NOTF on Wing Banking

[Skyray]

News of the Force published a number of letters to the editor on Wing Banking this morning.  I'm sorry, but I get it as an email and I don't have a link.  The responses were mostly favorable to Wing Banking, especially the ones from Virginia where it has actually been implemented.  Maybe one of our net gurus can scope out where Skip has this issue stashed and give us a URL.  It is an interesting read.

[ELTHunter]

I just read the same article.  I had heard the argument for implementing the program before, but something just struck me as I read the letters.  I would estimate that the majority of squadrons hold no state or federally appropriated cash.  If that is the case, and their money probably comes from squadron members dues, squadron fundraisers, etc. and is not mixed with "Corporate" monies.  Why the need for any visibility at all to auditors?  I understand that all subordinate unit property becomes property of the CAP.  However, we can have member owned property and equipment in the squadron headquarters as long as it is labeled as being privately owned by a member.  If the members of a squadron wish to pool their money for squadron use, why can't that money be held by the squadron?

I don't think there is any big conspiracy to confiscate unit money, but it just seems like a big knee jerk reaction to something that really wasn't a problem in the first place.

What's to keep members of a squadron from pooling their own money in an account for their own use?

[genejackson]

Morning guys,
First off, I am not an accountant so I'm not able to go into significant depth (maybe for the better, I'm an ENT booger picker by trade.

In order for CAP to receive many grants that are out there in the giant corporate world, we must be able to present an "Unqualified Audit" to those that hold the donation purse strings.   This is the really big issue for why the Wing Banker program is as needed as it is.   Qualified Audits mean there are funds out there in the individual Wings and Squadrons that cannot be completely accounted for at the National level, thus CAP as a whole cannot present this Unqualified Audit to the auditors.  Thus, inability to qualify for very large grants and the like.

So, CAP as a corporation is very much better served if we, as a whole, are able to have an Unqualified Audit.   In order for this to occur, every Wing must switch to the Wing Banker Program.   Then every single dollar can be shown on a large spreadsheet including where every single dollar has gone or come from.   Presto:  unqualified audit.

Please don't fight this thing.   It is not an effort to take monies from Squadrons.   Have your Wing give you deposit slips.  Do a fund raiser, etc and go deposit the funds to the nearest branch of the bank your Wing uses.   It is still your money, still belongs to your Squadron and your Squadron only.   To get it out, send a request for check to your Wing AO and have one issued.   Or send the bill and ask that he cut a check from your Squadron funds to pay for it.   Only on rare occasions such as coffee, donuts etc for classes have we had to pay upfront and then request repayment.  Not a big deal!

I hold the job of Group I Commander and have 11 Squadrons under me.  Every one of them has sent all funds to Wing and not one single commander has complained to me, not even once, that they had trouble getting any funds back from their accounts.   This program works, and it works VERY well.    Especially when it comes time for the end of year finance audit.   It is now a piece of cake to do end of year finances.   Wing already has the funds,  they already have a spreadsheet of all income/expenses.

Remember - the 3 things that will get you in trouble the quickest in CAP are:  cadets, airplanes and finances - and not necessarily in that order.

Wing Banker - a commanders best friend once you see it in action.

Gene

[genejackson]

--->>>  What's to keep members of a squadron from pooling their own money in an account for their own use?

This is a HUGE NO-NO !    Never, ever keep a cash drawer at the squadron.   That will get you in big trouble.

CAPR 173-1, 5 (h).  Units will not establish or maintain petty cash accounts. Reimbursement for out of pocket expenditures will be made by check.

[Skyray]

Once bit, twice shy.

I was interested in the letter from Doug Abruzzo asking what happened to the accounting for $300,000 between Florida Wing Commanders Don Cunningham and George Pringle that Florida Wing "lost."  During that same time frame, actually a little before Cunningham took over, my squadron had $7,000 in a maintenance fund that we had accumulated by good fiscal practice, charging our pilots a little more for proficiency flying, and having several aircraft mechanics working free for us.  Wing took the funds away from us under the "everything belongs to Wing" policy, and shortly after that they reassigned the aircraft and put our money in the general fund.  I have a high suspicion of Wing taking any funds they didn't generate, any time, any how.

[ZigZag911]

Remember - the 3 things that will get you in trouble the quickest in CAP are:  cadets, airplanes and finances - and not necessarily in that order.

I always felt the three quickest ways to "crash & burn" in CAP were finance, logistics, and safety (problems in any of these areas.

There is, however, much favorable to be said for your list.

Perhaps it needs to be expanded to a "Top 5"....or, as Monty Python said (quoted by so many), "Amongst our weaponry are such diverse elements as fear, surprise, a ruthless efficiency...." 

[O-Rex]

Under-the-table squadron accounts; DON'T DO IT.

Centralized banking is nothing new, been doing it for years in my "day-job."

I've seen enough shenanigans from home-grown CAP "Sgt Bilkos" under the old system (who spent more time & energy on  fundraising than any of our three missions, then squandered the funds, or did something they shouldn't have doen wit them) to make me a believer in the Wing Banking Program.

Worried about echelons-above comandeering your dough?  Fiscal responsibility is a two-way street, just remember to keep you own records, just as if you still had the checkbook.

[mikeylikey]

I've seen enough shenanigans from home-grown CAP "Sgt Bilkos" under the old system (who spent more time & energy on  fundraising than any of our three missions, then squandered the funds, or did something they shouldn't have done wit them) to make me a believer in the Wing Banking Program.

Colonel: "BILKO"!!!!!!!
Bilko:  "Yes my Colonel"

I did not trust the Wing Banker Solution at first.  I got used to it, and have been trusting it for some time now.  The turn around on checks and immediate payments could be quicker, figuring they have an accountant, a wing administrator and a NHQ funded accountant at Wing HQ.  PLUS the PAWG forms created look like something a fifth grader put together on their first try at excel.  I would have made the forms more PROFESSIONAL looking. 

[SARMedTech]

This is a little of topic, but are Squadrons allowed to have fundraisers of their own creation to gain funds for equipment, activities, etc. If we go to the wing bank, do all monies belong to the wing, or are they kept separate according to the Squadrons that raised the money and hence that belongs to them? Sorry if its a stupid question, I just hate dealing with finances.

[mikeylikey]

All money should be in one account that can only be accessed by Wing HQ.  Wing HQ should keep a ledger of what each SQD has contributed to the giant fund.  When you need cash.....the accountant goes to the ledger, decides if you have contributed enough to cover the expense.  If you haven't and you don't keep good records at the SQD, you will most likely miss out.  When I say miss out, I mean it could cost you BIG.   Lets say you have to pay rent each month.  However, you are 35 cents under what you thought you had in your portion of the Wing account.  The Wing Accountant will not cut your recurring check to the landlord, and the landlord approaches you and says get the "F" out, because he can now rent to a non, non-profit and get more money than what you were paying.  AND YES, it has happened in PAWG. 

Don't worry though.  HAWK MTN was short on electricity bills, so wing dipped into the Account and "borrowed" money from the general account.  I still wonder if HAWK ever gave that money back to the account.  That is like.....STEALING??

[genejackson]

Absolutely, Squadrons can have fund raisers.   Just be very sure to do two things first,  review CAPR 173-3 and make sure you follow all the rules and run it up the flag pole to the Wing CC for approval.  Since the Wing CC is the only Corporate Officer of a Wing, and all funds essentially belong to the Corporation upon receipt, make sure he's in the loop.

After you complete the fund raiser,  deposit all funds into your Wing Banker account under your Squadron's subaccount that Wing will manage for you.  Get your Wing AO to give you a stack of deposit slips for things like this.   And when you need a check cut, write the Wing AO and request one.   Program works and will keep you out of trouble for your finances.   

And to all those who say just keep some funds locally for when you need it quickly,  don't do this guys.   Petty cash accounts are strictly forbidden by the regs and will get you a FIND during a Subordinate Inspection and can get a Squadron commander removed, etc.   When each of us signed the back of the CAPF-12, we agreed to follow the rules and regulations and that's the way it goes.

Can you detect I'm a big supporter of the Wing Banker Program?   Sure am.   During my 11 years in CAP, I absolutely HATED the end of year Finance Report as a Squadron Commander and even worse hated the chasing of those reports as a Group Commander.   For the past 3 years the Finance Reports are now a breeze and since everything is held at Wing HQ, they have the primary responsibility to complete the report. 

Remember - it is still your money.   Just kept in a different back under a different number and it takes one more step to get it-usually an email request.   But, the end result is in the best interest of the entire organization - an Unqualified Audit.   We are a Corporation, pure and simple, and this is best for the Corporation.

Gene

[ELTHunter]

In order for CAP to receive many grants that are out there in the giant corporate world, we must be able to present an "Unqualified Audit" to those that hold the donation purse strings.

Again, I'll ask.  If the money wasn't allocated from any state, local or federal funds, why does it matter?  If the squadron isn't a legal entity of the corporation, how can the money be considered to be part of CAP's funds?  If I leave my wallet with $100 in it in the squadron meeting place while I go out on a mission, does it become the CAP's?

--->>>  What's to keep members of a squadron from pooling their own money in an account for their own use?

This is a HUGE NO-NO !    Never, ever keep a cash drawer at the squadron.   That will get you in big trouble.

CAPR 173-1, 5 (h).  Units will not establish or maintain petty cash accounts. Reimbursement for out of pocket expenditures will be made by check.

I understand the regulation.  If I and other members wish to open a joint account somewhere with no mention of CAP in it, what gives CAP any authority over that?  We are friends pooling money, we just happen to also be in CAP?

I understand that it is a raving success in the Virginia wing and I'm happy for you.  However, being as CAP is like 52 little Wingdom's, that doesn't mean what works perfectly in Virginia is going to work as well in 51 other places.

I'll also take issue with you about reimbursement.  In everything else CAP does, I end up having to front the money and get paid weeks/months later.  I have not seen anything that makes me believe this will be any different.  Frankly, I'm getting a little tired of being promoted as an unpaid professional organization that's on par with other federal agencies while being underwritten so much with members own funds.

[arajca]

In order for CAP to receive many grants that are out there in the giant corporate world, we must be able to present an "Unqualified Audit" to those that hold the donation purse strings.

Again, I'll ask.  If the money wasn't allocated from any state, local or federal funds, why does it matter?

It matters because to get an unqualified audit requires 100% accountability of CAP funds - regardless of source.

If the squadron isn't a legal entity of the corporation, how can the money be considered to be part of CAP's funds? 

Your unit received a charter from CAP, therefore it is a part of CAP, not a separate legal entity. Your unit is not a franchise like a fast food joint.

If I leave my wallet with $100 in it in the squadron meeting place while I go out on a mission, does it become the CAP's?

The money is in YOUR wallet, right? So, unless you tell someone to take it out, it is still YOURS, just like if youi accidently leave your wallet in a locker room while working out, the money inside is still yours.

--->>>  What's to keep members of a squadron from pooling their own money in an account for their own use?

This is a HUGE NO-NO !    Never, ever keep a cash drawer at the squadron.   That will get you in big trouble.

CAPR 173-1, 5 (h).  Units will not establish or maintain petty cash accounts. Reimbursement for out of pocket expenditures will be made by check.

I understand the regulation, please don't quote them to me.  If I and other members wish to open a joint account somewhere with no mention of CAP in it, what gives CAP any authority over that?  We are friends pooling money, we just happen to also be in CAP?

How about establishing a foundation to support your unit? See Policy letter for CAPR 173-3.

I understand that it is a raving success in the Virginia wing and I'm happy for you.  However, being as CAP is like 52 little Wingdom's, that doesn't mean what works perfectly in Virginia is going to work as well in 51 other places.

It works well in CO as well. The "52 little Wingdoms" is a problem CAP is trying to stamp out.

I'll also take issue with you about reimbursement.  In everything else CAP does, I end up having to front the money and get paid weeks/months later.

Isn't that what reimbursement means?

[Skyray]

Wing Banking is like a lawyer's trust account, and like a lawyer's trust account, you have to trust the lawyer.  Ideally, the wing would account separately for everything in its account, and when you ask for money properly with finance committee approval the wing finance officer would go to the books, and if you had sufficient credit you would get it.  There have been some shenanigans in the past, but as much as I dislike Major General Pineda on other grounds, it appears to me that he has been meticulous about handling money according to regulations.  He inherited a mess with Florida Wing (he was appointed to relieve Pringle before Pringle could deal with what appears to be an institutional lack of responsibility going back many years) and he did relatively well in squelching the problem, although I don't think he ever found the missing three hundred thousand.  I have horror stories about reimbursements from the Air Force that were never passed on to the pilots that incurred the expense, but Tony ended those events, and we need to look forward and be positive.

[Galahad]

Don't worry though.  HAWK MTN was short on electricity bills, so wing dipped into the Account and "borrowed" money from the general account.  I still wonder if HAWK ever gave that money back to the account.  That is like.....STEALING??

Yes, it is STEALING.  And it is specifically prohibited by CAPR 173-1 and CAPR 173-2 (see below) unless Wing obtained prior permission in writing from the units they borrowed funds from.  Not only can they not borrow the funds, they can't even borrow using the squadron funds as collateral (obligate). In my opinion if this actually happened the wing officers who signed off on it should be removed from their posts by NHQ immediately.  And a formal letter of apology should be issued to affected units, along with a description of the new safeguards that have been instituted to prevent recurrence in accordance with CAPR-172-2 Section 24.

CAPR 173-1 4.b and CAPR 173-2: 5: 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.

There are a number of wings who seem to believe that CAP financial regulations are merely 'suggestions'.   They commit to pay interest on squadron funds but they don't. They committed to provide regular reports. First it was monthly, then quarterly, now it's "whenever we get around to it". They commit to pay certain regularly occurring squadron bills when they're sent to wing HQ, but they pay them late (or not at all), and squadrons don't find out there's a problem until they discover their phone has been turned off.  And squadrons get stuck paying the interest and late fees. In short, these wings have committed to perform "banking services" but they are incapable of or unwilling to fulfill those commitments. The wing kings want access to and control of the money, but they find those nuisance items that go along with being a 'bank" such as providing timely service and providing for independent audits by non-CAP agencies (such as independent CPAs or state banking authorities) to be unnecessary distractions. 

I have seen squadrons threatened with charter "suspension" over wing banking because they insisted on following CAPR 173-1 instead of complying with orders from wing that were illegal per CAPR 173-1. I have seen squadron commanders removed over similar issues. I have met officers who were threated with CAPF-2B proceedings over the same issue.  I have seen a wing finance officer resign because he/she objected to the level of electronic access that NHQ had to these same squadron funds, "access" being the ability to transfer funds from one account to another at will without notice or explanation. The difference between "wing banking" and regular banking is that the CAP version is the "communist" version. You have no choice in where you deposit squadron funds. You cannot withdraw the funds without waiting on wing. If key personnel at wing HQ are on vacation, too bad. You must submit and endure whatever meager level of customer service is offered.  No one at wing level or above sees a need to strictly adhere to the regulations (i.e., the original contract agreement).  And if you complain are threatened with removal from CAP.

Another item everyone seems to have overlooked is that when the squadrons funds were maintained in separate accounts, every dollar was covered by FDIC.  Under wing banking everything is in one giant account, managed by a spreadsheet at wing HQ. So in the event of a bank problem once the FDIC limits are exhausted we're SOL.  That's not what I would call exercising fiduciary responsibility. 

It's up to NHQ to enforce the regulations and make sure the wing banks are providing good service. But now that they have gathered all the funds, the "service" part of wing banking contract seems to have fallen by the wayside.

If your wing is doing a fine job with wing banking, great, I'm happy for you.  But please don't assume that's the case everywhere.  The level of service you get is largely dependent on the wing commander and his or her personal ethics.  It can change.

BTW, I see no one has addressed the issue brought up in the NOTF thread, that CAP-USAF (Col Russ Hodgkins) reported to Congress for FY 2006 that CAP as an organization had achieved "unqualified audit status". 
http://www.cap.gov/documents/2006_CAP_Annual_Report_To_Congress_lorespdf.pdf
Since at that point in time only VAWG had fully converted to wing banking, how was this possible?  The answer must be that wing banking is not required to achieve unqualified audit status for CAP. Which is what many of us have been saying all along...

[mikeylikey]

Since at that point in time only VAWG had fully converted to wing banking, how was this possible?  The answer must be that wing banking is not required to achieve unqualified audit status for CAP. Which is what many of us have been saying all along...

You are correct.  It is not required for an unqualified audit.  It is in place to make it easier on the paid NHQ employees.  All they have to do is visit each state ONCE per year, see that the money is accounted for in one place and go back to the party at Maxwell. 

I would also like to know what event or events brought the original Virginia solution to light in Virginia?  Was there huge theft?  Was there hundreds of thousands missing?  Enquiring minds would like to know the dirty Virginia Wing secrets that got us all on board the program!

[RiverAux]

Uh, the money "loaned" to Hawk Mountain could have come from the general wing funds in the account.  Wing can use that money as it sees fit within the regulations.  Now, if they went beyond the Wing's money and dipped into the squadron accounts, that would be a problem. 

[ELTHunter]

Isn't that what reimbursement means?

Reimbursement for ground teams for small one day missions isn't a big deal, maybe we're out $30 for gas and oil.  For pilots, at least in some wings, it's another matter altogather.  They may spend hundreds of dollars for fuel and it may not be reimbursed for weeks or months.  In the event of a major hurricane or something where members are asked to respond hundreds of miles away, it also is an undue hardship.  It could cost hundreds of dollars in fuel, supplies and lodging to volunteer for the missions that CAP is selling FEMA and 1st AF that we can do.

Other agencies have credit cards or procurement cards that can be used in these situations as long as the required back up documentation is presented to verify the purchase.  In our case, we have to foot the bill and hope we get the money back some time.

When I travel for my job, I may spend hundreds of dollars on airfair, lodging and meals.  However, I always get the money reimbursed before the credit card bill arrives.  In CAP, that is the exception rather than the rule.

All I'm saying is that this program has the POTENTIAL to be another way to take advantage of the membership who is already donating time, energy and money that isn't reimburseable.

Seems to me if the problem with getting an unqualified audit was due to the vast amounts of money being held at the local unit level, they could have changed the regulations to state that funds not obtained from local, state or government sources and held by local units was not going to be considered CAP funds.  Maybe set a dollar limit.  It seems a moot point any way because the squadrons will never see any of the money that will be obtained from these large corporate grants.  It's mixing apples and oranges.

Just another example of NHQ trying to make things simpler and better at the top and harder on the folks that actually do the work.

Tags - MIKE

[ELTHunter]

Never, ever keep a cash drawer at the squadron.   That will get you in big trouble.

CAPR 173-1, 5 (h).  Units will not establish or maintain petty cash accounts. Reimbursement for out of pocket expenditures will be made by check.

So what if a squadron keeps a small "store" with cadet rank insignia, patches, cut outs and other uniform items on hand so cadets don't have to order a $4 item from vanguard and wait a month for it to come in.  When cadets buy $10 worth of stuff, how's that money supposed to be handled?  By the letter of the regulations, if I keep a cash box in the drawer to make change and keep receipts in until I place another $50 order to Vanguard, I'm technically breaking the regulations.  Under the WBP, I gotta go deposit the $10 in the Wing bank.  Turn around and order the items that I just sold, and then turn in a request to Wing to get reimbursed.  Are you telling me that makes sense and is more efficient?

[RiverAux]

Other agencies have credit cards or procurement cards that can be used in these situations as long as the required back up documentation is presented to verify the purchase.  In our case, we have to foot the bill and hope we get the money back some time.

That is just your wing.  Other wings have credit cards in the plane for use for fuel.