Procedure AA2003 - Museum of Art Store: Sales and Accountability
Arts and Architecture
Policy Steward facilitating procedure: Dean, College of Arts and Architecture
Table of Contents:
- PURCHASES AND CONSIGNMENTS
- EXCHANGES AND CREDITS
- CASH AND SALES RECONCILIATION, INCLUDING REPORTING
- INVENTORY RECORDS
- FINANCIAL RECONCILIATION
- PROCESSING RETURNED CHECKS
- AUDIT COORDINATION - FINANCIAL AND PROCEDURAL
- RECORD RETENTION, DISPOSITION AND DESTRUCTION
- CONTACT INFORMATION
- CROSS REFERENCES
The Museum of Art Store (hereafter referred to as Store) is operated by the University Museum of Art to complement the various exhibits. The Store sells a wide range of art objects, reproductions, books, cards, calendars, jewelry, catalogs, and prints, etc. The records necessary for the Store operation all originate with the State Manager employed by the Museum Store. Documents for purchases and sales, when coupled with physical inventory numbers, provide the information to calculate adjusted income and adjusted income percentages. The Store utilizes the SimpleRetailer and the Open P.O.S. system (hereafter referred to as P.O.S. system) which documents the inventory and sales records. For further information on the details of the P.O.S. system, refer to the documents SimpleRetailer Total Retail Control and Open P.O.S The Cash Register Emulator available at the Store Manager's office.
The Store maintains a change fund, that has been established with the Financial Officer in accordance with University Policy FN04 - Petty Cash and Change Funds , to replenish the cash drawer. Access to the funds and responsibility for the fund will be limited by the Store Manager.
This procedure documents the necessary steps for the purchase, sale, and inventory of merchandise, as well as the cash controls, reconciliation, and reporting required for operating the Store.
Store merchandise is obtained primarily with the Penn State Purchasing Card, as specified in the guidelines on GURU and Purchasing Department websites. On those occasions where a vendor does not accept credit card, the Store Manager will complete a Limited Order per the instructions specified for the form in the Forms Locator on GURU.
Upon delivery of ordered material, the Store Manager must enter the merchandise into the P.O.S. system. Each item must be assigned a unique item number.
The Store Manager labels or tags the merchandise with the unique item number and the retail price. The retail prices are determined by the Store Manager with agreement of the Director of the Museum.
Original work of art may be sold through the Store on specific consignment to the Store. Consignment items are generally available for purchase for three (3) months, or as determined by the Store Manager.
Artists wishing to consign works of art for sale in the Store must sign a Release form (Exhibit "A" ), acknowledging that the University is not responsible for loss, damage, or destruction to the consigned property as noted on the form. The release is retained as long as the art work is in the hands of the University.
When consignment items are received, the Store Manager records the merchandise on the Receive On Consignment form ( Exhibit "B" ), which details the consignees' name, address, and phone number, and the quantity, description, seller's fee, and retail price of the merchandise. This form is completed in duplicate with the original retained by the Store Manager and the duplicate given to the consignee. A separate Received On Consignment document is maintained for each consignee.
Items on consignment carry a special colored tag. All price tags are coded to the consignment key on the P.O.S. system.
All sales are processed through the P.O.S. System indicating method of payment (cash, check, charge ( Invoice ), IDCC , or credit card). Personal checks for the exact amount of purchase must be made payable to The Pennsylvania State University, and restrictively endorsed immediately per Policy FN01 - Processing Cash Revenues . Invoice sales are billed and recorded via the instruction on GURU. IDCC sales are processed via the instructions specified in the IBIS Online Documentation section of the Administrative Information Systems website. Credit card sales are processed in accordance with Policy FN07 - Electronic Payments - Credit Cards (formerly Credit Card Sales) and eCommerce guidelines.
NOTE: Credit card recordkeeping must comply with Credit Card Industry Privacy Rules for any sales where a credit card number is provided or recorded on paper. In such cases, papers containing credit card numbers must be rendered unreadable, except for the last four (4) digits.
Additionally, the Store has been approved by the budget executive to sell merchandise by phone and mail.
All orders received by telephone must be paid by credit card and processed through the P.O.S. System on the "Credit Card" key. "Phone Order" must be indicated on the sales slip. In compliance with Credit Card Industry Privacy Rules, paperwork containing credit card numbers must be rendered unreadable, except for last 4 digits.
A University Invoice is prepared in accordance with instructions on GURU (payment received at the Bursar) for mail orders that are received in the Museum Store office requesting billing when merchandise is shipped. In addition, a copy of the University Invoice is sent to the Financial Officer. Mail order sales and payments are processed through the P.O.S. system recording the customer information in the Accounts Receivable Menu.
Sales to University departments are handled by processing an IDCC via the instruction specified in the IBIS Online Documentation section of the Administrative Information Systems website , or via Penn State Purchasing Card, as specified in the guidelines on the GURU and Purchasing Department websites. This type of sales requires that the department making the purchase submits an IDCC to the Store. Interdepartmental sales and payments are processed through the P.O.S. system recording the customer information in the Accounts Receivable Menu.
When a consignment item is sold, the sale is processed using the P.O.S. System. The unique item number assigned to the consignment item identifies the name of the consignee.
Before payment is made to the consignee, the Store Manager takes a physical inventory of the consignee's merchandise to assure that the merchandise sold (recorded through the P.O.S. System) agrees with the physical inventory on hand.
A Sold on Consignment ( Exhibit "C" ) is completed in duplicate for each consignee. This form is used to prepare a Requests for Payments Reportable to the IRS on Form 1099 (per instructions on GURU) to pay the artist for the work sold. If payment is to be made to the individual artist (rather than a partnership or corporate representative), his or her social security number must be obtained for tax purposes. All social security numbers will be protected in accordance with Policy ADG08 - Collection, Storage and Authorized Use of Social Security Numbers and Penn State Identification Numbers . A copy of the Sold on Consignment form ( Exhibit "C" ) is filed in the Store's Office, and the original is submitted with the Requests for Payments Reportable to the IRS on Form 1099 to be attached to the consignee's check.
When a transaction is incorrectly recorded on the P.O.S. system, the Store Clerk retains the receipt and writes the word "VOID" across the front. The clerk notes the reason for the voided transaction on the reverse side, initials the tape, and places it in the P.O.S system drawer. The transaction is then recorded correctly.
At the conclusion of business for the day, all voided P.O.S. system receipt tapes are reviewed and initialed by the Store Manager. The voided tapes are used for reconciliation.
Unacceptable merchandise may be returned and exchanged within 30 days of purchase, or as determined by the Store Manager. The patron may exchange the merchandise for similar merchandise or a credit memo, provided that the receipt is returned with the merchandise. All exchanges and credits will be at the discretion of the Store Manager. For a further discussion regarding the accounting of credit memo, refer to procedure CR2052 - Accounting for Coupons and Gift Certificates ."
When the merchandise is exchanged for other merchandise costing more or less than the original item, the transaction is handled as a refund (using the "Return" key on the P.O.S. System) of the first item and a normal sale of the second item.
If the return/exchange merchandise was a consignment item and the artist has been paid, the merchandise that is returned becomes the property of the Store.
Separate discount keys on the P.O.S. system identify the "friends" and regular sales discounts. This permits the Store Manager to maintain the segregation between "Friends" discounts and "sales" discounts.
A special discount is available to "Friends" of the Museum for purchases (except books, consignment items, and sale merchandise). The discount is calculated automatically by depressing the "Friends Discount" key.
In order to calculate meaningful adjusted income percentages when an item is put on sale, it must first be entered on the P.O.S. System at the original selling price, then the discount percentage is entered on the keyboard and the "Sales Discount" key depressed. This results in the customer's receipt tape reflecting net sales value and the "Z" tape taken off at the close of the business each day reflecting gross sales by class, with the discount register reflecting sales discounts.
At the close of business each day, the Store Clerk reads ("X" tape) the P.O.S. System. Daily sales totals are obtained for merchandise categories, method of payment (cash, check, Invoice , IDCC , or credit card), discounts ("Friends" and sales), any voids, returns, tax, and grand totals. The cash in the register is counted and any checks are totaled. The Store Clerk completes a Daily Sales and Cash Reconciliation form ( Exhibit "D" ). The form is signed by the clerk preparing the form. The P.O.S. System read ("X") tape, and void tapes, are attached to the completed Daily Sales and Cash Reconciliation form.
NOTE: The County impact fee (in lieu of taxes) is assessed at year end by the Corporate Controller on gross sales.
The cash is secured in a deposit bag and taken to the Financial Officer for deposit. A Cash Transfer Log ( Exhibit "E" ) is used when the cash is transferred from the Store to the Financial Officer.
At the end of each day, the Store Manager secures the change fund in a secured location, and leaves the cash drawer ajar until the store opens the next day (see Policy FN01 - Processing Cash Revenues ).
The Store Manager clears (removes the "Z" tape) from the P.O.S. system and records the reset number on the Daily Sales and Cash Reconciliation form ( Exhibit "D" ).
The Store Manager prepares a Report of Cash Receipts ( ROCR ) via the instruction specified in the IBIS Online Documentation section of the Administrative Information Systems website. The department number 03-089-43, Sales Income 10010, Object Code 0030, is credited for total sales. Pennsylvania State Sales Tax is credited to Account number 0678. If the total of cash differs from the total cash sales on the P.O.S. System "Z" tape, the difference must be credited or charged to Cash Over or Short, Fund number 0752. The corresponding bank deposit slip is attached to ROCR and the applicable Daily Sales and Cash Reconciliation form, proving accuracy. The financial Officer receives a copy of the ROCR with a duplicate deposit attached.
Cash and checks are not to be reported on the same ROCR with credit card sales.
If any IDCC sales or Mail order sales via Invoice have been made during the month, the Store Manager also checks the Museum accounting records and/or sales reports to verify that the sale has been credited to the budget.
On a monthly basis, an income report is provided to the Director of the Museum for their review.
The Store Manager is responsible for taking a physical inventory at least once each year for June 30 reporting.
The physical inventory is recorded on the Inventory form ( Exhibit "F" ) by merchandise category, (e.g., books, etc). Inventory items should not be physically inventoried if purchase invoices have not been received and processed. After completion of the physical inventory, dollar inventory totals by merchandise category are determined.
Annually, the Store Manager compares the actual (physical) inventory amount ( Exhibit "F" ) to the expected (P.O.S. system report - not exhibited) inventory amount, and any difference is accounted for.
Using the P.O.S. system reports and physical inventory form ( Exhibit "F" ), the Operating Report ( Exhibit "G" ) is prepared in original and three copies. This form provides adjusted income realized for each merchandise category and for total sales.
The numbers posted to the Operating Report from the P.O.S. system reports must be accurately cut-off:
- Beginning inventory is closed inventory from the previous period.
- Ending inventory will come from the current inventory counts.
The Operating Report is forwarded to the following:
- Dean of the College of Arts and Architecture;
- Director of the Museum, Museum of Art; and
- Financial Officer, College of Arts and Architecture.
The Store Manager retains a copy of the Operating Report for the store files, together with the P.O.S. system reports
The Financial Officer is responsible for reviewing the store operation on a current basis, or at least once a year. This review is to insure that the maintained records accurately reflect the store's business transactions. Total inventory value (at retail) is limited to a maximum dollar value that has been established by the Dean, the Director of the Museum, the Financial Officer, and the Store Manager.
Purchases are compared to the amounts budgeted to insure that they do not exceed the established dollar limits.
The P.O.S. System reset numbers are visually checked monthly to insure that they are in agreement with the recorded numbers on the Daily Sales and Cash Reconciliation, and that none have been missed.
The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.
Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management , and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.
- Documents subject to a Legal Hold (see AD35, Legal Hold). A legal hold will remain in effect until it is released in writing by the Office of General Counsel.
- Documents under audit or review, either internally or externally. The retention period extends until released by the Corporate Controller's Office. The Financial Officer will be notified regarding any accounts which are under audit; the Financial Officer will be responsible for contacting the department.
Additional questions may be directed to the University Archivist or the Records Management Officer.
- Exhibit A - Release Form
- Exhibit B - Receive On Consignment Form
- Exhibit C - Sold on Consignment Form
- Exhibit D - Daily Sales and Cash Reconciliation Form
- Exhibit E - Cash Transfer Log
- Exhibit F - Inventory Form
- Exhibit G - Operating Report
For questions, additional detail, or to request changes to this procedure, please contact the Director of the Palmer Museum of Art.
- Policy AD22 - Health Insurance Portability and Accountability Act
- Policy AD35 - University Archives and Records Management
- Policy FN01 - Processing Cash Revenues
- Policy FN04 - Petty Cash and Change Funds
- Policy FN07 - Electronic Payments - Credit Cards (formerly Credit Card Sales)
- Procedure CR2002 - Processing Returned Checks
- Procedure CR2052 - Accounting for Coupons and Gift Certificates
- Blue/White Shredding Program
Date Approved: 01/18/2007
Most recent changes:
- Revision 3 - dated 11/21/2006
Revision History (and effective dates:)
- Revision 2 - dated 12/14/1994
- Revision 1 - dated 01/25/1979
- Original - dated 11/14/1972