Funding Events

Funding

Air Force Protocol
from 'Til Wheels are Up'

"Money is like intelligence -- if you don't reveal how little you've got, people will treat you as though you have a lot."
Anonymous



FUNDING PROTOCOL EVENTS

Providing meals or gifts to guests is always a nice touch -- as long as it is legal. Nothing can get a protocol officer in trouble faster than mishandling funds. The secret is to properly categorize your guests to determine what, if any, type of funds they are eligible to receive. It is important to note, however, that just because a group or individual qualifies for funds, perceptions should also be considered. What may be technically legal may be perceived as improper -- always consider the appearance as well as the law.

The general information that follows is current as of the publication date of this document. Always consult the applicable Policy Directive/Instruction for the most current and complete guidance. Additionally, since there will always be "gray areas" requiring clarification, consult with your organization's Financial Management (FM) section or the resource managers within the Services section.

The following is a short discussion of the three sources of funds that may be authorized to help defray costs for your protocol event. Where government funds cannot be used, you're still left with a few options which we'll discuss. Closing out the chapter is a useful matrix of the three government funding sources and events that are, and are not, authorized funding from these three sources.

FUNDS FOR DISCRETIONARY EXPENDITURES

Commanders have long been faced with "job related" expenditures for which no clear source of funds was specified. These expenditures typically include the costs of providing hospitality to official visitors, recognizing the outstanding contributions of members of the command, and similar costs which would normally be considered a business expense in civilian enterprise. Historically, commanders have sought to reduce the personal out-of-pocket financial burden by charging some of these costs, where authorized, to the government funds under his or her control. This chapter explains the major fund sources, as well as the sweeping reforms in SM&W funds in August 1989.

More information about OPR Funds


APPROPRIATED FUNDS (APFs)

Appropriated funds (or APFs) are government funds from the public treasury which are appropriated by act of Congress to conduct the business of government agencies and activities. The appropriation for the Department of Defense, for example, provides the main financial support for carrying out the defense and national security missions and activities assigned to the department and its component services. Under some circumstances, APFs may be used for discretionary expenditures related to the mission of command.

Official Representation Funds (ORF)

Appropriated funds can be spent under the commander's authority for official representation purposes. Commonly referred to as "Contingency Funds," these funds come from that part of the appropriation reserved for "Emergencies and Extraordinary Expenses." These official representation funds are specifically appropriated through the Secretary of Defense to the Secretary of the Air Force and are intended to "uphold the standing and prestige of the U.S. by extending official courtesies to certain officials and dignitaries of the United States and foreign countries."

More information about OPR Funds

OTHER APPROPRIATED FUNDS

Not all discretionary expenditures require the use of contingency authority. In fact, the major focus of the official representation authority is to project the national image outside the military organization for which the commander is responsible. Surprising numbers of expenditures for similar purposes within the organization are authorized form the normal operations and maintenance (or O&M) budget as routine appropriated fund expenditures associated with the organization's mission. 
AFI 65-601, Volume I, Chapter 4, discusses the types of expenditures that may be supported through the organization's normal appropriated fund budget. For example:

  • Activities supporting ethnic observances
  • Seasonal holiday decorations
  • Groundbreaking and Dedication Ceremonies
  • Invitations for Change of Command Ceremonies
  • Light refreshments for award ceremonies
  • Awards/trophies for competitive events
This list is not all-inclusive, but it serves to illustrate two points. First, many things which would not ordinarily come to mind as legitimate uses of appropriated funds may, in fact, be authorized someplace in one of the governing directives. Second, the guidance is split among several governing directives and not organized for easy reference, especially by a novice. When in doubt, of if you have questions, it's best to check with either your budget officer, supply officer, services officer, or legal officer. This problem is even further compounded with yet another alternative: non-appropriated funds.

Nonappropriated Funds (Special Morale and Welfare (SM&W) Funds)

Another source of funds frequently used to support protocol events is SM&W funds. Appropriated funds come from the taxpayers, by way of Congress and the appropriations process. However, nonappropriated funds (or NAFs) represent a portion of profits made by non-appropriated activities and Base Exchanges and are frequently referred to as "troops money." Within the Air Force, base officials administer the bulk of these funds to provide the morale, welfare, and recreation (MWR) of their personnel. There are overarching principles that govern when these funds can be used, and these principles take precedence even if an event, on the surface, seems to qualify for SM&W funds. For example, events must directly support the morale and welfare of military personnel, with no discrimination as to rank or position. AFI 34-201, Use of Nonappropriated Funds (NAFs), Chapter 12, governs the use of nonappropriated funds and implements Air Force Policy Directive 34-2, Managing Nonappropriated Funds.

More information about SM&R Funds

WHAT TO DO WHEN FUNDS AREN'T AVAILABLE

What do you do when you have to plan a dinner function and no U.S. Government funds can be expended? Or, you're planning a conference and want to provide refreshments at the breaks but your command does not authorize SM&W funds for light refreshments for conferences. Obviously, funds to pay for dinners or refreshments in these instances must come out of someone's pockets -- make sure that they don't all come out of yours!

In years past, your local civilian community could be called upon to help defray costs or host certain events that could not be paid for using ORF or SM&W funds. However, fairly new ethics regulations severely limit these past practices. As a general rule, if a local Chamber of Commerce were to offer, unsolicited, modest items such as refreshments, complimentary "welcome baskets", or items with little intrinsic value, such as plaques or certificates, current regulations would allow their acceptance. But, you cannot solicit or accept gifts from outside sources who do or seek to do business with the Air Force. Further, Air Force employees may not accept gifts that are given because of the employee's official position. There are several exclusions to these rules, but their interpretation can be complicated. The bottom line you need to know: Consult with your staff judge advocate on any question involving the offer of a service, meal, or gift from a source outside the Department of Defense. You'll save yourself and your commander unneeded grief and trouble if you do.

Here are a few suggestions on funding dinners or conferences when U.S. Government funds are not available:
  • For most events, you'll have to charge pro-rata costs to the attendees. For conferences, workshops, and seminars, estimate the total cost to provide refreshments, meals, and any other miscellaneous costs (speaker fees or conference materials). Divide the total cost by the number of attendees. Remember to clearly itemize the conference fee since some costs may be reimbursable to the attendee. Make sure to get the payment up front -- let the attendees know what they owe early.
  • For a special event like a dining-in or dining-out, you'll want to factor in not only the cost of the meal but the costs for such things as programs, honored guests' meals, and decorations. Prorate these additional costs over all the attendees (consider a "sliding scale" that does not penalize the lower ranking attendees).
In conclusion, commanders and protocol officers still face a difficult problem. There are still at least three different sources of funds for discretionary expenses: official representation funds, other appropriated funds, and SM&W authority to spend NAFs. Each of these sources is governed by a different set of directives, with different ways of classifying expenses, and complex rules governing their use. It also seems that each funds source has a different focal point on a commander's staff. The protocol or public affairs office typically provides expertise on official representation funds. The budget office or supply office is the authority on other areas of appropriated fund support, and the services office administers the SM&W program. All have some degree of expertise in their own programs, but little knowledge of the others. This makes determining the proper fund source very difficult and an absolute necessity. The solution described in the following paragraph should help solve this problem and provide education for the novice trying to determine funding sources.

Table of "Protocol Funds" Expenditures

The following table describes a variety of events that may or may not qualify for funding with O&M, ORF, and SM&W funds. It also appears in the AFI on SM&W; funds. It represents, for the first time, guidance for all three major fund sources and summarizes it in a single document. It lists a variety of possible expenditures, narrowing down the circumstances when necessary to provide precise guidance, and displays the rules in a side-by-side format to facilitate comparison among the different fund sources. This table has been cross-checked by comptrollers, budget office, public affairs offices, and protocol offices, and has been in use by most of the MAJCOMs since 1990. In using the table, we define "light refreshments' as non-alcoholic drinks, finger foods, snacks or dessert and do not include heavy hors d'oeuvres, buffets, banquets, smorgasbords, or meat items. (Exceptions to meat items are meatballs, chicken wings, and chicken drummies)


Table 12.1 SPECIAL, MORALE, and WELFARE (SM&W) AND RELATED EXPENDITURES
{Taken from AFI 34-201, Use of Nonappropriated Funds (NAFs)}
Section A. Individual Recognition Programs
Section B. Civic Affairs And Events
Section C. Memorial Observances
Section D. Welcoming And Orienting
Section E. Hosting Of Visiting Personnel
Section F. Enhancement Of Environment
Section G. Conferences, Workshops, And Seminars
Section H. Change Of Command Ceremonies
Section I. Membership In Organizations

 



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