N9G “TOOLBOX”
What is the N9G Tool Box?
• The N9G tool box provides the field with helpful information
on a wide range of subjects.
• The tool box provides information to CNIC Regions &
Installations; keeping them “audit-ready” at all times.
• We have provided each of you with a tool box, just make sure
as we provide you a tool monthly, you keep it in your tool box!
Topics that will be filling your Tool Box
Monthly
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Cost of Goods Sold developed by Inez Holt
November
Cash & Cash Handling developed by Dierk Jaeger
December
Managers Financial Review developed by Connie Milton
January
NAF Personnel
February
developed by Sandy New
Contracts developed by Dierk Jaeger
April
Reconciliation
May
Assets Inventory
June
Contracts
Catering, Marina, & Vehicle Storage
In keeping with the overall role of
MWR to provide free and
discounted recreation to military
personnel and their families, it is
the responsibility of MWR
management to ensure positive
internal controls are maintained.
Contracts
Catering, Marina, & Vehicle Storage
The facilities provided or available vary from Installation to
Installation.
Three of the areas that provide discounted services to all
authorized patrons are:
• Catering and Conference Centers for command functions, weddings,
festivities etc.
• Marinas for boat rentals, wet slip berthing, and off season storage facilities.
• Auto vehicle storage for working on your vehicle long term or keeping your
vehicle in storage while on deployment or other reasons.
All of these areas present their own unique differences; however, they all
require contracts for
Positive Internal Controls.
Contracts
Internal Controls
• Internal control is a system of policies and procedures
that operate within accounting.
• These internal controls protect MWR from fraud,
waste, and abuse
• Ensures that the financial records are timely and
accurate,
Above all……………….
Ensures that all legal and regulatory requirements are
being met.
Contracts
Internal Controls
Five key elements of internal controls play a vital role, without all of
these elements present; the internal control system simply will not work.
This is the foundation for all other standards.
 Environmental control refers to the attitude and behavior of
management and employees.
 It is the responsibility of management to enact the policies and
procedures that will drive employee behavior and attitude.
 Management sets the example; if upper managers are lax about
adhering to policy, then employees will tend to follow suit.
An important piece of environmental control is independent oversight
whether from a board of directors or an audit committee.
Contracts
Internal Controls
 Internal control should provide for an assessment of the risks MWR
faces from both external and internal source
 This is where the “What would happen if” needs to be asked
 Risk assessment generally falls under the purview of management,
but can be integrated with day to day analysis from employees
Contracts
Internal Controls
 Control procedures are the policies and procedures that are put
in place for carrying out the environmental controls, the risk
assessment, the monitoring, and the communication necessary
to keep the internal control system functioning.
 When properly enacted, control procedures can reduce the
chance for procedural errors and decrease the threat of theft or
fraud.
 By implementing policies that segregate duties and require
independent verification, management can create a series of
checks and balances that will keep operations running smoothly
and efficiently.
Contracts
Internal Controls
 Internal control monitoring should assess the quality of performance
over time and ensures that the findings of audits and other reviews
are promptly resolved.
 If MWR doesn't properly monitor its internal control system, it has no
way of knowing whether or not the system is working
 With proper monitoring, problematic control procedures can be
readily identified and retooled, replaced, or eliminated to keep the
internal control system (and operations as a whole) running smoothly.
Contracts
Internal Controls
 No internal control system can function without the communication
of vital information
 Communication should flow downward within each department,
laterally between departments, and upward to management
 The checks and balances put in place by the internal control
procedures ensure that each department will provide information
that is timely, accurate, and complete.
Contracts
Contracts are a primary tool used to protect MWR, NGIS,
CMWR, its employees, and authorized patrons.
Benjamin Franklin coined the proverb:
 This holds especially true when it comes to our business within MWR & NGIS for
contracts.
 Within MWR operations, written contracts are the ounce of prevention that help
reduce costly disputes.
 Written contracts are pre-serialized formal documents generated from an
automated software program or manual documents.
Contracts
A carefully drafted and written contract will always spell out the
entire arrangement between you and your authorized patron.
For convenience, MWR has, for the most part, prepared standard
contracts to use with all patrons especially for catering events
through the use of CATEREASE. For other required contracts,
marina, vehicle storage etc. each installation could or should tailor
these standard contracts to specific requirements and installations
as needed for the exact services to be performed, the products to
be furnished, time of performance, and the cost.
Contracts
Basic Reasoning for contracts:
 The parties must be competent.
 The parties must be authorized patrons so as to be binding on both parties.
 The contract must provide for an obligation-an exchange of something that is
of value. The action must be offered and accepted.
 The contract action(s) must be lawful.
 All terms must be included in the contract, including the date of effect.
Contracts Bind the Parties
 MWR requires their agreements to be in writing to benefit from enforcement
and collection of outstanding receivables if necessary.
Contracts
Know Who You Are Dealing With
 Contracts are binding between MWR and individuals.
 It is important that management and/or employees of MWR facilities sign
contracts to be binding (part of the competency test).
 Parties doing business for another must identify the person signing the
contract.
Contracts
“Catering”
IAW CNICINST 7000.3 and DOD 7000.14R, volume 13:
 Catering contract controls shall exist to ensure that all transactions, including private
party/event contracts, have been properly processed.
 It is important to ensure that any new process (i.e., manual or automated) includes a
system of internal controls that properly accounts for all contracts.
 Only a limited number of catering software packages are approved for use in MWR
activities; CATEREASE is widely used throughout MWR. CNIC HQ (N946) should be
contacted for further information and directions.
Catering Contracts
Navy MWR food and beverage activity managers are responsible for
maintaining complete schedules for all programmed private and catered
functions.
 A private party log (computerized or manual) will reference all functions
by a pre-numbered private party contract; numbering will ultimately be
controlled by:
 The accounting office if manual contracts are used
 Electronically generated if using catering software
 The log will be made available to the accounting office, fiscal oversight,
and internal review staff for verification with receipts due and received
as a result of private/catered functions.
Catering Contracts
All scheduled private/catered parties and group functions require the proper
completion and execution of a pre-numbered private party contract.
 The contract will be signed and dated by the MWR food and beverage activity
manager or designated representative and the party sponsor, who must be an
authorized patron of the MWR food and beverage activity.
 The party or function should not be made definite without a signature; the
signature can be physical, electronic, or email if the patron specifies that he/she is
agreeing to all terms of the contract.
 Management will advise the patron signing the contract that he or she will be held
responsible for meeting the total costs agreed upon and will ensure that the status
of personnel attending is per the signed contract.
Catering Contracts
However the following rules should be understood for deposits:
 Deposit requirements must be stated either on the contract and or within
the locally generated Catering SOP
 Deposits must be specified as refundable or non-refundable; also state who
must pay and who is waived
o If nonrefundable establish a time frame i.e. 50% if cancelled within 60
days or more of event date, 25% if cancelled 30 to 60 days; no refund if
cancelled less than 30 days prior to event date etc.
o Specify who is authorized a refund
o Specify when deposit must be made and conditions of tentative and
definite booking dates
 If command functions are not required to pay deposits – specify such – ensure it is
understood what a command function is, i.e. training, GMT, CO’s Call. Retirements
and change of command are not command functions if ANY catering of food and or
beverages or MWR support is required.
Catering Contracts
 Local policies should be established regarding event cancellation and
refund of deposits. When a cancellation is made and accepted by the
MWR food and beverage activity, and no expenses are incurred by the
activity as a result of the cancellation, management may exempt the
sponsor from all charges. Otherwise, all expenses incurred, as a result
of preparation for the function will be charged to the sponsor.
 The MWR activity must account for contracts prior to the function to
ensure adequate safeguard and separation of the administrative and
financial functions.
 Catering manager should not be the sole person entering
contracts, administrating contracts (making changes),
accepting cash, making deposits etc.
Catering Contracts
 Once management activates a contract (i.e., once a contract is assigned
to a patron), one copy will be immediately forwarded to the business
office along with a copy of the DAR, and or payment receipt.
 If any changes are made to the contract that modifies the total dollar
value, authorization must be received from the patron via signed
updated contract or an email from the patron specifying and authorizing
the modifications. This updated contract along with any and all
supporting documentation will be forwarded to the accounting office
for tracking.
Catering Contracts
 After the function has taken place, management will forward a second
copy of the contract with a Daily Activity Report (DAR) or for SAP/AIMS
locations, the automated Daily Activity Report may be used. This policy
pertains to SAP/AIMS locations that are equipped with a Point of Sale
(POS) System that automatically interfaces the daily accounting
information into the SAP/AIMS Financial System to the MWR support
services business office.
MWR Support Services Business Office will monitor numerically sequenced
contracts. Any discrepancy will be brought to the attention of the MWR Food
and Beverage Manager for resolution. Further investigation may be required
by the MWR Base Program Director.
Marina Contracts
MWR Marina programs are available at certain locations
and provide services such as slips, moorings, and storage
facilities. Marina patrons are required to meet applicable
local, State, National/Federal requirements, safety
standards, licensing, and/or certification, insurance and
registration.
Marina Contracts
 Marina contracts are to be pre-serialized by someone other than the marina
employees or marina management; preferable accounting or generated by the
marketing department in numerical sequence
 Management monitors the daily transaction logs, questioning all reversals,
credits, voids, and refunds.
 Someone other than the cashier walks the perimeter of the marina validating
the wet slip occupancy against the daily occupancy report.
 This will ensure that all patrons have paid in advance of their stay and
collect from anyone that may have come in after hours.
 This will also make it very difficult for someone to collect cash and dispose
of the contract. (pocketing the $)
Marina Contracts
Specific requirements for Marina Boat Mooring and Storage
Contracts include but are not limited to the following:
 Marine insurance including hull and machinery and
$100K/$300K minimum liability coverage throughout this
lease
 Boat and trailer registration as required by the state of
mooring or storage
 Coast Guard certification of worthiness as required by state
of mooring
Marina Contracts
Contracts and Agreements
 The provisions of the contracts and agreements provided by CNIC HQ
(N922E) will be the minimum used by all commands responsible for
recreational boating and sailing Marinas financially supported in whole or
part with NAF.
 The purpose of these agreements is to record and acknowledge the rights
and liabilities of all patrons and guests using MWR or other recreational
boats and sailing facilities, and to protect the government’s interest in
any incident involving a possible claim.
It must be understood that although the patron signs the agreement stating
that he/she is responsible to maintain updated information on file
(insurance, registration) it is also the responsibility of management to track
the requirements along with payments needed or made.
Contracts
Vehicle Storage
As with marina contracts, auto or
vehicle storage contracts require the
same level of control and tracking to
prevent the possibility of waste,
fraud and abuse.
Contracts
Vehicle Storage
Storage contracts are to be pre-serialized by someone other than the Auto Hobby
Shop or designated storage management, employees; preferably accounting or a
contract generated by the marketing department in numerical sequence if
available.
 Management monitors the daily transaction logs, questioning all reversals,
credits, voids, and refunds.
 At the end of each month management should run the Household Trial Balance
report for their specific location. This will show who is outstanding (AR) as well
as show possible conflicts in the billing process
 Someone other than the cashier walks the storage facility on a weekly basis
validating the occupancy against the locally maintained or in-house daily report.
This will ensure that all patrons have paid in advance of their stay and collect
from anyone that may have come in with a friend or stored vehicles/trailers not
actually listed. This will also make it very difficult for someone to collect cash
and dispose of the contract. (pocketing the $)
Contracts
Vehicle Storage
Vehicle insurance and registration used to be the responsibility of base security however,
with the removal of base decal requirements that responsibility falls on the member.
 It is MWR’s responsibility to ensure all drivable vehicles placed or stored within the
storage lots have a valid vehicle registration and required insurance coverage.
 The following are requirements for base driving privileges IAW OPNAV 11200.5D,
Military Police Motor Vehicle Traffic Supervision, Chapter 2,
Para 2-1:
o Driving a Government vehicle or POV on military installations is a privilege
granted by the installation commander.
o Persons who accept the privilege must be a lawfully licensed operators and not
under suspension or revocation
Contracts
Vehicle Storage
o Comply with laws and regulations governing motor vehicle operations on any
military installation
o Comply with installation requirements - possess, while operating a motor
vehicle, and produce on request by law enforcement personnel, the following;
 Proof of vehicle ownership or State registration if required by the issuing
State or host nation
 Valid State, host nation, overseas command, or international driver's license
and/or OF 346 (U.S. Government Motor Vehicle Operator's Identification
Card), as applicable to the class vehicle to be operated, supported by a DD
Form 2 ACT (Armed Forces of the United States Geneva Convention),
Common Access Card (CAC), or other appropriate identification for nonDepartment of Defense (DOD) civilians
Contracts
Vehicle Storage
 Valid record of motor vehicle safety inspection, as required by the State or
host nation and valid proof of insurance if required by the State or locality
for all vehicles in drivable condition
 Proof of valid insurance - Proof of insurance consists of an insurance card,
or other documents issued by the insurance company, that has a policy
effective date and an expiration date.
Contracts
 The design and implementation of control activities should be a coordinated
effort spearheaded by management along with designated employees.
 Collectively, this cross section of the organization should be able to address
all of the identified risks, design and implement the control activities, and
ensure that the techniques used are adequate to prevent fraud from
occurring in accordance with MWR’s risk tolerance.
 The ongoing success of any fraud prevention program depends on its continuous
communication and reinforcement.
 Stressing the existence of a fraud prevention program through a wide variety
of media — posters on bulletin boards, flyers included with invoices and
vendor payments, and articles in internal and external communications —
gets the message out to both internal and external communities that the
organization is committed to preventing and deterring fraud.