FSH 1809.12 - JOB CORPS CIVILIAN CONSERVATION CENTER HANDBOOK 1/83 WO AMENDMENT 1 452 - Use of Center Facilities. The welfare association shall be permitted to use Job Corps buildings, facilities, equipment, furniture, and fixtures designated by the Center Director without charge. 453 - Welfare Fund. The corpsmember welfare fund shall not use or be established with appropriated monies. Working capital of the association may be financed from voluntary contributions or loans from corpsmembers, staff, or commercial sources. The source of income of the association will be from profits earned in the operation of the canteen(s) or other activities. The profits from these operations will be used initially to repay installation costs and thereafter will revert back into the welfare fund. The association may also share in the profits from vending machines, pay telephones, and other devices located at the center and used principally by the corpsmembers. (These devices should be located in conspicous places where normal observation will serve to protect them against pilferage.) Welfare funds will only be used to operate activities or to make purchases or loans which clearly benefit corpsmembers. They shall not be used to make purchases or conduct activities for staff members, although staff may benefit indirectly from expenditures of funds to promote the general welfare of the corpsmembers. Where profits have accumulated over a period of time, they may be used by majority vote of the association with approval of the Center Director to finance association group activities, such as picnics, Christmas parties, and group trips from which all association members will benefit jointly. 454 - Management and Operation of Welfare Association Activities 1. The operation of a welfare association is an approved center activity and corpsmembers conducting association activities are covered under the Workmen's Compensation Act (FECA) and Tort Claims Act. 2. Control and management of association activities is vested in the association council under the guidance of the Center Director and designated representative. 3. Since an association may operate more than one activity, simplicity of operation and management is essential. The hours of operation for each activity should be set so that they adequately serve corpsmember needs, but do not conflict with daily routines. (The Center Director will approve or modify the hours of operation of association activities, as necessary.) 4. The operations conducted by or on behalf of the association will be performed by corpsmembers who may volun- teer for association assignments or be assigned such duties by the Center Director. Corpsmembers may be paid from association funds for work done during off-duty or leisure time. However, the Center Director should work with Fiscal and Accounting Management at the Forest level to develop the procedures that will be used. Two-thirds of the corpsmember student body must approve any expenditures that are to be paid to corpsmembers or employees of the association. The welfare association constitution should be updated to include the wages per hour that may be paid from association funds. 5. Whenever the size of a center and the number and volume of activities generate enough cash flow, the association may hire employees. Such employees shall not, however, be center staff personnel or corpsmembers, but association employees only. (Sec. 451, ex. 2, article XI of bylaws.) 455 - Cash Basis. Since Job Corps furnishes space, physical facilities, and equipment necessary for conducting association activities, operation will be on a cash basis. Provision is made for periodic recognition of accounts payable for merchandise and/or supplies which are by vendor's regulation billed periodically. Credit shall not be extended to corpsmembers or staff. (Sec. 451, ex. 2 article VI of bylaws.) Each activity should be operated as a self-sufficient operation. Income from an activity should cover expenses for the activity, plus an allowance for a small profit to provide working capital. 456 - Merchandise Control. Adequate control must be maintained over merchandise for sale. Merchandise shall be inventoried weekly at the close of business or concurrently with the change of work force if such change occurs other than at the end of the week. Exhibit 1 illustrates a method of merchandise inventory and verification of sales. Exhibit 1 CANTEEN INVENTORY AT COST COMPUTATION OF COST OF SALES AND VERIFICATION OF SALES 1. Beginning inventory, on (month, day, year) $ 10.52 2. Add cost of merchandise purchased and received for sale during period. +90.15 3. Total available for sale during period. $100.67 4.* Ending inventory, (month, day, year), at cost: Unit Quantity x Cost = Total Cost Candy bars 115 .04 $4.60 Chewing gum 40 .04 1.60 Cigarettes, single packs 19 .18 3.42 $9.62 Total cost of ending inventory (deduct). - 9.62 5. Cost of merchandise sold. $ 91.05 6. Add profits markup (example, 15 percent). +13.65 7. Less markdowns to or below cost (damaged or slow moving merchandise). - 4.55 8. Computed sales should verify amount of actual sales for period recorded in the cash record. $100.15 * In lieu of listing inventory items, a separate schedule may be prepared as an attachment. 457 - Accounting System. The system prescribed is a simple system of cash and merchandise accounting. There will be no need for accounting ledgers; the basic required records are covered in this section. 1. Contribution Record. A simple record, such as the one illustrated below, showing the amounts of individual cash contributions should be maintained: Record of Contributions Accumulated Date Received From Amount Total January 2, 1978 John Jones $5.00 $ January 2, 1978 Henry Smith 5.00 10.00 January 8, 1978 Harry Craft 5.00 15.00 February 24, 1978James Fortuen 3.00 18.00 March 3, 1978 Michael Nash 2.75 20.75 2. Sales Record. Maintain a simple daily summary of sales, receipts, and deposits. Record individual sales by use of a cash register or adding machine. At the close of each day's business, count and balance the actual cash on hand against the total receipts from the register or adding machine for the day. Exhibit 1, illustrates a method of recording daily transactions. 3. Summary Cash Receipts Register. A summary of cash receipts shall be maintained by the treasurer to reflect a continuous record of cash received, deposited, and on hand at the end of a given period, (Ex. 2). Entries to this register shall be posted from the daily sales record. 4. Sales Taxes. Where State laws require the assessment of retail sales tax, the tax shall be collected, deposited, and held for payment (by check). The necessary records shall be maintained as required by the State. The treasurer of the association is responsible for handling all matters pertaining to sales tax. Whenever State sales taxes are owed to a State government at the time financial statements are prepared, determine the amount owed from the required records and report on the statement of financial condition as State sales tax payable. 5. Cash Control. A staff member and an alternate shall be designated, in writing, by the Center Director to be present at the time of canteen opening and closing to ensure that cash on hand (not to exceed $25 for each activity) is provided to begin the day's operation. Amounts in excess of this amount are set aside for subsequent deposit in a local bank as often as warranted, but at least weekly. An adequate safe or locked strongbox shall be provided for the temporary safekeeping of association cash until it can be deposited in the bank. Association cash shall not be co-mingled with Government funds, such as imprest funds, at any time. Association funds kept in the same facility as Government funds must be separately stored and appropriately identified as corpsmember welfare association funds. 6. Checking Account. A checking account shall be opened by the association at a local bank, and a checkbook showing a record of deposits made and checks issued shall be maintained. Except for cash on hand, deposit all cash received by the association to the checking account. Deposits shall be made by a designated officer of the association council other than the treasurer. Deposit slips shall be prepared in duplicate. The original is retained by the bank. The copy is to be receipted by the bank and, thereafter, turned over to the treasurer for accounting purposes. A minimum balance, which shall be set by the association council, shall be maintained in the association checking account. The checkbook shall be maintained by the association treasurer. All association bills must be paid by check. Enter each expenditure as the check is written. Identify each check as to the purpose and nature of expenditure; for example, purchase of cigarettes for canteen. Additional information may be placed on the check stub to explain the transaction. Checks will be issued only after an approved and receipted order signed by the association president or vice president has been received. This approved and receipted order will serve as evidence of an approved expenditure and as evidence of receipt of the delivery of merchandise or services. All checks shall be signed by the treasurer and countersigned by a designated association officer. Checks and supporting invoices or purchase orders must be cross- referenced to each other and must be filed separately under control of the treasurer. Retain all canceled checks, deposit slips, bank statements, reconciliation statements, and check stubs for audit purposes. 7. Savings Account. A savings account shall be maintained with a local bank of any association funds surplus to the operation of association activities. (The savings account must allow for minimum working capital retained in the checking account as set by the Association Council.) Deposits to the savings account must be by check from the association checking account. Withdrawals from the savings account must be deposited in the association checking account. Savings accounts must be verified periodically by checking individual entries in the savings account book and by obtaining verification of the balance from the bank. The savings account bankbook must be retained for audit. 8. Reconciliation of Bank Statements. Bank statements showing the status of checking accounts are to be sent directly to the association finance committee for reconciliation. For control purposes, they should not be surrendered to the association treasurer. Bank statements shall be reconciled immediately upon receipt. The following is a step-by-step procedure to be followed in the reconciliation of bank statements: a. Obtain the checkbook from the treasurer. b. Verify the checks issued as evidenced by check stubs. c. Verify the mathematical extensions on the check stubs. d. Compare the checks received from the bank with the check stubs, checking the bank statement against the check stubs. e. Compare deposits shown on the bank statement with deposits entered in the checkbook. f. Using the format in exhibit 3, reconcile the bank balance in the checking account with the checkbook balance. g. Identify and adjust for any differences. Notify the bank, if necessary. h. File reconciled bank statements and returned checks in finance committee files for future audit. 9. Reports. Prepare accounting reports at the close of each month showing the status of association funds and results of operation. a. Profit and Loss Statement. Prepare a profit and loss statement (Ex. 4) from the information shown on the merchandise inventory and computation of cost of sales. b. Statement of Financial Condition. Prepare this statement in accordance with the format contained in exhibit 5. The source of each amount on this statement is shown opposite the item on the left margin. Exhibit 1 DAILY SUMMARY OF CASH SALES Date: Cash Transactions 1. Cash Sales $424.00 2.* Plus Other Receipts +15.00 3. TOTAL TRANSACTIONS $439.00 Cash on Hand 4. Cash in register or till: Coins $ 37.00 Bills 412.00 Checks 15.00 5. TOTAL CASH TO BE ACCOUNTED FOR $464.00 6. Less Change Fund - 25.00 7. TOTAL CASH FOR DEPOSIT $439.00 * Miscellaneous Receipts: refund on merchandise returned; Corpsmember donations, etc. EXHIBIT 2 IS A SEPARATE DOCUMENT. Exhibit 3 RECONCILIATION OF CHECKING ACCOUNT BALANCE WITH BANK BALANCE 1. Balance shown on bank statement, last date of bank entry. $249.00 2. Less outstanding checks: (List all checks which have not cleared the bank, as evidenced by comparison of the current bank statement and prior statements with check stubs in checkbook. Show all checks which have not cleared the bank through current date of reconciliation). Check No. 10 $20.00 Check No. 15 4.50 Check No. 16 6.00 $30.50 - 30.50 3. Add deposits not entered by bank: $219.00 Show date and amount. $100.00 +100.00 *Adjusted bank balance. $319.00 A. Balance per checkbook (show current balance as of date of reconciliation). $320.50 B. List bank service charges since last reconciliation (enter in checkbook as a deduction): (1) Date and amount $ .50 (2) Date and amount 1.00 - 1.50 *Adjusted bank balance. $319.00 *Balance must agree. Exhibit 4 PROFIT AND LOSS STATEMENT Period 19 to 19 Source of Data Data Amount 1. Obtain from Summary Cash 1. Sales $ Receipts Register, the sales for the reporting period. 2. Obtain from Canteen 2. Less Cost Inventory of and Computation Mdge. Sold of Cost and Verification of Sales Sales (Item 5), the cost of merchandise sold. 3. This is the total of Line 3. Gross Profit 1, "Sales," minus Line 2, from Sales $ "Cost of Mdge. Sold." 4. Other income, i.e., share 4. Other Income + of profit from activities other than canteen operation, such as vending machines, pay telephones, etc. 5. Total of gross profit and 5. Total $ other income. 6. Obtain from Canteen Inven- Other Expenses tory and Computation of Cost (Deduct) of Sales (Item 7), the mer- chandise markdowns and verify against the checkbook stub for the reporting period (do not include the cost of merchandise sold). 7. Net Profit (or Loss) is the 7. Net Profit total in Line 5, "Total Gross or Loss Profit and Other Income," minus Line 6, "Other Expenses." Exhibit 5 STATEMENT OF FINANCIAL CONDITION Period Ending Source Item Amount 1. Summary Cash Receipts Cash on Hand $ 25.00 Register 2. Checkbook Cash in Checking 200.00 3. Bankbook Cash in Savings Account 50.00 4. Merchandise Inventory Mdse. on Hand (at cost) 240.00 5. Equipment Purchased with Assoc. Funds 300.00 6. Supplies Purchased with Assoc. Funds 10.00 TOTAL Total Cash and Mdse. $825.00 7. Unpaid Bills Amount(s) owed for Mdse. (deduct) - 15.00 8. Total minus unpaid Net ownership in bills cash, equipment and mdse. $810.00 9. Should agree with Contributions $350.00 cumulative record of contributions 10. This is the difference *Cumulative profit between net ownership above or loss $460.00 and contributions 11. Net ownership of the Assoc. $810.00 *Note: This line should agree with total of "net profit" or "net loss" on all profit and loss statements to date.