of $12H K, after paying rent ofS1.8M.

• The Army Recreation Machine Program completed its first full year of operational control of the majority of U.S. Marine Corps slot machine operations. ARMP replaced older, maintenance-intensive machines with the latest touch-screen technology equipment. This new equipment and other revenue-enhancing initiatives more than offset revenue decreases from a reduced customer base, allowing ARMP to generate revenues in excess of $119M.

• Amusement machine operations continued to expand. Operations at Forts Benning, Jackson, Bragg, and Gordon were added to those already in place at Forts Sill, Irwin, and Lewis. Amusement machine operations expanded into four communities in USAREUR. and three in Korea. Stateside. the program generates $1.9M revenue and NIBD. before distribution to installations, of almost one million dollars. Overseas, it generated over $263,000.

The ,4RMP operated 797 amusement machines ill J 24 separate locations world wide. Revenue per machine was $4,201.

1995 MWR Annual Report -- II --

Section 1

During FY 95 the construction branch managed 81 construction projects milled at $267'()M.

The acquisition value offixed assets as of 30 September 1995 was $1.6 billion.

SUPPORT SERVICES INITIATIVES

Construction

Congress approved the FY 96 NAF MWR construction program with only one request for additional information. The construction directorate staff worked with installations, MACOMs, the Army Secretariat, and the Office of the Secretary of Defense to ensure the accuracy and completeness of construction information. Other FY 95 highlights include:

FY 96 NAF major construction projects totaling- $53.2M were approved. The overall construction program is a combination of Anny central funding ($29.8M) and installation self-funding ($23.4M).

AMWRF funding for the NAF major construction program is expected to increase to $40M for FY 97 and beyond.

• CFSC signed a memorandum of agreement with the USMC to support their N AF cons truction requirements. The fi rst project accepted is a 35,000 square foot three-ranks club at Marine Corps Air Station, Yuma, AZ. This design-build project will be completed in FY 98.

• CFSC's designers continue to design sports theme entertainment facilities. The first one constructed at Fort Hood was very popular and profitable. Several other installations are following suit by either constructing new faci I i ties or renov ati ng existing ones.

Contracting

The Contracting Directorate continues efforts to streamline the NAF acquisition process and implement approaches to procurement that improve quality, timeliness, and responsiveness. Toward that end the NAF Contracting Directorate has implemented several new initiatives:

Established the Consolidated Contracts Division, whose mission is to aggressively pursue partnering with other Services and consolidate the Army-wide requirements for price advantages wherever feasible and reasonable.

Issued a competitive solicitation for acquisition of a standardized automated NAF contracting system. Once acquired, at an estimated cost of $250,000, this system will document the process from requirement through award. It also automates collection of historical and trend data for use to project future needs.

Solicited the Joint Service Prime Vendor Food Contract, currently awarded to SYSCO for NAF food and related products. Once awarded, this contract can be used by all military services world wide, with annual purchases estimated at $54M. Award is anticipated in the third quarter of FY 96.

- 12 -- 1995 MWR Annual Report

• Awarded a total of six NAF Major Construction contracts valued at S63.9M and 12 capital purchase and minor construction projects valued at $2.5M. The NAFMC projects were valued between $1.2M and $11.2M, while the CPMC projects ranged from $45,000 to $495,000. Examples of NAFMC are guest houses, community activity centers, golf club houses, enlisted clubs and recreational parks; examples of CPMC are car washes, putting greens and swimming pools.

• Ini tiated a sol ic i tation for the Army's first con sol idated bed and bath linen contract. This contract is expected to have an annual value of $5M and will save MWR $500,000 per year. When awarded in FY 96, the contract will allow decentralized ordering and be mandatory for Army Housing and AFRCs.

Commercial Sponsorship and Advertising

Commercial sponsorship, in its fifth year of operation, continued its success. Last year installation and DA programs generated cash, goods and services valued at $7.0M. At Army level, examples of successful commercial sponsorship initiatives include:

• The "Dog Days of Summer" Tour sponsored by Miller Brewing Company, AT&T, Brown Foreman, and numerous local media companies, This program featured top name country and rhythm and blues performers in two-day concerts at 12 installations, entertaining over 40,000 soldiers and families. This program will continue in FY 96 as a one-day event.

• The All Army Boxing Championship and Trial Camp sponsored by the Brown Foreman Beverage company. For the fourth year, this sponsorshi p funded the purchase of boxing equi pment and clothing as well as celebrity visits by boxing legend Floyd Patterson, In addition, soldiers at eleven installations participated in Sega and Robotic boxing tournaments, with winners receiving prizes and the installation receiving a portion of the sponsorship fee.

In January 1995, DOD revised existing policy to allow the sale of advertising space in any media form (including printed, signs, and electronic formats) when that space is produced for or prepared by the N AFT. This revision also allows MWR to purchase advertising in civilian media for the events and programs that are open to the public, thus fostering better community relations and opening new sources of revenue,

EXf'cutil'f! SummaQ': FY 95 Pass in Revint·

There are 15, 6~ I, ()()O square feet ill the ,HWR facility inventory.

"Quality people, both single and married, are our strength. ll"c don " han' big ticket items ill terms o] WNlpOI1'1 , .. ystems, we've got big ticket doll." in terms of people. "

- Gen. Dennis J. Reimer Chief of Staff. Army

1995 MWRAnnual Report -- 13 --

Section /

H(lrkin.!: ill .llll'R around the world are 4fJ.O()O dedicated [ull- ant! part-time U, S. and local national employees.

Information Management

FY 95 marked the f rst full year of the three- year plan to field the MWR BOD-approved Management Information System. Significant accomplishments include:

• Standard software modules were selected - Time Labor Management System. Rectrac !/Golftrac!, Chi ld Development Services A utomated Management System, Financial Management Budget System, Standard Management Information Reports for Finance. Foodtrak, and Catermate.

• TLMS was fielded to 147 installations. Seventy-five installations are doing electronic data transfer. The remainder are expected to complete this phase in FY 96.

• Rectrac !/Golftrac! was fielded to II installations. Fielding will continue until FY 98.

• CDSAMS version 2.4 was fielded to 80 installations. Version 3.0 will be available for fielding in FY 96. Training was conducted for 300 users during FY 95.

FMBS was fielded to 90 installations. Fielding and training will be completed in FY 96. Version 2.0, a Windows-based product, will be fielded in FY 97.

Catermate and Foodtrak was fielded to 80 locations world-wide . Fielding for both is expected to be completed by the end of FY 96.

Human Resources

From the all encompassing Army Civilian Training, Education, and Development System, Career Field 51 (MWR), to the search for a single golf management trainee, the Human Resources' mission of shaping quality employees is on-going .

CFSC fielded the ACTEDS early this year. In a March 1995 videoteleconference, MACOM and CFSC representatives discussed the role of career field managers and how to implement proponency within the eight life-cycle management functions.

During FY 95, the Staffing and Referral office issued 360 referral lists to commands and activities; the average processing time for requests was 1.4 days. In support of the MWR Strategic Action Plan, CFSC developed and implemented an exit survey instrument to identify turnover issues in the workforce. CFSC will use the data collected to suggest changes to the personnel system that will improve retention.

- 14 -- /995 MWR Annual Report

New and revised training touched the lives ofMWR employees from the base of the Master Training Plan to the very topmost levels. The Army Management Staff College and CFSC piloted, as a joint venture, The General Officer Installation Command Course in November 1994. During the same period, the training center staff converted the CFS Management Course to a correspondence fonnat where two-thirds of the course can he taken non-residence with only a one-week resident requirement.

Marketing

The CFSC marketing division continued to support MACOMs, installations and CFSC program directors with program management. training and research.

A total of 65 installations and MACOMs received data detailing patron preference, usage, attitudes, and leisure interests generated from the Leisure Needs Surveys. Marketing personnel from 60 installations received training on the development, execution and analysis of leisure needs survey data using a computer-based statistical analysis program.

More than 100 Army marketing personnel attended the CFSC hosted training conducted in Orlando, FL. The training featured sessions on survey data analysis, the corporate image campaign, commercial advertising, advertising policy, promotions, public relations and sponsorship.

Executire Summary: FY 95 Pass in Review

Army Marketing staff coordinated design, implementation and promotion of the new MWR corporate image. The resulting logo and slogan provide Army MWR with a consistent look world wide. The graphics standards manual, developed in conjunction with the Army and Air Force Exchange Service, provides the specifications to ensure that the appearance and use of the logo is consistent. Installations world wide kicked off the new MWR corporate image campaign in conjunction with Army birthday celebrations in June.

The pu blic affairs staff aggressi ve I y promoted MWR in all media. F eedback, the Army's MWR command information newsletter, is in its fourth year of publication with an annual circulation of 30,000. Additional public affairs achievements were:

• Seventy eight radio releases and 16 television stories produced by Soldiers' Radio and Television (Army Public Affairs) highlighted programs like the Army Soldier Show, AFAP, and Army sports.

• More than 100 submissions to the Army and Air Force Hometown News Program generated 515 news releases recognizing soldier athlete and Army Soldier Show performers.

/995 MWR Annual Report -- 15 --

Section 1

Oller its 12 year history the Army Family Action Planning process has facilitated 44 pieces of legislation, implemented 103 new or revised policies. and improved ]05 Army programs ami services.

- 16 -- 1995 MWR Annual Report

• Answered over 50 major media inquiries from Army Times, ABC Television, Time magazine and other external media.

• Designed and staffed an MWR exhibi t on the National Mall in Washington, DC for Public Service Recognition Week. Staff greeted more than 2,000 visitors from 39 nations.

Plans and Policy Directorate

The Plans and Policy Directorate focused efforts on obtaining financial support for MWR on base realignment and closure installations, documenting research that reflects the true effect of leisure. recreation and family support programs on soldier and family readiness. coordinating revision of an update of DOD and Army policy, and monitoring execution of the MWR Strategic Action Plan approved during FY 94.

While DOD policy provides for rei mbursement of N AF BRAC expenses. the $2.5M requested by installations for personnel severance and relocation expenses from FY 91 and FY 93 BRAC actions had not been reimbursed. During FY 95 slightly less than one million dollars was reimbursed, providing hope that even more would be forthcoming in FY 96. The Army Audit Agency also identified $10. 9M in N AF buildings that qualified for reimbursement. CFSC continued to advocate for the full reimbursement for BRAC associated NAF expenditures ($15.7M).

During FY 95 the Army leadership received more CFSC-sponsored research that portrays the impact of MWR programs on soldiers and families, as the following key results indicate:

• There is a positive correlation between soldier readiness and the MWR programs (MWR and Readiness Study).

• A majori ty of spouses are satisfied wi th Army I i fe, support for families, and support their spouses in continuation of the Army as a career (Survey of Army Families Ill),

• A direct link exists between recreation programs and mission readiness. The Sample Survey of Military Personnel.reported value in terms of fitness, stress reduction and esprit de corps. Trends from this and previous SSMP show high satisfaction with recreation, youth and family programs.

The major policy changes provided by Congress, QSD and the Army Staff and issued in many interim formats were published in AR 215-1. The September 1995 update consolidated two regulations (AR 215-1 and -2), eliminated procedural language for brevity. highlighted funding policy and funding responsibility, and fully explained the three categories of MWR.

FY 95 marked the first full year of implementing the Army's MWR Strategic Action Plan. The majority of actions were on target for timely completion. The MWR Working Group and Executive Committee of the BOD modified the MWR SAP in September 1995 to ensure that it is updated for the future. The revised plan will be mailed to the field in early FY 96.

CFSC staff provided support to assist MACOMs and installations in developing supporting strategic action plans. In addition, the directorate supported strategic planning for Army Recreation Machines, Joint Service recreation policy, the new recreation delivery system and NAF employeel health benefits.

Executive Summary: FY 95 Pass in Rel'iew

/995 MWR Annual Report -- 17 --

Sectiun 2

- 18 -- 1995 MWR Annual Report

Strategies for the Future:

FY 96 and Beyond

Business Programs

As a result of the food, beverage and entertainment assessments, future operations will focus on theme restaurants that meet installation needs, Carts and kiosks will supplement sit-down theme restaurants. The carts! kiosks program provides a cost-effective, high-quality, quick-service alternative to sit-down restaurants.

Hospitality Television will be used to enhance training for both food and beverage personnel. HTV is a training channel devoted exclusively to the hospitality industry and can be customized and delivered via satellite or VHS to subscribers.

Emphasis on the centralized installation catering concept will continue. CFSC will use HTV to enhance training for both catering and food and beverage managers.

During FY 96, CFSC will conduct a world wide review to determine the availability of cable television for soldiers and families residing on installations. Review will determine services available, costs, and MWR earning potential. CFSC will make recommendations to the MWR BOD to improve services and maximize installation earnings.

Family Programs

During FY 96, the chief of staff, Army will decide whether to host the Army Family Action Plan Planning Conference annually or biennially. This decision will have no direct impact on the annual installation and MACOM conferences.

Full-fledged school-age services will become a bridge between child development and youth services. Both child development services and you th services person ne I wi II staff th i s new ly designed schoolage program, providing services for an additional 5,000 children Army-wide.

During FY 96, Child & Youth Services staff will be participating in a Wellesley College national school-age project to test accreditation of school-age programs. Ten pilot sites will test partnerships between MWR activities and school-age programs to increase schoolage spaces and increase MWR use during non-peak hours.

The FamilyAdvocacy Program will complete a video, "The Role of the Commander in the FAP," implement new parent support programs, and begin an awareness campaign on domestic violence for civilian employees.

Recreation Programs

Strategies for the Future: FY 96 and Bevond

Late in FY 96, the MWR BOD will review the outcome of the test of the new recreation delivery system for implementation world-wide. Once approved, CFSC will issue a desk-side "how to" manual which will assist installations with implementation.

Hospitality Programs

A plan to perpetuate operations at Shades of Green, already approved by the MWR Board of Directors and the Army Secretarial, will be presented to the Defense Secretariat and Congress for final approval. The plan calls for purchase of the hotel building and prepayment of the land lease for 100 years.

The Hale Koa Hotel will host the official dedication of the Maile Tower in November 1995. With the additional 396 rooms, HKH will be better able to meet ever-increasing demand. Likewise, AFRC-Europe will host ceremonies marking the reopening of Chiem see in November.

Amusement machine operations will continue building on the partnership with AAFES by installing and operating amusement machines in AAFES locations. Projected MWR and AAFES locations are Forts Jackson, Bragg. Campbell, Bliss, Knox, and Richardson. AAFES locations on Elmendorf, Keesler, Lackland, and Altus Air Force Bases will also be added to the amusement machine program. ARMP service to the USMC in Okinawa will expand to include amusement machines.

Construction

The first pre-construction review board considered 27 proposed FY 97 NAFMC projects to determine which ones would proceed with a project validation assessment. Sixteen projects were approved for PV As and 11 were rejected, saving approximately $500,000. This pre-ClcB process will carry forward to the FY 9R NAFMC.

In order to improve the quality of service provided by the U.S. Army Corps of Engineers in support of the NAFMC program, CFSC conducted a competition between all CONUS USACE districts. Selection of the winning district was based on the ability to use N AF contracting and project management procedures, design-build experience. overall cost data, and commitment to the program. The winning district, Seattle, will execute all the FY 97 NAFMC transferred to USACE.

111 fiscal year 1995. CFSC design staffprovided field assistance for 90 interior and food service design projects.

1995 MWR Annual Report -- 19 --

Section 2

The l1rm.v Medical Lift> Fund provides $3%;H ill !fle insurance protection for JVA.F employees.

Contracting

During FY 95, the NAF Contracting Office, at the request of the MWR Working Group, conducted a feasibility study to determine the viability of regionalization/consolidation of world wide N AF contracting. The anal ysis was based upon an extensive survey of installations. The survey, with an 84 percent response rate, provided information concerning the skills, educational, and training levels of contracting personnel and the type, number, and dollar-value of all procurement actions. The survey revealed procurement actions valued at $124.9M (via 61,163 actions) and $121.5M (via 56,274 actions) in FY 93 and FY 94, respectively. This data, along with other staffing, salary and cost data, will be used to assess the effic iency and proficiency of the existing organ i zation, and to develop strategies for ongoi ng improvement of contracting services. CFSC wi II present the results of the stud y to the MWR S trateg ic Working Group during FY 96.

CFSC will schedule the first formal Purchase Review Board during the third quarter of FY 96. This board identifies supplies and services for inclusion under the Army and j oi nt-service standardized and consolidated buy program.

Human Resources

The CFS Training Center is moving to embrace the emphasis placed on joint-service cooperative ventures. Navy personnel were already included in the NAF Basic and Advanced Contracting Training. The Army has the lead for development and delivery of the DOD Joint Family Support Directors Course.

The NAF Management Trainee program continues to recruit for selected positions in MWR. Visits to over 13 colleges and universities resulted in ten new trainees beginning their 12-18 month training at CONUS regional sites. Upon completion of the program, they will fill vacancies anywhere in the Army.

As part of a pilot Job Swap pro gram, CFSC wi 11 arrange exchanges for 4 MWR employees (2 NAF and 2 APF). This is the first non-career program Job Swap program in the Army. The potential for career development as outlined in ACTEDS is the basis for matching employees. Each exchange will last for six months with CFSC centrally funding costs.

In addition, FY 96 will mark the beginning of a Developmental Assignment program. Through this program, CFSC officials select employees for temporary assignments that allow development of personal skills and of benefit to the whole MWR program. Plans call for central funding of two employees under long-term training.

Due to last year's success of the Training with Industry pilot program at Oglebay Park, it will continue with the next selection occurring late this spring.

- 20 -- 1995 MWR Annual Report

Strategies (or the Future: FY 96 and Beyond

Marketing

Army Marketing plans to improve statistical research for the field by surveying all Army installations in a single year and further centralizing installation survey administration. Installations will see reduced administrative burdens, lower costs, higher q uali ty end-products and expanded availability of survey data to market MWR programs. The bottom line will be better in fanned program managers making better decisions.

Strategic Planning and Policy

An MWR guide for BRAC installations will be released in early FY 96. This guide will provide extensive implementing guidance to assist installations and MACOMs with MWR closure and downsizing at BRAC installations.

DOD will complete an extensive revision to military MWR program policies. These new pol icies wi 11 incorporate a decade of Congressional guidance and policy changes. These DOD Directives and Instructions will cover NAP construction, financial and personnel reporting requirements, banking and investments, contracting, and auditing,

Additional MWR research will be completed during FY 96. This research is expected to further document the impact of leisure, recreation and family programs on QOL and readiness. These studies include:

• An MWR and readiness study expected to detail the links between MWR and readiness and to recommend ways to strengthen those links.

• An analysis of military family advocacy data, as compared to civilian data.

• Lessons learned from the ACS unit services outcome evaluations.

During itsfirstfour years of operation, the Army :\'.4F Employee 401(k) Saving PIau's assets grew to $37/'-1.

1995 MWR Annual Report -- 21 --

Section J

- 22 -- 1995 MWR Annual Report

A Quality Workforce:

Trained and Ready

Maintaining a quality MWR workforce is directly related to the personnel, programs and systems offered to support it. FY 95 saw continued efforts on the part of management at every level to maintain a cost effective system that continues to provide for the needs of our diverse workforce.

NAF Employee Benefits

In June 1995 a MACOM based PAT convened 10 consider and recommend changes to Army's NAF employee benefits program. The issue of greatest concern was affordable, managed health care for NAF employees. The resulting redesign focused on a preferred provider system, reduced the employee's share of the total premium from 50 percent to 35 percent and provided other enhancements, including no claim forms. prescription drug cards, and a simplified premium structure.

.. .

'~"'=~~i'

.. !~. ~

The NAF group life insurance program was changed to provide a living life insurance benefit. an increase in optional life insurance to a maximum of $500,000, and an increase in the basic insurance to a maximum of $250,000.

The NAF employee 401(k) Savings Plan continued to grow with 6,000 employees participating. Plan assets grew to more than $37 million in less than three years. Helping employees to take advantage of these benefits enables managers to recruit and retain a professional, dedicated workforce.

The NAF Management Trainee Program

Each year the Human Resources staff recruits up to 10 graduates for this centrally-funded program to work in a variety ofMWR areas. Each specialty recruited is based on MACOM vacancy projections. Training begins with attendance at the CFS Management Course and continues with on-the-job training at CONUS-based regional training sites nominated by the MACOMs. The 12-18 month OJT follows career progression guidelines established by the ACTEDS plan. Upon successful completion of the program, the trainee enters the MWR Central Personnel Referral Program for permanent placement into a managerial position.

During 1995, ten trainees were hired: four club management; three marketing; one hospitality management; one outdoor recreation; and one golf management. Installations selected as regional training sites include:

Fort Hood, Fort Lewis. Fort Monroe, Fort Meade, Fort Bragg. Fort Sam Houston, Aberdeen Proving Ground and AFRC-Orlando (Shades of Green). Successful placement of two marketing specialists from the first group of trainees also occurred in FY 95. Remaining "FY 94" trainees will be completing program requirements in FY 96.

Feedback on the management trainee program from both installations and MACOMs has been extremely positive. The concept of using CONUS-based regional training sites to conduct the OJT has been validated as a cost-effective means of training these new MWR employees.

The Master Training Program

The CFS Training Center assumed management of the CDC Training and Curriculum Specialist Course, which was previously delivered by the program proponent in conjunction with a contractor. The MultiProgram Managers' Course. a revision of the Division Chiefs' courses, was delivered as a pilot in late FY95.

The HR staff coordinated and published implementing guidance for establishing and staffing the recreation and fitness Brigade Recreation Specialist position. Employees in these positions must meet deployment standards as outlined in FM 12-6, Personnel Doctrine.

A OualiO' Workforce: Trained and Ready

As the proponent for curriculum development, Human Resources staff conducted a needs assessments for the position of marketing manager. Subject matter experts from several installations and MACOMs contributed their time and specialized knowledge to this critical step in the process of developing valid training for the Army's MWR marketing staff. Human Resources expects to delivery the training during FY 96.

Continuing Education Units

The Human Resources Directorate continues to award CEUs for most CFS Training Center courses, and for installation and MACOM traini ng programs that qual i fy u nder standards set by the International Association for Continuing Education and Training. Attendees at the October MWR Expo in Heidelberg could earn over three CEUs for participati ng in selected workshops. One CEU is awarded for eac h 10 contact hours of instruction in a sponsored nonacademic setting.

The CPS training center has trained 9,509 employees since opening its doors ill 1987. More than one third of those trained are still ill our workforce today.

1995 MWR Annual Report -- 23 --

Section 4

Financial Report:

ArmyMWR

Army MWR corporate finances are the combined total performance from the field operating NAFIs, ARMP and the AMWRF. Section I of this report shows how those elements, taken in the aggregate, performed comparing FY 94 to FY 95. In addition, Section 1 reviews field operating NAFl results for the same period. Below are the summarized balance sheet (Figure 4~ I) and the summarized statement of income and ex pense (Figure 4-2) which support the analysis provided in the executive summary. The remainder ofthis section addresses individual Headquarters Department of the Army funds managed at CFSC.

Summarized Balance Sheet - Army MWR Operating Funds

30-Sep 3O-Sep Change
FY 94 FY 95
Assets
Current Assets
Cash/I nvestments $341,676,067 $239,112,690 ($102,563,377)
Receivables 38,524,008 38,264,818 (259,190)
Inventories 33,794,340 33,608,047 (186,293)
Prepaid Items 13,675,354 12,653,317 (1,022,037)
Total Current Assets 427,669,769 323,638,872 (104,030,897)
Fixed Assets 1,411,686,252 1,624,448,802 212,762,550
Accumulated Depreciation 55Q,665,9Q7 609,635,112 58,969,2Q5
Book Value Fixed Assets 861,020,345 1,014,813,690 153,793,345
Other Assets
Capital CommittmentiSinking Funds 2,677,806 16,037,722 13,359,916
Separation Sinking Funds 3,928,582 3,695,617 (232,965)
Other 42,630,070 35,Q13,351 (7,616,719)

Total Assets $1,337,926,572 $1,393,199,252 $55,272,680
Liabilities
Current Liabilities
Accounts Payable $38,725,277 $47,716,280 $8,991,003
Other 199,969,740 157,5Q4,475 (42,465,265)
Total Current Liabilites $238,695,0 t 7 $205,220,755 ($33,474,262)
Total Long Term Liabilities 15,251 ,547 56,528,192 41,276,645
Total Liabilities 253,946,564 261,748,947 7,802,383
Fund Equity 1 ,083,980,008 1 ,131 ,450.3Q5 47,470,297

Liabilities and Fund Equity $1 ,337,926,572 $1 ,393,199,252 $55,272,680
Figure 4·'
-24-- 1995 MWR Annual Report Figure 4-2 demonstrates the continuing trend that Army MWR as a whole is not generating enough NIBD to maintain its level of capitalization. In FY 94, NIBD was $78.5M, while $93.IM of the existing asset value was recorded as "used up" in the depreciation portion of the statement. The trend grew worse in FY 95, with NIBO of only $54.6M while depreciation grew to $99.4M.

Army Morale Welfare and Recreation Fund

FY 95 marked the second year of the MWR Board of Directors' financing strategies for modernizing the MWR NAF physical plant. This long range plan focuses on redirecting streams of installation revenue to the AMWRF for world-wide application. Additionally, the fund is authorized to borrow from the Army Banking and Investment Fund. This

Financial Report: Army MWR

Summarized Income and Expense Statement - Army MWR Operating Funds

Fiscal Year 94

Fiscal Year 95

Change

Revenue
APF: Military Personnel $13,235,708 $14,983,360 $1,747,652
Operations, Maintenance Army 317,827,821 357,425,420 39,597,599
Other Operating 6,633,547 13,115,645 6,482.098
DLA 5,087,587 5,249,482 161.895
MCA l:1,e~ QQQ 2,00Q QQQ (1;3 2:1Q,QQQ 1
Sub-total $358,634,663 $393,373,907 $34,739,244
NAF: Sales 276,626,906 270,936,649 (5,690,257)
Gross ARM Revenue 116,579,763 119,447,876 2,868,113
Central Fund AAFES Dividend 38,206,151 24,635,824 (13,570,327)
ASD/Other AAFES 87,222,447 75,276,390 (11,946,057)
Other Revenue 396,112,240 410,590,040 14,477,800
I nterestl ncome 15,1 J1 ,JS:1 lQ,9f!Q,QJ2 (4,I:11,J:I!:!)
Sub-total $929,878,898 $911 ,866,811 ($18,Q12,087l

Total Revenue and Appropriations $1,288,513,561 $1,305,240,718 $16,727,157
Expenses
APF: Operating Labor $172,339,132 $210,424,131 $38,084,999
Overhead Labor 45,306,576 47,038,954- 1,732,378
Other Operating Costs 125,138,955 133,310,822 8,171,867
Sub-total $342,784,663 $390,773,907 $47,989,244
NAF: Cost of Goods Sold 125,590,023 120,750,045 (4,839,978)
Operating Labor 371,825,500 367,536,229 (4,289,271)
Overhead Labor 108,388,928 120,730,310 12,341,382
Other Operating Costs 245,555,466 248,193,032 2,637,566
Sub-total $851 ,359,917 $1357 ,2Q9,616 $5 849,699

Total Operating Expenses 1,194,144,580 1,247,983,523 53,838,943
Military Construction Army 15,850,000 2,600,000 (13,250,000)

Net Income Before Depreciation 78,518,981 54-,657,195 (23,861 ,786)
Depreciation 93,004,608 99,390,889 6,326,2131

Net Income (Loss) ($14,545,627) ($44,733,694) ($30,188,067)
Figure 4-2
1995 MWR Annual Report -- 25 -- Section 4

Uses of an AMWRF Dollar

• Construction and Program Inyaslm enl

~ Field Services and Self-Sufficiency Exemptions • CFSC Administration

plan, coupled with the congressional mandate for the Services to sweep certain levels of installation cash to the central funds, resuited in an extremely aggressive capital improvement effort; $74.6M was derived from the sweep alone. As of Sep 3095, the AMWRF had $172.5M in outstanding commi tments for approved maj or construction. Furthermore, over the next three years, $40M is earmarked for the management information system, $20M for EUSA cable television and over $13M for other MACOM priorities.

While the largest portion of AMWRF cash finances capital requirements, the fund also invests in other Army-wide programs such as master training, interns, patron surveys and marketing. The next largest allocation is for field services such as the U.S.

Army Soldier Show, Army sports, the Army Chess Championship, Arts and Crafts Contests, and BOSS, as well as self-sufficiency exemptions. Finally, the fund supports a portion of the NAF administrative budget for CFSC. Figure 4-3 shows how the AMWRF dollar was allocated for FY 95.

Figure 4-3

During J·T 95. tile Army Recreation Machine Program operated 4,547 recreation machines in 248 separate locations w orldw ide. Revenue per machine wa.\" $25,843.

Army Recreation Machine Trust Fund

ARM Trust Fund, established to administer the Army's Recreation Machine operating profits, continues to be one of the most consistent sources for financing MWR capital requirements. During FY 95, over $80M was received in profit distribution from ARM operations. Major uses of cash this year included $48.8M share distributions, $47 .2M for construction, and $5,5M for internal ARM operations capital requirements. The trust fund balance at the ended of the year was $4.3M with its major commitment, financing the Hale Koa Tower, almost complete. The MWR Board has determined that once this project is completed, future trust shares will be applied to Army-wide needs through the Army MWR Fund,

Army Banking and Investment Fund Depositors' Balances

In Millions

700 600 SOO 400 300 200

91 92 93 94 95 96 97 98 99

Figure 4-4

- 26 -- 1995 MWR Annual Report

Army Banking And Investment Fund

ABIF manages a pool of U.S. Government securities on behalf of its participants and pays interest based on the earnings of that portfolio. During FY 95, the ABIF provided cash management and investment services to 425 Army and DOD entities. Participants earned a compounded rate of 4.52 percent on their average deposited balance, up from 3.99 percent during FY 94. During the year, the ABIF distributed $16.6M as interest income.

As in the previous year, invested cash steadily decl ined during FY 95, Deposits fell from $456M at the start of the period to $351 M on Sep 30 95. As funds were withdrawn to fund MWR programs and construction, investment managers focused on maintaining liquidity

whi Ie providing a competiti ve rate of return on those funds remai n i ng in the investment pool. Figure 4-4 shows the decline of the ABlF over previous years and projections through FY 99.

Army Central Insurance Fund

Despite suffering some heavy losses in the tort program. the ACIF showed a net income of $6.2M. This net income was impacted significantly by the annual actuarial study of the Workers' Compensation Program. The savings in this program will be returned to NAFls in the way of a reduced rate for FY 96. In the same manner, Unemployment Compensation costs leveled off at $5M annually, also yielding a rate reduction. The negative balance in the Family Child Care Claims Fund was reduced by $1.6M through a one-time payment of APi-< as approved by the MWR Finance Committee Working Group. The property program did not suffer any major catastrophic losses; money and securities losses were higher and fidelity bonding losses were lower than previous years. During FY 95, the program continued to respond to new insurance needs by offering weather insurance and hole-in-one coverage for golftournamerits. The Risk Management Program continues to provide broad insurance protection at the lowest possible cost.

Army Central Retirement Fund

The ACRF represents the total of employee and employer contributions and in vestment earnings on those contri butions (plan assets) for the U.S. Army NAF Employee Retirement Plan, along with the associated liabilities of the plan.

As of Sep 3095, the value of benefits participants earned (actuarial present value of accumulated plan benefits) was $284.5M. This is the amount participants would be entitled to if the plan were terminated today. This amount has increased from $262.IM a year ago. The market value of the plan assets as of Sep 30 to pay those benefits was $328.2M, compared to $277 .3M a year ago, or a funded ratio of 115 percent. The increase in the plans assets and funded ratio was attributable in part to a 19.9 percent in ve stment return - the resu It of a strong U.S. equity market.

A more realistic and important measure of the plan is to approximate future benefits to be earned by participants and the assets available to pay them. This valuation is performed by an independent actuarial firm on an annual basis. Estimates for Sep 3095 indicate that total future benefits discounted back to today's dollars are $334.2M, compared to $307.9M a year ago. Estimated plan assets available to pay these benefits shows a future shortfall of $31.8M, versus $33.4M a year agoan improvement of $1.6M. Amortization of this shortfall will occur over a number of years and is reflected in the rate charged employers and N AF employees.

Financial RewJrt: Armv MWR

The Risk Management Program insured over $ J. 6 billion ill assets.

The A rl11Y tVA F Employee Retirement Plait currently makes monthly pension payments of $/.3/\4 to more fila II 4. ()O() reti rees.

1995 MWRAn/Jual Report -- 27 --

-----_.- -- ----

Section 4

/\'A.F employees ./ih'd 2,644 Workers' Compensation claims at a cost of $3.6M.

Figure 4-5

Army Medical/Life Fund

The Army offers health, dental and life insurance benefits to its NAF employees. The Army Medical/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. Claim expenses are satisfied through payments to employees and health care providers for those who participate in the selfinsured health and dental care components of the program. The fund also pays death claim benefits to beneficiaries of deceased employees who participated in the life insurance program.

During FY 95, the self-insured health benefits component of the program declined in participation due primarily to rising premium costs. In an attempt to counteract the impact of escalating health care costs, CFSC implemented an aggressive cost-control system. The plan administrators also expanded the lower premi urn preferred provider option in many geographic 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. At the close of the fiscal year, the plan administrators were poised to make major changes to 1996 plan year (CY 96) medical benefits program. These changes-lower cost to employees, expanded PPO coverage and improved benefit levels-were designed to stem falling participation levels and satisfy growing employee concerns over the affordability of quality health insurance offered by the Army.

Income to the Army MedicalfLife Fund's during FY 95 was $25.2M; expenses were $24.9M. The small surplus generated by the fund during FY 95 will serve as a hedge against future cost increases that otherwise would have to be passed on to plan participants and employers.

Army 401(k) Plan

Since its inception in 1991, the USA NAF 401(k) Plan has generated significant interest among many employees, although participation - currently 31 percent of those eligible - has not risen to anticipated levels. Nevertheless, assets of the plan continue to grow as participating em-

u.s. Army NAF Employee 401 (k) Fund Average Annual Total Returns % Period Ending 30 September 1995

Name of Inve§tment Fund 1 Year Return 3 Year Return 5 Year Return
Retirement Money Market Fund 5.66% 4.08% 4.64%
Growth and Income Fund 24.54% 17.69% 21.05%
Growth Company 38.71% 22.14% 24.20'''10
Overseas Fund 3.75% 12.86% 8.87%
U.S. Bond Index Fund 13.63% 6.75% 9.89%
Fidelity Asset Manager 10.09% 10.94% 14.66% - 28 -- 1995 MWR Annual Report

ployee salary deferrals and employer matching contributions flow into the plan and accumulate investment earnings.

As of Sep 30 95, the total of individual 401(k) account balances was $37 AM, an increase of $12.2M over the total on the same date last year. The accompanying chart shows investment returns for each of the six funds available for employees to select as investment options. Figure 4-6 shows the investment mix of the fund as of Sep 30 95. Despite recent and historically higher returns in other funds, many employees apparently choose to "play it safe" with their investments in the money market fund.

Financial Reoort: Army MWR

NAF401 (k) Savings Plan Investment Mix

OV&r&eas 1.45%

u.s. Bond Indu 15.91%

Retirem&nt Mone!f Market 35.56%

Asset Manager 4.08%

Growth & Income 35.31%

/995 MWR Annual Report -- 29 --

Section 5

Program Status Reports

Army Family Team Building

AFfB, completing its second full year of training soldiers, civilians and family members to better cope with the challenges created during deployment and family separation, has already begun to make America's Army more ready and self-reliant. An independent evaluation of AFfB validated that families are more prepared, more confident and better able to take care of themselves as a result of the training. With training, the disparity between individual needs and the expectations of institutional support systems is lessened. Based on this initial feedback, the three purpose!.' of AFfB remain:

- 30 -- }995 MWR Annual Report

• 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.

The challenge for AFfB at every level is to maximize the effectiveness of the chain of training by getting the program of instruction from the AFfB master trainers to the installation instructors and attracting family members into the classroom to receive the training. It is here we can measure the overall success of the program.

Soldier AFTB training began in November 1993; training for civilians began in April 1994; and family member training commenced in June 1994. During the first two years, 770 family member volunteers and support staff graduated as AFfB master trainers. During the same time frame 1,800 volunteers graduated as instructors. Efforts in FY 95 focused on training for the Reserve Component. Goals for FY 96 include:

• Revising the Master Trainer curriculum to make it a true train-thetrainer course.

• Updating the AFfB local level instruction modules (Phases I, II, III).

• Conducting nine AFTB Master Trainer Courses. Six courses in CONUS and three overseas, are expected to produce an additional 1,400 Master Trainers.

Army Community Services

In FY 95, $37.2M APF was programmed for ACS. The overall APF obligation was $37M. This equates to a 99.5 percent obligation rate, a significant improvement over the 94.2 percent rate in FY 94. The Family Advocacy and Relocation programs obligated $49.5M and $5.5M DOD money, respectively. Figure 5-1 shows how APF dollars were spent; an additional $1.4M NAF subsidy was used to support food lockers and to reimburse volunteer expenses.

Commanders and ACS professionals are continually challenged to deliver quality services, meet customer needs, and maintain DOD-mandated programs when the base operations requirement for resources exceeds those programmed. Key personnel at every level must coordinate efforts to raise the ob ligation rate to 100 percent if we hope to defend our requirements in the future. ACS programs continue to support readiness and retention by preparing soldiers and their families to deal with more frequent deployment-related stress. They foster soldier and family selfreliance, resiliency and stability during war and peace. For that reason wc must maximize use of the APF support provided.

Family Advocacy Program

Educating the chain of command continues to be the primary prevention tool for combating family violence. Spouse abuse prevention education and trai ning will be expanded to ci vi I i an employees duri ng FY 96. New FAP missions include oversight of the Ncw Parent Support program contract and the Transitional Compensation entitlement program. The first program provides training and support for new parents; the second provides support for family members of soldiers separated from active duty for inflicting abuse.

Exceptional Family Member Program

The individuals served by EFMP contacts, case management, briefings and training increased this year. As of Mar 95, the EFMP had over 31,000 sponsors and over 36,500 exceptional fam i I Y members enrolled. EFMP published a revision to AR 608-75, Exceptional Family Member Program, and obtained funding for a civilian employee EFMP awareness video, which will be completed during FY 96.

Consumer Affairs and Financial Assistance Program

Frequent deployments, increased soldier contact through the ACS Unit Service program, access to liberal credit, and garnishment laws increased demand for CAFAP services. CAFAP focused on preventive education, financial counseling and debt liquidation in order to meet this increased demand. CAFAP assisted over 16,000 clients payoff more than $90.0M in debts. The Volunteer Income Tax Assistance program served over 36,000 individuals and saved soldiers and families over $2M in income tax assistance fees.

Pm/trwn Status Reoorts

"The ACS story is a proud S/Ol}' in our history. It's a story of lending closets, thrift shops. nursuries, of providing care ami comfort and of contributing stability to the United States ;trmy. '.'

M (jell. Dennis J. Reimer Chief (~f Stall: A.rmy

1995 MWR Annual Report -- 31 --

Section 5

Relocation Assistance Program

Higher PERSTEMPO in the Army dictates increased support from the Relocation Assistance Program. Individual contacts in the RAP increased from 581,000 in FY 92 to over 676,000 in FY 94. The Standard Installation Topic Exchange Service, the automated information service. continues to be a highly used service. as indicated by the 88.355 occasions it was accessed during FY 95. RAP eases soldier and family concerns during the relocation process, returning the soldier to duty more rapidly.

Family Member Employment Assistance Program

The FMEAP helped place over 12.000 fam i I Y mem bers in jobs and added over $52M to Army household income. It helped over 39,000 individuals prepare job applications. SF-l7ls and resumes. FMEAP aggressively advocates and delivers skill-building training and employment opportunities for soldiers. civilian employees. retirees. eligible Reserve/ National Guard components and their family members.

Deployment/Mobilization Support

ACS at CFSC served as the DOD executive agent for the American Red Cross, assisting them with over40 deployments of civilian staffto Haiti. Kuwait and other locations where military personnel were deployed.

Working under the philosophy that education helps prepare families to face possible deployments, ACS published and distributed Operation Resources for Educating About Deployment and You-both as printed

matter and videos to active duty and reserve component family programs. The OP READY materials are comprehensi ve traini ng modules out! i ni ng support through-

out mobilization, deployment and reunion. CFSC is conducting train the trainer workshops to enhance the utilization of the materials in the field.

Total Operating Costs ($ in M)

OSD FAP $49.5

OMA FtllEAP $2.1

OMA OMA Infoj Ref

CAFAP &. Follow Up

$4.6 $2.7 OMA

$2.6 OMAFAP

$20.1

OMA Base &. O",_ch'

"Includes $1.3 In Outreach

Figure 5-1

- 32 -- 1995 MWR Annual Report

$5.5 $1.4

" NAF Costs

Information, Referral and Followup

The IR&F program is a key element of the ACS Strategic plan. In Phase I, ACS unit service coordinators took information about ACS programs and installation/community resources to the commanders and unit personnel. The goal of Phase II is to provide state-of-the-art IR&F services including professional training, enhanced automation, staffing, certification and marketing.

Arts and Crafts

Total program funding decreased from $18.9M in FY 94 to $ 18.3M in FY 95, with a significant shift in focus to NAF. This shift can be attributed to closure of a few programs and conversion of staff from

APF to NAF. The subsequent increase in NAF labor expenses

plus a slight increase in cost of goods caused a decrease in the

NIBD of $500,000.

Priorities for use of APF at the installation have changed the Arts & Crafts funding mix to 58 percent NAF and 42 percent APF. A&C, as a Cat B activity, is authorized 65 percent APE With the current shift to NAF, successful A&C programs are focusing on innovative, customer-driven programs for the future. Emphasis must remain on efficient business-like practices. Managers must promote and market resale goods in support of instructional programs, improve merchandise displays and ensure pricing which yields sufficient revenue to offset operating costs. Fees and charges established should, at a minimum, cover instructor and program direct costs.

Program Status Report.\'

NAF Operations (in $M)

10~--;:6

8" 6- 4" 2-

-2-

-4- ~'---

-6/

Revenue

HIBD

Primary focus for the success of A&C must be programs, instruction and services tailored to community and customer needs. Directors should actively partner with other MWR and community organizations. Bringing Arts and Crafts to the participants of the School Age

Services program is one example of this partnering effort.

Managers at all levels need to remain abreast of industry Total Operating Costs

trends. Subscriptions to professional journals and member-

ship in professional organizations are a tool to help staff

remain current.

CD ROM computer applications can provide tremendous time and labor savings. Patrons can design their own furniture, furnishings, clothing, knitting patterns. design logos. pictures and cards. This technology can be used in countless applications and offers potential to generate N AF revenue.

Figure 5-2

FY95 NAF 58%

42%

For FY 96, A&C training is planned for January in conjunction with the Hobby Industries of America convention. This training will provide managers latest techniques and equipment. Similar training is planned for Korea in April,

Financial Information Army Average Data

.EY..fr4 Ei.1l5

Cost of Goods Sold Labor

Other Oper Exp

62.9% 70.3% 20.2%

63.3% 76_1% 18.4%

Figure 5-4

Figure 5-3

1995 MWR Annual Report -- 33 --

Section 5

Automotive Skills

NAF Operations (in $M)

10' 8- 6'

Revenue

NIBD

LFY94; .FY95i

APF support for Automotive Skills, rated 4th in importance by soldiers on the FY 95 Sample Survey of Military Personnel, increased from $9.1 Min FY 94 to $10.5M in FY 95. The funding mix for the program is 55 percent APF and 45 percent NAE This change in mix is attributable to a shift in personnel costs as more of the instructional staff is converted to APE

NAF revenues increased $400,000 over' the FY 94 level. NIBD increased approximately $100,000 as the result of management's efforts to reduce NAF labor costs (shift of employees to APF) and decrease other operating ex penses as a percent of total revenue.

Figure 5-5

While Automotive Skills programs face challenges to generate greater NIB 0 and offer increased staff provided services for a fee, the focus of the program must remain in offering technical skills development and

saving users money. Without this focus, APF support will become difficult to defend.

Total Operating Costs

FY 95 NAF 45%

FY 95 APF 55%

Figure 5·6

- 34 -- 1995 MWR Annual Report

A reeen t change to AR 215 -I establ i shes spec i fie services that will be provided by Automotive Skills staff. When providing these or other services, managers are encouraged to establish realistic fees, charges and retail prices that provide value to the customer yet return reasonable earnings to IMWRF. Efficient application of resources must remain a focus throughout the program. Staffing, hours and days of operation, and levels of instruction must be validated based on customer use. As an example, four lO-hour days may be more effecti ve than fi ve 8- hour days.

Financial Information Anny Average Data

FY94 74.6% 72.6% 13.1%

~ 77_3%

70.0% 12_2%

Cost of Goods Sold Labor

Other Oper Exp

Figure 5·7

Armed Forces Recreation Centers

AFRC occupancy remains high at 93.5 percent. The high occupancy rate, combined with the increase in business during the first full year of operations at Shades of Green, resulted in increased revenue of $11.1 Mover FY 94.

Despite severe operational challenges, the AFRCs achieved a positive NIBD of $3M in FY 95. In addition to a 16 percent decline in the dollar value against the German mark, AFRCEurope's physical plant was realigned based on the German Government's decision not to finance the facility renovation in Berchtesgaden. The Hale Koa Hotel incurred significant expenses in preparing for the new tower's grand opening in FY 96. Dragon Hill Lodge experienced a significant increase in local national

labor costs. Although Shades of Green's performance improved significantly in FY 95, results were adversely affected by the annual increase in building and land rent. The impact of rent will be offset by the purchase of the building and prepayment of land rent.

Bowling

Bowling continues to be a major source of NAF revenue at Army installations and one of the most popular recreational programs available to soldiers and their families. In FY 95, bowling produced $45.7M in revenue resulting in $2.8M in NIBD. This is a marked improvement over FY 94, as shown by a $2.7M increase in NIBD and reversal of a three-year declining revenue trend.

The MWR Strategic Action Plan includes three bowling goals:

Increased open bow I ing, development of a bow ling center managers certification program, and automated scoring for all centers with 13 or more lanes. To achieve these goals the following actions were taken:

• Centers concentrated their efforts on marketing to the recreational bowler. Many centers find that customers prefer open bowling by two-to-one.

• CFSC polled centers to determine the need for automatic scoring systems. Only one center, 13 lanes or more, did not have an automatic system. That center will get a system from a BRAC installation during FY 96.

• CFSC is working with industry and the Air Force to develop a bowling manager certification program. This program, for delivery in FY 96, will require a combination of education and experience.

Program Statlls Reports

NAF Operations (in $M)

~- 100/

:FY!I41 .FY 95J

84.7

90

BO

70 60 50

40

30

20'

10'

o

Revenue

NIBD

Figure 5-X

NAF Operations (in $M)

I~FY 9-6: .FY95

50
45
40
35
30
25
20
15'
'0'
5'.
0
R ..... nue 2.8

~

NIBD

Figure 5-9

Financial Information Army Average Data

.EY_M ~

42.4% 41.7"10

53.0% 53.7"10

11.8"10 11.8%

Cost of Goods Sold Labor

Other Oper Exp

Figure 5-10

1995 MWRAnnual Report -- 35 --

Section 5

Army Recreation Machines

The Army Recreation Machine Program continues to be the second largest contributor to MWR, providing over $750M to MWR since its inception. Despite drawdowns and community closures in Europe, net income-including distribution to NAFls in which facilities ARMP operates---once again exceeded $1 OOM in FY 95. The success of ARMP is based on continually upgrading equipment and game programs to offer the newest and most entertaining games to the customer. ARMP is applying that same formula for success in the expansion of amusement machine (video game) operations in CONUS and overseas. This project which began during FY 95 has already generated revenue totaling $1. 9M.

Better Opportunities for Single Soldiers

- 36 -- 1995 MWR Annual Report

The BOSS program continues to benefit from the enthusiasm and interest of the soldiers it serves. With the opening of seven new installation BOSS programs, single soldier issues are represented at every Army installation where their numbers reach 50 or more. The program continues to carry forward its mission of providing a voice for single soldiers by surfacing issues through the chain of command, assisting in planning soldierdeveloped recreation opportunities, and supporting community service related projects. Significant achievements for FY 95 include:

• Conducting two Army-wide BOSS training conferences: one in Wi lliamsburg, VA and one in Nashville, TN. These conferences, targeted to program managers, BOSS representatives and senior NCOs, trained over 500 participants in financial and programming aspects of BOSS.

• Producing promotional video highlighting single soldier opportunities at Shades of Green. Fi fteen BOSS program representatives were selected to assist with the filming of this video, which was distributed to all installations.

• Participating on the DOD Quality of Life Sub-Taskforce for Single Service Member Issues.

Child Development Services

The ratio of APF to NAF support for CDS programs shifted further to APF compared to FY 94. The resulting 66 percent APF support exceeds the DOD goal of 65 percent for Category B programs.

Program Status Reports

NAF Operations (in $M)

str 58.0

I FY94 ~FY95,

Through sustained efforts at all levels Child Development Services continued to show a dramatic turnaround iii NAF operations. The NAF subsidy was reduced by 15 percent. This improvement resulted from slight increases in NAF revenue, some reductions in NAF operating costs and continued implementation ofthe CDC financial management turnaround plan.

Army-wide CDS programs executed $11 DAM in APF ($101 M executed by the field and $9AM executed at CFSC for the

field); $107.3M was programmed for direct program costs. CDS continues to build on the program cornerstones of affordability, availability, and quality with the following initiatives:

• DOD certification of 125 of 134 CDS programs.

• Accreditation of 107 of 160 (67 percent) CDCs by (he National Academy of Early Childhood - a 35 percent increase in FY 95.

In FY 95, DOD provided $15.7M APF for expansion of child care spaces. Over 60 pilot sites were established to test school-age program options.

The new programs established under School-Age Services serve as a bridge between Youth Services and CDS programs, allowing installations to meet full day, part day, recreational and sports needs for military and ci v i I ian children age s 4 weeks to 1 H years. FY 95 ini tiati ves included:

Completing and distributing thirteen training modules for personnel working with school-age children. School-age resource libraries containing hands-on operations materials were distributed to the installations.

Training more than 200 MACOM and installation personnel as Army school-age representatives and advisors. Four hundred MACOM and installation staff received training in new SAS program concepts.

Financial Information Army Average Data

FY94 FY95

Labor

96.6% 12.3%

96.5% 10.5%

Other Oper Exp

Figure 5·/3

60' 50' 401 3D! 20' 10'

·10- ,---

Revenue

·5.2 -4.5 NIBI)

, . ....-"

/995 MWR Annual Report -- 37 --

Figure 5·11

Total Operating Costs

FY 95NAF 34%

FY95APF 66%

Figure 5·12

Section 5

NAF Operations - Revenue (in $M)

Successful club managers focused on improving profits in dining room food sales, reducing food costs through use of the prime vendor program. improving products, and increasing catered events. The trend to move away from membership clubs continued. In their place, installations are offering marketdriven programs such as theme restaurants and other food,

beverage and entertainment facilities that provide quality products and services for specific market segments.

~FY94

Figure 5-14

Clubs

Through continued efforts to improve service, reduce overhead and close or consolidate unprofitable facilities, clubs showed a dramatic improvement in net income before depreciation for the second consecutive year. The NIBD for the club program was $3.7M. This is a $3.2M improvement over FY 94 results.

NAF Operations - NIBD (in $M)

The BOD requirement for MACOMs to justify unprofitable clubs at the spring FY 94 BOD meeting has proven fruitful. In FY 94, almost onehalf of club facilities were unprofitable. Today, that number is reduced

to less than one-quarter. The BOD considered the process a valuable tool and now requires an annual report on club profitability; thus continuing close management scrutiny.

1.9

/

·3

NCO

Community

otnCG'

Fi~lIre 5·15

- 38 -- 1995 MWR Annual Report

Club operations continue to improve by:

• Conducting regional catering training conferences presented by nationally renowned catering experts. Four conferences were held in FY 95.

• Using the resolicited Prime Vendor Contract.

• Conducting independent Food, Beverage and Entertainment Assessments to evaluate the entire installation food service market.

• Placing greater emphasis on food sales. costs and quality, with the goal of improving food profitability.

Financial Information Army Average Data

FY94 ~

Cost of Goods Sold Labor

Other Oper Exp

36.9% 48.0% 26.4%

36.5% 47.1% 25.7%

Fig/Ire 5-16

Food, Beverage and Entertainment Concepts

A series of themed di n i ng concepts has been developed and refined by the CFSC and MACOMs, and are being implemented world wide. The new venture funding, approved by the MWR BOD in Mar 94 as a one-time funding source, was divided among the eight locations selected by a MACOM PAT: Mannheim, Camp Casey, and Forts Hood, Myer, Benning, Stewart, Shafter, and Belvoir. Funding was provided following project validation.

Pm~rmn Status Reoorts

Primo's

Italian Restaurant

In mid-October 95, Primo 's Italian Restaurant at Fort Hood was brought under a memorandum of agreement and joined the CFSC branded concept. They were provided concept operations manuals, new menus and extensive front- and back-of-the-house training. Sports USA concepts, similar to the Sports Dome at Fort Hood, are now being designed for Forts Stewart and Bragg. USAREUR developed two other concepts:

Provisions, an Old West Steakhouse with a Rock & Roll spin, which opened in Jul 95 in the Mannheim community and will be offered to CONUS installations; and Lexington's. offering seven serving stations and an automated order-payment system, which opens in Heidelberg early in FY 96. Camp Casey in Korea and Fort

Benning are on line to open the firstReggie ~~ Beverage Company concepts.

To supplement the full-service theme restaurants, a cartlkiosk concept is being developed to provide flexibility, timely activation and construction cost reductions. Menu selections will be limited to popular, easy-to-

prepare items that meet quick-service demand. Carts and kiosks, which wi II allow us to offer ex press versions of the Primo's and the Reggie's restaurants, are planned for Fort Bragg.

Drop-in food service concepts are also being developed for other MWR snackbars. Mulligan's offers a snack bar fare and is targeted to the golfer-on-the-go, Strike Zone, the bowling center snack bar theme, will offer a variety of specialty quick-service food items.

1995 MWR Annual Report -- 39 --

Section .'5

NAF Operations (in $M)

i.s 1.(1' ns

~.5- -1.0

-1.5

-2.0

·1.4

:1~fY941 .FY 9_sl

Entertainment (Music and Theater)

While the total APF expended in support of the entertainment program remained constant between FY 94 and FY 95, total NAF revenue fell $300,000. Despite the reduction in revenue, net loss before depreciation fell from $IAM in FY 94 to 5600,000 in FY 95. The cause for the improved NLBD was a reduction in closure related costs from $945.556 in FY 94 to less than $141,995 in FY 95.

RRV8nUIIJI

HIBD

Although some traditional entertainment programs are thriving, IMWRF financial concerns have forced other installations to move to a non-facility based program that provides support

to the entire MWR program. In those cases the entertainment program expanded its operations, targeting markets such as youth services and local schools. Often, the staff serves as a consultants for all types of entertainment and coordinators for installation special events.

Figure 5-17

Total Operating Costs

FY95 NAF 44%

FY 95APF 56%

Figure 5-/?l

NAF Operations (in $M)

11.5

5.7

Revenue

HIBD

Figure 5-20

- 40 -- 1995 MWR Annual Report

Financial Information Army Average Data

FY94 ~

Labor OIherOper Exp

60.3% 55.5%

75.2% 47.5%

Recycling

Recycling generated an NIBD of55.7M from MWR operated recycling programs and transfers of a portion of the income from the Installation Recycling Account to the IMWRF. The increase from $2.9M in FY 94 was due to higher prices, more buyers for recyclable items, and expanded local sales authority.

As more installations adopt local sales, earnings should continue upward in FY 96. Market prices are expected to remain at current levels for most of FY 96. Commanders should conti nue to encourage their installations to reduce solid waste. primarily through recycling. Generating an increase in demand for recycled content materials will maintain and increase the markets for recyclable wastes.

Golf

Program Status Reports

Historically, golf has been one of the most profitable installation-level MWR programs. However, in the past two fiscal years, golf has experienced a downward trend in NIB D, earning $7.5M in FY 95, down $2.2M from FY 94.

Although factors such as construction, severe weather, and base closures affected the NIBD, the reduced income demonstrates the importance of a continuous review of prici ng strategies and expenses. During FY 95, CFSC conducted a comparison of Army golf courses with top municipal courses. This review revealed that:

• Average revenue per round was $22.70, half that of the municipal sector's $40.

NAF Operations (in $M)

/.-" .. ----.

80.0/ 64,3 66,4

70.0' 6II.0! 50,01 40.0' 30.0' 20.0- 10.0- 0.0/

Revenuil

NIBD

Figure 5-21

• Average number of rounds played on Amy golf courses, 43,000, equaled that played at the municipal courses.

• Revenue, from greens fees and other sources, is 50 percent less than our municipal counterparts.

• Total expenses are one-third less than that of a municipal course, with the greatest difference in the amount the Army spends on maintenance expenses.

• Army NIBD average per round is $3.60; municipal courses average $9.40.

Goals for FY 96 are to improve the NIBD. Benchmarks and regional standards will assist in meeting the goal to improve NIBD.

Other major emphases in FY 95 were environmental and maintenance issues. Several MACOMs evaluated their installations for compliance with state and federal environmental regulations. These evaluations have saved installations thousands of dollars in potential fines. In addition, installations were challenged to develop maintenance plans that are tied to the budget and employee standards.

Financial Information Army Average Data

FY94 ~

Cost of Goods Sold Labor

OtherOper Exp

63.4% 45.2% 19,4%

61.8% 48.8% 19.5%

Figure 5·22

1995 MWR Annual Report -_ 41 --

Section 5

Guest Houses

Despite a slight decrease in revenue in FY 95, NIBD for the guest house program was stable at the FY 94 level of$l O.2M; this was achieved by aggressive control of operating expenses.

l

During FY 95, the Army Lodging Strategic Plan and Lodging Standards were developed. These documents establish goals and standards for both the guest houses and official temporary duty housing. The goals and objectives affecting the guest house program include:

NAF Operations (in $M)

00.0

• Developing a business-based corporate approach to operating the Army Lodging Program. Included is a feasibility study of joint venture food and beverage operations, consideration of joint use lodging facilities and the establishment of Army-wide lodging standards. The standards, initially optional, promote economies to the traveler, while

focusing on quality and customer service.

NIBD

50.0'

.w.0'

30.0-

20.0

10.0

0.0

Revenua

• Developing a professional lodging management team and motivated customer service workforce. Included is development of a lodging career training ladder. customer service trai ni ng, and line-level employee training.

• Promoting financial management and accountability as managerial skills in a business environment. This objective is primarily focused on official. TOY lodging; however, one objective calls for the review of guest house rates and their impact on soldiers in a PCS status.

Guest houses are an important part of the MWR program, providing a valuable service to soldiers and needed income to the installation morale, welfare and recreation fund. The ACSIM community, MACOMs, and installations are working together to improve the program and provide quality lodging facilities to all soldiers and families.

Financial Information Army Average Dala

FY 94 Ef.9_5

Figure 5-23

Cost 01 Goods Sold Labor

Other Oper Exp

37.7% 47.9% 24.8%

37.4% 48.8% 22.9"/"

Figure 5-24

- 42 -- 1995 MWR Annual Report

Leisure Travel

Leisure Travel revenue increased $300,000 and NIBD increased $100,000. In order to look at the causes for improvement we must look at the Information, Ticketing and Registration program, the Consolidated Ticket program, and the Commercial Travel Operations that comprise the total program.

The ITR program generated adjusted NIBD of $253,684 in 20.0

FY 95, from revenues of $16.2M. This compares to NIBD 15.0

of ($17.300) in FY 94 and ($246,800) in FY 93. During 10.0

FY 95, eleven installations transferred in-house ITR func- 5.0

tions to commercial travel office contractors. At least two more locations will transfer in FY 96. Analysis of operating results after transfer showed an average 60 percent decline

from prior year ticket sales. This decline resulted from higher markups, reduced product availability and no dedicated ticket sales staff. Results prompted discussions with the contractor to limit ticket markups to a cost no greater than the highest price charged for the same product by ITR offices at the 5 nearest military installations.

Program Status Re{)ort.~

NAF Operations (in $M)

30.0

2ll.5 20.8

25.0

4.8 4.9

:~,/

0.0

RIJV8nU8

NIBD

The CTP issued tickets valued at almost $7M to 120 participating installations of all Services. These tickets totaled 296,154 ad-

mission days. Sales activity declined 13 percent from FY 94

due to the loss of 2 attractions (Cypress Gardens and Silver Total Operating Costs

Dollar City) and transition from in-house sales to CTO at

several major installations. The CTP saved IMWRFs nearly

$1 M in administrative overhead. The CTP plans to add at FY 95 APF

least seven new attractions in FY 96. 12%

Figure 5-25

eTO reported income of $5.4M in general ledger account 541 for FY 95. Only $4.6M of that income was reported under the Leisure Travel Business Codes, with the remainder under other business codes. Considering the improper reporting, CTO income increased for the first time in four years despite continuing impact from downsizing.

FY 95 NAF 88%

CTO transitioned (0 four new travel services contracts at nearly 200 Army locations in CONUS. At 150 sites Carlson Wagonlit Travel received the contract. FY 95 concession fees increased slightly, contrasting with declines noted in the previous three years. The transition to CWT was particularly notable for major increases in non-air revenues. Additionally, three new offices were established at commercial sites:

Forts Benning, Campbell and Sill. Fort Sill reports revenues increased by 60 to 80 percent since opening in their new PX mall location.

In FY 96, travel reeng i neeri ng in itiat i ves w ill affect Army commercial travel contracts. The new contracts will include all DOD locations comprised in 12 regions worldwide.

Figure 5-26

Financial Information Army Average Data

~ ~

Cost of Goods Sold Labor

Other Oper Exp

89.9% 9.2% 51.4%

91.3% 9.4% 47.5%

Figure 5·27

1995 MWR Annual Report -- 43 --

Section .5

NAF Operations (in $M)

O_Bn .• 0.0 - ~.4 ~.B' -1.2- ·1,6'

.. :FY94 .FY95

Revenue

NIBD

Libraries

Total FY 95 APF funding for libraries was $27.6M, up $1.5M from FY 94. APF expenditures covered the cost of labor for librarians and technicians, in addition to new equipment purchases and maintenance and development of library collections/ services. These collections/services offered the best and newest in reading material, educational support. audio-visuals and electronic databases.

NAF subsidies decreased by more than $100,000. NAF subsidies-six percent of total operating costs, down from seven percent in FY 94---funded local national technicians overseas and some stateside part-time evening employees, many of whom are soldiers.

Figure 5-211

CFSC libraries continued to meet the information needs of their respective communities. Soldiers and spouses look advantage of these facilities and responded to official Army surveys by consistently ranking libraries in the top three MWR programs in terms of use and importance.

Total Operating Costs

FY95 NAF

.>: ~_6%

FY95 APF 94%

Central APF purchases included $899,000 for library reference materials such as encyclopedias, atlases, and CD-ROM reference publications. Additional! y, $847,000 was expended to purchase 10,086 book kits for isolated troops including 300 book kits supporting troops in Haiti, Kuwait, and Macedonia.

The CFSC Library Division developed a vision statement in support of FORCE XXI and documented the Army libraries' mission, philosophy of service and direction for the future. In executing a portion of the vision, the Library Program is currently involved in the central acquisition ofcomputer workstations featuring multi-disk changers and CD-ROM materials. This purchase, with delivery expected in FY 96, will enable libraries to

prov ide increased access to a wider range of u p- to-date reference materials such as world news indices and full text/image reference periodicals.

Figure 5-29

- 44 -- J 995 MWR Annual Report

Sports

APF support increased $13.7M to $69.7M in FY 95. leaving the funding mix for the program at 82 percent APF and 18 percent NAF- eighteen percentage points below the Category A goal of 100 percent. The increase in APF contributed to a $1.6M reduction in NAF labor and other operating costs. This reduction in NAF expenses, when offset by a $300,000 decrease in FY 95 revenue, produced a $1.3M decrease in NLBD from $lOM in FY 94 to $8.7M in FY 95.

Although the APF increase allowed managers to replace some NAF personnel and purchase much needed equipment, many installations have designated military units to operate facilities, or provided borrowed military manpower to staff facilities under Community Recreation control. Volunteers often replace professional officials for many sporting events.

Program Status Reports

NAF Operations (in $M)

~/--6,9 6.6

10-0/ --

8,01 6_0' •. 0'

2_0-

0.0:

-2_0

4_0

-6.0 L'

~,O

:~~:~,/

Raven"" NIBD

Despite funding constraints, the program continues to provide soldiers and their families the opportunity to learn and play the sport of their choice. A wide range of services is provided. including intramural and individual sports, fitness training, health promotion, and aerobics. Sports is consistently identified in the top five in importance and use by soldiers and their families on Army surveys.

The Army provided approximately 675 soldier-athletes the opportunity to advance to competition in 15 All Army Sports. Army won 11 out of the 15 Armed Forces Championships, capturing gold in boxing. wrestling, men's and women's basketball, women's bowling, men's volleyball, men's and women's track and fie ld, men's and women's softball, and men's soccer.

Seventy-five soldier-athletes advanced to national level competitions in various sports. Army athletes comprised 47 percent of the entire U, S, Armed Forces Delegation at the I st Military World Games in Rome, Italy, Out of the 94 Army athletes (I ncluding weAP athletes)who competed in Rome, 14 won medals.

Financial Information Army Average Data

FY94 FY95

160.4% 155.5%

61.6% 51.4%

Labor

Other Oper Exp

Figure 5-32

Figure 5-30

Total Operating Costs

FY95 NAF 18%

-------~--

$67,9M

FY95APF 82%

11.)95 MWR Annual Report -- 45 --

Section 5

Outdoor Recreation

Despite a loss of APF support, the overall FY 95 NAF financial condition of Outdoor Recreation programs showed su bstantial improvement.

APF support fell from $21.8M in FY 94 to $15.1 M in FY 95. Duri ng the same time N AF revenue increased $1 .2M to $36.5 M for FY 95. Total NAF operating expenses were approximately $500,000 less in FY 95. The increase in revenue coupled with the decrease in operating expenses and a significant decrease in closure related expenses yielded a 53M increase in NIBD to S4.5M in FY 95. Managers at all operational levels should be commended for that financial turnaround.

NAF Operations (in $M)

/" 40.0'/

35.0' 30.0' 25.0

:W.O· I'

I'

15.0- 1

1~::~ .1,

o.o~-

Revenue

The popu lari ty of the Outdoor Recreation programs continues to grow on military installations. The strong correlation between Outdoor Recreation and the military mission based on elements of adventure, wellness, and fitness helps foster that relationship. Likewise, the increasing popularity of outdoor pro-

grams nationwide supports the need for the Outdoor Recreation programs. Installation surveys and market assessments validate the popularity and high interest level for outdoor recreation.

NIBD

Customers' needs and interests are the driving force behind the development of new activities and facilities. Installation outdoor recreation directors continue to provide high-quality equipment, a wide range of introductory classes, and specialized program-

Total Operati ng Costs ming to reach all segments of the community. Classes that have current customer appeal include sailing, rock climbing, rappelling, trap and skeet, mountain biking, scuba. and sea kayaking.

Figure 5-33

FY 95 NAF 58%

FY 95 APF

Major construction am] renovation projects executed during FY 95 will expand program offerings and improve the installation's ability to meet customer needs. Examples include the outdoor recreation center and

complete renovation of Belton Lake at Fort Hood. the outdoor recreation center at Fort Riley, the marina upgrade and expansion at Fort Monroe. and the park upgrade at Fort Bliss. I n the future, outdoor recreation participants can ex pect to see new Ira vel camps at Forts Sam Houston and Huachuca, major outdoor recreation area upgrades at Fort Sill, and an upgrade of American Lake and the outdoor recreation complex at Fort Lewis.

32%

Figure 5-34

- 46 -- 1995 MWR Annual Report

Financial Information Army Average Data

EYM ~

Cost of Goods Sold Labor

Other Oper Exp

54.9% 41.1% 28.9%

54.8% 39.6% 29.4%

Figure 5-35

-----------------_._----

World Class Athlete Program

Soldier athletes enrolled in WCAP continued their quest to the 1996 Olympics. As a result of support from senior Army leadership, a total of 90 soldiers pursued rigorous training schedules at their designated training sites, while maintaining their military skills and schools. Seventy-nine WCAP athletes qualified for the summer Olympic trials. Ten additional soldiers entered the program and began training for the 1998 winter Olympics in Nagano, Japan.

World Class athletes continue to place well in major sporting events and create a positive image for the Army wherever they compete. Some of their accomplishments include:

• Captured 97 medals in major competitions.

Program Status Reports

Gold Silver Bronze
Event Medal~ Megals Medals
Armed Forces Championships 44 10 5
Pan American Games 1 2
US National Championships 1 5 12
US Olympic Festival 5 5 3
World Military Games 1 2 1
Figure 5-36 • Sergeant I st Class Jesse Ravelo was named as the Amateur Boxing Coach of the Year by USA Boxing and was selected III as the assistant coach for the 1996 U.S. Olympic Boxing Team. Sgt 1st Class Ravelo led the Army team to its third consecutive Armed Forces Championship and a third place finish at the USA Boxing National Tournament.

• Specialist Dionicio Napier was named Army and Armed Forces Male Athlete of the Year, and was the Armed Forces gold medalist in the 100m dash. SPC Napier's other successes inc I ude a si I ver medal in the 4 x 100m re lay at the Pan American Games and gold and silver medals in the 200m, and 400m dashes from the First World Military Games held in Rome, Italy.

• Lieutenant Rhett Nichol was selected as assistant coach for the U.S. Olympic Team Handball Team. He has been working as an assistant coach for the U.S. National Team since his assignment to the World Class Athlete Program in June 1995.

• Staff Sergeant Tonia Stubbs, a gold medalist at the 1995 Pan American Games in Mar 95, was selected as the Army Female Athlete of the Year for 1995. SSG Stubbs has been a defensi ve spec ialist on the U.S. National Handball Team since Aug 94.

/995 MWR Annual Report -- 47 --

Section 5

NAF Operations (in $M)

8.0 6.0 4.0 2.0 0.0 -2.01 "".oj ~-.

~.o / _:;..u

NIBD

Recreation Centers (Community Activity Centers)

Figure 5-37

Recreation Centers experienced a $3.2M increase in APF support. This increase in APF resulted in a $1.4M decrease in NAF expenses over the FY 94 level. NAF revenue also increased $1.4M from the FY 94 level to $ 6.2M in FY 95. As a result of the shift in expenses to APF and the increase in revenue, NLBD decreased from $4.7M in FY 94 to $ 1.9M in FY 95. Although authorized 100 percent APF support, this Category A program's funding mix is 63 percent APF and 37 percent NAF.

The requirement for managers to improve their financial performance plus the changing needs of the military community mandated a review of the way we do business. Customer needs must provide the impetus for new programs. Computer centers, which are fast becoming standard in recreation centers, were established to meet customer interests. Successful recreation center operations are

diversified and innovative, providing programs throughout the community to serve both soldiers and the community.

Total Operating Costs

FY95 NAF 37%

FY95APF 63%

Figure 5-38

- 48 -- 1995 MWR Annual Report

The trend toward com munity acti vity centers continues. Several construction projects have been submitted for facilities that house a variety ofMWR activities. Activities in the CACs vary but may include food and beverage, arts and crafts, outdoor recreation, reading rooms and the directed/self-directed social activities normally conducted in Recreation Centers. CACs serve as a community hub and remain essential during mobilization and deployment. They serve as in and out processing centers for soldiers deploying, activated Reserve and National Guard units, and meeting places for family groups.

Financial Information Army Average Data

.EY....9:I ~

Cost of Goods Sold Labor

Other Dper Exp

50.8% 92.2"~ 50.8%

48.0% 54.0% 66.5%

Figure 5-39

Youth Services

The Youth Services program showed substantial growth during FY 95 as it continues efforts to reposition itself from primarily a sports program to one providing affordable, safe activities for youth during non-school hours. Total program costs grew from $37.1 M in FY 94 to $53.4M in FY 95; total APF support increased from $21.2M to '$37.2M. Direct APF support for FY 95 was funded at $20.9M and executed at $27M (a 132 percent execution rate) as commanders reprogrammed dollars for YS use. The YS program is now 70 percent funded with APF as opposed to 57 percent in FY 94.

Program Status Reports

NAF Operations (in $M)

!nFY 94 .FY95

. J

-.:.:.:_~///

Revenue NIBD

Figure 5-40

The NAF subsidy for YS fell from $4.8M in FY 94 to $4.7M in FY 95. This reduction is attributable to a $400,000 increase in revenue and decreases in NAF labor costs and other operating expenses as a percent of total revenue. The subsidy would have been reduced an

additional $1 M had it not been for one-time costs associated

with closures in USAREUR.

Installation YS staff received training in sports, recreation and youth development during FY 95. Multi-disciplinary training for various installation family advocacy program, ACS, military police, and youth services personnel was conducted to prepare them for dealing with at-risk youth. In FY 96, staff can look forward to a two-week course in adolescent growth and development. Staff will also receive innovative program materials and technical assistance to help them build on fundamental programs and transition to new concepts. Plans include computer labs, homework centers, youth employment and sponsorshi p initiati ves.

Financial Information Anny Average Data

.EY.9:4 EY.95.

Cost of Goods Sold Labor

Other Oper Exp

55.3% 96.3% 41.3%

54.9% 87,5% 38.2%

Figure 5-43

Total Operating Costs

FY95 NAF 30%

FY 95 APF 10%

Figure 5-41

The network of installation - wide services shown in the figure to the right will remain the core that allows youth to cross program bound-

aries and to develop the skills they need to make positive life

choices. This figure embodies the concept, "It takes a whole communi ty to raise a child!"

Inte rve ntio n & Su pport Serl Ices

Sports & Fitness

Leisure & Recreation

Leisure Skills &

Leadership

Figure 5-42

1995 MWR Annual Report -- 49 --

Section 6

"Our mission is to go and fight and will America's wars ill the shortest time possible and bring soldiers home. And when they get home, they ought to have a great quality of life."

- Maj. Gen. Frank Miller Assistant Chief of Staf] [or Installation Management

Audit Results

Independent commercial auditors audited the balance sheets. statements of operations. changes in fund balances. and cash flows for the year ended Sep 30 94. An unqualified audit opinion was rendered for the Army Morale Welfare and Recreation Fund, NAF Employee Retirement Plan, Central Insurance Fund, Banking and Investment Fund, Medical! Life Fund, Hospitality Management Fund, NAP 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 95 are in progress. Significant results of the functional audits conducted during FY 95 were briefed to the MWR Board of Di rectors Audit Committee:

• Overhead and Layering. Results showed that Army took appropriate actions to reduce layers of IMWRF management; financial management and reporting procedures needed improvement; MWR common support services maintained excess personnel; and some key management controls were not effective.

• Planning for Closing or Downsizing MWR Activities (BRA C).

Results showed that policies and procedures were generally adequate; financial statements were accurate and timely; installation implementation plans were approved; contracts were terminated promptly; fixed assets were accounted for and safeguarded; and NAF employees had been apprised of the i r righ ts, The audit also identified N AF buildings that were turned over to other government activities at no cost; the Office of the Secretary of Defense supports Army proposed legislation to obtain fair market value for NAF buildings.

• MWR Financial Operations. U.S. Army Audit Agency conducted audits of financial operations at selected installations, revealing substantial losses due to low customer demand, inadequate pricing strategies, and high operating costs. Management labor costs were not charged to the activity where the work was accomplished. Additionally, USAAA cited inadequacies in property accountability, training and ineffective management controls. In FY 96, more audits of this nature are planned.

- 50 -- /995 MWR Annual Report

Time spent by USAAA and Army Internal Review offices auditing NAF programs is shown at Figure 6-1. NAF audittime dedicated by USAAA increased between FY 94 and FY 9S, from 12 to 14 work years. Installation Internal Review offices' audit time declined from S3 to 46 work years in FY 94 and FY 95, respectively.

AudiT Findings

j-USAAA I

I ~ ~nternal Review . o Total

NAF Audit Work Years

FY 94 FY 95

Figure 6-1

/995 MWR Annual Report -- 5/ --

Section .5

NAF Operations (in $M)

O_Bn .• 0.0 - ~.4 ~.B' -1.2- ·1,6'

.. :FY94 .FY95

Revenue

NIBD

Libraries

Total FY 95 APF funding for libraries was $27.6M, up $1.5M from FY 94. APF expenditures covered the cost of labor for librarians and technicians, in addition to new equipment purchases and maintenance and development of library collections/ services. These collections/services offered the best and newest in reading material, educational support. audio-visuals and electronic databases.

NAF subsidies decreased by more than $100,000. NAF subsidies-six percent of total operating costs, down from seven percent in FY 94---funded local national technicians overseas and some stateside part-time evening employees, many of whom are soldiers.

Figure 5-211

CFSC libraries continued to meet the information needs of their respective communities. Soldiers and spouses look advantage of these facilities and responded to official Army surveys by consistently ranking libraries in the top three MWR programs in terms of use and importance.

Total Operating Costs

FY95 NAF

.>: ~_6%

FY95 APF 94%

Central APF purchases included $899,000 for library reference materials such as encyclopedias, atlases, and CD-ROM reference publications. Additional! y, $847,000 was expended to purchase 10,086 book kits for isolated troops including 300 book kits supporting troops in Haiti, Kuwait, and Macedonia.

The CFSC Library Division developed a vision statement in support of FORCE XXI and documented the Army libraries' mission, philosophy of service and direction for the future. In executing a portion of the vision, the Library Program is currently involved in the central acquisition ofcomputer workstations featuring multi-disk changers and CD-ROM materials. This purchase, with delivery expected in FY 96, will enable libraries to

prov ide increased access to a wider range of u p- to-date reference materials such as world news indices and full text/image reference periodicals.

Figure 5-29

- 44 -- J 995 MWR Annual Report