Standards for Canteen Services

Operating Standards

1. All food items must be pre-packaged. The breaking apart of prepackage food items for resale will only be allowed if the separated items are themselves pre-packaged by the producer of the good and include an expiration date. Canteen staff must ensure any food expiration date is not lost when separating a prepackaged food from its larger package. 

2. Offender organizations for fund raising activities may re-sell popcorn, tea, and coffee purchased through the canteen through the use of offender group accounts. No other food products available through a facility canteen will be re-sold for a fund raising activity. 

3. Offender organizations at institutions may not sell any items in visiting rooms or during visitation. Offender organizations at community level may sell approved items in visiting rooms or during visitation. 

4. Community Correction Centers will not operate canteens or use a "bag and drop" host facility canteen operation unless specifically authorized by the Deputy Director of Community Corrections. Pre-packaged food items may be provided through vending machines. 

A. The agency must give Department of Rehabilitative Services (DRS) priority before entering into a contract for vending machines on state owned premises or premises leased by the state when the machines are used by the public or staff and are not used in lieu of a department operated canteen (O.S. 7, section 73). If DRS declines a contract, then the Department of Corrections has met the statutory obligation and may enter into a contract with a private vendor. (Attachment M: Legal Memorandum – Vending Machine Contracts – June 9, 2008). 

B. Where vending machines are utilized in lieu of a department operated canteen, a community correction facility is not required to seek those vending services from a Department of Rehabilitative Services (DRS) approved provider (Attachment M Legal Memorandum – Vending Machine Contracts – June 9, 2008). 

C. Profits generated from a DRS vending machine provider are considered to belong to the DRS provider. 

D. Profits generated from a non-DRS vending machine will be considered part of the department’s canteen system and remitted monthly to the Chief Financial Officer for deposit into the 205 Fund.

5. Offenders working in a facility canteen may not access the canteen computer, cash register, directly hand the item(s) sold to the offender customer, or participate in any record keeping or determination of any canteen inventory purchase decision. 

6. The OBS system uses the "item markup" approach for sales price determination. All canteen Item markups will be based on their item category as defined in Attachment I. This approach differs from a "gross margin" pricing system in that an item using an "item markup" will always have a lower sales price in OBS than its’ equivalent markup percentage would have been using the same percentage expressed as a "gross margin markup." 

7. Returns of electronic items sold through the canteen are not allowed. The canteen system is not responsible for manufacturer warranties. Unit staff may assist offenders with product returns provided the offender has the receipt for purchase and a copy of the manufacturer’s warranty registration. 

8. Canteens will only stock those over-the-counter (OTC) medications for offender resale as authorized by the Chief Medical Officer. 

9. Canteen cash sales proceeds will be remitted to the business office at the close of the canteen’s business day. Included with the cash will be a copy of the receipt register’s "Daily Canteen Summary Report" and one copy of each "Hobby Craft Sales Receipt’ done that business day. 

10. Business office staff will compare canteen cash received with the information from the two canteen register reports described in item #9 to ensure cash received and receipt totals balance. 

11. Facilities will physically count on-hand canteen inventory once a month and calculate inventory discrepancies using the "Inventory Reconciliation Report." These discrepancies must be corrected through creation of an Inventory Adjustment report. The time of the month to count the canteen’s inventory can be determined by the facility based on the facilities’ needs. For example, if canteens were to count on the 15th of each month, the canteen could sell down inventory to make the task easier and have plenty of time to build inventory back up before gang pay at the first of the next month. 

Inventory Loss Prevention
Department canteen operations are a sizable business when considering the daily sales and the amount of inventory on hand for the 17 separate canteen locations. For this reason it is critical for every canteen to implement and follow excellent "inventory loss prevention procedures". This segment of the user guide will provide some processes canteens should have in place to control inventory losses and help to develop good management practices as it relates to canteen inventory. 

Receiving Deliveries from Vendors
When a delivery is received from a vendor it’s important to have excellent check-in procedures to eliminate losses due to short orders that are not reflected on the vendor’s invoice as actually received. 

For example, a loss can occur when a vendor delivers 10 cases of chips and canteen staff reads the invoice and sees 10 cases of 8 bags delivered and then just counts the cases without opening the boxes. However, after the vendor leaves, a staff member opens a case box and discovers only 6 bags of chips. In this example the department just lost 2 bags of chips in inventory because the staff member failed to count the number of bags in the box. 

Staff must open all boxes and break down pallets in the vendor’s presence when receiving items to ensure all invoiced items are actually being received before signing an invoice. This way the vendor can credit the invoice before it’s signed by a DOC staff member. 

Once a vendor’s invoice is signed, it is a legal binding document and the canteen is at the vendor’s mercy for any future item shortage credit. If you find a delivery shortage after the vendor leaves the facility, you should immediately call the vendor to ask for credit. However, they are not required to give the credit in this situation. 

Honest mistakes can and do happen. Vendors want happy customers. To minimize these types of mistakes it is critical that facility staff open every box to check for damage and shortages. Never allow an offender to check in a vendor’s delivery. Receipt and validation of inventory is the responsibility of the canteen supervisor and ultimately the business manager. 

Vendor Credits
Sometimes it is discovered that inventory was delivered damaged or out of date after the vendor has made a delivery and is no longer at the facility. When this happens, it is important to develop the habit of immediately calling the vendor and asking for credit for the damaged or out-of-date inventory. In most cases vendors will give the credit on a future invoice –as long as they believe it’s a legitimate credit. Once again vendors like happy customers but facility canteens must first bring the problem to the vendor’s attention. Do not leave money on the table by failing to ask for a vendor credit when it is legitimately due. However, it ultimately is the responsibility of the canteen supervisor to minimize this through the proper receiving of inventory. 

Inventory Rotation
When you receive inventory from a vendor it is critical that excellent rotation practices be followed when re-stocking the canteen with the new inventory. 

Poor inventory rotation practices are a major cause of inventory write-off due to product expiration. For example: diet soda products have a very short shelf life. If a canteen receives 50 cases of diet soda from a vendor and then stacks the new inventory on top of the diet soda currently on-hand, then before too long the bottom of the stack (older inventory) will become out of date. Remember to rotate all inventory when new stock is received. Follow the inventory management practice of "First-In / First-Out." 

Inventory Security
Theft is the number one cause of inventory losses in any retail environment. One of the most effective things to control theft is to search all offenders working in the canteen each time they leave. Rotation of offender canteen staff every 90 days or so can also minimize theft losses. 

Facilities may want to look at other security measures such as rotating DOC staff responsible for the receiving of new inventory from vendors. Having different employees involved in the receiving process will help to reduce the temptation of an employee making a personal deal with a specific vendor in regards to the delivery and receiving of an invoice billed to DOC. 

Scanning of Canteen Sales
The easiest way to unknowingly lose inventory is poor scanning operations when ringing up a sale. The proper setup of the canteen’s sales scanner and monitor is extremely important. Monitors should be placed where they can seen when scanning an item without having to turn the person’s head or body who is making the sale. 

It is important to ensure with every scanned item, that the item is recognized by OBS on the monitor and that the offender is actually authorized to receive the item. If the person working the canteen window is not reading the monitor for the scanned items, they will not be able to tell if the item rang up properly. 

The failure to observe the monitor when selling canteen items will result in sending free inventory out the window because they are hearing the scanner register the item but not paying attention to the fact that the scanned item was not being ‘sold.’

Damage Control
Breakable inventory should be stocked close to the floor and in low traffic areas. Do not stock breakables high on a shelf or on a main aisle when there is heavy traffic. 

It should be every canteen’s policy that damaged inventory is never given out to anyone, especially to an offender. The practice of giving out damaged inventory to offenders and staff (once they become aware of this practice) can result in increases in damaged inventory. Giving out damaged inventory can result in greater inventory losses because of the human potential to seek a ‘freebee’ by damaging items when management is not looking. Damage inventory must be securely disposed of without anyone benefiting from the loss. Do not give away any damaged inventory – it will only lead to greater inventory losses. 

Efficient Inventory Re-Order Procedures
Over ordering can be a major cause of inventory loss. It is very important when manually placing an order with a vendor to know of the canteen’s daily item sales, how many days before next delivery from that vendor, and how many units are currently on-hand. The OBS stores all canteen inventory transactions in its database and will calculate all this information and provided the canteen supervisor with a suggested re-order quantity. 

However this information is only as good as the system maintenance values that were entered into the "Lead Time Days" field on all locally activated items. Also canteen supervisors need to ensure their "Shelf Quantity Days" for their canteen have been correctly entered by the central office Canteen Inventory Manager. When running the "Inventory Needs Report", if recommended re-order quantities do not ‘make sense’ then contact the system Canteen Inventory Manager at central office to discuss the problem. 

The over ordering of canteen stock greatly increases the risk of inventory losses due to expiration dates and other canteen loss issues. 

Canteen Vendor Management
Office of State Finance (OSF) policy requires that all vendors who do business with the state be registered and have an OSF ten digit vendor identification number and assigned location code so that appropriate accounting and tax reporting information is recorded in the state’s financial accounting system. 

A vendor’s OSF identification and location information will be entered in the OBS system’s central office Vendor Maintenance screen before a vendor purchase order is created. Facilities may work with vendors who are not registered with 78 . 

OSF and assist them in becoming a registered vendor. The OSF vendor registration website is: http://www.ok.gov/OSF/documents/osfvend.pdf.

1.Canteen supervisorswill not purchase items for resale from vendorswhodo not have an OSF vendor number and location code pre-defined in the OBS systemas identified in the centralized Vendor Maintenance table.

2.Canteens should use their"Inventory Needs Report" to assist them inthe determination of efficient canteen re-order management practices.

3.Canteen staff will recommend, through their chain of command, opportunities for agencywide item purchase contracts to achieve maximum item cost efficiencies.

Average Moving Cost
Inventoryin the OBS system isvalued using"average moving cost" and updatedwhen new items are brought into inventorythrough the receiving documentprocess. Offender canteen returns also affectthe "average moving cost" of aninventory items.

AMC Errors
When AMC errorsaresuspectedfacility canteen supervisors willimmediately stop selling theitem(s)and notify central office of thesuspected error.Central office staff will research all suspected errorsand, when appropriate, take steps to notify all canteens supervisors oftheerror. Canteen supervisors,when requested by central office, willsuspend system-wide selling of the identified item(s) until such time as aresolution to the AMCerror is accomplished.

Negative Canteen Inventory
Canteens should notsell itemsbelowa zero OBS inventory quantity.To help prevent this problem canteen shall run the"Item Quantity BelowZeroreport" after the canteen has closed for the dayto identifyanyitemswitha negative inventorycount.Canteens willidentify the cause of the negative inventory andmake the appropriate corrections prior to going home for the day.Items listed onthe "Item Quantity Below Zero Report" for the previous day and not corrected,may notbe sold until such time as the canteen’sinventoryis back in balance.

When canteens purchaseitemsfrom a vendor and then immediatelysellthoseitems the same day, the canteen supervisorshallensure a purchase order andreceiving document are completed before the end of the business day.The failure tofollow thisprocedure can causecanteen inventory items to go negative in count andremain negative overnight. Negative inventory countsmaycause significanterrors inthe item’s OBSinventory valuation (AMC). Erroneous pricingofcanteensitemsacross the entire department canteen systemwill result ifinventory management disciplineisnot enforced.79 

Inventory Adjustments
Canteen adjustments impact inventory valuations, system tracking of items on-hand, and cost of goods sold. When entering and classifying a canteen inventory adjustment the follow definitional standards will be used. Adjustments for inventory error corrections, shrinkage and spoilage adjustments should be closely monitored and well documented by facility staff. 

Inventory Correction
Inventory corrections are done for an inventory adjustment when the item quantity in OBS doesn’t agree with the actual item quantity on hand (number of units of an item on the shelf) after taking an actual fiscal inventory. Using the "Inventory Count Sheet" and computing discrepancies using the "Inventory Reconciliation Report" a manager can correct inventory count by adding or subtracting the number of units out of balance on the Reconciliation Report. This type of adjustment may also be used, when specifically instructed by central office, for an inventory adjustment to correct an AMC error. Users should document their justification in the comments field when entering this inventory adjustment. 

Unsalable Inventory
Never carry over from one month to another any inventory that is unsalable. Unsalable inventory should be adjusted out every month regardless of the amount. After the monthly canteen inventory is counted and inventory adjustments are entered, the inventory values in OBS should match exactly to actual on-hand quantity. Canteen ordering/stocking practices and security procedures should be reviewed in months the inventory adjustments exceed acceptable levels. The ideal inventory adjustments should be around .5% to 1%, with a target of .5%; this is calculated based on the percentage of total sales the total inventory adjustments represent for a given period. Adjustments that continually exceed 1% should be subject to review. 

Shrinkage
Shrinkage adjustments are made when the inventory reduction is the result of theft, offender consumption, or a loss that is unknown. An example of unknown loss could be "inventory unintentionally not charged to an offender but given to the offender at the canteen window because the staff member making the sale did not observe the system warning that the offender had exceeded their trust account’s available balance. Through an inventory adjustment the canteen manager can correct inventory by subtracting the number of units short. Users should document their justification in the comments field when entering this inventory adjustment. 

Spoilage
Use spoilage adjustments for an inventory reduction when inventory on-hand becomes unsalable due to damage or breakage of inventory stock after vendor delivery (on-site in warehouse or canteen). Spoilage adjustments are done also for inventory that has exceeded it "sale by" date. Spoilage is basically inventory that was delivered by the vendor and brought into the system through a receiving document but has become unsalable and does not qualify for vendor credit. Users should document their justification in the comments field when entering this inventory adjustment. 

Disposable Items
The disposable items reason is for inventory used as a point of sale (POS) supply. These are items purchased by the canteen with a PO but given to the customer at no charge to execute a sale. An example is sacks purchased by the canteen but used to package their offender canteen sales. Another example is spoons given away with an ice cream sale. Through an inventory adjustment the canteen manager can correct on hand inventory by subtracting the number of units used as POS supplies. Users should document their justification in the comments field when entering this inventory adjustment. 

Vendor Returns
Use "Vendor Return" as an inventory adjustment when inventory is received out of date, damaged, or actual count is short from the vendor and the vendor has given an "on-invoice credit." Invoice credits are entered in the discount field of the receiver and the corresponding inventory adjustment entered into OBS using the "Vendor Return" reason to correct inventory on-hand. Users should document their justification in the comments field when entering this inventory adjustment. The justification must also include the receiver number where the vendor credit is taken. 

Item Management
The department manages all items offered for resale through the canteen system through the use of a central office "Item Maintenance" screen. Items are entered into this screen by first identifying their UPC/PLU, item description and assignment of the item to a "department" and "category." 

When entering a new item into the central "Item Maintenance" screen ‘lead time days’ will normally be set to "1" with a ‘multiplier’ of 1. Facilities when selecting the item for their local inventory stock will adjust their ‘lead time days’ and ‘multiplier’ to support their specific canteen needs. 

Items when entered into the central office "Item Maintenance" screen will also be identified as eligible for sale to ‘level 1’ and ‘level 2’ inmates. Item not subject to sales tax (stamps) will be identified. Item ‘exemption’ from normal spending limits and whether the item is kosher/halal will also be marked as appropriate.81 

Blocking Item Sales
When appropriate, the central office canteen inventory manager, can temporarily or permanently block any inventory item from being sold throughout the system through the "Item Maintenance" screen. 

Blocking Item Re-order
Inventory items can be block from future reorder through the "Item Maintenance" screen by ‘deactivating’ the item. Item ‘deactivation’ does not block existing inventory stock from being sold. When wanting to both block an item from being sold or re-ordered, users must first check the "block item" sales box and de-activate the item. 

UPC/EAN/PLU Codes
All items sold through facility canteens will utilize a centrally managed inventory UPC (Universal Product Code), EAN (European Article Number), or PLU (Product Lookup Unit) code numbering system. Canteen supervisors have access to all centrally managed UPC/PLU item listings maintained in OBS through their "Local Item Maintenance" screen. From the central inventory listing they will select only those UPC/EAN/PLU coded items authorized by their local canteen board. 

UPC/EAN/PLU Code Request/Changes
When canteens wish to purchase items for which no centrally managed UPC/PLU currently exists in OBS or change an item’s description the facility canteen supervisor will, before completing or modifying a purchase order, contact the central office canteen inventory manager. When requesting a new UPC/PLU item number added to OBS, the canteen supervisor will provide the information as required below and fax or email the request (Attachment J) to the central office canteen inventory manager. 

1. UPC/EAN number (if available). 

2. All UPC codes must conform to the UPC-A (12 digit number) format with no spaces, dashes or any other character. EAN codes utilize a standard 13 digit format. If a UPC/EAN number is not specifically associated with the product the canteen supervisor will advise and request that a PLU number be assigned. 

3. Item description; 

4. Appropriate department assignment; 

5. Recommended category assignment; 

6. Recommended lead time for product re-order;

7. Whether the item should have a "quantity prompt"; 

8. Whether the item qualifies for exemption from the weekly offender canteen purchase limit; 

9. If the item taxable or non-taxable; 

10.Item multiplier; 

11.If a food item – identify if it is Kosher. 

PLU Code Standards 
When a new canteen PLU code is required the central office canteen inventory manager will assign the new canteen item a four digit PLU code using the numerical standards identified in the table below. Items brought into inventory under a PLU code will utilize the "package price" of the item with the appropriate "item multiplier" identified on the Purchase Order and Receiving documents.

Item Categories
Four Digit PLU

Food / Beverages 

20XX 

Personal Hygiene 

21XX 

Health & Beauty 

22XX 

Stationary 

23XX 

Crafts 

24XX 

Clothing (Non-OCI) 

25XX 

Canteen Supplies 

26XX 

Medical 

27XX 

Electronics 

28XX 

Household 

29XX 

Use of PLU Codes
Food items brought into inventory under a UPC designation will not be broken up for resale. If non-food prepackaged items that have a manufacturer’s UPC code are separated by the facility canteen for resale (example: pens, pencils, T-shirts, etc.), the canteen supervisor will utilize a PLU code for those items and not the manufacturer’s UPC code for inventory purchase order and receiving purposes.

OCI/Agri-Services UPC/PLU Code Standards
Oklahoma Correctional Industries and the Agri-Services Unit will, to the maximum extent possible, provide the central office canteen inventory manager a UPCEAN code for every item they offer to facility canteens for resale through the canteen system. When a manufacturer product UPC/EAN code is not available OCI managers will create an item unique PLU code for the specific item offered for resale through the canteen system.

All OCI/Agri-Services PLU codes will be twelve (12) digits in length and utilize the following format.

OCI/Agri-Service Item
Twelve Digit PLU
Item Description
099999XXXXXX


Over the Counter Medications

It is a desire of medical services that canteens, for security and offender medical care management purposes, utilize a standardize list of over-the-counter pharmacy products and those listed medications be purchased from a vendor authorized by the medical services division.

It is the responsibility of department medical services to provide facility canteens a list of standard over-the-counter medications to be stocked for resale. Canteens will utilize the preferred pharmacy contract vendor for these over-the-counter medications. As with all canteen purchases, the preferred vendor must be an OSF listed vendor with an OSF vendor identification and location code set up in the OBS vendor maintenance table.

Hobby, Art and Craft Sales
Hobby, art and craft items sold through the facility canteen are subject to a canteen board approved category markup along with appropriate state, county and city sales taxes. The current markup percentage in OBS for Hobby Craft Sales is 30%. Sales tax percentages are based on Oklahoma Tax Commission data and should be updated in OBS at least quarterly by central office staff.

Hobby craft items are not brought into the canteen inventory system but are sold through the “Hobby Craft Sales Entry” screen with proceeds from the sale directly posted to the appropriate offender’s trust account. Deductions from the offender’s account are then automatically done by the system for sales tax and system markup. Hobby craft sales will not be shown on the canteen “Markup Summary” report but are included in the “Statement of Canteen Operating Income” report.

Sales entry into the “Hobby Craft Sales Entry” screen of any item will only occur after a buyer and offender have agreed upon a cash price for the item inclusive of system markup and appropriate sales taxes.

Canteens can only accept cash, money orders and cashier checks for hobby, art and craft sales. Personal checks are not authorized. All finished hobby, art and craft items, except for gifts described below, will be sold through the facility canteen and may be offered for sale to the public.

Entering a Hobby, Art and Craft Sale Into OBS
Canteen Staff will enter a craft sale using the Hobby Craft Sales Entry screen.

1. Canteen sales staff will enter the offender’s DOC number and the amount of the hobby craft sale.

2. The OBS system will compute the appropriate markup based upon the Hobby Craft Sales markup percentage and appropriate sales tax based on the canteens state, county, and city tax rate.

3. Sales staff will enter in the “Source Doc. #” field the last name of the purchaser.

4. Sales staff will enter into the comments section a brief description of the item being sold.

5. Two system generated hobby craft sales receipts are printed for each hobby craft sale once it is ‘saved.’ One copy of the receipt is to be given to purchaser with the second copy retained by the canteen and forwarded to the business office with the daily cash receipts.

6. The “Offender Statement Report” will be used for providing the offender information on the proceeds and trust account auto-deductions associated with the hobby craft sale.

7. Money collected from the hobby craft sale and credited to the offender’s will equal the total cost of the sale as computed by OBS. OBS will credit the deposit into the offender’s account of the hobby, art or craft sale proceeds and then do an auto-withdrawal process for the sales taxes owed and system profit.

Standards for Offender Hobby, Art and Craft Sales
1. Offenders making hobby, art and craft items may send up to a total of six gifts per year to persons on their authorized visitation list without the item being sold through the canteen system.

2. Employees may purchase arts and crafts through the facility's canteen according to local procedures.

3. Upon transfer, all offender art and craft supplies, incomplete items, and finished inventory will be transferred or disposed of in accordance with OP-030120 entitled “Inmate Property.”

4. Hobby Craft Sales have a 30% OBS parameter markup. Therefore when a hobby craft sale is made outside of the OBS system for subsequent entry into OBS (example: facility arts and crafts show), staff must:

• Apply the 30% OBS markup for the item sold based on the offender’s agreed to sales price, and then
• Apply the appropriate canteen sales tax to the items cost plus OBS markup to determine the actual entire sales price amount,
• Receive from the buyer an amount equal to the entire sales price,
• Record each individual sale and income received in the OBS system using the Hobby Craft Sales Entry screen.
• Canteen supervisors are encouraged when conducting these types of events to contact central office to see about setting up a remote canteen site OBS sales computer to facilitate these sales events.

Zero Cost Inventory
The department, as a result of a federal court legal settlement, is required to allow and track the distribution of religious pamphlets through the canteen system. To facilitate this process the OBS system has been modified to allow ‘non-cost’ items to be brought into inventory and disbursed at without charge to the offender.

Items brought into inventory at zero cost must first be ‘flagged’ as a zero cost item on the “Item Maintenance” screen. A “PO” and “Receiver” will be used to bring these items into inventory.

Staff Sales
Canteens are authorized to sell canteen items to department staff. Cash sales require daily deposit of cash receipts into the 700 fund using normal CORE deposit procedures and will be reconciled daily with the cashiers daily deposit slip.

Administration Canteen Maintenance
There are seven central office canteen maintenance screens that control the overall operation of the canteen module. Those seven screens are:

1. Canteen Maintenance screen: This screen is used to define specific facility canteens; define their appropriate sales tax rates (city, county and state) and if changed by law the effective date of the change; and the specific canteen’s shelf quantity days.

Shelf Quantity Days
It is extremely important to the efficient operation of OBS that the canteen shelf quantity day’s field appropriately reflect the average number of days that relate to a specific canteen’s shelf space.

Example: Because of canteen space limitations only five days of resale inventory can be kept on hand. The shelf quantity days for that canteen should be set for five days.

The default setting for canteen shelf quantity is 10 days. It is the responsibility of each canteen supervisor to let central administration know if their canteen shelf space requires a lesser number of shelf quantity days.

2. Vendor Maintenance screen: Defines authorized OBS canteen vendors, their mailing address, OSF vendor number and location code. (see Canteen Vendor Maintenance this section)

3. Item Department Maintenance screen: Defines the major item categories of all items sold through the canteen system.

4. Item Category Maintenance screen: Defines the sub-categories of all items sold through the canteen system. It also defines category “markups” and whether the subcategory can be sold to level I and II offenders.

5. Item Maintenance screen: Defines all items sold in OBS (UPC/PLU #, item description, item department and item category). It also defines whether the item is Kosher / Halal, an exempt property list item, a taxable or non-taxable sales item, requires a quantity prompt, etc. All item maintenance is controlled by central office and must meet the rules defined in this guide.

6. Adjustment Type Maintenance screen: Used to define the authorized reasons for making a canteen inventory adjustment. (see Inventory Adjustments this section)

7. Privilege Level Spending Limits screen: Used to define offender privilege level spending limits and gang pay privilege level amounts. These OBS system restrictions will be established based on current policy (OP-060107 - Systems of Incarceration).

Facility Canteen Maintenance
There are two basic grouping of facility canteen maintenance screens. One maintenance screen group defines the canteen computers allowed to access the canteen module. The other group defines those items will be stocked for resale by that specific canteen, the vendors they will use to make their canteen purchases, and the information that will appear on the purchase order and receiving document germane to that specific canteen. The Local Item Maintenance screen is specifically addressed below because of its importance to efficient OBS operations.

Local Item Maintenance
The Local Item Maintenance screen identifies those items a facility canteen will stock (or special order) in its’ canteen for resale. To select new items from the centrally managed UPC/PLU item table uncheck the “display active only” button. Check the “institution active” button to activate a new inventory item to the facility’s active canteen stock group. Facilities when activating new items should identify in the vendor field the vendor they will commonly use to order the item. Enter into the “lead time/days field” the average number of days that it takes from the time the item was last received to normally receive the next delivery.

Lead Time/Days
Normally, an item’s re-order lead time is based on the selected vendor’s delivery schedule to that canteen. The “Lead Time/Days” field is located on the Local Item Maintenance screen. It is imperative when entering an item’s “re-order lead/time days”, the user consider the preferred vendor’s delivery schedule and enter into this field a lead time sufficient for those items based on the number of average days between item delivery from that vendor.

Item Multipliers
Item multipliers are used in OBS to define the “normal package quantity” of the item normally purchased. Item multipliers are “institutional specific” and are individually set by the facility canteen through the Local Item Maintenance screen under Administration/Local Canteen.

The item multiplier field behaves differently on the Purchase Order screen and the Create Receiving Report screen.

1. For purchase orders, users will enter the actual quantity to be purchased and OBS will round up to this number to the nearest item multiplier as defined on the Local Item Maintenance screen.

2. On the Receiving Report, users will enter the quantity received and OBS will take the number entered and multiply it by the item multiplier to calculate the quantity received.

Use of Quantity Prompt
Canteen supervisors are responsible for designating those active items in OBS that their facility canteen will resale. Use the “quantity prompt” button for identifying those items where the item’s multiplier is greater than one. Most item multipliers in OBS are based on package quantities. A unit multiplier of one may be appropriate when dealing with broken or reduced package quantities. This is especially important for items brought in at a package price but sold individually.

Recommended Reorder Quantities
As discussed earlier in this section, shelf quantity days refer to storage space and are defined in the central office Canteen Maintenance screen. The OBS system computes an item’s “Max Quantity” (also referred to as recommended order quantity) during the nightly process.

The following formula is used to determine the suggested canteen reorder need defined on the Inventory Needs Report.

((average daily sales) * (lead time/days + shelf quantity)) – (quantity on hand + quantity on order)

An example of this formula in use is:

Item’s average daily sales = 10 items
Vendor lead time for reorder = 6 days
Canteen shelf quantity space = 10 days
Quantity on hand = 30 items
Quantity on order = 40 items

10 * (6+10) – (30+40) = 90
Recommended purchase quantity = 90 items

Note: If either “shelf quantity days” (as defined on the Central Administration Canteen Maintenance screen) or “lead time days” (as defined on the Local Canteen Item Maintenance screen) are incorrectly defined in the system, then recommended reorder quantities will reflect bogus information.

Purchase and Receiving of Canteen Inventory
All items purchased for resale in a facility canteen will be done using the OBS purchase order and receiving process and only from vendors who are DCS/OSF registered vendors and listed in the OBS canteen vendor maintenance table. Canteen supervisors are not to purchase any item from a vendor without first completing an OBS purchase order. All purchase orders, amended purchase orders, receiving documents and vendor invoices will be kept together.

Canteen supervisors will ensure all items brought into their canteen for resale are received using the OBS Receiving Report screen. When inventory delivered does not agree with the purchase order staff will edit the original OBS purchase order to match vendor invoice. Only after the amended purchase order agrees with the vendor invoice will an OBS receiving document be created.

OBS Purchase Orders
It is extremely important when creating or editing the OBS Purchase Order screen that users enter into the package quantity field the appropriate quantity received (this can be either a case or unit quantity).

Case and Unit Quantities
Full case quantities are entered when the multiplier under local item maintenance is greater than one. Unit quantity is entered when the multiplier field is one. The appropriate multiplier field must be reviewed within the purchase order to determine whether a case or unit quantity should be entered. The only time staff should be entering a value into the computed quantity field is when they are receiving a quantity of units less than the established item multiplier setup in their local item maintenance screen.

AMC Error Warning: Any time a value is entered into the computed quantity field the user must manually change the package cost field from a full case cost to a unit cost. Failure to follow this rule will result in erroneous computation of the item’s Average Moving Cost (AMC).

When an item is being brought into inventory with a unit cost greater than 25% of its current AMC value, a warning message will pop up notifying that a significant AMC change is likely to occur. Failure to heed this warning and confirm unit cost will result in incorrect pricing of the item when sold.

OBS Receiving Documents
No editing or adjusting of a receiving document should be done as a result of differences between the original vendor order and actual vendor invoice. Users must edit the original OBS purchase order for invoice changes before receiving items into inventory. Only after the purchase order matches the vendor invoice will the user create a receiving report.

When executing a receiving document, users will select ‘receive all’ and confirm the total cost field matches the vendor invoice. If they do not agree then the original purchase order must be amended.

Only after vendor invoice and OBS total cost field agrees will the user enter into the receiving document any vendor discounts/credits and freight cost. Any discounts/credits and/or freight cost must be shown on an invoice by a vendor before being enter into a receiving report.

Vendor Discounts and Refunds
Vendor discounts, credits and refunds will be entered on the receiving document in the “credit/discount field.”

Vendor Freight Costs
Vendor freight charges will be entered on the receiving document in the “freight field.”

Payment of Canteen Invoices
Vendor account payables for canteen purchases are processed through the OBS accounting system based on the OBS receiving process. Business office staff will coordinate with their canteen supervisors prior to printing any vendor check to ensure no purchase order/receiving document corrections are required or in progress. Once a vendor payment is printed, its related purchase order and receiving document cannot be modified without first voiding the entire check.

All completed purchase orders and receiving documents related to a particular vendor by a facility in OBS are consolidated at the time a vendor check is printed.

Self Imposed 7 Day Delay
Business office staff should normally wait at least 7 days between the time the vendor invoice is received and the printing of the vendor check. Using this time delay in making a vendor payment helps to ensure inventory corrections can be made without having to void a vendor payment check. Business office staff should confirm with their canteen supervisor:

1. There are no suspected AMC errors related to the invoice’s receiving document.

2. That all items on the invoice have been received by the canteen and the canteen supervisor supports invoice payment.

Invoice Payment Required within 30 Days
O.S. 62, section 34.72 requires establishment “of a procedure to assess and pay interest for the late payment of an invoice, which interest shall be calculated beginning the thirtieth day after receipt by the designated office of a proper invoice for which payment has not been mailed, transmitted, or delivered to a vendor by the close of business on the forty-fifth day.” Such interest shall be at an annualized rate based on an average of the interest rate for thirty-day time deposits of state funds during the last calendar quarter of the last preceding fiscal year, as reported by the State Treasurer.

Facility business managers will ensure that vendor invoices do not go unpaid more than 30 days.

Vendors Payable Report
The “Vendors Payable Report” is a useful tool to identify those canteen receivables that have generated an Account Payable-Canteen and the status of the payment. This report also shows the check number applicable to the receiving document, any vendor discount/credit and associated shipping cost (if applicable).

Canteen Module Reports
The following list of reports is not all inclusive but just provides users information on many of the canteen module reports and the type of information available.

Useful Inventory Management Reports

• Agency Zero Movement Report (ADM Only) – Identifies those inventory UPC codes that had zero sales activity for the date range selected.

• Consolidated Inventory Report – Identifies active inventory information to include sales, inventory movement, AMC, COGS and suggested reorder quantities.

• Inventory Adjustment Report – Identifies inventory adjustments (correction errors, shrinkage, spoilage, disposable items and vendor returns) for the period selected. This is a good report to do both time and location comparative analyses.

• Inventory Inquiry Report – Use this report to see whether an inventory item is currently in stock and at what canteen locations.

• Inventory Needs Report – Identifies those items the system recommends re-ordering from a vendor based on existing shelf quantity, average sales/week, quantity on hand and quantities on order.

• Inventory Reconciliation Report – Use to compare actual physical quantities of inventory on hand to inventory tracked by the system. Discrepancies identified using this report become inventory adjustments to bring actual stock values in line with actual physical count.

• Exempt Canteen Items Report – This report identifies, by offender DOC#, those exempt item canteen purchases (for the period selected) that may need to be recorded on the offender’s property record.

• Stock Status Report – Identifies those items select by the local canteen supervisor to be sold by that canteen, the item’s primary vendor, and related item quantity information.

• Receipt Report by Rec# – Identifies inventory received by receiving report number.

• Receipt Report by PO# – Identifies inventory received by purchase order number.

Useful Canteen Item Reports

• Item Activity Report – Identifies sales and inventory activity for a specific inventory item for the date range specified.

• Item Detail Report – Identifies whether a inventory item requires a quantity prompt when sold, if it’s a taxable item when sold, is it exempt from the offender’s weekly canteen spending limit, whether the item is kosher/halal, and if it can be sold to a privilege level 1 or 2 offender.

• Item Quantity Below Zero Report – Identifies if a local canteen has sold more of an item than its inventory count identifies was on hand at the end of the day. This useful report helps to identify in advance whether an AMC error is likely to occur because the canteen failed to timely record the receipt of inventory from a vendor into the OBS system.

• Item Sales History at Selling Price Report – Identifies all the offender sales (for the time period selected) to include quantities sold, sales price, and total dollar sales of that item to an offender(s).

• Item Status Report – Identifies those centrally managed UPC/PLU codes listed in the system and whether they are active, inactive, and/or locally active at a specific canteen.

• Price List Report – Identifies current canteen inventory sales prices.

• Returns for Period Report – Identifies those offender sales (by item and date) that were returned back into inventory and the associated sales transaction receipt number.

Other Useful Canteen Reports

• Markup Summary Report – Provides comparative sales, cost of goods sold (COGS), and gross profit (before sales taxes) for the 17 canteen locations. Sales and COGS information included in this report DO NOT INCLUDE hobby craft sales since these items are not brought into canteen inventory but are sold through the canteen system directly by an offender.

• Offender Canteen Available Balance Report – Provides current available spending limit information on a facility’s offender population and whether an offender has shopped at the canteen within the last 30 days.

• Offender Transaction History – Identifies, for a specific offender and the time period selected, all canteen item purchases.

• Sales Per Period Report – Identifies, for the time period selected, total item sales, total quantities sold, and total sales dollars. This report does not include hobby craft sales information since these sales are not brought into inventory.

• Sales Tax Report – Identifies, for the time period selected by OBS location: taxable sales, taxable sale refunds, net taxable sales, non-taxable sales, non-taxable sales refunds, and gross sales. Information from this report is used to file the monthly Oklahoma Tax Commission sales tax report as required by law.

• Vendor Listing Report – Identifies vendors that are centrally active in the OBS system, inactive, and what locations use a particular vendor.

• Vendor Payables Report – Identifies, by receiving document number for the date range selected, all vendor payables and any associated check number used to pay the vendor invoice.

Computation and Payment of Canteen Sales Taxes
The department utilizes a common sales tax permit for all its canteen locations. Central office staff will utilize the Oklahoma Tax Commission (OTC) “Quick Tax” electronic filing system for reporting canteen sales. The website for this system is: https://ok.quicktax.govconnect.com/Welcome.asp. When utilizing the “Quick Tax” system staff will select “Sales Tax”, enter the department’s FEIN number and tax permit number and select the payment type of “mail in.” Sales tax report filing and payment is due to OTC by the 20th of the month.

OBS Sales Tax Computation
The OBS system computes canteen sales tax charges by facility canteen location as defined in the “Canteen Maintenance Screen.” It is extremely important that OBS sales tax rates be kept current with published OTC state, county and city sales tax rates. Central office staffs are responsible for keeping OBS sales tax rates current with OTC published rates. Facilities are responsible for notifying central office of a known county or city tax rate change.

OBS Sales Tax Report
Prior to entering the OTC “Quick Tax” system, central office staff will run the OBS “Sales Tax Report.” This report is a comprehensive report that provides canteen sales information by institution on total sales, taxable sales refunds, non-taxable sales, non-taxable sales refunds, and net sales. Users will use the sales report information applicable to the reporting month for entering information into the OTC Quick Tax reporting system.

Entering OTC Computed Sales Tax Liabilities into OBS
The OTC Quick Tax System provides the OBS system its sales tax liability and sales tax discount information into the “Sales Tax Expenditure Entry” screen. Users will enter the OTC computed “Net Sales’ Tax Liability” into the “Net Sales Tax Expense”’ field for the canteen location. The OBS system will automatically calculate the “OBS Sales Tax Discount.”
It is extremely important before selecting “save” that the OBS system’s “Net Sales Tax Expense” is equal to the OTC computed sales tax obligation. Only select “save” after confirming both the OTC computed tax liability and OBS Net Sales Tax Expense are equal.

Printing the Sales Tax Payment Check
Printing the sales tax check will be done by central office through the Print Checks screen and selecting “Central Checks.” Sales Tax payments will be mailed to the Oklahoma Tax Commission at the address provided on the OTC invoice.