| SECTION II - MANAGEMENT REPORTS
A. GENERAL
The management reports described in this section were designed
with the intent to:
* provide operating management with information considered
necessary to control the costs of housing operations,
with particular emphasis on the primary costs of raw
food and labor, and to measure the profitability of
conferences, catering, and other special events,
* provide higher level management with information considered
necessary to evaluate performance, and
* provide all levels of management with information to
analyze costs of operations using uniform measures of
comparison.
Although this Bulletin identifies the person or persons that
normally would be expected to prepare each report, final
decision on this matter rests with campus management.
The reports prepared for intracampus distribution only are
optional at the discretion of the appropriate level of campus
management. The reports prepared for the Office of the
Vice President-Business and Finance are mandatory. The
formats of the exhibits describing these reports are to be
followed in their preparation.
The reports presented for campus management use do not
preclude the preparation of additional reports. Furthermore,
the content of the reports should be considered as minimal
and should be further detailed when necessary to meet the
managerial needs of a particular campus.
Monthly reports will be due approximately ten days after
the Accounting Office receives the Appropriation Ledger.
Quarterly reports will be due at the end of the month
following the quarter.
B. LABOR USAGE REPORTS
Labor and labor-related costs are the largest item of operating
expense in housing operations. The labor usage reports illustrated
in Exhibits II - A and II - B are designed to provide
management with a useful tool to help control and analyze the
use of that; labor. They should be prepared for each residence
hall facility by the person maintaining the employee time
records for that facility.
Residence Hall Administrators should evaluate the necessity for
labor usage reporting in apartment facilities.
Frequency and Recommended Distribution
Frequency Distribution to Management
Household Monthly - showing Household Manager, Residence
month and year- Hall Administrator and
to-date staff, and Accounting Office
Food Service Monthly - showing Food Service Manager,
month and year- Residence Hall Administrator
to-date and staff, and Accounting Office.
Weekly - showing (For preparation of Food
week and month- Cost Report)
to date
Use of the Reports
The reports are basically intended for use by household and food
service managers. The reports, prepared from individual employee
time records, can be used by these managers to:
* measure productive against non-productive time of full-time
employees by function,
* measure the productive time of full-time employees and
students against a common base (occupant days or meals
served) on an actual and planned basis, and
* compare their performance with other facility managers.
The reports can be used by the Residence Hall Administrator and
his staff to:
* compare management performance between facilities against a
common base (occupant days or meals served),
* analyze labor usage in different types of physical facilities,
and
* analyze labor usage at different occupancy levels which can
help in the determination of fixed and variable labor
requirements for given levels of service.
In addition, the weekly Labor Usage-Food Service report is to be
used in the preparation of the weekly Food Cost Report discussed
in Section II-C. Both the Food Service and Household monthly
reports are to be used in computing functional labor costs
reported in the monthly Statement of Operations.
Source of Data and Method of Preparation
Currently a summary record of each employee's time is maintained
for payroll purposes. This record, which is prepared from the
employee's clock card, also includes vacation time, sick time and
other time off. By having the employee report his productive
time by function and activity, all the information necessary to
prepare the labor usage reports will be available.
To accomplish this, two steps are necessary:
* employees who work in more than one functional area must be
listed on the labor "prelists" for those functional areas,
and
* employees must report time worked by functional area and
activity. This can be done on the employee's clock card
using any suitable coding system.
If the use of overtime is significant, the productive time of
full-time employees should be further detailed on the report
between straight time and overtime hours.
C. FOOD COST REPORT
Raw food cost and labor (prime costs) represent over ninety
percent of the cost of operating a food service facility. The
Food Cost Report illustrated in Exhibit II - C is designed to
provide food service management with a useful tool to control
these costs on a weekly and month-to-date basis. Note that it
excludes conference, catering, and other special events food
service costs.
The report can be prepared by the facility food service administrative
staff or a central clerical staff.
Frequency and Distribution
The report should be prepared weekly; the last report in the,
month should cover through the last day in the month. Since the
report is directed at "cost per meal", the report covering the
next to the last week in the month can be extended to include the
few remaining days in the month without causing any significant
distortion.
The interim weekly reports should be distributed to the facility
*Food Service Manager and the Residence Hall Administrator. Also,
the last report of the month should be distributed to the Residence
Hall Administrator and his staff.
Use of the Report
The facility Food Service Manager can use the weekly report to
control prime costs on a cost per meal basis. He can:
* compare calculated prime cost per meal to his budgeted
(planned) cost per meal and pinpoint cost areas requiring
further investigation,
* analyze labor costs in detail to determine the specific
areas causing any undesirable deviations,
* watch absentee meals as an aid to planning and as a further
explanation of cost deviations, and
* take corrective action on a timely basis.
The Residence Hall Administrator and his staff can use the monthly
report as an overall control tool. They can:
* compare management performance between facilities on a common
basis (meals served), and
* compare prime costs as a percentage of monthly food service
revenue to monitor the need for changing food service
quality levels.
Source of Data and Method of Preparation
Labor hours are obtained from the weekly Labor Usage Report,
Exhibit II - B on page 10.
The standard rate per hour covering full-time employees should be
calculated for each functional area at the beginning of the year
and reviewed quarterly for revision if necessary. It is
intended to avoid the necessity to calculate manually each week
the actual pay of all employees. A separate weighted average
hourly rate should be calculated for each functional cost area,
based on the number and salary classification of personnel
normally employed in each area. To those rates a flat percentage
should be added to cover retirement and other fringe
benefits. The loading percentage discussed in Section V-C to
cover non-productive paid time should then be added.
Example: Weighted average hourly rate.......... $2.50
Retirement and other fringe
benefits - 10%...................... .25
2.75
Loading percentage for non-productive
time - 20%.......................... .55
Standard Hourly Rate.................. $3.30
To accurately calculate the cost of raw food consumed, all food
purchases must be tabulated, and weekly and month-end inventories
of food on hand must be taken. If Kardex records are maintained,
they should be adequate for weekly inventories; however, a
physical inventory should be taken at month-end to insure accurate
month-to-date costs as well as to adjust the Kardex records. All
food items in storage should be inventoried, as well as all
significant items in the kitchen area. It should not be necessary
to inventory the ingredients (flour, sugar, spices, and other such
items) located in the kitchen area since their value should be
fairly constant from week to week. Raw food consumed during
conferences, catering, or other special events can be obtained
from food cost records covering those events. These records
are discussed next in Section II-D. Note that on the last
Food Cost Report of the month the "Total Raw Food Consumed"
month-to-date should agree with the raw food cost reported on
the Statement of Operations.
Meal statistics are defined later in Section II-G.
Since there is a definite break between regular sessions and
summer session, an inventory should be taken and a new Food
Cost Report prepared for the balance of the month covering the
new session. This will assure an accurate reflection of costs
for each session.
D. CONFERENCES, CATERING, AND OTHER SPECIAL EVENTS
In order to evaluate the profitability of conferences, catering,
or other special events, a separate profit and loss statement
should be prepared for each event. Exhibits II - D and II - E
illustrate combination direct cost records and gross profit
statements covering each type of event. They are designed to
account for all significant direct costs and therefore should
provide a satisfactory measure of profit performance. They do
not provide for the direct charging of indirect supplies or
utilities. These costs will be allocated to all events in
total on the Statement of Operations.
Distribution
The individual event statements should be prepared by the
administrative staff of the facility and distributed to the
Household and/or Residence Hall Manager, the Food Service
Manager, and to the Central Conference Coordinator.
Since all information necessary to prepare these statements
should be readily available, they should be prepared and distributed
within a few days after the conclusion of the event.
Source of Data and Method of Preparation
Each event should be assigned a sequential event number. This
number can be used to record time on daily clock cards and to
account for all events when preparing the month-end cost summary.
Hours can be summarized and entered daily from the clock cards.
The standard rates per hour for full-time food service employees
are the same rates as those developed for weekly food cost
reporting. Similar rates are required for household personnel.
After itemizing raw food costs, an amount should be added to
cover condiments and other unidentifiable raw food items. This
should be a small standard percentage of the sum of the directly
identifiable raw food costs.
Special expenditures, to be charged to the miscellaneous accounts
(household 76XX08, food service 76XX38), would include any purchases
of supplies or services made specifically for the event,
such as: truck or other rentals, service from the Physical Plant
Department to set up special eating facilities, and floral pieces.
Care should be taken to consider these expenditures in the month-
end expense accrual discussed later in this bulletin.
A standard charge for linen changes should be established for
conferences. The standard rate per change should include the
direct cost of laundering or cleaning each linen item, plus a
small percentage to cover depreciation. The labor cost
involved in actually changing the linen will be accounted for
in the time charged to the conference by housekeeping or linen
service personnel.
The cost of raw food consumed during all events is to be
summarized weekly for preparation of the Weekly Food Cost report
previously covered, and all direct costs are to be summarized
monthly as a basis for allocating costs and expenses on the
Statement of Operations. Note: When conferences extend into
the next month, a second sheet should be used to facilitate
allocating costs to the proper month.
E. STATEMENTS OF OPERATIONS AND BALANCE SHEETS
A Statement of Operations should be prepared monthly for each
facility by the campus accounting office. The format illustrated
in Exhibit II - F should be considered as a minimum
requirement; income and/or activities can be further detailed
to meet the needs of campus management. Apartment
housing statements require only one year-to-date actual column
since they are year-round operations and do not have conference
activities. Balance sheets are required as indicated below.
Distribution
The statements should be distributed to the individual facility
managers, the Household Manager, Food Service manager, and
Residence Hall Administrator. Further campus distribution of
individual facility statements should be at the option of
higher campus management.
Individual facility statements of operations and balance sheets,
as of June 30, are to be prepared on the preprinted standard
formats illustrated in Exhibits II-H and II-I. One copy of
each statement will be forwarded by Accounting Officers to the
Chief Accountant on or before the date indicated in the Fiscal
Closing Instructions.
Use of the Statements
Prepared under the guidelines set forth in this bulletin, each
statement should accurately reflect revenue and costs on a monthly
and year-to-date basis. The statements should:
* provide a basis for the Household and Food Service Managers
to monitor performance against their operating plans,
* pinpoint deviations by functional cost area, and
* enable the Residence Hall Administrator to detect unfavorable
trends in time to take corrective action.
Method of Preparation
Exhibit II - G illustrates in worksheet form the steps necessary
to arrive at monthly and year-to-date total cost by functional
account. Note that by using year-to-date figures, any errors
will be self-correcting. However, all monthly figures should be
scrutinized for reasonableness.
The following statistics should accompany the statement: total
capacity, planned occupancy and percent of capacity, and actual
occupancy and percent of capacity.
F. SUMMARY REPORT OF STUDENT HOUSING AND FEEDING OPERATIONS
An annual summary report on operations and occupancy is to be sent to
the Vice President-Business and Finance, Attention: Manager of
Auxiliary Enterprises. This summary report is to be prepared using
the format illustrated in Exhibit II - J. The summary operating
statement portion of the report can be prepared by the campus
accounting office directly from the individual facility statements,
combining like facilities as indicated. For the summary report
of occupancy, count all occupants of a facility, including resident
staff members, conference participants, summer session students,
etc. times the number of days each such occupant has resided in
the facility.
Preparation and Distribution
The summary report is to be prepared and distributed in time to
reach all addressees by September 1st. Distribution on campus
should be to the Residence Halls Administrator and all higher
management levels as designated by the Chancellor.
Use of the Summary Statement
In addition to the use of the summary statement by campus management,
the office of the Vice President-Business and Finance will
prepare combined reports of these summaries for University-wide
use and information. The annual summary report is not a substitute
for the reports required in Section II.E. (Exhibits II-H and II-I).
G. STATISTICAL COST ANALYSIS REPORT
Accurate disclosure of costs by functional area can reveal only
what a given function or service is costing. Alone, it provides
no basis for evaluation. The quarterly report illustrated in
Exhibit II - K is designed to provide such an evaluation by
relating costs (regular session and summer session only) to
standard bases of comparison.
Distribution
The campus report should be distributed to the individual facility
Household and Food Service Managers, the Residence Hall Administrator,
and to higher campus management as designated by the *Chancellor.
Use of the Report
It should be noted that the report is not designed to provide
answers but rather to point up areas for potential analysis. Some
of the benefits of the report are that it:
* provides campus management with a direct comparison between
facilities on a common basis,
* gives an opportunity to set and measure warranted improvement
goals quarterly, and
* helps isolate fixed and variable costs for future planning
purposes by providing cost data that can be plotted at
varying volume levels.
Source of Data and Method of Preparation
The quarterly reports can be prepared by the campus accounting
office from the quarterly Statements of Operations. Necessary
statistics as defined in Exhibit II - K should be supplied by
the Residence Hall Administrator's office.
NOTE: In order for campuses using outside food service agencies
to compute food service statistics they will have to obtain
actual meal counts as defined in notes supporting the Exhibit.
Annual Summary
At the end of the year this same report should be prepared, using
total annual costs to arrive at actual per occupant costs. The
average number of occupants (students in the case of Student
Program) would be used in place of occupant days or meals served.
H. ANNUAL LINEN REPORT
Since linen can represent a sizable investment and source of
pilferage, a linen inventory should be taken annually. It should
be taken by other than housekeeping or linen room personnel and
supervised by someone from the accounting department or the
Residence Hall Administrator's staff. Should results reveal
significant losses, more frequent inventories should be taken.
* All disposals of linen items throughout the year should be
authorized by the Household Manager and a written record
should be maintained in his files showing items, quantity,
and date of disposal.
* The inventory should be priced at current prices.
A report on the results of the inventory, by facility if appropriate,
should be distributed to the Residence Hall Administrator
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