How do Non-Appropriated Funds Instuments (NAFIs) get established.
What regualations, laws, directives, govern the establishment of NAFIs
In order to provide an answer to your question, the first thing that I did to gain insight into Non-Appropriated Funds (NAFs) was to consult the DoD Financial Management Regulation (FMR) 7000.14-R. Chapter 13 of the FMR specifically addresses NAFs. DoD Financial Management Regulation (FMR) 7000.14-R, Volume 13, Chapter 1, Paragraph 010214 states what Non-Appropriated Funds Instruments (NAFIs) are, but it does not address how they are created. Therefore, I kept looking through Chapter 13 of the FMR for further guidance. That is where I stumbled on DoD Financial Management Regulation (FMR) 7000.14-R, Volume 13, Chapter 1, Paragraph 010202 which states: For additional information on the use and accounting for APFs for NAF activities, refer to Department of Defense Instruction (DoDI) 1015.15, “Establishment, Management, and Control of Nonappropriated Fund Instrumentalities and Financial Management of Supporting Resources.”
Open full Question Details
When I did a Google search on DoDI 1015.15, I found it easily. It is filled with all of the details that that you will need to answer your question about setting up a NAFI, however sometimes it leads you to other documents for information. One of the key takeaways for me when I was going through DoDI 1015.15 was that the Departments (read “the services”) are charged with establishing NAFIs. I bring this up because that means that the Navy comptroller shop should know the specifics of establishing a NAFI for your organization since they are the ones who will have to approve and establish it.
Suggestions: First, review FMR Volume 13 for a full discussion of the treatment of and accounting for Non-Appropriated Funds. Second, a complete reading of DoDI 1015.15 will allow you to gather more detailed information and guidance on Non-Appropriated Funds Instruments (NAFIs). Finally, since this is a Navy program, it is most strongly recommended that you contact your local Navy comptroller organization and your legal consul for more information and their policy interpretation of the issue.