POLICY
TITLE

Inmate/Resident Commissary Operations

CHAPTER

SIGNATURE ON FILE AT FACILITY SUPPORT CENTER

David M. Garfinkle
Vice President, Finance
SIGNATURE ON FILE AT FACILITY SUPPORT CENTER

Richard P. Seiter
Executive Vice President/Chief Corrections Officer
SIGNATURE ON FILE AT FACILITY SUPPORT CENTER

2

POLICY
NUMBER

2-6

Page 1 of 5

EFFECTIVE DATE

SUPERSEDES DATE

JULY 3, 2006

SEPTEMBER 1, 2003

FACILITY
NAME

METRO-DAVIDSON COUNTY DETENTION FACILITY

FACILITY EFFECTIVE DATE

FACILITY SUPERSEDES DATE

AUGUST 24, 2006

FEBRUARY 7, 2005

G.A. Puryear, IV
Executive Vice President/General Counsel

2-6.1

POLICY:
Each CCA facility will provide a commissary to permit eligible inmates/residents the opportunity to
purchase approved items on a regular basis. Employees are not authorized to purchase items from the
inmate/resident commissary. Adequate controls and processes will be in place regarding all commissary
including contracted vendor transactions. The Warden/Administrator is ultimately responsible for fiscal
policy, management and control of the facility though the daily fiscal management of the facility rests
with the Business Manager/Manager, Operations Finance.

2-6.2

AUTHORITY:
CCA Company Policy

2-6.3

DEFINITION:
SKU: It represents an individual item type. Each item has it’s own unique SKU number.

2-6.4

PROCEDURES:
PROCEDURES INDEX
SECTION
A
B
C
D
E
F
G
H
A.

SUBJECT
Establishment
Manual
Pricing
Funds
Physical Inventories
Inventory Variance Reporting
Review Committee
ATF Section

ESTABLISHMENT
The facility will receive a loan from the Facility Support Center (FSC) to purchase and establish
the initial Commissary inventory.

B.

MANUAL
1.

Each facility will be provided with a Commissary Manual that outlines the following
minimum procedures:
a.

Ordering;

b.

Receiving;

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2.

JULY 3, 2006

2-6

c.

Delivery;

d.

Returns;

e.

Equipment;

f.

Change Requests;

g.

Inmate/Resident Claims;

h.

Inmate/Resident Trust Fund Accounting; and

i.

Inmate/Resident Welfare Fund Accounting.

At a minimum, the Commissary Manual will be available in the Commissary and the
business office and in any other areas that have operational and/or administrative
responsibilities in regards to commissary vendor transactions.
AT THIS FACILITY, ADDITIONAL COPIES OF THE COMMISSARY MANUAL WILL
BE KEPT IN THE FOLLOWING LOCATIONS:
NONE

C.

PRICING
1.

The Warden/Administrator and Business Manager/Manager, Operations Finance or
Bookkeeper will be responsible for establishing sales prices, unless sales prices are
determined by the management contract.

2.

A thirty percent (30%) margin will be used to determine prices, unless otherwise
approved by the Managing Director, Operations Support & Internal Investigations or
management contract specifies pricing requirements. In the event pricing is included in
the management contract, prices will be determined by either mark-up or margin, as
determined by the contract, and all items will be set at the maximum allowed (excluding
sales tax).
a.

Mark-Up
i.

If the management contract specifies a mark-up, the price is calculated
by adding to CCA’s invoice cost the product of CCA’s invoice cost
multiplied by the mark-up percentage.
EXAMPLE: If the management contract mandates a 25% mark-up on
an item that costs CCA $5.00, the price is determined by multiplying
$5.00 by 25% ($1.25) and adding the result to the invoice cost ($5.00),
or $1.25 + $5.00 = $6.25.

b.

Margin
i.

If the management contract specifies a margin, the price is calculated
by dividing CCA’s invoice cost by (100% minus the margin
percentage).
EXAMPLE: If the management contract specifies a 25% margin on an
item that costs CCA $5.00, the price is calculated by dividing $5.00 by
(100% minus 25%) or $5.00 divided by 0.75 = $6.67. Margin is
computed by dividing the profit (where profit equals price minus cost)
by the price. In this example, margin is computed by subtracting CCA’s
invoice cost ($5.00) from the price ($6.67) and dividing the result
($1.67) by the price ($6.67) or $1.67 divided by $6.67 = 25.0%.

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3.

D.

JULY 3, 2006
Price Changes
a.

All new prices must be approved by the Business Manager/Manager,
Operations Finance and Warden/Administrator.

b.

The Commissary Manager will prepare an updated order form anytime a price
change occurs.

FUNDS
1.

2.

Funds from Commissary sales will be used to replenish the Commissary inventory.
a.

All order forms are to be purchased from Commissary funds unless prohibited
by the management contract.

b.

All supplies utilized for basic commissary operation are to be paid from
commissary funds unless prohibited by management contract.

Profits from the facility Commissary will be used to repay the FSC until the loan is paid
in full.
a.

3.
E.

Once the loan is paid in full, any remaining profits are to be used on
inmate/resident welfare expenditures.

If interest is earned from Commissary funds it will be used on inmate/resident welfare
operations.

PHYSICAL INVENTORIES
1.

2.

3.

F.

2-6

The Commissary Manager, with assistance and supervision of the Business
Manager/Manager, Operations Finance, will perform a month-end physical inventory of
the Commissary.
a.

The inventory will be taken after all sales for the current month are completed
but before sales for the next month begin.

b.

The physical count forms will be signed and dated by all personnel involved in
performing the month-end inventory.

c.

The physical inventory report will be signed and dated by the Commissary
Manager and Business Manager/Manager, Operations Finance.

d.

The inventory will be valued at the cost of the items, not the selling price.

Test counts of five percent (5%) of total SKU’s will be performed and documented by
someone independent of the commissary function.
a.

Since test counts are intended to test the accuracy of the month-end inventory
results, they will be performed in conjunction with the month-end inventory.
The SKUs test counted should vary from month to month.

b.

The test count documentation (e.g. count forms) will be signed and dated by
the individual who performed the test counts.

The Warden/Administrator or Business Manager, Manager, Operations Finance will
review the month-end inventory report and corresponding documentation (e.g. count
sheets and inventory report, to include test count documentation) with the Commissary
Manager. The Warden/Administrator or Business Manager/Manager, Operations
Finance will provide evidence of their review and approval by signing and dating the
inventory documentation.

INVENTORY VARIANCE REPORTING

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1.

JULY 3, 2006

The Business Manager/Manager, Operations Finance will generate an Inventory
Variance Report from the commissary system after the physical inventory counts are
entered into the commissary system.
a.

2.

2-6

In the event the commissary system does not generate an Inventory Variance
Report, a computerized report must be prepared to detail the variances in
quantity and extended cost between perpetual inventory and physical inventory.

The Business Manager/Manager, Operations Finance and Commissary Manager will
review the variances. All variances greater than .0025% of the current month sales on
a “per item” basis will be researched and an explanation provided for the variance.
SKU items should not be “netted together” in order to determine whether a significant
variance of .0025% or greater exists. The variance explanations should not be limited
to dollar ($) variances only. Sound judgment should be used when reviewing item or
each variance to determine the necessity for further research of the cause of the
variance.
Example: Current Month Commissary Sales=$180,000. Inventory Variance=$540.
$540/$180,000=003. .003 is greater than .0025 therefore all variances will be
researched and an explanation provided for the variance.

G.

3.

Explanation for variances greater than .0025% will be noted on the Inventory Variance
Report.

4.

The Business Manager/Manager, Operations Finance will sign and date the completed
Inventory Variance Report.

5.

Once the Inventory Variance Report is complete and has been signed, the inventory
balances will be adjusted in the commissary system by an individual who does not work
in the commissary.

REVIEW COMMITTEE
The Vice President, Facility Operations will designate a committee to be responsible for
periodically reviewing issues and requests for new items, pack/size changes, and price
increases associated with the facility commissary operation. A health authority will serve on the
committee only to review and approve any non-prescription (over-the-counter) medication that
is available to the inmates/residents through the commissary.

H.

AT THIS FACILITY, ADDITIONAL CONTRACTUAL PROCEDURES ARE AS FOLLOWS:
NONE

2-6.5

REVIEW:
The Vice President, Finance will review this policy on an annual basis.

2-6.6

APPLICABILITY:
All CCA Facilities (Provided contractual requirements do not mandate otherwise)

2-6.7

APPENDICES:
None

2-6.8

ATTACHMENTS:
None

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2-6.9

JULY 3, 2006

2-6

REFERENCES:
Commissary Manual
ACA Standards. The ACA Standards for this facility are:
4-4025/4-ALDF-7D-10/3-JTS-1B-01/3-JCRF-1B-01
4-4031/3-JTS-1B-07
3-JCRF-1B-09
4-4035/3-JTS-1B-11
4-4042/4-ALDF-5C-25/3-JTS-1B-17
3-JCRF-1B-19
4-4379

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