The University golf courses and facilities are available for use by students, University personnel, and the general public. The courses and facilities are one operation, administratively housed in one centrally located Golf Shop. The golf operation consists of two golf courses - the Blue Course and the White Course.
Besides collecting greens fees for the use of the courses, many other services are available. They include, but are not limited to:
- Special golf events
- Sale of merchandise
- Golf club repairs
- Gift certificates (for merchandise or services)
- Rental of:
- golf clubs
- pull carts
- riding carts
- range balls
Published fees and rental rates are recommended to the Manager, Auxiliary Recreation Services by the Golf Manager and must be approved by the Corporate Controller. Percentages of mark-on, as they pertain to merchandise sales, and published repair rates are established by the Golf Manager and require the concurrence of the Manager, Auxiliary Recreation Services.
The Golf Manager is responsible for the daily management of the Golf Shop. He/She is directly assisted by two individuals - one for Shop Operations (Shop Manager) and one for Golf Course Operations - in the management of the facility. In the absence of the Golf Manager, the Assistant Golf Manager will assume the management responsibilities.
All cash, check, or credit card transactions are recorded by sales category on cash registers in the golf shop. No refunds are given unless specifically approved by the Golf Manager. In certain cases, such as Intercollegiate Athletic team usage, settlement is made by an Interdepartmental Charges and Credits (IDCC). Infrequently, for special events approved by the Golf Manager, an organization may be billed for services and merchandise provided by the Golf Operation. Such credit will not be extended to individuals.
All income from the Golf Operation is credited to Budget 08-027-90 (Golf Shop), Fund 1005 (Sales Income), Object Code 030; or Fund 1003 (Fees Income), Object Code 029.
The Manager, Auxiliary Recreation Services is the budget administrator for these budgets.
Golf Operation Salable items are inventoried on a perpetual basis and are valued using the "average cost method."
The responsibility for the assignment and control of keys for the Golf Operation facilities lies with the Personnel Officer. He/She is to make certain that all keys are accounted for and that they are issued only to those persons having a need to access those areas that the keys control. (See Policy AD68 - University Access Policy, and Key and Key Core Request.)
"Rangers" are employed to monitor the movement of players on the courses to assure that golf course rules and regulations are adhered to, and to prevent unauthorized play by individuals failing to pay for the privilege. The hiring of each ranger must be approved by the Manager, Auxiliary Recreation Services.
Sales tax is to be collected on applicable services and merchandise. Although it is not specifically addressed in this procedure, it is assumed that any applicable sales tax will also be collected and recorded when a transaction occurs. Pennsylvania sales tax is collected on all services and items for sale or rent except the following:
- Hats and visors
- Socks and wearing apparel
- Tees, spikes, and shoe laces
- Greens fees
- Rule books
- Range balls
This procedure first examines the various aspects of the operation of the Golf Shop, after which specific guidelines for the use of the cash register, credit card sales, and reconciliations will be outlined.
Non-members desiring to use a golf course must pay a daily greens fee (good for 18 holes of golf) at the golf shop. To determine if an individual qualifies for the student rate, a student identification card must be presented. A cash register receipt serves as the greens fee ticket. The customer must register on the Log Sheet (Exhibit "A").
By presenting the cash register receipt, the customer gains admittance to the first tee where it is checked for the proper date. The customer must keep the receipt while using the course. Rangers will periodically request that a customer present his/her receipt during the course of play as a spot check to assure management that those using the course have paid.
Since no refunds are issued, a rain check is provided to a customer as a courtesy only when sudden storms occur that prevent play (not if pre-existing wet conditions cause the customer to change his/her mind about playing).
Rain checks are issued only if eight or fewer holes were completed before interference occurred. (It is not necessary to issue a rain check to a member since the member is granted unlimited play as part of his/her membership fee.) In many circumstances, it is impossible to determine if eight or fewer holes were completed prior to the interference. In these cases, the Golf Manager reserves the right to use his/her judgment in determining if a rain check shall be issued.
To issue a rain check, a Bag Tag (Exhibit "B") is stamped with a rubber "RAIN CHECK" stamp, dated, and attached to the cash register receipt. The bag tag is initialed by the Golf Shop Attendant and returned to the golfer for later redemption. Rain checks only apply to the greens fee and are good for one year from the date of issue.
When the customer presents the rain check for redemption, he/she must sign it and give it to the Golf Shop Attendant. The Golf Shop Attendant uses the "No Sale" key to generate a cash register receipt. The "No-Sale" receipt is initialed by the attendant and given to the customer. The Golf Shop Attendant then initials and dates the redeemed rain check and the redeemed rain check is placed in the register drawer.
The customer registers on the Log Sheet and writes an "RC" in the appropriate column. Second rain checks will not be issued.
Memberships are available to individuals in various categories (i.e. student, faculty/staff, retired faculty/staff, or public). Individuals may apply for membership by completing a Golf Operation Membership Application (Exhibit "C") and submitting it to the Golf Shop along with payment of the prescribed membership fee.
Upon the in-person receipt of a Membership Application, the Golf Shop Attendant examines the form for completeness and verifies (by identification, if applicable) that the applicant is qualified for the particular category of membership he/she is claiming. The Attendant then makes sure that the Applicant has included the correct membership fee. The Attendant is not to accept an Application unless full payment has been submitted with the Application.
The Golf Shop Attendant prepares a two-part Fee Receipt (Exhibit "D"). The correct amount of the membership is rung up on the cash register. The Attendant notes the amount paid, the means of payment, the date, and his/her initials on the "office use" portion of the Application. The cash register receipt, right portion of the Fee Receipt, and Application are attached and forwarded to the Golf Operation office for further processing. After completing a pre-numbered Membership Card (not exhibited), the Attendant gives the customer the left portion of the Fee Receipt along with his/her Membership Card.
Membership Applications which have been received by mail are processed by the Golf Manager. He/She examines the form for completeness and (if applicable) verifies the applicant's eligibility for the particular type of category of membership the applicant has requested.
If there is insufficient information or remittance, the application and remittance are to be immediately returned to the applicant with a memo explaining the deficiency, and asking the applicant to reapply.
If the application and remittance is proper, the Golf Manager processes the application through the register and prepares a two part Fee Receipt as previously described for applications submitted in person. The Manager inscribes the amount paid, the means of payment, the date, and his/her initials on the "office use" portion of the application. The Application is further processed as described below. The left hand portion of the Fee Receipt is held in the Golf Shop until the customer comes to pick up his/her Membership Card. At a customer's request, his/her Membership Card and left portion of the Fee Receipt will be mailed.
If an applicant is determined to be ineligible after the initial verification and acceptance described above, but before the pre-numbered Membership Card is issued, the membership fee is to be refunded. This is the only exception to the "no refund" policy since it is done for the convenience of the Golf Operation management.
The Golf Manager will complete a Refund Request. Budget 08-027-90 (Golf Shop), Fund 1003 (Fees Income), Object Class 029 is charged. The "check to be mailed" box is to be checked. The Golf Manager processes the form as prescribed by the Usage Guide.
Membership is effective when a Membership Card has been assigned to an applicant.
The member presents the Membership Card to the Golf Shop Attendant at the time of sign-in, and to the Course Attendant at the first tee.
The Golf Shop Attendant checks the card number against his/her list of current card numbers to verify that the number is valid and that the customer is the authorized user. The member must register on the Log Sheet (Exhibit "A") and indicate his/her Membership Card number.
Golf Operation employees are allowed golfing privileges when not working. These privileges are extended to employees only and exclude family members and friends. Employee names appear on a posted reference list prepared by the Golf Manager. Identification must be presented if there is any doubt as to the individual's identity. Once the on-duty employee verifies the individual as an employee, the individual is issued a "no-sale" receipt with the letter "O" written on it. The individual must sign-in on the Log Sheet and place an "O" in the "other" column.
From time to time, complimentary playing privileges may be extended to certain University guests, V.I.P.'s, etc. This is limited to visiting P.G.A. professionals and others during their visit, as approved by the Golf Manager. Golf Shop Attendants and the shop manager will be notified of such occasions by the Golf Manager. A "no sale" register receipt is to be issued to each guest, with the name(s) being recorded on the Log Sheet and a "O" being marked in the "other" column.
Golden Passes (not exhibited) are life-long memberships which are issued in limited number to certain distinguished individuals within the University structure. The Manager, Auxiliary Recreation Services shall notify the Golf Manager of the names of the current holders of Golden Passes in writing on an annual basis. Based upon this listing, the Golf Manager shall complete a Membership Application and issue a season Membership Card (as previously described) for each of these individuals. Under the "Method of Payment" portion of the Membership Application, the Golf Manager shall write "GOLDEN PASS." The list of pass-holders is retained with the applications.
The golf teams are allowed free playing privileges on both courses. The names of golf team members appear on a posted list prepared by the Golf Manager. Identification must be presented to the Golf Operation employee by the golf team member to verify his/her identity. The individual registers on the Log Sheet and places a "GT" in the "other" column.
On occasion, special golf events are scheduled by the Golf Manager. These events are of the nature that a group of golfers will compete in a related match sponsored by an organization. It is the responsibility of the Golf Manager to coordinate such events and oversee the tabulation of fees due the Penn State Golf Operation as a result of the event activities.
Settlement may be accompanied by either having each golfer at the time he/she registers pay a fee established for the event, or by producing a billing for the total event based on the number of participants.
If each golfer pays at registration, the fee is processed like a daily greens fee (see the discussion in a previous section).
If a billing is to be produced for the total event to outside organizations, the Golf Manager shall complete a University Park Invoice, crediting Budget 08-027-90 (Golf Shop), Fund 1003 (Fees Income), Object Class 029, which will be sent to the sponsor of the event. (See also Policy FN02 - Charge Sales and Billing.)
If a billing is to be produced for the total event to a Penn State organization, the Golf Manager shall request that an Interdepartmental Charges and Credits (IDCC) be generated, charging the department's budget and crediting the Golf Shop budget.
All requests for lessons are directed to the Golf Manager who is responsible for the coordination and scheduling of all lessons.
Golf Professionals are hired by the Golf Manager for the purpose of giving lessons. All such hirings and the related amounts of compensation to these Golf Professionals must be approved by the Manager, Auxiliary Recreation Services.
Since compensation is based upon the number of customer participants and lesson fees, adequate and accurate record keeping must be maintained to provide substantiation for such compensation.
The customer is requested to make payment (per published rates) at the Golf Shop prior to, or at, the first lesson. The Golf Shop Attendant receives payment of the lesson fee which is processed through the cash register by using the appropriate key.
(The greens fee is included in the playing lessons fee.)
In addition, the Attendant completes a pre-numbered Cash Transaction Support Form (Exhibit "E") from the appropriate instructor's pre-numbered Cash Transaction Support Form book, and the customer is given the yellow and white copies of the Form. The pink copy is retained in the Golf Pro's book at the Golf Shop. The cash register receipt is attached to the pink copy.
Before starting a lesson, the Golf Pro verifies that the customer has paid for a lesson by requesting the yellow copy of the Cash Transaction Support Form. The yellow copy of the Form serves as evidence that the lesson has been paid for.
Most instructors are regular employees of the University and receive supplemental pay based upon a percentage amount of the lessons taught. These instructors submit the yellow copies of the Cash Transaction Support Form monthly to the Golf Manager who then completes the Supplemental Compensation Form ("SUPP" in IBIS) for submission to the Financial Officer. The Financial Officer will approve the payroll data and forward it to the Payroll Department.
Instructors who are non-regular employees are paid on a wage payroll basis. Every wage payroll period, the Golf Manager will complete the Wage Payroll (WAGC in IBIS) for Wage Payroll employees.
The yellow copies of the Cash Transaction Support Form are the backup for preparing Wage Payroll data for lessons.
The Golf Manager submits and approves the payroll data electronically through the IBIS system in accordance with the approved paths established by the Financial Officer to meet the Payroll deadlines.
It is the responsibility of the Golf Manager to review the instructors' Cash Transaction Support Form books. A continual review must occur for the purpose of determining each instructor's compensation. Each payroll period, a review shall be performed for the purpose of verifying the integrity of the consecutive pre-numbering series of each instructor's book, and to reconcile the Form books back to the cash register tapes.
The Golf Operation offers clubs and other equipment for rental as a convenience to golfers using either the Blue or White Courses. (Range balls are only available at the Practice Center.)
The Golf Manager shall be responsible for purchasing items to be rented. All items purchased for rent are to be charged against Budget 08-027-90 (Golf Shop), Fund 1001 (General). (The Object Class will vary according to the type of item being purchased. Rentable golf balls would be charged to Object Class 307 [Recreational and Athletic Supplies]. Golf Clubs, and other equipment under $1,000, would be charged to Object Class 455 [Equipment, under $1,000]. Riding golf carts would be charged to Object Class 710 [Equipment, $1,000 and over].)
The procedure for purchasing, receiving, and inspecting items is outlined later in this procedure in the section, "Materials/Equipment Procurement."
The Golf Manager is responsible for maintaining a database on the computer tracking the receipt of purchased rental items and the updating of the quantities on hand for all rental items.
The Golf Manager is responsible for conducting a physical inventory of those rental items under his/her care twice a year beginning on the last working day of the month, with one occurring so as to reflect the inventory as of the close of business each golf season and one as of June 30 (the end of the fiscal year). Complete physical inventories taken at other times of the year may be desirable due to certain problem situations (e.g., the discovery of gross inaccuracies within the inventory records), but such counts are purely optional and at the discretion of the Golf Manager. Any unusual circumstances are to be pursued and the Manager, Auxiliary Recreation Services is to be notified.
Where practical, rental items are to be securely labeled as being the property of the University Golf Operation.
Sets of clubs are available for use on the Blue and White courses. Individual range clubs are available for rent for use exclusively on the practice area. Customers desiring to use rental sets must pay the appropriate fee to the Golf Shop Attendant and must leave a drivers license or other suitable identification to insure the return of the clubs. The Golf Shop Attendant processes the rental through the cash register and gives the customer the register receipt. He/She also records the rental on the Log Sheet (Exhibit "A") next to the customer's name.
Upon return of the golf clubs, the Attendant checks for any damage or shortages. If the clubs are satisfactory, the Attendant returns the customer's identification.
Pull carts are available for customers wishing to use them. A single rate is charged for any usage up to 18 holes. The Golf Shop Attendant collects the proper rental fee from the customer, records the rental on the cash register, and gives the customer the register receipt. The Attendant notes on the Log Sheet (Exhibit "A") that the customer has rented a pull cart.
Upon the return of the pull cart, the Attendant so notes the return on the Log Sheet. Rain checks are not issued for pull carts.
Riding carts are available at both 9 or 18 hole rates. Riding carts may be rented to customers 18 years of age or older (as evidenced by a driver's license). A Golf Cart Rental Agreement (Exhibit "F") is to be used for each riding golf cart rented.
The Golf Shop Attendant circles the desired "Number Holes Played," fills in the number of the riding cart the customer will be receiving, and has the customer sign the agreement. The proper rental fee is collected from the customer. The original agreement is placed in the cash register drawer, and the copy and the register receipt are given to the customer. The cart rental information is recorded on the Log Sheet.
A rain check may be issued for a riding cart rental on a 9 to 18 hole basis, depending on how many holes were played. (Such rain checks are issued only if a sudden storm terminates play, not if pre-existing wet conditions causes the customer to change his/her mind about playing.)
The Golf Shop Attendant makes a determination as to the number of holes completed. If 0-8 holes had been completed on an 18 hole rental, an 18 hole rain check is issued. If 9-12 holes had been completed on an 18 hole rental, a 9 hole rain check is issued. If 0-3 holes had been completed on a 9 hole rental, a 9 hole rain check is issued.
The Attendant collects the customer copy of the Golf Cart Rental Agreement and stamps "RAIN CHECK" on the face of it and writes (in ink) the number of holes the rain check is good for. The Attendant initials the rain check and returns the agreement to the customer for later redemption. Rain checks are good for one year from the date of issue.
When the Customer presents a riding cart rain check to a Golf Shop Attendant, the number of holes the rain check is good for is transferred to a new agreement form. The Attendant records the number of the riding cart the customer will be receiving on both the new form and the Log Sheet (Exhibit "A"). The copy of the new agreement is given to the customer. The rain check is initialed by the Attendant who attaches to it the original page of the new agreement and places both in the register drawer.
Range balls are available for rental only for use on the practice area. A customer desiring this service pays the required amount to the Golf Shop Attendant who issues a basket of balls, records the rental on the cash register, and gives the register receipt to the customer. The balls and basket remain at the practice area for later collection by the Golf Shop Attendant.
The University Golf Operation offers a club repair service to its customers. If necessary, clubs will be sent to a specialist for repair.
When a customer delivers his/her clubs to be repaired, the Golf Shop Attendant informs the customer about the repair fee schedule and the estimated length of time it will take to perform the work. The Attendant completes a pre-numbered Repair Claim Tag (Exhibit "G"), removes the stub and gives it to the customer. The Tag is fastened to the clubs. The clubs are forwarded to the repair area where repairs will be made or where the clubs will be forwarded to a specialist for repair.
The Golf Manager shall determine if the repair work will be performed in-house or if the work warrants that the clubs be sent to the specialist.
Clubs to be sent to the repair specialist are clearly labeled as to ownership and are sent via a commercial shipping company that provides insurance coverage and tracing as part of its shipping services. (The Repair Claim Tag is removed for safe keeping until the clubs are returned.) The Golf Operation establishes a maintenance contract once a year with the specialist. When the clubs have been repaired, they are returned, along with a bill, to the golf shop. The Golf Manager inspects the shipment and completes a Partial Receiving Report . (See the subsection "Receiving" in the section, "PURCHASING", of this procedure.) The bill from the specialist is attached to the Partial Receiving Report before it is forwarded to the Department of Purchases. Repair work done by the specialist is charged back to the customer on a cost-plus basis as calculated from the specialist's bill.
The cost-plus repair price is written on the Repair Claim Tag per the approved set of rates.
When the customer arrives to pick up the repaired clubs, he/she must present the claim stub as proof of ownership. If a customer has lost his/her claim stub, he/she must show a driver's license as identification and be able to verbally describe his/her clubs to the Attendant to prove ownership.
The Golf Shop Attendant is to collect the claim stub and full payment, and record the transaction on the cash register. The register receipt and clubs are returned to the customer and the Repair Claim Tag and claim stub are placed in the register. If the claim stub is not returned, the Attendant will require that the owner sign his/her name on the Claim Tag, and the Claim Tag is placed in the register drawer.
The Golf Manager is responsible for monitoring the use of the Repair Claim Tag. By checking the pre-numbered control number on each ticket, he/she is to make sure that all issuances of a tag are accounted for (each tag should result in a repair sale at the cash register.) Voided Repair Claim Tags are to be retained for reconciliation. The Golf Manager maintains a log of all Repair Claim Tags indicating which Tags have been issued, and which of these are open or settled.
Gift Certificates and coupons shall be issued, redeemed, reconciled and reported per University Procedure CR2052 - Gift Certificate and Coupon Accountability.
The Golf Manager oversees the service of accepting used golf clubs from patrons only in trade against the purchase of a new set of clubs from the Penn State Golf Shop. These golf clubs are then offered for resale by the Golf Operation.
The Golf Manager, Assistant Golf Manager, Office Manager and Shop Manager are permitted to value the trade-in. All other employees must defer judgment to the above staff.
When the patron offers the clubs to the qualified staff noted above, it is the staff member's responsibility to determine the market value of the clubs and the estimated cost of repairs to refurbish the clubs (if necessary), and arrive at a value for the trade of clubs.
The value of the trade-in is decided by the following procedures:
- Determine the age of the clubs, condition and complement of the set (is set complete, no clubs missing).
- Assign value based on the range value of clubs;
- Irons: $7.00 to $15.00 per club
- Wood Heads: $7.00 to $15.00 per club
- Metal Heads: $12.00 to $20.00 per club
Once the purchase price has been agreed to by both the staff member and the patron, the staff member completes two copies of the Golf Club Trade-In Agreement (Exhibit "H"). The staff member and the patron sign both copies and each individual keeps one of the copies.
The receipt of the golf clubs from the patron is to be recorded by the Golf Manager on a Special-Order Inventory Log Sheet (Exhibit "I") using information from the Golf Club Trade-In Agreement.
To calculate the price of the new set of clubs, subtract the trade-in value from the customer's purchase price of the new set. To this sub-total, add PA Sales Tax to arrive at the total sale price.
- Perform any necessary club repairs to the trade-in clubs to make them sellable and itemize the cost of the repairs.
- Add repair cost and trade-in value to calculate the wholesale cost of the used equipment.
- Multiply the wholesale cost by 20% to calculate the golf shop mark-up.
- Add mark-up to wholesale cost to determine the retail price for the used equipment.
NOTE: Compare the retail price to the general shop prices of clubs.
Do not add PA Sales Tax to used equipment.
- The item of equipment is then posted in the inventory records and an electronic Inventory Control Card (Exhibit "J") is created. The equipment is assigned an N.L.U. number and priced by the procedure listed above.
- The item is then placed in the golf shop on display for resale.
Set of irons #3-9, PW. (8 clubs) reasonable condition
Trade in value @ $12.00 per club / $96.00 per set
Club repair work - re-gripped @ $2.00 per club or $16.00 per set
Wholesale of $112.00, mark-up of 20% = $22.40. Total sale price of $134.40
Round out price to next highest dollar = $135.00 sale price
Vending machines are placed in the Golf Shop and serviced by an outside contractor. The Golf Operation receives a portion of the income from these machines.
Auxiliary Recreation Services receives a predetermined amount of commission from the revenue received for sales from all vending machines. The Golf Operation is credited a portion of this income on a yearly basis. The Financial Officer budgetarily distributes this commission revenue to each of the auxiliary enterprises.
Since these vending machines are not the responsibility of the Golf Operation, no refunds are to be given to Golf Operation customers by Golf Operation employees due to losses incurred from the use of the machines. A refund slip is provided by the contractor for the patron to complete and submit for refunds.
The Golf Operation maintains an inventory of merchandise for sale. This inventory is maintained as one inventory at two locations within the same building: the Golf Shop Sales area and the Stockroom.
Inventory data for each item is maintained separately on an electronic Golf Inventory Control Card (Exhibit "J"). All purchases to and disbursements from inventory are to be recorded, as well as any adjustments to quantities as a result of physical inventories or inventory cycle counts. At any point in time, this card will indicate item number, description, costs, selling prices, and reorder points and quantities, and by location, quantities-on-hand and quantities-on-order. Some of this information is updated via weekly transactions (i.e., receipt of inventory, daily sales activities, etc.) by the Shop Manager (or his/her designee). The open order information is updated as necessary by the Golf Manager.
All purchases of items for resale shall be charged against Budget 08-027-90 (Golf Shop), Fund 1001 (General), Object Class 310 (Supplies and Materials for Resale).
Non-consumable supplies and materials used in the process of performing golf club repairs are considered to be "resale" merchandise and are therefore inventoriable items.
For ease in identifying an inventory item, as well as ease in processing related information, an individual four digit stock number (i.e. 0180) called an NLU code is assigned to each item in stock. This code identifies the name of each item in stock, helps maintain accurate inventory records, and enables accurate tracking of sales on the cash register. This number is used as a reference tool and is employed in conjunction with an item description. Stock numbers are originally assigned by the Golf Manager at the time an item is being added as a stock item. To avoid duplicate assignment of a number, the Golf Manager must always refer to a current listing of assigned stock numbers before assigning a stock number to a new inventory item. The full methods and criteria used in assigning stock numbers are determined by the Golf Manager.
The reorder point for each inventory item is established by the Golf Manager so as to provide an optimum number of inventory "turn-overs" per year, and to have minimum inventory on hand in the off-season. The Golf Operation's internal guidelines govern how the reorder point is determined, based on lead times, etc.
Once the reorder point has been determined, the weekly postings of stockroom withdrawals via sales should detect when an item is to be reordered.
On a monthly basis, the Golf Manager will review the electronic Golf Operation Inventory Cards and identify any items whose quantities have dropped below their respective reorder points and may have been missed during the weekly inventory postings.
Items which become unsalable due to damage or obsolescence while stocked are to be reported to the Golf Manager. The Golf Manager shall either discount the selling price of the merchandise for quick sale, return the merchandise to the vendor, or dispose of the item through University Salvage.
If the choice is made to either return the merchandise to the vendor or to dispose of the item, the Golf Manager shall complete the upper portion of a pre-numbered Certificate of Disposition of Obsolete or Damaged Material (Exhibit "K").
The Golf Manager will maintain the Certificate of Disposition until the material or equipment is removed from the Golf Operation premises. He/She then completes the bottom certification portion of the form. (The witness signature must be from outside the Golf Operation.)
All materials deemed unusable must be properly disposed of. Refer to the Policy PC-10 in the University Policy Manual, "Disposal of Obsolete, Surplus or Scrap University-Owned Equipment, Supplies and/or Materials." In some situations a "Report of Disposition or Permanent Transfer of Equipment" form is also required to be processed. Refer to Page 6.2 of the General Forms Usage Guide for further information.
Items returned to a vendor must be done in such a manner that the vendor will either credit the University's account or issue a check made payable directly to the University.
The Certificate of Disposition is returned to the Shop Manager who will relieve the quantity of the item indicated on the certificate from the appropriate electronic Golf Operation Inventory Control Card (Exhibit "J"). The completed certificates are to be filed in the Shop Office in numeric order by Certificate of Disposition form control number. These filed Certificates will be used as proof of the disposition of the items, and, during the physical inventory reconciliation process, to retire the items' electronic Golf Operation Inventory Control Card (if the item has been totally depleted at that time).
Consumable items and services, other than rental items and items for resale, are purchased using the methods described in the "Materials/Equipment Procurement" section of this manual and are charged to the Golf Operation budget, 08-027-90, and to a fund and object class as determined by the Golf
Manager. Since these are expense items, there is no need to inventory them, although supplies should be safeguarded against misappropriations.
The following applies to the purchase and receipt of all rented items, items for resale, supplies, services, etc., acquired on behalf of the Golf Operation.
Purchasing activities for the Golf Operation are conducted centrally by the Golf Manager. He/She may not delegate this responsibility and is responsible for processing orders through standard procedures through the University Department of Purchases, and initiating IDCC's for supplies transferred within the University.
There are four general University forms available to the Golf Operation for use in ordering materials and equipment. They are the Purchase Order, the Limited Order, the IDCC, and the General Stores Requisition-Invoice. Detailed instructions for their usage and that of other pertinent forms are outlined in the "Purchasing" section of the General Forms Usage Guide, and are governed by the policies in the "Purchasing" section of the University Policy Manual.
Purchase Order is initiated by the Golf Manager on IBIS via "PURC" and processed according to the instructions.
Limited Order provides a means of obtaining material similar to those obtained via a Purchase Order, but where the total value of the order does not exceed $500. Limited Orders are subject to certain restrictions
as outlined on page 2.9 of the General Forms Usage Guide.
This is used when acquiring materials from within the University structure. The budget distribution "charge" portion and other areas of the form are completed by the ordering area per the instructions.
The IDCC is delivered to the supplying department as an order for goods. When goods are delivered, the IDCC is processed through Accounting Operations for the payment. Services, on the other hand, are usually billed after the services have been rendered by the supplying department. The Golf Manager prepares an IDCC as payment in response to the billing in this case.
If goods are not delivered, but are picked up directly from the supplier's location by a Golf Shop Attendant, the attendant must make certain that the goods match what is called for on the IDCC before leaving the supplier's location, and before signing anything acknowledging the receipt of the goods.
Whenever inventoriable items are being ordered, the electronic Golf Operation Inventory Control Card (Exhibit "J") for each respective item ordered, is to be updated with the open order information. The Purchase Order number, date, and quantity of the item are to be recorded in the appropriate location.
All new inventory is received on a regular basis at the Golf Shop Stockroom. Materials are to be isolated in a specific area until inspected and received-in, to avoid intermingling with materials already processed.
NOTE: The withdrawal of items from a shipment of materials not yet inspected and received-in is not permitted.
The inspection of incoming materials is normally performed by the Stockroom Clerk who verifies the identity and quantity of each item received from the salmon Receiving Report copy. The condition of the materials is examined to ascertain whether there were any damages sustained during shipping. If any problems exist, the Clerk notes them on the vendor's packing list and on the Receiving Report. He/She dates and initials the document and forwards the paperwork to the Golf Manager as notification of the problem.
It is the responsibility of the Golf Manager to contact the supplier and/or shipper in an attempt to resolve the problem, or to contact the Manager, Auxiliary Recreation Services for assistance in resolving the problem. If necessary, the Department of Purchases is to be contacted for final resolution. Inspections must take place as soon as possible after the receipt of any item.
Once it has been determined by the Stockroom Clerk that the materials are satisfactory, the Clerk must document the acceptance on the salmon Receiving Report.
If a Purchase Order was used and all items ordered are received, the salmon Receiving Report is signed by the Stockroom Clerk and marked "received." A Partial Receiving Report will be made for partial receipts of merchandise.
If an IDCC was used, the acceptance of the materials is recorded on the Golf Operation's copy of the IDCC.
The Stockroom Clerk delivers the received materials, the salmon Receiving Report copy, packing slip and invoice (when sent directly to the Golf Shop) to the Golf Manager. After receipt of the bill and verification by the Golf Manager, the documents are forwarded to the Manager, Auxiliary Recreation Services. Copies of the documents are retained by the Golf Manager. If the invoice is not sent to the Golf Shop, the Golf Shop will provide support documentation upon the request of the Financial Officer.
The original Receiving Report (or Partial Receiving Report) is signed by the Financial Officer and forwarded to the Department of Purchases.
All Golf Operation copies of the receiving paperwork, including packing list copies, are first used by the shop manager in updating the inventory records for the Golf Operation, where applicable, and is then forwarded to the Golf Manager for review, filing, and/or further processing.
Items are to be placed in their proper storage positions in the Shop stockroom by the Golf Shop Attendant, and inventory records updated accordingly.
The following applies only to inventoriable items (those items to which an inventory stock number has been assigned and for which an electronic Golf Operation Inventory Control Card [Exhibit "J"] has been created).
Items which are not normally stocked and must be special-ordered for resale to a particular customer are purchased in the same manner and charged to the same budget as are inventory items. However, the items are specifically earmarked for delivery to that customer and inventory records are not updated. Instead, the item is to be recorded on a Special-Order Inventory Log Sheet (Exhibit "I").
Once the inspection and acceptance process for inventory items has been completed, the receiving paperwork must be processed for information pertaining to the receipt of each item. It is from this paperwork that the quantities-on-hand and quantities-on-order are updated on each affected electronic Golf Operation Inventory Card by the shop manager (or his/her designated substitute). The quantities and date received are recorded on the electronic Golf Operation Inventory Card and added to the inventory on-hand balance. If the order was shipped complete, a mark is placed next to the "quantity ordered." If a partial shipment was received, no mark is used, indicating that further shipments of that item are outstanding.
Receiving paperwork is initialed and dated by the shop manager as an indication that it has been processed for the updating of inventory records.
Cost and price determinations are calculated as discussed below.
Costs are not to be updated from the purchasing or receiving documents, but are only to be updated based on a vendor's invoice, and shall include shipping charges. Using this cost data from the vendor's invoice, new unit costs are determined by the shop manager using the "weighted average" method as outlined below:
- Determine the total value and quantity of the newly received material based on the vendor's invoice.
Ex. Assume 20 each of Item A were received at a total cost (including shipping charges) of $155.35.
- cost (including shipping charges) of $155.35.
Ex. Assume 15 each of Item A are in stock at a cost of $6.00 each; 15 x $6.00 = $90.00 total value.
- Determine the combined total value and quantity of the item.
Ex. 20 valued at $155.35
+15 valued at $90.00
- Divide the total value by the total quantity to obtain the "weighted average unit cost."
Ex. $245.35 / 35 units - $7.01 per unit
The newly calculated costs, and date of invoice, are to be recorded on the electronic Golf Operation Inventory Control Card (Exhibit "J"). Costs are to be recalculated every time an invoice is received.
To determine the selling price of an item, the following formula is used:
Unit Cost (from above)
+ Amount of Mark-on (a fixed % times the unit cost)
= Unit Selling Price
The percentage of mark-on used by the Golf Operation are established by the Golf Manager. All items are assigned a sales category based on the percentage of mark-on for each item. Since the percentages may vary by item, each electronic Golf Operation Inventory Card shall indicate the current percentage for that item.
As a result of this cost and price determination process, and since the Golf Operation uses the "average cost" method of valuing inventory, new price tags are to be prepared for items already in the sales area of the Shop, as well as for the materials just received that will be used to replenish the sales areas. These tags are prepared by the shop manager and include the stock number of the item, the retail price, the encoded cost, and the proper register key to use to record a sale.
Since the shop manager has knowledge of the inventory quantities in his/her possession (the electronic Golf Operation Inventory Control Cards are always maintained in the database), he/she will know the quantity of an item currently in stock at the Shop and, therefore, how many extra price tags for an item are to be prepared for use in updating the quantity already in stock.
In addition, the new rate is entered into the database reflecting the cost of the item(s).
The sale of all merchandise (with the exception of Interdepartmental Charges and Credits [IDCC] sales and billings) is recorded through the cash register. Items for sale have been assigned an individual stock number known as the NLU Code. This code is keyed into the register and records the sale, and displays the proper sale price. The journal tapes are used for cash accountability. A daily NLU readout of all coded sales is matched against sales department key totals. These sales are then entered into the computerized inventory database at least weekly which adapts on-hand figures and updates dollar sales. The descriptions, prices, costs, and stock numbers are all maintained in the database. Other services are recorded on present register keys that are recorded by category on the journal tape.
Each cash register contains a $200 change fund which is governed by Policy FN04. In addition to the cash register change funds, a $1300 back up change fund is maintained in the safe at the Golf Shop. These change funds are to remain intact, as they are assigned for Golf Operation use for the sole purpose of making change. They are not to be used for "petty cash" purposes. The Shop Manager is responsible for all monies kept or transacted in his/her shop. The Golf Manager is ultimately responsible for all monies kept or transacted in the Golf Operation.
The sale of all merchandise is to be credited to Budget 08-027-90 (Golf Shop), Fund 1005 (Sales Income), Object Class 030 (Sales).
There are two types of discounts that are normally encountered in the Golf Operation's merchandising efforts: discounts offered to Golf Operation employees and University Golf Teams for individual use (at cost plus ten percent); and discounts on slow-moving items as determined by the Golf Manager.
Discount sales are rung into the register according to product code, and the percentage of discount is entered on the register discount key. Cost-plus-ten percent sales are rung on the appropriate register department key, and the patron is given the cash register receipt.
All sales to University Golf Teams must be recorded on the Golf Team Purchases form (Exhibit "L") at the time of the sale. The sale is rung into the cash register and the receipt attached to the Golf Team Purchases form.
Each month, the sales to the Golf Teams which have been recorded at the Golf Shop on the Golf Team Purchases form are forwarded to the Golf Manager who summarizes them and creates a Billing IDCC.
Although no cash refunds are given under any circumstances, exchanges of merchandise can be made. The customer must have the original cash register receipt. Any item presented for return or exchange must be of new (resalable) condition. Any stains, tears, or signs of wear will make the item non-returnable. Exchanges may be made for items of the same price, items of a lesser price, or items of a greater price (with the customer paying the difference). In any of these cases, a Cash Transaction Support Form (Exhibit "E") is prepared showing what was returned and its original selling price. The new item, and its selling price, is also noted on the Cash Transaction Support Form. If the new item is of a greater price, with the customer paying the difference, the difference is processed through the cash register under the appropriate product class key. The customer is given a copy of the register receipt. If the new item is of a lesser price, it will be treated as an even exchange.
Should the customer not wish to exchange the returned item for something else, a Gift Certificate may be written for the full purchase price of the returned item. A Cash Transaction Support Form is prepared indicating the return of the original item, and a Gift Certificate is prepared per University Procedure CR2052 as described previously in this procedure. The Gift Certificate and a copy of the Form are given to the customer. However, since no money is transacted, no amount is recorded through the register, and, therefore, no register receipt is given to the customer.
Inventory records are updated appropriately as discussed later in this procedure in the section, "Updating Inventory Records With Sales Data."
Besides payment by IDT and Gift Certificate, discussed previously, the other acceptable means of payment include cash, check, and credit card. Cash from the change fund and from sales revenue are not to be used for cashing personal checks or for making personal advances or loans to any individuals.
Any checks accepted for payment must be made payable to The Penn State University for the exact amount of the purchase, immediately endorsed, and deposited in accordance with University Policy FN01. Endorsement must also specify Budget 08-027- 90 (Golf Operation). Verification of the check writer's identity must be made by means of a driver's license, University ID Card, etc.
Note: Returned checks shall be processed per the Procedure CR2002 - Processing Returned Checks.
Visa and MasterCard credit cards may be accepted for payment under the guidelines of Policy FN07 - Credit Card Sales, and by following the procedure Credit Card Sales (Visa and MasterCard) -Manual/ Basic Terminal Authorization/Processing," procedure #FM2013. The Discover credit card is covered by the procedure "Credit Card Sales (Discover) - Manual Processing Authorization," procedure #FM2010. Although the customer is given a copy of the completed credit card slip, the sale is still processed through the cash register and a register receipt given. A Cash Transaction Support Form is issued if the transaction involves the sale of merchandise in inventory that needs to be tracked with detailed information (exact size, color, style, etc).
The Golf Manager is responsible for overseeing the operation of the cash register(s). It is the Shop Manager's responsibility to see that the correct change fund is placed in the registers at the start of business, to see that the Golf Shop Attendants know the proper operation of the register, to monitor the use of the register, to authorize all voids, and to perform the cash/sales reconciliation at the end of the business day.
Only the Golf Manager and the Shop Manager (and authorized substitutes) shall have access to the key(s) permitting the resetting or clearing of information in the cash register. Only one person at any time may be permitted to operate the cash register and have access to the register's drawer. That person is responsible for the contents of the register and the proper processing of transactions through the register.
Should a mistake occur requiring a void, the register receipt must be saved, the mistake noted on the receipt, the receipt initialed by the cashier making the error, and the receipt initialed by the Shop Manager (indicating approval of the void). The receipt is to be placed in the register drawer for use in reconciling that day's activities.
At the end of the morning shift, and in the presence of the next shifts cashier, a cash register X Report Tape is generated by the Shop Manager. The money in the cash drawer is counted and marked on the read slip. Any voids are attached to the read slip that is then initialed by the Shop Manager and placed in the cash drawer. At the end of the afternoon shift, the Shop Manager extracts three reads from the register. A department read and NLU read are performed to reconcile daily merchandise sales and are then forwarded to the Golf Office for data input. A closing journal read (Z Report) is then done which resets the register for the next day's business. The reset numbers on the register are automatically advanced. The ending number becomes the beginning reset number for the next day's opening. The register journal tape is used to complete the evening cash reconciliation form.
The Shop Manager then completes a Cash Report Details Sheet (Exhibit "M".)
The money collected for the day, the Cash Report Details Sheet, and other related paperwork are placed in the shop's safe at the end of each business day. The change funds are also to be placed in the safe and the cash register drawers left open.
At the beginning of the next business day, the Golf Manager shall count the money and verify the totals on the Cash Report Details Sheet. He/She resolves any discrepancies, and then makes the deposit at the bursar-designated depository.
Per Policy FN01, "Cash Sales and Receipts," all monetary receipts must be deposited in accordance with FN01 parameters. Refer to Policy FN01 for other guidelines concerning depositing revenues.
The Golf Manager posts the necessary information to a Report of Cash Receipts for the shop in accordance with the instructions in the Report of Cash Receipts Booklet available at the OAS Administrative Training and Support Center. According to the credit card procedures #FM2010, and #FM2013, cash/check transactions must appear on a separate ROCR from credit card transactions. And since different banks handle the VISA/MasterCard transactions and Discover Card transactions, separate ROCR's must be generated for those two types. The total on each ROCR represents either cash and check or credit card transactions and must agree to the totals of the Cash Report Details Sheet.
Any overage or shortage in excess of $20 must be approved by the Manager, Auxiliary Recreation Services. Credit card documentation is mailed to the Bank Card Center in the provided self-addressed envelope. Cash Report Details Sheets are used for entry into the University computer system.
The department read, NLU tape, all discount slips, Cash Transaction Support Forms, and any Pre-numbered Receipts are forwarded daily to the Office Manager for input into the golf shop inventory database on a weekly basis. The dollar sales and applicable discounts are recorded in a pre-coded form in the Sales database. This information is then combined/added to the Inventory database where all on-hand and dollar sales of each individual item is updated. Any returned items are entered in the Received column in this database which places them back in the inventory. All tapes and documentation are clipped together, dated, and filed.
A count is made of all inventory items on hand at a specified point in time. The quantities that are found to exist have two primary uses: they are used to compare against the purported quantities-on-hand as contained within the inventory records in order to detect any deviations, and, secondly, they are used to "reset" those quantity-on-hand figures to reflect the actual physical quantity. The former usage helps to detect any shortcomings with the associated methods of record keeping, or may reflect the occurrence of any other improprieties. The latter usage not only provides a means for maintaining accurate on-hand quantities, but the actual physical quantities are also used to compute the dollar value of the inventory at a desired point in time.
A complete count of all inventory belonging to the Golf Operation is to be taken at least twice a year beginning on the last working day of a month, with one occurring so as to reflect the inventory as of the close of business each golf season and one as of June 30 (the end of the fiscal year). Complete or partial physical inventories may be taken at other times of the year due to certain problem situations (e.g., the discovery of gross inaccuracies within the inventory records), but such counts are at the discretion of the Golf Manager.
Certain items within the inventory may have fast turnover and/or large dollar characteristics. In those cases, closer scrutiny must be observed to maintain adequate controls.
To provide closer monitoring of these sorts of inventory items, cycle counts must be performed by taking physical inventories of selected items or groups of items at intervals between the regular physical inventories. The scheduling of cycle counts is a judgmental decision of the Golf Manager based upon the perceived potential for inaccuracies of on-hand quantities. However, cycle counts are to be performed.
For regular physical inventories, the idea is for counts to be taken in such a manner as to represent a "picture" of the inventory at a certain point in time. This necessitates that attention be given to what is or is not considered to be part of the Golf Operation's inventory. Most problems in this area involve items being received or shipped. To avoid confusion, the Golf Manager is responsible for insuring that such items are segregated using the following guidelines:
- All items that ARE a part of the inventory should be clearly identified with assigned Golf Operation stock numbers.
- Items which have physically arrived from a vendor on or before the time the counting begins are to be "received in" and the necessary paperwork processed, including posting to inventory records. Such items ARE to be considered part of the inventory.
- Items which have been "pulled" for sale to a customer, but are awaiting the arrival of additional back-ordered items from a vendor in order to complete the sale, ARE considered a part of the inventory, since the sales documents will not have been processed.
- Items which have been received on the Special-Order Inventory Log Sheet (Exhibit "I") and are awaiting the customer's pickup ARE considered a part of the inventory.
- Generally, if the proper paperwork has been (or will be) processed such that the inventory records indicate (or will indicate) an item has been added to the inventory by the cutoff date, then IT IS considered a part of the inventory.
- Any items NOT considered a part of the Golf Operation's inventory should be sorted apart from the inventory.
- Items which have physically arrived from a vendor after the time the counting has begun are to be kept in an "isolation area" and ARE NOT considered part of the inventory, but rather "on-order." These items may be received and put into stock only after the counting has been completed and verified by the Golf Manager.
- Generally, if the paperwork indicates that an item has left the inventory, IT IS NOT considered a part of the inventory.
Often the case is encountered where material is received from a vendor well before the related invoice is received. Since all material received in inventory must have a corresponding cost associated with it in order to have a proper valuation, problems may develop when an invoice does not arrive in time for use in the valuation process. Priced packing lists may be substituted in these cases.
Any uncertainties are to be resolved by the Golf Manager.
The responsibility for scheduling and coordinating the physical inventory lies with the Golf Manager. The Shop Manager should prepare the items for counting by organizing, segregating, and labeling as previously discussed. The Shop Manager conducts the actual counting (with at least one other person) and processing of the information. Count crews will be comprised of two persons; one person counts the items, the other records the information.
NOTE: No individuals who regularly receive materials or handle items in the stockroom are to participate in the counting of the inventory.
The Golf Manager establishes a time schedule. Time allotments are specified for phases of inventory such as planning, counting, review for variances, costing of inventory, and finalizing inventory counts and valuation. The Golf Manager, upon scheduling the date(s) the physical inventory is taken, is responsible for giving sufficient notice to those areas served by the Golf Operation that normal activities will be suspended during this period.
NOTE: Stable conditions must exist to ensure that accurate inventory counts can be taken. NO material is to be added to, or removed from stock, or moved within or between locations once the counting begins, until the Golf Manager has verified the counts. No sales activities are to occur.
The establishment of "cutoff" procedures is helpful in achieving a correlation of physical inventory counts to inventory and accounting records (as previously discussed) by assuring that the transactions are recorded in the appropriate period (pre-inventory vs. post-inventory).
All damaged or obsolete items should be removed from inventory in advance of the physical count to avoid inclusion in the count and valuation process.
All inventory locations to be counted (both the two general locations and specific locations within those areas) are to be identified. An inspection and review is made of all locations for potential problems that may be encountered during the counting process.
An inventory "floor plan" is developed which identifies all inventory locations and diagrams a logical progression for the counting process to follow. A well designed floor plan will assist in providing control and cross references for inventory count forms and inventory locations, as well as a method for charting the progress of the inventory counting.
A complete listing of inventory items in spread sheet form (or similar format) is employed to document the counts. Spread Sheets are to be distributed to count crews prior to the commencement of the counting process. Each count crew is to be assigned a specific area and will count everything in that assigned area and only in that assigned area.
The Golf Manager is responsible for assuring that the inventory records are current so as to be able to process the physical inventory data (once it is available) in an expedient manner. A complete listing by stock number of all inventory items is helpful for use in making the Stockroom and sales area orderly before the physical inventory begins. This list is to act only as an aid in organizing inventory items by stock numbers and must not show any quantities or prices.
Of prime importance is the timeliness of on-hand quantities and unit costs. The accuracy of these figures depends upon the proper processing of any documents (e.g., receivers, sales records, invoices from vendors, etc.) involving the addition to, or removal from, inventory of an item up to the time of the cutoff.
The Golf Manager instructs the count crews in physical inventory procedures and provides them with special instructions if problems are encountered during the counting process.
As was stated earlier, each count crew is comprised of two persons. One is Count Crews responsible for counting, while the other is responsible for recording the information on the spread sheets. All entries on the spread sheets are made in ink. After an item has been counted and the stock number, description, and quantity recorded on the spread sheet, the spread sheet is submitted by the Count Crew to the Golf Manager. No additions to or withdrawals from stock can be made at this time until the inventory count is verified. Any problems encountered during the counting process are to be immediately brought to the attention of the Golf Manager.
All completed spread sheets are to be returned to the Golf Manager. Any missing spread sheets or other problems are immediately resolved. For any items recorded on the spread sheet by description and without a stock number, the description is cross-referenced in the inventory records to the stock number, which is added to the spread sheet. If a stock number does not exist for the item (i.e., the inventory records do not recognize the item as being a part of the inventory), then the Golf Manager must resolve the matter.
Whatever the final determination is, the Golf Manager notes the resolution on the spread sheet.
NOTE: Any corrections, adjustments, deletions, etc., appearing on the spread sheets after the count crews have completed the count must be accompanied by an explanation, initialed and dated by the person making such changes, and must be approved by the Golf Manager.
All inventory locations are to be visually inspected by the Golf Manager and a number of items are to be selected randomly and spot-checked for counting accuracy. Several large-volume and large-dollar-value items are specifically to be included in these spot checks. A minimum number of spot checks is 10% of the stock numbers in the inventory. Any variances are to be immediately resolved by the Golf Manager and the particular count crew responsible for the area in question.
Once all spread sheets have been checked and spot-checks have been completed, the Golf Manager deems the counting phase completed and sales activities may return to normal.
Records such as receiving reports, sales records, and other documents which reflect pre-inventory and post-inventory transactions are to be so labeled and maintained by the Golf Manager for ready access in case of a problem encountered during the further stages of processing the physical inventory information. These records are also used by the University Auditing Department during their periodic audits of the Golf Operation. Specifically, note the last receiving report for items included in the count, as well as the last sales documents of the corresponding period for items which were sold to customers and were not included in the count. Special attention should be given to the handling of prepaid orders placed with supplies but not yet received at the time of the physical inventory count. The amount of the prepayment would have to be deducted from the purchases or added to inventory for a proper reconciliation to occur.
Once the spread sheets have been verified, five pieces of information (the stock number, the quantity counted, the units of measure, location, and location count crew) must be summarized by sales category and stock number into a Physical Inventory Base Report (Exhibit "N") listing by the Golf Manager.
This report provides a cumulation of the spread sheet data summarized from each individual spread sheet.
After all spread sheets have been processed, the Physical Inventory Variance/Valuation Report (Exhibit "O") is produced. This report is produced by using the data found in the Physical Inventory Base Report and adding several columns of additional information. These columns include the electronic Golf Operation Inventory Control Card on-hand quantities as of the physical inventory cutoff date, any variance between the on-hand quantities and actual count quantities, unit costs (using the weighted average cost method), and extended values (based on the actual count quantities and unit costs).
The valuation is by each stock number and is the actual quantity of an item times the unit wholesale cost for that item. The accuracy of valuation depends upon the accuracy of those two factors (as was previously discussed) and must be given major attention by the Golf Manager who is responsible for insuring that the inventory records are current and valid.
The listing not only provides the total value of each item in inventory, but also gives the total value of the entire Golf Operation inventory. It is the responsibility of the Golf Manger to review this report for any significant variances or other irregularities. Any variance should be examined in detail in an attempt to provide a reason for the variance. The Golf Manager will take the necessary steps to improve upon the matter. Any adjustments to these procedures must be communicated to Systems and Procedures via memo, in order that this procedure may be kept current. The Golf Manager shall sign the report signifying approval of the accuracy of the data contained therein.
Two copies are made of the Variance/Valuation Report. The original of the report is to be retained by the Golf Operation. Two copies are to be forwarded to the Manager, Auxiliary Recreation Services for review. After reviewing the Report, the Manager, Auxiliary Recreation Services shall forward one copy to the University Auditing Department. The other copy is retained by the Manager, Auxiliary Recreation Services. All copies should be clearly labeled on the first page with the established cutoff date for the physical inventory and the date that the reports were produced.
As is discussed later in this procedure in the section, "Financial Reconciliation/ Auditing/Record Retention," a "book value" of the inventory is derived from the accounting records. A comparison is made between the calculated actual count value from the Variance/Valuation Report and this book value.
This comparison will indicate the amount of any inventory shortage/overage and, therefore, the severity of any inventory handling or reporting problems or accounting procedural problems. This inventory shortage/overage figure is used for managerial purposes and is used at a later time to adjust the budgetary accounting records. Once reviewed, the Golf Manager initials both the Golf Operation's main copy and the copies reserved for Auditing and the Manager, Auxiliary Recreation Services.
Any significant variance between the accounting records and actual values are to be explained in writing, and copies of the explanation are to be attached to all copies of the report. The June 30 copy for Auditing is to be submitted to Auditing by July 31.
After the Physical Inventory Variance/Valuation Report has been finalized, the on-hand quantities on the electronic Golf Operation Inventory Control Cards (Exhibit "J") are permitted to be replaced by the actual count quantities. This acts as a reset for the on-hand numbers by using the actual count quantities as the base for inventory transactions that will transpire between this physical inventory and the next.
To achieve this replacement, the Golf Manager uses the Variance/Valuation Report, and, line-by-line, compares the actual count quantity for each item and location to the matching electronic Golf Shop Inventory Control Card "Balance" column. If the amounts differ, the date and "INV ADJ" are written in the "Date" column of the card, and the actual count quantity is recorded in the "Balance" column. The amount of the adjustment is recorded in the "Decrease" column as a negative number if the adjustment results in an increase from the prior balance, or as a positive number if the adjustment results in a decrease.
Periodic reconciliations are to be performed under the direction of the Golf Manager to help ensure that related sets of financial documents balance, and thus test the integrity of the record keeping system. Results of reconciliations are to be reviewed by the Golf Manager.
On a monthly basis, University "Central Accounting" Monthly Budget Reports are to be examined to ascertain that the proper Golf Operation accounts were credited with the income. Likewise, comparisons should be made to determine that purchases to stock are accurately reflected on both the University's budgetary accounting records and the Golf Operation's internal records.
After each physical inventory is taken and the valuation figure has been determined, this value is reconciled to the budget records as follows:
Beginning Inventory (audited value of inventory as of fiscal year-end physical inventory)
+ Purchases (current fiscal year-to-date) as reflected in Budget 08- 027-90 (Golf Shop), Fund 1001 (General), Object Class 310 (Supplies and Materials for Resale).
- Withdrawals from inventory (current fiscal year-to-date sales as reflected in Budget 08-027-90 [Golf Shop], Fund 1005 [Sales Income], Object Class 030 [Sales], as reported by each sales category per the Golf Shop Cash Report Details Sheet [Exhibit "M"], divided by [1.00 = the percentage of mark-on in decimal form; this is done for each sales category]).
For example, for the sales category "equipment": assuming the percentage mark-on to be 43% and the fiscal year-to-date sales in that category to be $15,000,
then 1.43 = $10,489.51
This is repeated for each sales category until the total cost of goods sold is derived.
= Ending Inventory Book Value
The physical inventory value is to be compared to this ending inventory book value as discussed previously in the section, "Physical Inventory."
Also, a gross profit statement is to be generated and available for use by those in Auxiliary Recreation Services, who are responsible for the activities of the Golf Operation (the Auxiliary Recreation Services shall specifically receive a copy), and for use by the Auditing Department.
See Procedure CR2002 - Processing Returned Checks.
The Golf Manager is responsible for monitoring the controls and methods as discussed in this procedure, as well as conducting periodic spot audits.
The Financial Officer is responsible for monthly reconciliations to the Central Accounting Records to ensure that the monthly fiscal reports reflect that income was properly credited per this procedure, and to performing spot audits as outlined in the Financial Officer Procedures Manual.
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.
For questions, additional detail, or to request changes to this procedure, please contact the Financial Officer, Aux Rec Services.
Date Approved: 08/10/93
Most recent changes:
Revision History (and effective dates:)
- Rev. 6 - Dated 07/22/93
- Rev. 5 - Dated 06/05/87
- Rev. 4 - Dated 09/25/85
- Original - Dated 05/--/73