Virginia Wing's "Wing Bank Solution"

[RiverAux]

How does all this qualified audit/Combined Federal Campaign stuff fit in with each wing having a separate federal tax number? 

[ADCAPer]

Gods...Bob!  This in the long run will benefit the units and membership by increasing the number of large dollar donors who right now will not touch us!

Obviously this issue won't be proven one way or the other for some time, but I'll offer my .02 cents anyway.

I say that you will never see the Wing Banker program provide any substantial benefit to the vast majority of the units at the local level. I'll agree that there might be some benefits gained at the National level by improving the accounting of funds, and CAP at the national level may even manage to acquire some large scale donations, but those funds will never trickle down to the local units in any amount that will offset what is being lost.

Unfortunately National is simply turning a blind eye to the money that is being lost at the local unit levels, and yes, it is in fact being lost. At least one of the local supporters in my area has already started moving their donations away from my squadron; they don't want to make a donation to support a local organization when they know that their funds are being transferred out of the local area and placed under the direct control of someone else.

(And please, I don't need to hear how you shouldn't be telling anyone that the money is leaving the local area; that is a matter of ethics that has already been decided at our local unit. Our membership determined that failing to disclose the details of the WBP to our supporters would not only be unethical, but could also be considered fraudulent.)

[Eclipse]

Wings are the only units specifically tasked with missions.

Units are a convenient way of organizing the corporation....heck look at IOWG.  The came right out and said that they are taking operational control of ES away from units and managing and running at the wing level.

Yeah, ok, whatever.  Semantics won't win this.

The units contain the people, the assets, and perform the training and execute the missions.

[Eclipse]

Unfortunately National is simply turning a blind eye to the money that is being lost at the local unit levels, and yes, it is in fact being lost. At least one of the local supporters in my area has already started moving their donations away from my squadron; they don't want to make a donation to support a local organization when they know that their funds are being transferred out of the local area and placed under the direct control of someone else.

(And please, I don't need to hear how you shouldn't be telling anyone that the money is leaving the local area; that is a matter of ethics that has already been decided at our local unit. Our membership determined that failing to disclose the details of the WBP to our supporters would not only be unethical, but could also be considered fraudulent.)

Except they are not - the control, barring malfeasance, is at your unit.  Which bank its in is inconsequential.
If you want to shoot yourself in the foot, have fun, but don't misrepresent the program just to make a point.

[lordmonar]

Unfortunately National is simply turning a blind eye to the money that is being lost at the local unit levels, and yes, it is in fact being lost. At least one of the local supporters in my area has already started moving their donations away from my squadron; they don't want to make a donation to support a local organization when they know that their funds are being transferred out of the local area and placed under the direct control of someone else.

(And please, I don't need to hear how you shouldn't be telling anyone that the money is leaving the local area; that is a matter of ethics that has already been decided at our local unit. Our membership determined that failing to disclose the details of the WBP to our supporters would not only be unethical, but could also be considered fraudulent.)

You are giving your donors erroneous information.  The money collected locally will be used locally.  It is just accounted for at the wing level.

[ADCAPer]

You are giving your donors erroneous information.  The money collected locally will be used locally.  It is just accounted for at the wing level.

First of all, if you think I'm out there simply spreading "erroneous information" then you are dead wrong. If the people you are requesting funds from are asking questions then all you need to do is show them the regulations and any of the myriad of "Wing Banker Guides" that are out there and they can decide for themselves whether or not to support you. If you are not fully disclosing the details of the WBP to your donors when they ask the questions then you are doing far worse than providing "erroneous information", you are guilty of deception.

For what it's worth, one of the donors who stopped financially supporting my unit is a long time CAP member. If someone who has been in this organization for years doesn't trust it with their donations under the WBP, then why should anyone else?

Anyway, I approached a local city and asked them about supporting my unit. I carried a copy of the Financial Regulations, the Wing Banker Guide, our Local OI, and a list of what we had been doing to support the local area. Their City Manager turned out to be a former AF enlistee who served for a few years in the 1950's. He has been involved in municipal government for over 50 years, the last 35 years as a professional City Manager. After telling him what CAP is about, and why I was requesting a donation these are some of the questions / answers / scenarios that came up:
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I have to answer to the Mayor, the City Council and our local taxpayers, what guarantee do I have that these funds will ultimately be used in the local area. (This was the point I produced the Regulation / WB Guide / Local OI, which he actually sat and read while I waited) His responses were:

Why was this regulation recently revised? How often is it revised? Who decides when it should be revised? Do the local units or Wings have any input into the revisions? Why is there a separate "Wing Banking Guide" when there is a national regulation? Why does every state have a separate guide? If this is a national program then shouldn't all of the policies and procedures be in one regulation that addresses the operations in every state?

If I provide funds to support your local unit it would consist of taxpayer subsidized funds, so I would expect that they would be used to support activities in the local area, can I audit your operation to ensure that this is in fact what they are used for? If I discover that these funds are not used as intended, are you prepared to reimburse the local taxpayers who provided them?

If the funds are to support the local area, why are you transferring them out of the area, we have local banks here that would be more than happy to work with you? I explained that it was for accounting purposes, to obtain an unqualified audit for national CAP. Then why are there separate Wing Banker Guides instead of one national regulation that addresses everything? He also said that as far as he knew that other local chapters of other national organizations didn't function like this and that in his opinion I was requesting support for a local cause, but was then transferring the money to a national organization that may or may not decide to use it at the local level.

Who monitors / authorizes / controls the dispersion of the funds? (NOTE: This question ultimately led to a telephone conversation with his City Attorney.) Their final opinion was that the funds are not "controlled" locally because we are transferring the "physical control" of the funds to another entity. In their opinion we only have "requesting" authority for the funds, not "control" of them. I pointed out that the regulation required the approval of the local finance committee to obligate funds, and he pointed out that from what he could see I didn't have any control over what went into the regulation and that it could be rewritten tomorrow to say whatever National wanted it say. At this point his example was that I should start sending him my paycheck and then just send him a letter whenever I needed him to pay something for me.

He was also skeptical about how the Wing could apportion interest among different units without running afoul of the state banking laws. He said that it was his impression that in our state only a certified financial institute can legally apportion interest. He finally decided that he "wasn't sure" if it was legal for the Wing to do this, and that it would just be too much of a headache, and too expensive on his part to pay his city attorney to do all the research to ensure that he would be in the clear legally with the state, or ethically with his taxpayers.

His final decision was that he couldn't support us because he could not guarantee to his taxpayers that the funds he donated would in fact be used at the local level. He said that he believes that "legally" any Wing "could" redirect any locally obtained funds to wherever they wanted at any time, and that he would not have any avenue to protest what he would he see as a misuse of his taxpayer subsidized donation, because according to CAP own regulations all donations belong to CAP as a corporation, and not to the local unit. He said that in his opinion since the funds were being transferred out of the physical control of the local area that he viewed any he donation he could make as supporting a national organization, not a local function, and that his city was simply not interested in supporting the National CAP.

[NIN]

Bummer that you decided to find a nice way to torpedo your unit's funding source. Nicely done, there.

Whether you decide to bank with Wachovia, who only has a branch 500 miles from your unit, or Joe Podunk's First Bank & Trust 2 blocks from your meeting place is immaterial, regardless of Barney Fife's read on our regulation.    What happens when the local bank started to charge you a monthly fee and you decided to take your business to the bank up the road in the next town over?  Is the Mayor going to say "Sorry, you're banking in Centreville now... We won't give you any of our money if it means its going to reside in a bank 200 yards past the town line.."?? Great way to let yourself be held hostage there.

There are many nationwide organizations that have "local" chapters which are not "independent" chapters (and even some who are independent) who manage to do business in this way. The fact is, unless we want every "local chapter" (read as "squadron, group or wing" depending on your geographical area and unit span) to have a full-time paid staff of fundraisers & financial professionals, we're not going to see the same controls and flexibilities locally that, say, the local ARC chapter enjoys.

And by the way, hiding behind the fig leaf of "ethics" is pretty weak.  Your read on your "ethical concerns" doesn't stand up to the light of day. If it did, you'd sign your posts with your name and your unit, because if you're right, you're right and you shouldn't have to hide your face in the public forum.

But you're not.  You've just taken a stance that is essentially diametrically opposed to the needs and demands of the corporation and its duly appointed Board of Governors.  Your poorly thought out screed against the wing banking system doesn't take into account things like reality and GAAP. (ever heard of GAAP?  I highly doubt you have). Sure, the interest apportionment thing may be a little freakish state to state.  But you yourself said that they weren't even sure it was legal (meaning they weren't sure it was illegal, either), so why'd you even bother to bring it up?

Worse yet, you've taken your fairly boorish read of the situation and gone "off the reservation" with it, thus essentially putting a tourniquet around a funding source.     The good thing about this is that outstanding "leadership" such as this tends to cause units to fold up and die.  Its apparent that your unit, under its current "leadership" either needs a regime change to a group of officers who will get with the program, or it needs to go away.  Thanks for starting yourself on the process either way.

If you're so right, then stand up at your next commander's call and recite the screed you've posted here. Otherwise, stop undermining your unit's ability to accomplish its mission.

And like I said, prefacing your actions with "I have ethical concerns"  holds about as much water as "with all due respect."   I've been on the receiving end of "officers" who attempt to hide their illegal, immoral, disrespectful and unethical conduct behind a screen of "I was acting as a whistleblower" or "I couldn't ethically stand by while this happened.." as if by invoking the word "ethics" you suddenly wrap yourself in a cloak of nobility and righteousness.   Duh.

[RiverAux]

My first reaction was to say that most of this wasn't the town's business but on second though I do applaud them for checking on an organization they were considering giving money to.  However, I suspect that you managed to torpedo the donation by bringing up stuff that really isn't an issue.  As mentioned before local units have never had absolute control over their funds but as a practical matter they have and still do determine how the funds are spent.  You should have been able to convey that to the town. 

[NIN]

My first reaction was to say that most of this wasn't the town's business but on second though I do applaud them for checking on an organization they were considering giving money to.  However, I suspect that you managed to torpedo the donation by bringing up stuff that really isn't an issue.  As mentioned before local units have never had absolute control over their funds but as a practical matter they have and still do determine how the funds are spent.  You should have been able to convey that to the town. 

Its a lot like saying "I'm wearing barbed wire underwear"  Is it really that important, and did you just scare people by saying so?

[ADCAPer]

Bummer that you decided to find a nice way to torpedo your unit's funding source. Nicely done, there.

Well, you're certainly entitled to your opinion, but the only one who may have torpedoed anything would have to be National. The existing member made his own decision without consulting anyone after he reviewed the Wing Banking concept before it was implemented, and the other source had never had been a supporter; they were approached after the WBP went into effect.

Also, that "Barney Fife" comment is completely uncalled for. I found this man to be polite, well informed and exceptionally knowledgeable in financial matters. When he wasn't sure about something that I couldn't explain, and which wasn't addresses in the regulation, he made the effort (and I'm sure it cost him from his budget) to call his city attorney and look for ways to help. Even while he was eventually explaining that he wouldn't donate to a program that he considers full of potential flaws he stayed professional about it. If CAP had anyone who was looking out for their interest in the way that he appeared to be looking out for his cities we probably wouldn't be having this discussion.

As far as moving from one bank to another, go back and read what I posted. The concern of the city manager that I talked to was not that the bank was changing; it was that the money would be leaving the "control" (his opinion) of the "local" unit.

You are free to disagree with anything I've said, but the individual I talked with said that he wasn't interested in giving money to National CAP, and in his opinion, that's what he would be doing. This may be an isolated issue of local tax dollars at play, but there are people and organizations out there who do not want to participate under these rules.

Also, if you'll go look at my post, it said that he decided that "...it would just be too much of a headache, and too expensive on his part to pay his city attorney to do all the research...   He shouldn't have to research anything to know that he would be okay in donating to a "local" unit, but he read the regulation that National put out, he read the Wing Banker Guide, he read our local OI, and then he decided that CAP didn't have a program in place to ensure that his donation "stayed" at the local level, and because he answers to the taxpayers that was a deal breaker.

As for GAAP, I am vaguely familiar, and having said vaguely I'm sure that someone will fill me in on what I'm missing, because I don't see where that has anything to do with the issue I've addressed. Any local government obviously has the right to say that they don't want to donate tax dollars to a "local" organization that is going to move them out of the "local" area and put them under the "control" (his opinion) of an outside entity.

[lordmonar]

You are free to disagree with anything I've said, but the individual I talked with said that he wasn't interested in giving money to National CAP, and in his opinion, that's what he would be doing. This may be an isolated issue of local tax dollars at play, but there are people and organizations out there who do not want to participate under these rules.

Do you see where the problem here is?  The rules have not changed one bit where the money is concerned.  The only difference is that you now must send National's money to a bank account under the control of the wing financial officer.  Before you had to send National's money into an account under the squadron's control.

You can't go around and say the WBP is costing you local donations because your donors don't want to give to national...because that is exactly what they have been doing all along.

But YOU are upset about the WBP because it seems like wing/national is taking control away from you at the squadron level.  So you let your donors know about YOUR misgivings about the program and gave them the impression that just because national "can" use money donated to "local units" that national "WILL" use that money.

So...that argument does not wash.  Don't give me the line about "total disclosure" because if you did that before then your donors would not want to "give money to national" 10 years ago.

No....if YOU explain what is really happening to your donors then they will understand that monies raised by local units in the form of donations, dues and fund raisers WILL be used at the local level.   You can explain that while the money is all "owned" by national the regulations do not allow for them to be shifted except in cases where the unit folds and/or very exceptional cases and only with unit approval.

In the Wing Banker Program the wing acts as the bank, accountant, reporter, and check-writer service for the subordinate units. Units continue to maintain control of the obligation and transference of their funds via the local unit finance committee. Wings may not transfer or obligate unit funds in any way without unit written approval. Wings must not impose internal service charges to units.

Emphasis mine.

So....bottom line.....what is the problem with WBP?

Sure it is slow, sure it's a pain when the wing's paperwork and the squadron's don't match.  But the WBP should be opening up sources of funds not closing them.  If your local donors don't trust the system it is because YOU have created the atmosphere of mistrust....ergo it is up to you to give them the CORRECT information and rebuild that trust.

It is as NIN said.....YOU scared them off with YOUR fears that wing/national was going to take "YOUR" money...with out really understanding that: 1) it was never yours in the first place and 2) wing and national has no intention or power to do so with out YOUR permission.

It looks like you have your work cut out for you.

[NIN]

Another thing....

I work in higher education. We have an office at the college that specifically raises funds from sources other than our traditional avenues (tuition, room & board, etc).  Alumni donations, grants, annual fund giving, etc.

Some of the gifts given to the college take the form of "restricted" funds, meaning that they have substantial donor restrictions on what they can be spent on.

CAP needs, at both the national and wing level, to have "advancement offices" whose sole duties are to shag down donations, gifts, grants, etc.  Now that we will have an "un-qualified" audit, the money should start rolling in ...    Our last advancement officer at the national level was a "one trick pony" whose sole idea was an $11 million investment in a multi year deal with a NASCAR team.  Ugh.

[Dragoon]

There's a pretty simple way out of this.

If you've got someone who wants to donate to your local unit, but doesn't want the money going anywhere else, just get the Wing Commander (as the lowest level Corporate Officer and owner of the "wing banker") to sign a letter to the doner promising that the money will be spent only on your unit.

Nothing illegal here.  Just the guy who controls the funds committing to spend them on a specific set of stuff  - your squadron's stuff.

You get the money and the doner sleeps well.

If the Wing CC won't do this, then the doner will have to understand that he's donating to the Wing, not the unit.  And then the doner can make up his own mind.

[mikeylikey]

Wow......lets not forget that donated money from any source is going to the Corporation, not the local SQD.  NHQ is only allowing you (the local SQD) to use thier moeny.  If you did a car wash and raised money....you rasied moeny for CAP Inc.  Not your SQD. 

[SAR-EMT1]

Wow......lets not forget that donated money from any source is going to the Corporation, not the local SQD.  NHQ is only allowing you (the local SQD) to use their money.  If you did a car wash and raised money....you raised money for CAP Inc.  Not your SQD. 

Whoa!... hold on there Mike. In no way should money I earned go to someone else. I am a member of several organizations. and CAP is the only one that has the ability to manage money at a non-local level.
I know the regulation "says" that the Wing will have control to get a clean audit and that money isn't moved without Sqn approval. BUT this already hints of the possibility of malfeasance. Skimming can take place, and as the city manager said " whats to keep NHQ from changing the reg tomorrow and 'confiscating ' local fundage for its own use" ??
I'm no lawyer but the whole program strikes me as being in the gray zone of common sense/legality.

In my humble opinion every unit should IMMEDIATELY create a separate entity - booster club etc.. and get as much money as possible safe within a LOCAL span of control.

Then again this is just one big example of how much I HATE and reject anything CORPORATE.

- This isn't an attack on anyone, including my / our Wing CC's etc. Just a gripe about the way the oversight is structured. Now, have there been issues with money? Yes, Should the Air Force and others go after those responsible? Yes. But this is a bit too extreme.
Knowing this si a done deal I officially support it, salute and carry on, however I feel that we should get rid of this program through channels ASAP, while doing what we can to protect local funds.

- Someone commented that ' in the past funds were never local to begin with' - or something like that. While I cant speak for your unit,
In so much as my local Squadron is concerned, thats hogwash.
While Wing saw the bank statments, they had not the power to touch the funds and 100% of any fundraising or gifts or whatnot went to the squadron no mention was even made of a Corporation. Just the AF Auxiliary's Cadet Program. to my knowledge the checks even went -
"to: 328th Composite Sq. USAF Auxiliary"  ... not "CAP Inc."
- Primarily for scholarships to allow cadets to attend a [flight] encampment.
No one at Wing complained, no one misplaced a decimal or stole out of the coffers.
And considering that the Wing IG resides at our Squadron we can be doubly sure that what is done is within the law and or Reg. 

JMHO

[RiverAux]

In so much as my local Squadron is concerned, thats hogwash.

You may have thought so but Wing and National still had technical control over "your" squadron funds, they just did not exercise it. 

[capchiro]

You know, SAR-EMT1 has a good point.  I have had scout and cub packs as a scout master and cub master and the money we collected we kept and there was really no accounting to any national entity.  Now, the question is, how do they receive money from the United Fund, etc., with all of the individual cubpacks and scout troops running around with $1,000.00 to $5,000.00 in unaudited accounts?  Why did we (CAP) have to get an unqualified audit to get money from donors when the scouting organizations don't?  Or was this just an excuse?  the main problem as I see it is that the new Wing Banking Solution forces squadrons to maintain an unauthorized "slush" fund in violation of the Regs or members to extend credit to the squadron and await for reimbursement from Wing.  this is assuming that there will always be a need for operating cash at the squadron level for things such as a coke machine and the ever changing amount of money in same.  Not everything is a major purchase expense and can wait for Wing to cut a check.  But again, how are other voluntary agencies such as Boy Scouts able to obtain donations from the same corporations that we have been told will not give us money without an "unqualified audit" without requiring the same of Scouts, etc???

[mikeylikey]

It seems that the virginia plan is due to some HUGE f-up in Virginia.  I would really like to know what happened there!

[jimmydeanno]

Nothing happened there.  The gentleman that wrote it was the VAWG COS at the time, and the wing was looking for ways to gain access to more grants, etc. 

Maybe, just maybe, this proposal was created in an effort to genuinely HELP the organization instead of "sucking up unit funds" and denying people "their" money. (not attacking you, just "in general") It just seems that things with people do with genuine interests seem to always come up with "I wonder what the real reason behind this is."

[NIN]

Virginia was also one of the first places to even 'beta test it.'

WRT the "qualified versus unqualified" audit, let me clear up the terminology.  "Qualified" means "We, the auditors, have conducted an audit of this august organization and find it to be in fine finanical shape with the following qualifiers [...]"  thus the term "qualified."  The audit is conducted with various "oh by the way" and "here is this little odd thing" that a LOT of organziations have. 

Unfortunately what that means is that there are around 1,000 entities out there for which Civil Air Patrol's audit does not even begin to "touch" the veracity of the funding reporting.  We show it as an "asset" for these 50 units in Wing X, but we didn't see whether or not Squadron XY in Wing X spent 2/3 of its money on "Administration" instead of directly on "Cadet Programs."  (anybody remember the whole  Red Cross administrative overhead thing following 9/11?)  A LOT of businesses and granting organizations won't give money to a non-profit that cannot demonstrate reliably that donations to it, as proven by third party auditors, are going where "the rubber meets the road" instead of to support administrative actions.

Not sure if that's the case with United Way, but I know plenty of units that get United Way contributions (ask Shawn Stanford) without any sweat.

So we get branded with "qualified" and some outfits won't grant/donate unless they can tell that the majority or a supermajority of the money goes directly to support "the program" not "pay the light bill and the toilet paper bill.."

Another thing: Your unit has an EIN issued by the federal government.  That EIN is the same EIN that is used nationwide (and, heh, world wide) for Civil Air Patrol units.  That EIN is the EIN that a donating/granting organization wants to get back so they can get the credit for their grant or donation.

IOW, whether you're the Joe Podunk Cadet Squadron or Pacific Region, CAP, you have the same EIN number as... Civil Air Patrol, Inc.

So technically, when someone is donating money to the Joe Podunk Squadron, for legal and tax purposes, they ARE donating the money to Civil Air Patrol, Inc.

Unless your unit has a separate EIN that nobody is aware of.