6 FAM 550
REPORTING REQUIREMENTS
(CT:GS-227; 05-14-2021)
(Office of Origin: A/OPR/CR)
6 FAM 551 CHARTER
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
a. All employee associations must operate under a charter that the principal officer or designee and two board members signed; the Office of Commissary and Recreation Affairs (A/OPR/CR) reviewed; and the Assistant Secretary for Administration approved. The charter must clearly describe all services the association will provide. Associations must submit any proposed changes in the services provided under an approved charter to A/OPR/CR for review and to the Assistant Secretary for Administration for signature prior to their initiation. The charter must follow the A/OPR/CR format and chartering guide.
b. In the absence of an approved charter, no association is authorized to operate on U.S. Government-owned or-leased property and/or under U.S. Government auspices. Without a charter, associations may not import duty-free products under the name of the principal officer, operate as a U.S. Government instrumentality for Federal tax purposes, receive loans or grants from the Central Commissary and Recreation Fund, receive assistance from the Office of Commissary and Recreation Affairs, or receive support (space, utilities, properties, etc.) from the post.
6 FAM 551.1 Charter Revocation
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
If post management or the Office of Commissary and Recreation Affairs (A/OPR/CR) determines that an employee association is mismanaged; not in compliance with the charter and these regulations; or has created a significant embarrassment to the mission or U.S. Government; upon the recommendation of A/OPR/CR, the Assistant Secretary for Administration has the authority to revoke the charter and terminate the association.
6 FAM 551.2 Charter Suspension
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
If an employee association is not adequately insured in accordance with 6 FAM 530 or is not compliant with financial reporting, upon recommendation of the Office of Commissary and Recreation Affairs, the Assistant Secretary for Administration has the authority to suspend the association’s charter until the association takes actions the Assistant Secretary for Administration requires to remedy such noncompliance.
6 FAM 552 BYLAWS
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
On the establishment of an employee association, the association board must draft bylaws in a format provided by the Office of Commissary and Recreation Affairs (A/OPR/CR). The association must adopt such bylaws pursuant to Robert’s Rules of Order and submit the original, signed document to A/OPR/CR for review and approval. All revised bylaws are subject to A/OPR/CR approval.
6 FAM 553 POST PROFILE
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
a. Posts must maintain data on employee association operations in the employee association section of Post Profiles on the Department’s OpenNet.
b. Employee associations must annually update data fields to all three tables in the post profile in full by April 1. Upon completion of the annual update, associations must notify by email the Office of Commissary and Recreation Affairs. Updates are due as changes occur throughout the year.
6 FAM 554 ANNUAL CERTIFICATION
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
a. The principal officer or designee must sign and send an annual certification statement to the Office of Commissary and Recreation Affairs (A/OPR/CR) by May 1 each year in A/OPR/CR as required by the A/OPR/CR format and chartering guide. The certification statement must:
(1) Certify that the association is managing its operations prudently and pursuant to provisions of the Foreign Affairs Manual and the laws of the host government, to the extent that they do not contravene U.S. Federal law; or
(2) Identify in detail where the operations are not in conformance with the Foreign Affairs Manual or local laws and provide a plan and schedule for remedying the nonconformance.
b. The Assistant Secretary for Administration must promptly refer repeated or serious instances of noncompliance or failure to take remedial action to the Director General (DGTM) for appropriate disciplinary action.
c. The Assistant Secretary must report all known or suspected waste, fraud, abuse, false certifications, and corruption on a timely basis to the Office of Inspector General, Office of Investigations, as well as A/OPR/CR. See 1 FAM 053.2-5.
6 FAM 555 ASSESSMENT
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
Employee associations must remit an annual assessment payment to the Central Commissary and Recreation Fund as authorized by 6 FAM 515. The assessment is a percentage of gross revenues as determined by the Central Commissary and Recreation Fund Board. The Office of Commissary and Recreation Affairs will notify employee associations the amount they must remit annually.
6 FAM 556 FEDERAL TAXES
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
a. Employee associations are U.S. Government instrumentalities for Federal tax purposes. Associations are subject to employer taxes under 26 U.S.C. 3121, and to withholding requirements under 26 U.S.C. 3404. Therefore, employee associations must withhold Social Security, Medicare and income taxes from each of its U.S. citizen and U.S. resident alien employees (including part-time staff and temporary employees). The association’s tax liability is its share of FICA (the combination of Social Security and Medicare). Income tax and FICA withheld from employee wages must be reported on Internal Revenue Service (IRS) Form 941 and remitted to the IRS. Associations may not treat an individual performing work for the association as an independent contractor, absent a determination from the IRS after filing IRS Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
b. Employees may not claim the foreign earned income exemption for any part of their wages earned in the course of employment with the employee association.
c. Employee associations are not subject to direct taxes on its own income, nor is it required to pay Federal unemployment taxes or U.S. State taxes.
6 FAM 557 FINANCIAL STATEMENTS AND AUDIT REPORT
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
a. Employee associations are categorized based on gross revenue to determine financial reporting requirements. Association management must submit a balance sheet and income statement to the employee association board of directors monthly. The association must also submit a balance sheet and income statement by cost center to the Office of Commissary and Recreation Affairs (A/OPR/CR) by August 15 (for the period January 1 through June 30) and by April 1 (for the period January 1 through December 31). The financial statements must conform to the A/OPR/CR format utilizing U.S. generally accepted accounting principles (USGAAP) or International Financial Reporting Standards (IFRS).
b. A firm of chartered, certified, or otherwise qualified accountants or by two disinterested, qualified individuals (approved by A/OPR/CR if no firm is available) must conduct an audit or independent review of the employee association, including a physical inventory of stock and equipment, at least annually. The association must submit the audit or review pursuant to U.S. generally accepted auditing standards (USGAAS) and A/OPR/CR guidelines.
c. Financial reports must be written in English and denominated in U.S. dollars.
d. The independent audit or review report package must include:
(1) The auditor’s opinion letter;
(2) A management letter on internal controls, which the auditor prepared;
(3) Audited financial statements including a consolidated balance sheet, income statement and statement of cash flow; and
(4) The Board of Director’s signed statement of auditor independence.
6 FAM 558 TRUSTEESHIP and TERMINATION OF OPERATIONS
6 FAM 558.1 Trusteeship
(CT:GS-227; 05-14-2021)
(Uniform State/USAID/Commerce/Agriculture)
a. If the Office of Commissary and Recreation Affairs (A/OPR/CR) determines an employee association to have been mismanaged, upon A/OPR/CR recommendation, the Central Fund Board Chairperson will approve trusteeship status for an association. The association board may be disbanded, if necessary, and the association monitored and guided by the principal officer (trustee) or designee (trustee’s representative). The association trustee will develop a management plan and submit it to A/OPR/CR to resolve management deficiencies. Report all known or suspected waste, fraud, abuse, false certifications, and corruption on a timely basis to the Office of Inspector General, Office of Investigations, as well as A/OPR/CR. See 1 FAM 053.2-5.
b. In order to ensure orderly management of assets and obligations in the event of dissolution or temporary closing of an employee association due to reduction or closing of post operations, or if for other reasons personnel are not available at the post to act on behalf of the members as authorized pursuant to association charters or bylaws, the principal officer is delegated authority to act as trustee on behalf of the employee association subject to these regulations. In the event the principal officer cannot act at the post as otherwise authorized by the regulations stated in this paragraph, the executive director of the regional bureau is authorized to act as trustee on behalf of the employee association, in coordination with A/OPR/CR.
6 FAM 558.2 Termination of Operations
(CT:GS-168; 05-17-2012)
(Uniform State/USAID/Commerce/Agriculture)
a. In order to ensure the timely and thorough liquidation of operations, employee associations that are terminating operations must use an A/OPR/CR provided checklist. The checklist must indicate that all financial obligations of the association have been met and must accurately reflect the sales of association inventories and assets, and the close-out of all association banking and investment accounts. The checklist must be submitted to A/OPR/CR along with a final independent audit report and a check (made payable to the Central Commissary and Recreation Fund) representing any residual association funds. Funds will be held on deposit for a period of 10 years for the reestablishment of an employee association at post. After that time, the funds will be absorbed into the Central Fund.
b. Association board officers or post personnel responsible for the formal termination of operations, who fail to adequately document the financial management of the close-out, may be held personally liable for lost/unaccountable funds.
6 FAM 559 UNASSIGNED
6 FAM Exhibit 554
Annual Certification Format
(CT:GS-168; 05-17-2012)
You may copy the following text and paste it into a new document. Modify the text as the situation warrants.
Chief of
Mission
Employee Association Compliance Certification
As Chief of Mission/Principal Officer (or his or her designee) of the United States Embassy/Consulate in (Post), I have taken the necessary measures to ensure that our employee association is managed prudently and is in full compliance with its charter and bylaws, 6 FAM 500 regulations, applicable U.S. law, and all legal requirements of the Government of (Country). I also assure you that an adequate system of internal controls is in place to protect the assets of the association and the interests of the U.S. Government and that all reporting requirements, to include financial statements, the annual audit report/financial review, the board certification of auditor’s independence, and Post Profile updates have been submitted to A/OPR/CR on time. I also certify that post does not procure services from the employee association as prohibited by FAR 3.601 OR that a post specific waiver has been granted by the Office of the Procurement Executive dated (specify date waiver granted).
This statement is true and correct to the best of my knowledge, and the language of 18 U.S.C. 1001 as follows:
(a)Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully—
Falsifies, conceals, or covers up by any trick, scheme, or device of a material fact;
Makes any materially false, fictitious, or fraudulent statement or representation; or
Makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years or, if the offence involves international or domestic terrorism, (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.
Signed
Name Date
Printed Name