****

***Employee Association Manager of the Year Award***

In April, Ms. Sally Debbaugh of the U.S. Government Employees Recreation Association (USGERA) in Tunis, Tunisia was selected for the 2004 Manager of the Year award (based on her performance during 2003).  Ms. Debbaugh was cited for cutting costs while at the same time increasing the USGERA’s income by almost ten times compared to the previous year.  The board was also extremely pleased with her hard work and innovative managerial skills.  In 2003, Ms. Debbaugh recruited, hired and trained her 8-member staff, implemented the Third Country Diplomat (TCD) program, installed a point of sale system, increased inventory turnover, improved post morale through community events, and negotiated new concessionaire services for USGERA customers.  

Second place was awarded to Jay Crawford of the Employee Welfare Association (EWA) in Tokyo, Japan for his enthusiastic leadership, customer service attitude, and commitment to new business opportunities.  Third place was a tie between Shaun Parker of the American Embassy Employees Association (AEEA) in Kiev, Ukraine and Tom Davis of the 

U.S. Employee Association (USEA) in Islamabad, Pakistan.  Mr. Parker was cited for increasing cash flow and the AEEA’s involvement in the community and Mr. Davis was cited for his dedication and creativity and increasing the USEA’s cash flow. 

This year’s Manager of the Year award was exceptionally difficult to decide as there were so many nominees and all were outstanding.  The remaining nominees (in alphabetical order by post) are:

-- Beirut, Tami Azzi    

-- Cairo, Shaila Contractor

-- Dhaka, Annette Nuttall

-- Helsinki, Barry Mederrick

-- La Paz, Yvonne Lyons

-- Lagos, Rose Gregoire

-- Muscat, Marci Moore

-- New Delhi, Som Nag

-- Oslo, Joseph Perez

-- Ouagadougou, Alfred Kabore/ Jeff Allen     

-- Quito, Maryanne Macris

-- Seoul, Young Kim

-- Stockholm, Tiffany Engstrom-Young

-- Tel Aviv, Michael Labrecque

-- Warsaw, Beata Smialek

-- Yerevan, Rod Rumsey

The annual awards process is announced each January.  Nominations are submitted by Boards of Directors based upon the manager’s performance for the calendar year just prior.  The winners receive framed certificates and a cash award.  Copies of this year’s nominations are available from CR upon request.

  Congratulations again to the winners and nominees for making 2003 a great year!

**4th  of July**

**Events**

It’s that time of year again!  Time to celebrate the birthday of the U.S. of A.  Around the world, U.S. mission communities are gearing up for 4th of July events.  Around CR, the staff is gearing up to answer questions on employee associations and 4th of July events.  Below are some of the more common questions we receive along with our guidance on the issue.

*Can the association accept donations from outside vendors for our event?*

If vendors/businesses offer donations that benefit the membership, the association may accept them, provided there is no implication of privileges to be extended to them for the donation.  

*Can the association run the U.S. mission’s 4th of July party and keep a portion of ticket sales?*

It is appropriate for the employee association to plan/organize and manage a 4th of July celebration for the mission community, to include ticket sales.  The employee association should identify the venue and all costs associated with the event prior to establishing the ticket price.  Additionally, given the nature of the event, the employee association should obtain appropriate liability insurance prior to the event - if the board has not already done so.  In addition to ticket sales, the association may also provide concession sales of snacks and sodas, etc (and keep any profits).  

*Can we hold a raffle at our 4th of July event?*

Gambling, or games of chance, are prohibited per Federal Property Management Regulations.  This applies to gambling in its traditional form (i.e. slot machines and poker games) as well as other types of games of chance such as raffles.  The question really boils down to whether the participants of the game pay money in exchange for a chance to guess.  If so, this is against regulations.  If not, and options to play the game are given simply to event attendees, association members, or anyone who requests one, then such a guessing game would be OK.  Additional questions on gambling may be referred to the CR Operations Team.

*Can the association hold money for the 4th of July Committee?*

Employee associations may hold funds for the CLO and for CLO sponsored events.  To avoid any misunderstandings or disputes, money received or distributed should be signed for and a clear modus of operandi must be written indicating how funds will be handled (i.e. who is eligible to request funds, etc.).  Keep in mind that any money received in this manner is not considered income for the association and should not be accounted for as such.  To avoid money being included in calculation of the annual assessment. the money should be clearly defined on the association’s balance sheet as a separate line item for the CLO. 

###### Did you know?...

· Customers subconsciously prefer *fewer* choices in the size of products and ...

· When it comes to size, *larger* sizes tend to be the most popular 

· Finally, retail stores typically invest 1-2% of sales per year in technology

  The CR Operations Team gathered these nuggets of retail wisdom from the 2004 Military Commissary Conference that took place earlier this year in April.  

***IT ALL ADDS UP***

Unfortunately, as a staff, we find it fairly common that employee associations do not operate with budgets.  For the most part this is true because, budgets are not mandated.  Maybe they should be.  

No matter how small the operation, a budget is the single most effective financial management tool available to Boards of Directors.  A budget serves to summarize the goals of management in a formal plan and allows the board to quantify targets for sales, cost of goods sold, operating expenses, net income, and cash flow.  Budgeting becomes especially important for associations experiencing cash flow problems.  By budgeting, management is able to respond to change in an efficient manner.  This efficiency is accomplished because the budget process obligates the board to think ahead and prepare for the affects of such things as a change in the composition of the membership, loss of sales, or replacement of fixed assets, to name a few.  Budgeting also compels the board to compare the success of one operation (e.g., commissary) to other operations (e.g., cafeteria, preschool, etc.) keeping in mind the overall goal that each revenue generating activity should be financially self-sustaining. 

In preparing the budget, historical data and trends *generally* serve as the benchmark (provided historical data is reasonably representative of present day operations).  Analyzing sales is the starting point for budgeting for most associations because inventory levels, purchases, and operating expenses are, by and large, determined based on sales activity.   Begin by listing known expenses and cash outlays from previous years.  Review these and note any trends as increasing or decreasing.  Are increases in expenses controllable or are they fixed?

Project membership demographics for the next calendar year.  How will the demographics affect sales and use of services?  A great source for such demographic information is the CLO.  

Review past years’ markup policy on sales and services.  Did the markup cover costs related to the sales/services?  Did the revenues cover overhead expenses?  Was the markup too low to provide for an adequate profit margin?  Or, did unanticipated expenses arise?

Review present inventory to determine salability.  Measures should be in place to ensure that inventory replenishment selections meet the needs of the membership.  Develop an ordering schedule that best suits customer needs to improve your inventory turnover.

Plan for contingencies.  Analyze non-cash expenses such as depreciation.  Anticipate the replacement of fully depreciated assets.

After completing the above steps, you’ll have the necessary tools to project revenues, expenses, and cash disbursements.  These projections should be detailed in the budget.  The budget should be prepared based on the association’s reporting year – in other words, on a calendar year basis.

The budgeting process does not end with the preparation of the report.  For a budget to be effective, management must continuously compare actual performance with planned performance.  Actual results should be monitored on a monthly basis.  In fact, the board should receive monthly actual vs. projected financial statements.  Monitoring actual results will allow the board to implement corrective measures in a timely manner and to assure that money is being spent as the board has voted it be spent.

Questions regarding the budgeting process may be directed to the CR Accounting Team.  For boilerplate accounting documents and instructionals, including budgets, please visit our internet website at: www.state.gov/m/a/c8225.htm.

##      Human Resources

## ...Managing the Association’s Most Valuable Asset

For employee associations, summer is a time of turnover.  The board and members move onto other assignments while new members come in.  As members move on, often the manager does the same, making it necessary to find and hire another manager.

  Human resource management is a balancing act.  At one extreme, you hire qualified people who are well suited to meet the needs of the business.  At the other extreme, you train and develop employees to meet those needs.  Most employee associations fall between the two extremes. Essentially, the employee association’s goal is to hire or promote the best qualified person or people it can find ***and***afford.  Afford?   Hmmm.     That’s a topic for another discussion.  Best qualified you can find?  That, I believe, we can address.

Where to begin?  You’ve identified the need to fill a vacancy.  You’ll need a job posting.  The job posting should include the job title, brief description of duties to be performed, duty hours, duty location, guidelines for application, and the latest date to apply.  You may also include information pertaining to pay and benefits (as appropriate for your particular situation and locale).  Also consider stating the minimum qualifications required and those qualifications desired.  Additionally, the posting should clearly indicate that the position is not a USG position.  

The next step is posting the job.  Where will your applicant pool come from?  Employee associations have a great deal of flexibility in the hiring process and are not required to follow USG regulations and policies pertaining to the recruitment and retention of FSNs.  As such, your applicant pool may be a combination of eligible family members, locally resident U.S. citizens, local national citizens, and third country national citizens.  Keep in mind employee association positions are *not* subject to the priority placement of eligible family members at post.  Bottom line, you hire the best-qualified person you can find and *afford.*

Employee associations should develop a standard job application to provide to applicants. Applications should be reviewed in their entirety prior to scheduling interviews.  Determine who will review the applications.  For example, applications for a cashier position should be reviewed by the activity manager (i.e., commissary manager, video club manager, club manager) or the general manager where no activity manager exists.  The Board of Directors or hiring/selection committee delegated by the board should review applications for the position of general manager.  Applicants should be ranked based on their level of education and work experience.  Other experience may be considered as it may relate to the duties to be performed.  All interviews should be conducted by the same individual or individuals to ensure continuity and fairness in the selection process.  Standard questions should be developed for use in interviews to include some job-specific questions.  For example, accounting applicants should be queried on basic accounting principles.  

Upon completion of all interviews, a selection may be made and an offer extended to the selected applicant.

Many associations often overlook the next course of action:  draft an employment agreement outlining those details of his/her employment.  A boilerplate employment agreement is available from our internet website at: www.state.gov/m/a/c8225.htm.    

The employment agreement must take into account local labor laws as they apply to employees. (In some countries local labor laws may also apply to third country nationals and/or U.S. citizens.)  Often, post’s human resources office can provide guidance pertaining to local labor laws.  Keep in mind, a signed contract may not supercede applicable labor laws, even for locally resident U.S. citizens.  Once drafted, feel free to request a review from the CR staff.  In general, we can point out potential areas of concern.  However, we will be unable to identify violations of local labor laws.  For that, you must utilize a local attorney or other individual at post intimately familiar with such laws.

Now that you have carefully crafted the employment agreement, you need only obtain the appropriate signatures.  Employment agreements should contain one board member signature (usually the Board Chair) and the employee’s signature.  

Present the employment agreement to the employee along with his/her description of duties and the association’s employee handbook.  Upon signature, a copy of the agreement should be provided to the employee.  The original document should be retained in the employee’s file.   

What’s next?  Now that your newly appointed employee is on staff, how do you retain him/her?  You must ensure that the individual is provided the necessary tools to perform the job while developing his/her skills.  To do so will require a combination of resource materials, training, and feedback.  Resource materials and on-the-job training must be developed in-house and tailored to each individual employee associations’ needs.  The best method for providing and receiving feedback is performance reviews.  In the next issue of the *CRonicle*, we’ll follow-up this article with guidance for developing employee standards, implementing the performance review process, and tips for incentives that will help to keep your employees happy.  

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