M A N A G E M E N T ’ S D I S C U S S I O N & A N A
PLACE HOLDER L Y S I PAGE S
2 After retiring from the Army, Henry worked for his The MD&A features:
hometown of Carbon Hill, Alabama for 26 years. Mission & Vision First with the police. Then in city hall as a Clerk, Organization Magistrate, Council Member and ultimately Mayor. A Locations “We had the same ol’ complaints as they do in DC:
transportation, police, fire departments, and … how Residents & Staff
ya gonna control all the dang dogs!?!” Henry once Strategic Vision appropriated $19 million to rebuild the school, High-Priority S
repave highways and replace sidewalks. That Performance Goals ’
planning experience was an asset when it came to Performance Summary & Highlights
Gulfport’s redevelopment. So Henry was made Chair T
Financial Statement & of the Gulfport Startup Committee. “In 2006, Mr. Summary
Cox and I attended five meetings with Congress Legal & Regulatory
to present five distinct options for Gulfport. Our Compliance N N E “I work with Gulfport O I public affairs to keep M S E I residents informed.” S – Henry Pike S S (Army) G Y U A L
committee had people from the VA and DoD. C N Plus we worked with architects and contractors to A determine the best way forward.” Today Henry gives
the residents routine updates. And he posts new A S I
construction photos on his door. You could say he’s N
‘Mayor’ of the new Gulfport. A D M
28 29 M S I A S N Y A L Over the past two centuries, the mission of the Home has not wavered. Yet, the G A
execution of that mission has certainly evolved over time. E N M
A In 1826 the Naval Hospital was launched in Philadelphia to care for seamen and
E N & officers. By 1851 the Old Soldiers’ Home was established for veterans in
Washington with reparations from the Mexican War. A Trust Fund was created to T N REFOCUS RETIREMENT ’ S
O make this Home self-sufficient, and each enlisted contributed small payroll deduc- I
O D S tions to grow the Fund. I S Since then, the notion of retirement has dramatically evolved. In the 1800s, S U C
C veterans were urged to recuperate and remain at rest. That view changed at the U S S I Introduction turn of the century when military governors ruled the Homes and demanded strict S D adherence to traditions of the service. In the early 20th century, a working farm I
O
S sustained our Washington veterans. By the ’60s, retirement progressed toward ’ N T recreation and leisure, and many activities like golf and swimming took off. Indeed, & N
many stipend workers helped support that lifestyle. E A M N E A G We’re honing L Y A
Mission: Vision Guiding Principles S N our Vision by: I A S M To fulfill our nation’s commitment To actively nurture the Health and Establish Accountability Adopting Aging to its veterans by providing a Wellness Philosophy of Aging while Honor Heritage in Place premier retirement community providing our nation’s heroes with Inspire Excellence with exceptional residential care a continuum of Life Care Services Maintain Integrity Modernizing all and extensive support services. in a community setting. Maximize Workforce Facilities Serve Customers Raising Effectiveness
Of late, AFRH is posturing to move forward in a new direction – with modern facilities and operations to match the Aging in Place vision in modern retirement living. In FY09, AFRH received funding from its Trust Fund to begin “rightsizing” our infrastructure to realize efficiencies. Plus our new Gulfport facility, which reflects our vision for modern retirement, was 75% complete at the end of this fiscal year. Our great challenge is to preserve an enjoyable retirement in a fiscally prudent manner. Today, management is pleased to report that we are truly succeeding. [From Public Law] - 24 US Code, Section 411 Establishment of Armed Forces Retirement Home (b) Purpose - The purpose of the Retirement Home is to provide, through the Armed Forces Retirement Home-Washington and the Armed Forces Retirement Home-Gulfport, residences and related services for certain retired and former members of the Armed Forces.
30 31 M S I
REGARD STRUCTURE A S N Y A L G A E N M A
E N &
AFRH Organization T N ’ S
O Management I
D S
e AFRH is organized in a contemporary I S truc tur n al S MG Carla S rg an izatio U R H O A F business establishment, with a corpo- C C rate office that manages independent Hawley-Bowland U S S I
functioning retirement communities in (Army), North S D
I n rg an izatio different locations. This arrangement A F R H O O
S Atlantic Regional ’ N C o rp o rate allows corporate to make strategic T
R eso urc es Medical ate decisions, as well as communicate & N C o rp o r am es T e E I n itiativ er tin g O f fic with Congress and constituents. Command, A hief O p era M the C O f fic e o f to n , D C ) N n W ashin g E c ated i lo A ( A F R H - Walter Reed, is G
- n Facilities L A F R H W ashin g to
Y A 0 1 0 ) G ulf p o rt ( 2 Local Advisory S N Using the successful “One Model” for I
A Board Chair. all community operations, each Home S M has a Director who reports to the COO. Plus each community can make its own tactical operational decisions, RADM Christine ratio n s manage its facilities and respond to L ” f o r o p e N E M O D E ST A F F Hunter (Navy), A F R H “O SU P P O R T local resident requirements. A Local T he f fic e - Saf ety O s C en ter Advisory Board helps provide expert Deputy Director - B usin es T O R D I R E C experience and knowledge of military A F R H - W A F R H - G TRICARE and medical related concerns. Management Servicc es RR esidd enn t S Activity, is Servic es H ealthc are s re Servic e atio n s H ealthc a Medical Advisor mp us O p er C a io n s A d miss es n al Servic to AFRH R ec reatio rvic es lun teer Se V o an c e N ursin g rity (far right). y M ain ten ic es Sec u F ac ilit o c ial Serv ervic es atio n S ter D in in g S T ran sp o rt ln ess C en c tivities W el elig io us A g istic s R ic es L o D en tal o d ial Serv d s C ust G ro un O p to metry es U tiliti N utritio n ec o rd s M ed ic al R ivin g A ssisted L C are L o n g T erm up p o rt M emo ry S Our “One Model” is at work in each AFRH facility.
32 33 . . . . g n i s a e r c e d
e r e w
Full Time Equivalent Staff s r s 1000 e e
1000 b e y m u o 900 l n
p f
800 f m
a 736 t
E 683 s
700 f 1 o 0 600 r 0 548 2 e
b 500 h 446 g M m S u
u 400 o I
336 A r
N 299 288283 266 307 h S
300 N t
5 Y Washington, DC A 200 9 L 9 G 1
A 100 Dating back to 1851, AFRH-W has going significant changes. The
EXPLORE SURROUNDINGS E m N o
0 r ** * M
1995 F 2002 2003 2004 2005 2006m any2007 historic2008 2009 features 2010 2011 and is adjacent major change will begin in FY11, A E Year *Projected **Gulfporto Presidentt starting to hireLincoln’s Cottage and the with the replacement of the Scott N & Gulfport, MS
AFRH FY09 ReveSoldiers’nue Trend Homes National Cemetery. Yet, Building. The new facility will offer T N ’
AFRH-G was damaged in 2005 by the infrastructure of AFRH-W is under- smaller, more accessible activity S O 50 s
I Locations r Hurricane Katrina, and will reopen spaces for residents. Upgrades to D a S l FY07 l I S o
as a modern senior living facility in 40 FY08 the Home’s main entrance and golf S D
U
FY09 C October 2010 on the same site it f shack will begin in FY10, along with o C
U
s 30 S has occupied since 1976. keyless entry to resident rooms. S n I o i S All amenities for dining, health- l
D AFRH-W is conveniently located l i I 20 O care and recreation are planned. M near world-class medical centers S ’ N The historic chapel is being suc- and historic sites in Washington. T 10 & N cessfully renovated after sustaining It boasts a 9-hole golf course on
E A hurricane damage. And the centu- 0 its property along with many hobby M Enlisted Fines Enlisted Payroll Resident Fees Sales & LeasesInterest Income N
E ry-old “Graduation Oak” tree still & Forfeitures Contributions shops, a fitness center and onsite A Revenue Sources G presides over this community. medical services. L Y A
AFRH Stewardship: Trust Fund and Budget Authority S N I
A A western view of the new Gulfport > < Artist’s rendering of the new S 200 Trust Fund Balance Commons and Quadrangle M s r Budget Authority a 180 l l
o 160 D
f 140 o
Eligibility RESIDENTS > Veterans by Branch of Service Trends
s 120
– USn Army: 403 (42%) Over the years residency has fluctuated.
Anyone may become an AFRH resi- > Veterans by Gender o 100 i
– USl Air Force: 315 (32%) Per the chart below, overall residency l
dent if their active duty military service – Male: 875 (90%) i 80 – US Navy: 224: (23%) has declined (along with capacity). was at least 50 percent enlisted, – Female: 102 (10%) M 60 – US Marine Corps: 30 (3%) Buildings no longer serviceable have Warrant Officer or Limited Duty Officer 40 > Veterans who served in War Theaters*: – US Coast Guard: 4 (< .01 %) been mothballed as part of the strategic (per US Code 24, Section 412 (24 20 – World War II: 413 (31%) Total: 977 planning process. All residents now live USC.412). Further, a person must also: 0 – Korean War: 460 (36%) 1995 2002 2003 2004 2005 2006 at200 AFRH-W7 2008 2009till AFRH-G 2010* 2011* reopens. a) Have 20 or more years of active – Vietnam: 440 (33%) Fiscal Year *Projected duty service and be at least 60 – Grenada: 2 (< .01 %) years old, OR – Panama: 4 (< .01 %) AFRH Resident Trend Data – Gulf War: 2 (< .01 %) b) Be unable to earn a livelihood due 262 255 1600 Independant Living to a service-connected disability, * Figures exceed 100% as many have served in multiple wars Healthcare OR 1400 271 235 > Current Resident Mix* (per Eligibility): n 1200 o
c) Be unable to earn a livelihood due i 222 t 202 a) 20 year Military Retiree - 734 (76%) a 1000 to a non service-connected disability, l u
yet served in a war theater or b) Unable to earn a livelihood (service p 800 o
received hostile fire pay, OR P connected): 78 (8%) 600 1324 1304 929 888 844 775
d) Have served in a women’s compo- c) Unable to earn a livelihood (war 400 nent of the Services before June 12, theater): 112 (11%) 200 1948 *Note: FY04 + 05 d) Women serving before 1948: 53 (5%) included AFRH- 0 Gulfport operational FY04* FY05* FY06 FY07 FY08 FY09 * Demographics fluctuate, yet are accurate as of Sep 30, 2009 Fiscal Years *Note: FY04 + 05 included AFRH-Gulfport operational 34 35
The Trust Fund Balance has been Steadily increasing since 2003, but will decrease with withdrawals for Gulfport and the Scott project in 2010 200 *projected 180
160
140
120
100
80
60
40
20
0 1995 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 2011*
AFRH Trust Fund Balance (in Millions of Dollars) NOTE: The drop from $171 million is reflection of hte $21 million expense in rebuilding Gulfport and the beginning of the Scott Project expense of $8M.) M S I A S N Y A L G A E N M A
E N &
T N ’ S O I
D S I S S U C C U S S I S D I
O S ’ “We felt very lucky to come here. N T
& N
E
But we’re looking forward to A M N E going back to Gulfport.” A G L Y A S N I
A – Marian Ritchie (Navy), left S M
Barriers STAFF Developments Gulfport Resident Wait List Many eligible veterans who wish to As AFRH residency has decreased, so large decrease occurred when Gulfport Synergy move to AFRH cannot. Some can’t . .
has the number of staf. f. The Staff Trend closed in 2005. However, Gulfport .
move to the East Coast or separate g
The AFRH team is comprised of Federal chart below shows then trend towards staffing will ramp up starting 2nd i Total Former Gulfport 376 from family in their waning years. s employees, expert consultants, and serv- more efficient staffing.a Incidentally, a quarter FY10. e r
Former Gulfport at AFRH-W: 204 Another hurdle is the policy regarding ice providers. Blending expertise from c e d spouse admission. When spouses fail various sources has proven to improve Full Time Equivalent Staff Former Gulfport out of AFRH: 172 e 1000 r to meet our firm Eligibility, we lose service to residents and reduce costs. e
1000 w
s
eligible veterans as residents, along s e
Our devoted staff serves our residents r e Total Other 585 900 e y with their spouses. with the same honor and commitment b o m l 800 u
Current residents asking transfer: 313 To lessen the impact of such p 736
with which they served our great nation. n
683 m 700 f f
losses, AFRH has developed a unique E
Eligible & approved applicants: 272 Members of the AFRH family are: a t f s o
600 approach: make both existing facilities 548 1 r 0
> Dedicated, compassionate & energetic e have similar capacity: AFRH-G 582 500 0 b
2 446
m
> Salaried professionals & contracted h and AFRH-W 568. This enables cost 400 g u 336 u
experts N 299 307 efficiencies to be achieved. Further, o 288283 266 300 r h
> Broad mix of service & health t the possibility of developing additional, 200 5 personnel 9 more favorable locations can be 9 1
100 > A multi-cultural blend of committed considered. m 0 o workers r ** * 1995 F 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year *Projected **Gulfport starting to hire 36 37 AFRH FY09 Revenue Trends
50 s
r FY07 a
l FY08
l 40
o FY09 D
f o 30 s n o i l l i 20 M
10
0 Enlisted Fines Enlisted Payroll Resident Fees Sales & LeasesInterest Income & Forfeitures Contributions Revenue Sources
AFRH Stewardship: Trust Fund and Budget Authority
200 Trust Fund Balance 180 Budget Authority s r a
l 160 l o
D 140
f o
120 s
n 100 o i l l
i 80
M 60
40
20
0 1995 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011* Fiscal Year *Projected
AFRH Resident Trend Data
262 255 1600 Independant Living Healthcare 1400 271 235 1200 n 222 o i 202 t 1000 a l u
p 800 o P 600 1324 1304 929 888 844 775
400
200
0 FY04* FY05* FY06 FY07 FY08 FY09 Fiscal Years *Note: FY04 + 05 included AFRH-Gulfport operational
The Trust Fund Balance has been Steadily increasing since 2003, but will decrease with withdrawals for Gulfport and the Scott project in 2010 200 *projected 180
160
140
120
100
80
60
40
20
0 1995 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 2011*
AFRH Trust Fund Balance (in Millions of Dollars) NOTE: The drop from $171 million is reflection of hte $21 million expense in rebuilding Gulfport and the beginning of the Scott Project expense of $8M.) M S I A S N Y A L G A E
N DISTINGUISH PURPOSE M A
E N &
T N ’ S O I
D S Strategic Vision I S S U C C U S S I S D I
& High-Priority O S ’ N T
& N
E A M N E
Performance A G L Y A S N High-Priority Performance Goals A “mock” room, I A S M Goals AFRH conceived five Strategic Goals in 2003. They form the basis of our Strategic This year, AFRH has differentiated its “significant with the actual furniture, was Plan for 2006-2010. Each Goal has specific, measurable objectives – with corre- challenges.” These key initiatives were existing objectives in created in DC sponding Key Actions to ensure steady progress. Our aim has been to make great the AFRH Strategic Plan – yet they have risen to the top of our A for resident strides – so that our veterans will be just as proud of this organization as we are Must-Do list. Now, these endeavors are the key to greatly improving focus groups.
of them. So, we have marched forward with unwavering resolve to meet and resident life and ultimately realizing the AFRH Mission. Thus, we are
exceed these Strategic Goals: spearheading these vital Performance Goals:
Goal 1: Goal 2: Goal 3: Financial Growth: Improved Processes: Culture of Integrity: Create net growth and stability for the Modernize operations to leverage and Inspire commitment to AFRH Guiding Healthcare Housing Stewardship4 AFRH Trust Fund. maximize resources across AFRH. Principles through mutual respect. (Resident Wellbeing) a. Gulfport: (Corporate Effectiveness)
Ensure exceptional resident Add Residents to a fully Maintain overall vitality via Exceptional Service: Learning & Growth: care and extensive support. functional facility in FY11. efficient management. Enhance the AFRH experience to Promote personal excellence and enrich the quality of residents’ lives. professional growth for all personnel. b. Washington: “Right-size” facility and give
it a facelift by 2013.
4 Resident satisfaction, superior staff, capital improvements, effective contracts, contained costs & Trust Fund solvency
38 39 M S I A S N Y A L G A E
N SURVEY SUCCESS M A
E N & STATUS MANAGEMENT CHALLENGE RESULTS
T N ’
Progress Scott Project – GSA initiated project S O I +++ – Bridging Architect & Construction Manager awarded D S Performance I S S
U Progress Gulfport residents’ return – Priority waiting list established C
C +++ – Ongoing Focus Groups study Q&As U S S I S
D Progress Succession Planning – Plan developed within Human Capital Strategic Plan I
Summary & O +++ S ’ N T Progress CARF/CCAC Accreditation – CARF/CCAC inspection yielded accreditation thru 2013 & N
+++ – Monthly monitoring continues E A M N
E Progress Constituent & Congressional – LRFP completed & updated Highlights A G +++ oversight committee education – Local Advisory Board stays active L Y A – NCPC approved Scott Project
AFRH has directed many resources to meet our challenges and execute our S N I A S
M strategy. And many FY09 achievements are documented here. Results are positive.
While some staffing challenges disrupted our performance rating cycles, they never
inhibited Excellent Service or impeded progress on major performance goals. A STATUS PERFORMANCE CHALLENGES RESULTS With the emergence of our three High Performance Goals in FY09, these new Progress Resident maintenance requests – Automated system set up with great results measures along with our former measures form a complete picture of how AFRH +++
is doing. Progress Customer service improvements – I SERVE badge buddy issued to all staff +++ – Survey of activities show 70+% satisfaction
Progress Accountability of funds – Unqualified audit opinion Challenges +++
Each year the AFRH IG identifies and reports on management’s challenges as Progress Visibility of the Home’s military – 1st annual Freedom Day gala held (September 22) +++ heritage – Halls of Honor designed into program of requirements well as performance challenges facing the Home. Throughout FY09, our IG for both Homes
tracked the collective challenges identified in FY08 for this year. Progress Timelines & participation in – Added Performance Management as COO Timothy +++ mandatory training mandatory class Cox explains the Home’s benefits to visiting enlisted.
40 41 M S I
High-Priority Performance Goals Performance Measures Trend A S N Y A L These Goals were established in FY09 (per OMB requirements), and closely All Measures stem from the AFRH Strategic Goals and Objectives – starting in G A E N
match our four Focus Areas from last year. Those Areas were a key part of the FY07 as a baseline. As always, our managers review staff performance using M A
E N & AFRH Strategic Plan and their measures can be followed over several years. AFRH Strategic Goals the Business Plan and its corresponding action plans. Likewise, integrating our
T N
FG - Financial Growth ’
For FY09, our new High-Priority Performance Goals are prominent strategies budget and Goals is carefully monitored. And now, so is the mapping of our S O ES - Exceptional Service I
D S that will help us focus our resources even better. IP - Improved Processes Strategic Goals to our new High-Priority Performance Goals. I S LG - Learning & Growth S U C C CI - Culture of Integrity U S High-Priority Performance Goals Analysis S I
Our New Performance Goals support Most Strategic Goals S D I
O S
’ Relationship to High-Priority Baseline Performance FY07 FY08 FY09 FY09 AFRH STRATEGIC H-P GOAL 1 H-P GOAL 2 H-P GOAL 3 N
T AFRH Strategic Performance Measure Actual
Goals Goal FY07 Target GOALS WELLBEING HOUSING STEWARDSHIP & N
E Goal: HEALTHCARE (Resident Wellbeing) Financial Growth • • • A M N E
ES, IP Accreditation In good standing Met Met Met CARF/CCAC through A Exceptional Service • • • G 2013 for AFRH-W Mike Longwell L Y A
ES, IP % of resident 70% Met Met Met 74% Improved Processes • • • S N and Richard satisfaction I A S Learning & Growth • • M ES, IP % of resident 95% NA NA Met 99% Robinson assessment plans Culture of Integrity • • (Army) salute Goal: HOUSING FOR VETERANS (Gulport & Washington)
GULFPORT the Tomb of
FG, ES, IP Construction Within Budget and Met Met Met On Plan the Unknown. on schedule
FG, ES, IP Operational Plans Plan N/A Met Met On Plan
WASHINGTON
Construction Within budget and NA NA Met On Plan on schedule
FG, ES, IP Operational Plans Plan Met Met Met On Plan
Goal: STEWARDSHIP (Corporate Effectiveness)
FG Trust Fund solvency Even balance of Met Met Met Long Range Financial resources versus Plan reported solvency obligations through 2018
FG, IP Accuracy of Financial Unqualified audit Met Met Met Unqualified audit reporting opinion opinion
LG Evidence of 80% participation in Met Met Not 98% for Safety, EEO, measurable training 4 mandatory training Met and Ethics, IT Security goals classes for all staff not completed
CI % of Employee 70% N/A Met Not 63% of all responses Climate Survey Met were in the top 2 positive responses of choices. While 77% are “Excellent” or satisfied overall, there “Very Good” are some problems with pay levels.
42 43 M S I WITNESS PROGRESS A S N
Y OVERVIEW: AFRH FINANCES A L G
A AFRH Trust Fund: our financing E
N source since 1851. M A
Our Trust Fund balance was at E N & Financial
$156 million in 1995 and dramatically T N ’
dropped to $101 million in 2002. This S O I
serious decline led Congress to seek D S Balance Sheet: Assets and Liabilities rose in FY09 (from FY08): I S
new leadership and direction for S U Statements Assets: C AFRH. Ever since, the balance has C U
S been steadily rising through better FY09 FY08 Net changes: S I
$477,345,938 $469,867,888 $7,478,050 S
D management and cost efficiencies. I
*The Trust Fund rose to $167 million Liabilities: O S ’ at the end of FY08 and reached $177 N T
Analysis & FY09 FY08 Net changes: & N million in FY09. Yet, the impending $16,329,453 $14,939,341 $1,390,112
E Scott Project will be fully funded from A M N
E the Trust Fund. As we expense the A G Scott Project, the balance in the Trust L Y A Summary S
N Fund will decline from FY10 through
5th Consecutive Unqualified Audit Opinion: I A FY13. S M The independent accounting firm Brown & Company expressed an unqualified Budget Authority: investing in opinion on our comparative FY09 and FY08 financial statements, the Consolidated veteran housing. 5Statements of Net Cost, Balance Sheets, Statements of Changes in Net Position, Increased spending is the result of and Statement of Budgetary Resources. Also, Brown & Company did not report any greatly enhancing veteran housing – material weaknesses. specifically, startup operations to
Agency management, in partnership with BPD, is accountable for the integrity rebuild Gulfport and capital funding for the Washington Scott Project. Hence, of the financial information presented in this report. All financial statements and the Budget Authority for FY10 and data have been prepared from the AFRH accounting records in conformity with FY11 will show increases in spending generally accepted accounting principles (GAAP) as defined by the CFO’s Act of and decreases in the Trust Fund.
1990 and OMB. ENDING NET POSITION:
AFRH’s Net Position at the end of Limitations of the Principal Financial Statements FY09 (per the Consolidated Balance
Our statements have been prepared to report the financial position and operating Sheet and the Consolidated Statement of Changes in Net Position) was $461 results of AFRH, pursuant to the requirements of 31 U.S. 315(b). They were million: a $6 million increase – or 1.32 prepared following GAAP. These statements are in addition to financial reports percent – from the prior fiscal year. Net prepared from the same books and records used to monitor and control budgetary Position is the sum of the Unexpended Aging in Place
resources. They should be read with the understanding they are for a component of Appropriations and Cumulative Results will offer new of Operations. the US Government, a sovereign entity. resources for residents. 44 45 . . . . g n i s a e r c e d
e
r Full Time Equivalent Staff e 1000 w
s 1000 s r e e e b
y 900 m o l 800 u p n
736 f m
f 683 a E 700
t f s
o
600 1 548 r 0 0 e
500 2 b 446 h m 400 g u u 336 o N 299 288283 266 307 300 r h t
200 5 9 9 1
100 m
0 o r ** *
1995 F 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year *Projected **Gulfport starting to hire M S I
AFRH FY09 Revenue Trends A
S Our Course of Action: Revenue: Budgetary Concerns: Long Range Planning: N Y
50 A L a. Develop a plan to reduce
FY09 revenue was about $61 In the past decade, the needs of the In FY07 and FY08 we engaged experts G s A
r energy costs by 2014 FY07 E
million. Currently, the main source a AFRH-W community and the facilities to develop a multi-year financial plan N l M l 40 FY08 A of revenue for our Trust Fund is o to support them have shifted dramati- to ensure Trust Fund solvency while b. Create an optimum population
E
D FY09 on each campus with reduced N f & Enlisted Fines & Forfeitures. cally – requiring swift action over the addressing our agency-wide capital o
30 infrastructure by 2013 T s
N Further, the Home’s founders coming decade to accommodate needs. This led to the development of ’ n S
o c. Promote resident indepen- O established that funding would i both. Plus, the new administration the landmark 10-year LRFP. l I
l
i dence: implement Aging in D S come from automatic deductions 20 has charged agencies to leverage Concurrently, management also M
Place strategy by 2010 I S from enlisted military. Currently it Government purchasing power to sought to cut operating costs and S U d. Reengineer key cost driver con- C C
is 50 cents a month per individual, 10 achieve savings. improve resident services. We consid- U tracts between 2009 & 2013 S S
I for the duration of service. These Hence, we have developed, and are ered options ranging from replacing
e. Deploy our Master Plan to S D deductions have been supple- now executing plans to manage our buildings to adding programs to boost I 0
develop south campus O S mented with Interest Income Enlisted Fines Enlisted Payroll Resident Fees Sales & LeasesInterest Income financial issues. resident health. We decided to reduce ’ & Forfeitures Contributions N T (on Treasury Notes), Sales and Revenue Sources the need for costly healthcare by & N
Leases, as well as Resident Fees. Fiscal Concerns: implementing Aging in Place. This E
AFRH Stewardship: Trust Fund and Budget Authority A M
program motivates residents to stay N • Higher Gulfport operational sq. ft. E Earned Interest was lower: Sales & Leases healthy and identifies ways for them A
G 200 Trust Fund Balance $0.8, 1% costs (almost double in new facility) L Y A to stay in independent living – the s 180 Budget Authority In FY08 and 09 many of the r • Ongoing Washington high infrastruc- S N a least costly level of care. l I l A Home’s large Treasury Notes 160 ture costs (managing 272 acres) Resident Fees S o In the LRFP, experts analyzed our
M $11, 18% reached maturity and were rein- D • Exploding healthcare & energy costs
140 f new operating environment and man- o vested at a premium to increase 120 which have outpaced inflation s agement approach to improve resident sustained revenue in the out years. n • Inefficient costly contracts that do
o 100 i Interest Income service. Indeed, we found that it does l AFRH FY09 As a result, this netted a decline in l $-.1, 0% not meet the needs of AFRH i 80 REVENUE strengthen the Trust Fund. Moving for-
interest income for FY09. M Enl60isted Fines ward, the new operating environment & Forfeitures $4402, 70% will truly help us maintain Trust Fund Expenditures: Enlisted Payroll 20 Contributions solvency and keep budgets in check. As we focus on residents and the $7, 11% 0 All of which will help us serve our future, AFRH is spending funds on 1995 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011* nation’s veterans to the best of our two major Goals: Exceptional Fiscal Year *Projected ability. Service (which supports the High- Priority Goals of Healthcare and AFRH Resident Trend Data Housing) plus Improved Processes 262 255 (which fulfills our stewardship in 1600 Independant Living Healthcare finances and modernization). 1400 Learning & Growth Learning & Growth $14,309 (.03%) To control finances more effectively 271 235 $896 (0%) Improved Processes 1200 AFRH-WASHINGTON BUDGET $201,314 (.46%)
n “Working here is AFRH CORPORATE BUDGET BY STRATEGIC GOAL FY09 Culture of Integrity we have conducted numerous o 222 i BY STRATEGIC GOAL FY09 Culture of Integrity $48,621 (.11%) t 202 1000 $754,632 (8%) an adventure every studies in IT, acquisition, pharmacy, a l
u Financial Growth day. The people are chillers, power plant, healthcare p 800 Exceptional Service $0 (0%) o $437,624 (5%) delivery, maintenance, and the P marvelous.” 600 1324 1304 929 888 844 775 Exceptional Service LRFP. Financial Growth $43,516,638 (99.49%) –Jackie Bell, Improved Processes $1,216,063 (14%) 400 $6,583,065 (73%) Arts Specialist (Staff) 200
0 46 FY04* FY05* FY06 FY07 FY08 FY09 47 Fiscal Years *Note: FY04 + 05 included AFRH-Gulfport operational
The Trust Fund Balance has been Steadily increasing since 2003, but will decrease with withdrawals for Gulfport and the Scott project in 2010 200 *projected 180
160
140
120
100
80
60
40
20
0 1995 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 2011*
AFRH Trust Fund Balance (in Millions of Dollars) NOTE: The drop from $171 million is reflection of hte $21 million expense in rebuilding Gulfport and the beginning of the Scott Project expense of $8M.) M S I A S N Y A L G A E N M A
E N & 64 years later,
T N ’ S O I
D S I S veterans rally for S U C C U S S I S D I
O
S true peace. ’ N T
& N
The Embassy of Japan extended a generous olive E A M N E
branch, choosing eight residents to visit the country A G L Y A and play its veteran softball team. For a week they S N I A S
M toured Japan by train and ferry, tasted delectable food and sake, and explored exotic castles and tem- ples. All expenses paid. Above all, they formed close “When we landed, a Japanese player where but one building was left standing. Five residents bonds with their veteran counterparts in the East. grabbed my suitcase by one hand – and “It looked like a skeleton,” lamented Gigi. share stories me by the other. He never let go till we Given the history between our nations, from the got to our hotel!” beamed Marian Ritchie. you might think things would be awk- whirlwind Gigi Malone added, “We rode bullet ward. “Not so,” said Hugh Wingo, who journey to Japan trains at 300 mph across Japan. The served on the USS Benham and saw 50
landscape had beautiful gardens and of his buddies die from a kamikaze hit. (Stanley Sagara,
fields.” They also had an assigned inter- “We never saw anyone turn up their Dorothy Malone,
preter. “The trip meant a little extra to nose at us. One sponsor said: “You beat Marian Ritchie, me,” said Minoru Nagaoka smiling. us … but the next day after the war, you Minoru Nagaoka “That’s where my parent’s grew up: helped us.” This solidarity inspires us to & Hugh Wingo). Iwakuni, Japan. Stanley Sagara also has look forward to the day when today’s
eight cousins in Fukushima. But they adversaries become tomorrow’s allies.
were too busy to visit family. The group
toured a memorial park in Hiroshima,
48 49 M S I GATHER CONFIDENCE Internal Controls Risk Management A S N Y
Rigorous controls are integrated into The IC Board strengthened risk man- A L G
A our financial reporting system, via BPD agement in FY09 for key actions under E N
and NFC. An AFRH Senior Assessment the goal of Financial Growth. Also, a M A
Team, established by the CFO, has draft Risk Management Plan was vetted E N & LEGAL & maintained oversight of our IC program throughout AFRH. Managers were T
N FY09 Programs: since 2006. Each manager on this asked to identify high, medium, and ’ S O I Team reports controls through an low risks in their service areas. After D S
annual survey. AFRH can provide those risks were presented to the IC I S S U REGULATORY qualified assurance that controls over Board, action plans to mitigate them C C financial reporting as of September 30, were created. U S Washington S I
2009, were operating effectively. No IC Ongoing progress continues with S D I Master Plan
material weaknesses were reported. the expansion of key actions. Status O S ’ AFRH uses IC categories as required reports are now standard agenda items N T
COMPLIANCE &
N by law: at IC Board meetings. Plus many of 1 Management Affirmation
E
1) Control Environment: organizational the risks will become agenda items at A M AFRH made great strides in strengthening its management practices and internal structure & culture monthly Performance Improvement N E A G
2) Risk Assessment: identifying fac- meetings at the campus level. L controls (IC) in FY09. Our FY09 audit contained no material weaknesses. In addition, Y A Gulfport tors that may hinder objectives At the corporate level, AFRH had S N the Home emphasized IC risk management for each service area through the year. I
A 3) Control Activities: policies, proce- maintained three risk management Master Plan S
M M dures & mechanisms programs. Recently, the Scott Project Statement of Assurance 4) Information & Communications: was added as a fourth to improve 2 I am pleased to report AFRH compliance with all applicable requirements, and progress flow of information infrastructure and provide better in expanding action planning to previously identified risk areas. 5) Monitoring: periodic assessments housing for veterans. AFRH managers, along with our partners BPD and the National Finance Center (NFC), participate in all IC. We have assessed their effectiveness, in accordance with the Federal Managers’ Financial Integrity Act (FMFIA), (PL No. 97-255) Section 2 and OMB Circular The AFRH A-123, Management’s Responsibility for Internal Control. Based on our analysis, AFRH can provide reasonable assurance that objectives have LRFP been achieved. No material weaknesses have been reported in our IC or financial reporting. 1) Washington Master Plan Given our comprehensive management controls, I am pleased to certify with reason- This Plan strives to generate new revenue to support our resident-focused care able assurance that: 3 from underutilized land on the Washington Campus. The intention is to construct a
> AFRH financial reporting is reliable. and material effect on the financial ground lease with a developer(s), where AFRH retains land ownership and receives Transactions are properly recorded, statements. 1monthly payments. The strategy seeks to attract mix-use development of 77 acres processed and summarized to permit at a fair market value that is compatible with the AFRH Mission. From 2005 to the preparation of financial statements > AFRH performance reporting is reliable. 2008, AFRH progressed by gaining the approval of the residents and the NCPC. Scott Project in accordance with GAAP. Assets are Performance measures are properly The original selected developer (which declared bankruptcy in late 2008) and “AFRH can provide safeguarded against loss from unautho- recorded, processed and summarized to AFRH were unable to reach a suitable agreement. The credit crisis that subse- reasonable assurance rized acquisition, use or disposition. permit information preparation per criteria established by AFRH management. quently ensued made moving forward with the planned development impractical. 4 that objectives have > AFRH is in compliance with all appli- Thus, negotiations ended in late FY08. However, we are continuing to talk with cable laws and regulations under FMFIA, Timothy C. Cox other interested developers and will be positioned to proceed when the real estate been achieved.” FFMIA and FISMA. Financial and busi- market improves. —Timothy C. Cox (COO) ness exchanges are executed in accor- dance with laws governing the use of budget authority, as well as laws and Chief Operating Officer regulations that could have a direct November 16, 2009
50 51 M S I
Federal Manager’s Financial Integrity Federal Information Security HSPD-12 PIV (Homeland Security A S Act (FMFIA) Management Act (FISMA) Presidential Directive 12 - Personal N Y A L 2) Gulfport Master Plan Identification Verification). Certification G
A This Act requires an agency to report FISMA requires a competence review E
N The rebuild of the Gulfport facility is within budget and on schedule. Plans are was maintained. That assessment was
the health and integrity of its financial, of information security and privacy M A not scheduled for FY09, but will be
underway to reopen the facility to residents in October 2010. Its reopening will program and related activities. It policies, procedures and practices. E N & completed in FY10. In FY06, AFRH
be a force multiplier in our risk management strategy. ensures that resources are consistent One of its primary objectives is to T
N earned its Certification and Starting early in FY09, we ramped up planning efforts for the Gulfport standup. with the overall mission, that programs ensure the effectiveness of information ’ 2 S O Accreditation (C&A). It was recertified in I We began resident focus groups to answer questions and provide information on achieve intended results, and that both security controls. Under strong senior D S FY08, and is valid for three years. The
IT, living arrangements and building layout. In FY10, we’ll be actively preparing the are free of waste, fraud and misman- leadership, AFRH has enhanced overall I S next review will be in FY10. S U
building for occupancy and solidifying plans to move former Gulfport residents agement. Further, the agency head security and has improved the safety C C back to the new facility starting October 2010 (E.g., FY11). must see that laws and regulations are of our IT hardware and software U S S I
followed, and that fiscal management S D I 3) The AFRH LRFP complies with Federal standards. Agency Auditor O S ’ Our long-term strategy is to maintain Trust Fund solvency. We will achieve FMFIA sets requirements for internal N T
& N this through our LRFP. The original draft in FY08 surveyed plans to upgrade controls, and requests yearly evalua- Overall FFMIA Compliance YES YES
E facilities, operations and budgets. Plus, it projected our financial status over a tion of the control and financial sys- A M tems to protect their integrity. AFRH N E 10-year span. System Requirements Yes Yes A G 3 performs these evaluations annually L To offset the decrease in revenue discussed earlier, we will follow our new Y A and is pleased to report no “material
Accounting Standards Yes Yes S
N operational plan – which calls for a smaller footprint and infrastructure. Also, we I
A weaknesses” have been found in will continue to contain facility costs in other areas, and seek new ways to boost S M revenue. Fortunately, the LRFP is proving to be an essential guide in these efforts. FY09. USSGL at Transaction Level Yes Yes Update: Our first LRFP revision was completed in the summer of 2009. It featured new information plus more accurate cost and revenue data. Even with Federal Financial Management these new figures, we still found that the Trust Fund will remain solvent in the Improvement Act (FFMIA) assets. OMB approved the AFRH FISMA Report for FY08 during FY09. coming decade. All told, the LRFP is our corporate key to avoiding financial risk FFMIA requires all agencies to provide Also, AFRH funded a new and safeguarding the Home for future generations. And we are confident that it reliable, consistent disclosure of data, Memorandum of Agreement with will help us keep the Trust Fund solvent. per GAAP. For FY09, AFRH is in sub- Department of Interior (DOI) National stantial compliance. BPD-ARC estab- Business Center (NBC) to provide 4) Scott Project lished our accounting process and FISMA compliant desktop support Master Planning for AFRH-W was performed on many levels. We determined they are also in compliance. Based and hosting services consolidation the Scott Residence was at risk due to its aging infrastructure and massive repair on agency assessment and the audit for all AFRH IT. Implementation cost of $81 million. In the LRFP, the Home decided to tear down Scott and build opinion, AFRH is in compliance with will be completed in early a healthcare and multi-purpose facility in its place. Federal financial management systems Carroll Collins FY10. 4This facility will bring vital improvements to the lives of Veterans and manage requirements, the Federal Accounting and Charles In FY08, BPD performed the financial risks inherent with keeping the Washington facility open. Lastly, this Standards Advisory Board, and the US the annual risk assessment Felder discuss strategy fulfills all three High-Priority Performance Goals. Standard General Ledger (USSGL) at and AFRH earned a pass- the transaction level. Army life with ing grade with an addi- CSM Jefferson tion to the network Varner. architecture for
52 53 M S I
Financial Management Systems Home (including medical and dental Improvement Plan (QIP) – even though A S care, pharmacy, independent living, none are “findings” or mandates, but N Y
AFRH uses financial systems from our A L
assisted living and nursing care). Any merely suggestions that do not affect G
A partner BPD-ARC (Oracle financials At age 65, Esker is very proactive. he served 22 years, including three E
N year in which a facility of the Home is accreditation. At the end of FY09, only
11i, Oracle Assets, PRISM and M He’s serving as Chair of the Resident each in Frankfurt and Nuremburg, A not inspected by that entity, the DoD seven of the new QIP additions were
WebTA). ARC personnel operate and E N & IG must perform a comprehensive yet to be completed. Advisory Council (RAC) for a third year. Germany. Esker stressed that change is
maintain the system, ensuring top- T
N inspection on all aspects listed above, Our monthly Process Improvement notch support. Plus they provide “The RAC is the residents’ voice more difficult for older people. And how ’ S O including but not limited to, financial (PI) meetings provide oversight and I value-added services that interface and we handle their problems. Each we must help them understand the D S and contracting records, IT, facilities management of the QIP. These A with Oracle Federal Financials (e-pay- I S maintenance, IG Hotline, safety, secu- meetings are helping managers morning at 7:30 I meet with the reasons for it. So, AFRH created the S U
roll, procurement, purchase card, C C
rity, the Local Advisory Board, and the review progress. Plus, the PI meetings Director Chuck Dickerson and “Gulfport Startup” and “Scott Rebuild” U e-travel, Federal investment and IPAC S S
I Resident Advisory Committee or manage risk, in tandem with the
transactions). Ultimately, ARC is Ombudsman Al Mori. We usually settle committees to keep residents involved. S D I
Council. IC Board’s action plans, which are
responsible for the financial integrity any issue by 8:00. If the mundane “This is without a doubt the best place O S
’ identified for CARF reporting. and security of this system. Although, N T CARF/CCAC Accreditation: things are OK, 95% of the residents will for retired people. I’m very contented &
N payroll transactions are handled by
E Valid 2008 - 2013 DoD IG Inspection be happy.” Esker’s tour in the Army here. I have no desire to ever leave,” NFC and they are integrated with the A M above-mentioned systems. CARF/CCAC is the accrediting body The DoD IG Inspection Team was N
E may have helped his diplomacy skills. he declared. A G
for CCRCs and other organizations comprised of 22 Subject Matter L In Vietnam he worked for the Army’s Y A Compliance in aging services. It helps ensure that Experts (SME). The team completed S N Equal Opportunity Program. Altogether I
A retirement homes fulfill their promise its first comprehensive inspection on A key mandate at AFRH is passing S
M of quality, lifetime care to seniors. all aspects of AFRH-W in September inspections to ensure compliance AFRH achieved CARF accreditation 2009. Recommendations will be with operating procedures and best in September 2008 for a 5-year period forthcoming in early FY10. practices. Beginning with the National ending in 2013. Defense Authorization Act of FY08, In October 2008, CARF provided us AFRH was required to secure and “It’s a small with 34 recommendations from their maintain accreditation by a nationally accreditation survey. AFRH has chosen recognized civilian accrediting entity Heaven on Earth to implement them all in its Quality for every aspect of each facility of the here. You don’t worry about a thing.” –Esker McConnell (Army) An artist’s conception of the future “Quadrangle” in Washington
54 55