1. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters Air Force Services Agency NAF Budget Process MS TERRY CICATELLO AFSVA/SVFAA

2. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Objectives Describe the steps involved in budget preparation NAF, APF, and NAF AO responsibilities for in house and activity budget submission –Students: List the steps involved in budget preparation, NAF and APF Explain the responsibilities of the NAF AO for in house and activity budget submission

3. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Overview Define Mission Establish goals Establish requirements to meet goals Develop NAF Requirements Budget (NRB) Develop Income and Expense Budget Develop Cash Flow Budget NAF Council Perform Financial Analysis

4. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Budget Process AF Rolling 4 Quarter Budget Process –Accomplished through the AF Standard Budget Program –Updated quarterly –Do the quarter just finished for next FY –Cannot touch quarter you are in –Revise, if necessary, the other two quarters Includes NRB, Income and Expense, Cash Flow and APF budgets

5. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Training The RM ensures management receives budget training, if needed.

6. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Financial Goals Starts with the Mission –From Services Commander or Director Activity managers develop financial objectives and goals with their applicable flight chiefs and RM based on requirements of the SV commander or director or higher headquarters –Don’t forget to get your staff involved

7. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Financial Goals (cont.) Factors to consider –Amount of APF support authorized –Desire for new or revised programs –Desired changes in inventory levels –Desired construction and facility alterations –Need for new equipment or repair of existing equipment –Higher headquarters financial goals where established –Mission changes that will affect base population operations

8. I n t e g r i t y - S e r v i c e - E x c e l l e n c e NAF Requirements Budget What is the NRB? –Long-range plan for spending large amounts of money –Shows estimated cash needed to buy capital assets, bulk purchases of expendable equipment and high value supply items –Sets base cost for other budgets –Helps control costs of items –Limits expenditures to those approved

9. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Who prepares? –Activity manager How long? –Prepared for a minimum 5 years NAF Requirements Budget (Cont.)

10. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Why? –Contains all your requirements With funding source, cost center that will use, estimated month and year of purchase, and estimated cost Prioritized and Justified For your activity Then within your Flight Then within the Fund NAF Requirements Budget (Cont.)

11. I n t e g r i t y - S e r v i c e - E x c e l l e n c e NAF Requirements Budget (Cont.) Criteria? –Fixed Asset (FA) Individual cost $1,000 or more Doesn’t lose identity during use Expected use 2 years or more –Repair to a FA which is $1,000 or more and extends assets useful life 2 years or more

12. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Criteria? (cont.) –Facilities and Improvements Project cost of $1,000 or more –Includes all costs to place the facility in use Doesn’t lose identity during use Expected use is 2 years or more Building and structure include erection, installation, and assembly of new facility –Or additions and renovations of projects NAF Requirements Budget (Cont.)

13. I n t e g r i t y - S e r v i c e - E x c e l l e n c e NAF Requirements Budget (Cont.) Criteria? (cont.) –Bulk Purchases of Expendable Equipment Individual cost more than $100, less than $1,000 Expected use is two years or more Purchase must total $2,000 or more Does not include bulk purchases of items that qualify as fixed assets or bulk purchases of supplies

14. I n t e g r i t y - S e r v i c e - E x c e l l e n c e NAF Requirements Budget (Cont.) Criteria? (cont.) –Purchases of High-Value Supplies Individual cost may be low, but total purchase is a high dollar amount Specific dollar amounts are not set by regulation Minimum prorata amount is $200 Not to exceed three years Bulk purchases of glassware may be one line item if the cost is considered high and each item last at least 2 years

15. I n t e g r i t y - S e r v i c e - E x c e l l e n c e NAF Requirements Budget (Cont.) Funding Source –Must be specific - NAF vs APF Cannot designate a requirement for both sides AFI 34-201, para 4.1.6: “When APFs are authorized, use NAFs to purchase equipment for MWR activities only in an emergency. The installation commander certifies and identifies the emergency in writing and approves waivers to use NAFs instead of APFs for the purchase.”

16. I n t e g r i t y - S e r v i c e - E x c e l l e n c e NAF Requirements Budget (Cont.) Unprogrammed NAF Expenditures –Installation commander approves unless delegated to Services Commander/Director Affects cash flow budget and other approved NRB items

17. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Income and Expense Budget Who Prepares? –Activity managers prepare realistic operating budget for each CCC under their management using the accrual basis of preparation When? –Quarterly in accordance with the Rolling 4 quarters Budget Program Why? –Blueprint of the operation –Provides a guideline to conduct business

18. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Income and Expense Budget (Cont.) How? –Sales Factors influencing sales –Number of customers –Number of units sold –Selling price –Customer desires

19. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Income and Expense Budget (Cont.) How? (cont.) –Cost of Sales Computation –Beginning inventory –Plus purchases and transportation –Minus Discounts Earned and Prime Vendor Rebates –Minus ending inventory –Results in cost of sales –Cost of Sales Percentage Divide cost of sales by total sales

20. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Income and Expense Budget (Cont) How? (cont.) –Activity Revenue Factors influencing –Base draw-down –Training missions support –Evaluate historical data

21. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Income and Expense Budget (Cont) How? (cont.) –Expenses Fixed costs Variable costs Mixed costs –Review for possible major changes Consider seasonal fluctuations Payroll increases/decreases Departures from normal operation

22. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Income and Expense Budget (Cont) Justify –Compare bottom line of I&E to goals Should be equal or higher –Review variances –Put words to changes for the approval process and for future reference If you are starting a new program, state it If you are deleting a program, state it –Both will impact your personnel expense, supplies required, cost of sales, activity revenue, etc.

23. I n t e g r i t y - S e r v i c e - E x c e l l e n c e CASH FLOW BUDGET Prepared by RM –Automatic with Budget Program –Includes NRB information –Depicts cash inflow and outflow –Early indicator for availability of cash for capital requirements

24. I n t e g r i t y - S e r v i c e - E x c e l l e n c e BUDGET PROCESS Activity Manager prepares NRB and Income & Expense Budget –Sends to respective Flight Chief Flight Chief consolidates and prioritizes by flight –Sends to RM RM consolidates by Fund –Prepares Cash Flow Budget Sits with Services Commander/Director, NAFFA, Flight Chief to prioritize for Squadron/Division –Budget Working Committee, if established Take to NAF Council for approval –Installation commander approves all budgets

25. I n t e g r i t y - S e r v i c e - E x c e l l e n c e FINANCIAL ANALYSIS Nonappropriated Fund Financial Analyst (NAFFA) has responsibility –Is inherently the responsibility of manager, flight chiefs and commanders/directors Analyzes statistical data to identify variances Accomplishes narratives to explain variances Using the AF Standard Budget Program

26. I n t e g r i t y - S e r v i c e - E x c e l l e n c e FINANCIAL ANALYSIS Good analysis is a valuable management tool –Used by manager, Flight Chief, RM, and Commander –Make adjustments to current budgets –Provide comments and recommendations to fix problems Forwards to Services Commander/Director for review, comments, and signature NAFFA forwards to MAJCOM/SV/FM

27. I n t e g r i t y - S e r v i c e - E x c e l l e n c e SUMMARY Three budgets –NRB - by manager –Income and Expense - by manager –Cash Flow - by RM Prioritized by manager, flight, fund NAF Council Approval Financial Analysis Performed Takes communication from the front line employee all the way up the chain of command to make this work

28. I n t e g r i t y - S e r v i c e - E x c e l l e n c e BUDGET PROCESS

29. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters Air Force Services Agency