Civilian MWR

Commander, Navy Installations Command has responsibility for the operation and oversight of Civilian Morale, Welfare and Recreation (CMWR) programs. The Chief of Naval Personnel is responsible for policy issues. The Fleet Readiness Division (CNIC) within the Fleet and Family Readiness Department is responsible for providing administrative and technical guidance to CMWR programs.

A CMWR activity shall be established only upon written authorization (letter of establishment) issued by CNIC N92 .  Installation Commanding Officers must submit a letter to CNIC N92C1, via the region.  Normally, the host command is responsible for administering CMWR programs for civilian employees of the installation and its tenant commands or activities. Unless specifically authorized by CNIC, separate CMWR activities shall not be operated by tenant commands.  However, if a tenant command desires to establish a CMWR activity of their own, the tenant command must submit a letter to CNIC N92C1, via the installation commanding officer, the tenant command's ISIC, and the region.

Legal Status
Category II and IV CMWR activities and their supporting nonappropriated fund instrumentalities (NAFIs) are integral parts of the DOD and considered instrumentalities of the United States. As such, both are entitled to the immunities and privileges enjoyed by the federal government under the constitution, federal statutes, established principles of law, and international treaties and agreements. CMWRs shall collect and pay all applicable Federal taxes. CMWRs are entitled to the same immunity from the taxes of the states, the District of Columbia, and political subdivisions thereof, as the United States. CMWR concessionaire contractors are not instrumentalities of the United States and therefore shall collect, report, and pay all applicable federal, state and local taxes.

To provide adequate programs, activities and facilities of a food service (Category II) or recreational nature (Category IV), conveniently available to DOD civilian employees. The provision of such services enhances command morale and promotes the general welfare of the work force. CMWR programs are counterparts to, but separate from military personnel MWR programs. The financial integrity of each Category II and IV program shall be maintained and the functions of each separate category shall not be combined nor consolidated into a single nonappropriated fund activity without the expressed written approval of CNIC N92C1.

CATEGORY II PROGRAMS These programs have the dual role of providing a product as well as generating sufficient net income to sustain a Category IV (Recreation and Welfare) program. Most Category II activities take place during meal and work-break times, and are authorized to provide food and limited retail services for civilian employees. In addition to regular meal-time (or shift work) service, food and beverages may be offered either manually or by machine throughout the day. Examples include snacks, confections, beverages and similar refreshments. This authorization also includes amusement machines, including electronic games.

CATEGORY IV PROGRAMS General welfare and recreation programs are necessarily flexible because of the degree of NAF financial capability, employee interests, facility availability and other variables. The objective of these programs is to offer a variety of activities and benefits that will collectively appeal to as many eligible patrons as is financially feasible. Examples of Category IV programs include sports (self-directed and organized); hobbies and crafts; social and recreational groups; lounges and work break areas (if not authorized from APF); circulating library; bowling; outdoor activities; family services; and special installation or command events not authorized APF support, but that will promote command morale or welfare of the civilian work force. Participation fees and charges shall be the primary source of program income to supplement Category II revenue sharing provided through dividends, if any.

Program Management Annual Assessment
All CMWR activities are required to pay an annual program management assessment based upon total revenues generated by each respective CMWR activity during the fiscal year being reported.  For those operating in AIMS/SAP, 1 percent of the previous month's revenue will be automatically downloaded by CNIC financial personnel in Millington, TN by the 10th of each month.  However, for those CMWR activities not yet operating in AIMS/SAP, program management assessment will be calculated by multiplying 1 percent of the total revenue entered on line 16 (Total Cash Receipts) of the CMWR Financial Statement to obtain copy of the Financial Statement, see below.

If not in AIMS/SAP, the annual program management assessment payment shall be included with the annual report package submitted to CNIC (N92C1). 

Examples of annual/monthly program management assessment are as follows:


                  $     1,000                                                            $     10

                  $    10,000                                                           $    100

                  $    50,000                                                           $    500

                  $   100,000                                                          $  1,000

                  $ 1,000,000                                                         $ 10,000

Property and Liability Insurance
Per DOD Regulation 7000.14-R Vol.13 and CNICINST 5890.1, CMWR activities must maintain property and liability insurance coverage and personnel responsible for the custody of non-appropriated funds must be bonded.  At a minimum, CMWR activities shall purchase coverage for NAF-purchased furniture, fixtures, and equipment (as recorded on NAF control records), merchandise inventory, NAF-purchased vehicles, and its non-appropriated funds and securities in financial institutions.  CMWR activities may obtain insurance coverage through a commercial insurance company or through the Navy CNIC MWR's Self-Insurance Program.  If the CMWR activity has elected to purchase commercial insurance coverage rather than to participate in Navy CNIC MWR's Self-Insurance Program, a copy of the commercial insurance policy cover letter must be submitted along with the annual report package.  Note that the minimum liability coverage of $500,000 per person and $1,000,000 per occurrence is required.  Historically, insurance purchased through the Navy CNIC MWR's Self-Insurance Program is less expensive than purchased from a commercial underwriter. 

  a. Calculating Property and Liability Payment.  To establish the cost for NAF property and liability insurance coverage, the CMWR activity must determine the current (depreciated) value of NAF-purchased furniture, fixtures, equipment, and vehicles, and add that figure to the actual value of merchandise/stock inventory currently on-hand. 

  b. Calculating Bonding Coverage and Payment.  To determine the amount of bonding insurance, identify the number of personnel positions to be covered, and the total amount of bonding sought for each person.  The number of CMWR personnel bonded and to what level each is to be bonded is a local decision.  CMWR activities are only covered for the amount of bonding insurance purchased and losses greater than that amount must be absorbed by that activity.  Therefore, careful consideration should be given to the amount of bonding insurance required by the CMWR activity.  Basically, those handling cash need to be bonded.

  c. Total Cost for Coverage.  Once the property values and bonding insurance requirements have been determined, add those amounts together.  The result represents a total of the CMWR activity's insurable assets.  Identify the appropriate asset range below and use the corresponding multiplier to determine the CMWR activity's cost for obtaining coverage through the Navy CNIC MWR's Self-Insurance Program:

      1.  0.75 percent of value of covered assets and revenue for activities equal to or greater than $1,000,000.

      2.  1 percent of value of covered assets and revenues for activities between $100,000 and $999,999.

      3.  1.25 percent of value of covered assets and revenues for activities less than $100,000.

  d. Example.  The following example is provided to assist you in calculating your CMWR activity's annual assessment and insurance/bonding payments for this fiscal year:

  • Total cash receipts = $92,000 (Fund Financial Statement -Line 16 or AIMS/SAP Executive Summary Total Revenues)
  • Depreciated NAF property (office equipment) = $2,000 
  • Current stock inventory = $2,400
  • Bonding insurance coverage for two people who have access to no more than $5,000 at any time.

       1.  To determine the correct cost for liability and bonding insurance coverage, add together your total cash receipts, the total value of your property and inventory, and the amount of bonding you have determined.  In this case, it totals to $106,400.  Now multiply $106,400 by the corresponding multiplier (determined from the appropriate asset range in paragraph 5 above), which in this case is 1 percent, to determine the amount you owe for insurance ($106,400 x 1% = $1,064 - annual amount owed would be $1,064).  See paragraph 6c below for further breakdown of this example.

      2.  To determine the CMWR program management assessment payment due for your activity, take the total cash receipts (Line 16 of the Financial Statement) or the Total Revenues listed on the AIMS/SAP Executive Statement for the activity ($92,000) and multiply by 1 percent to determine the amount of program management assessment owed.  In this example, $92,000 x 1 percent, the amount due is $920.  To determine the overall total amount due to CNIC, add your insurance costs and program management assessment together, in this case it equals $1,984. 

      3.  Example Breakdown:

                                Total Cash Receipts                                                                          $92,000

                                Total NAF Property                                                                              4,400
                                (includes equipment/stock inventory)

                                Bonding (2 people @ $5,000)                                                        +   10,000

                                Total Insurable Assets                                                                 = $106,400

                                Multiplier is 1% ($106,400 x 1%)
                                (equals insurance premium)                                                            = $1,064

                                Plus Program Management Assessment                                             +    920

                                Total Due (Assessment & Insurance)                                                  $1,984

  e.  If your CMWR activity is operating in AIMS/SAP, program management assessment, liability insurance, and personnel bonding payments will automatically be downloaded in SAP by CNIC financial personnel in Millington, TN.  However, if your CMWR activity is not operating in AIMS/SAP, ensure program management assessment, liability insurance, and personnel bonding payments are included with submission of your CMWR annual report package.  Request submission of two checks; one for liability insurance/bonding coverage and the second for program management assessment fee.  However, if all payments are submitted on one check, include a breakdown of the assessment and liability insurance/bonding coverage payments (in the example above, $920 was for program management assessment and was $1,064 was for liability insurance and bonding coverage for two people).

Randolph-Sheppard Vending Stand Act
This federal law requires the establishment of a vending facility program for the blind on federal property. A good working knowledge of the program is essential for CMWR activities with vending machine operations. State Licensing Agencies (SLA), who represent the blind, have a priority right to operate vending facilities and cafeterias in certain newly-contracted or renovated buildings and receive a portion of net income from some vending machine operations. Applications for permits by the SLA to operate vending facilities on Navy-controlled property must be forwarded to CNIC (N92C1) through the on-site official. The on-site official is the commander who has the property management control of the building or installation. When vending income profit-sharing with the SLA exists, the formulas and periods of payment prescribed in the governing instructions must be followed.

Annual Reports
For those CMWRs operating in AIMS/SAP, in addition to CNIC downloading monthly program management assessment payments, annual liability insurance and personnel bonding payments will be downloaded as well.  Submission of payment checks is no longer required.  If the CMWR activity has purchased commercial insurance/bonding coverage, include a copy of the policy cover page with the annual report.

  a.  All CMWR activities must include the following in the annual report:

      1.  Cover sheet signed by the Commanding Officer.

      2.  Total value of CMWR NAF property (equipment, inventory, vehicles, etc.)

      3.  List of personnel to be bonded, including individual bonding limits.                               

      4.  Annual Vending Machine Report (if CMWR has vending machine income) in two parts:

          (1) Vending Machine Cover Sheet (see enclosure (1)).

          (2) Vending Machine Income Statement (see enclosure (2) with instructions for completion found at enclosure (3).

  b.  For those CMWR activities that are not in AIMS/SAP, the following additional information is required to be submitted:

       1.  Financial statement for both Category II and IV activities (if a command has both).  To obtain a copy of the CMWR financial statement, click here.

       2.  Checks in the amount(s) calculated per enclosure (4) for program management assessment, personnel bonding, and liability insurance.  Include a copy of the commercial insurance policy cover page if bonding and/or liability insurance was purchased locally.

       3.  CMWR checks should be made payable to Commander, Navy Installations Command and mail to:

             5720 INTEGRITY DRIVE
             MILLINGTON, TN 38055-6550
             ATTN: N92C1

Annual Vending Report. The Vending Facility Program for the Blind on Federal Property implements The Randolph-Sheppard Vending Stand Act. Each year, CNIC is required to collect vending machine income reports from all CMWR activities and submit Navy's consolidated annual report to the Department of Defense. A sample letter submission is forwarded to each command annually.

CNICINST 5890.1 Risk Management Manual for Navy Morale, Welfare and Recreation Nonappropriated Fund Activities)

CNICINST 7043.1 CH 1  (Procurement Policy for Commander, Navy Installations Command Nonappropriated) Fund ActivitiesBUPERSINST 12990.1A (Operation of Navy Civilian Command Morale, Welfare and Recreation (CMWR) Activities)


Annual Report Submission Request Letter

Annual Report Submission Request Letter - Cover Sheet Enclosure 1

Annual Report Submission Request Letter - Income Statement Enclosure 2

Annual Report Submission Request Letter - Instructions for Income Statement Enclosure 3

Annual Report Submission Request Letter - Annual Assessment and Insurance - Bonding Payment Enclosure 4

OPNAVINST 4535.1B (Vending Facility Program for the Blind on Federal Property)

SECNAVINST 4535.3A (Vending Facility Program for the Blind on Federal Property)

DOD 1015.8-R (DoD Civilian Employee Command Morale, Welfare and Recreation Activities and Supporting Nonappropriated Fund Instrumentalities Regulations)

DOD Directive 1125.3 (Vending Facility Program for the Blind on Federal Property)

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