VIRGINIA CORRECTIONAL ENTERPRISES

1. VIRGINIA CORRECTIONAL ENTERPRISES FUNDING AND OPERATIONS

2. VCE IS A SERVICE AREA OF THE DEPARTMENT OF CORRECTIONS ESTABLISHED IN 1933

3. ABOUT VCE: STAFFING • 175 FTE’S • 30 TEMPORARY EMPLOYEES • OVER 1,500 INMATES

4. ABOUT VCE: FACILITIES • 23 SHOPS • 14 INDUSTRIES • 16 CORRECTIONAL FACILITIES • 2 WAREHOUSES • 2 COPY CENTERS

5. ABOUT VCE: PRODUCTS • WOOD AND METAL FURNITURE • SEATING • OFFICE SYSTEMS • LICENSE PLATES/TEMP TAGS • CLOTHING • SHOES • VINYL BINDERS/SIGNS

6. ABOUT VCE: SERVICES • 2 COMMERCIAL LAUNDRIES • MICROFILM/DOCUMENT CONVERSION • PRINTING AND XEROX COPY CENTERS • EMBROIDERY & SILK SCREEN • OPTICAL (DOC ONLY) • DENTAL (DOC ONLY)

7. FUNDING • VCE IS AN INTERNAL SERVICE FUND • VCE RECEIVES NO FUNDING FROM THE GENERAL FUND • CASH FLOW IS GENERATED FROM COLLECTIONS OF SALES • CUSTOMERS PAY VIA IAT, EDI, CHECK OR CREDIT CARDS

8. CUSTOMER BASE • VCE CAN SELL TO STATE AGENCIES, COMPONENT UNITS OF THE COMMONWEALTH, TO INCLUDE HIGHER EDUCATION, CITIES, TOWNS, COUNTIES, FEDERAL GOVT. AND NOT-FOR-PROFITS. • CAN ENTER INTO CONTRACTS WITH PRIVATE SECTOR (P.I.E. OR SERVICE AGREEMENTS)

9. REVENUES • PROJECTED REVENUE FOR FY08: $50 MILLION • FY05 – FY07 REVENUES AVERAGED OVER $48 MILLION/YR.

10. FY07 SALES DATA • $29.3 MILLION TO STATE AGENCIES • $17 MILLION TO HIGHER ED. • $2.7 TO OTHER

11. AUTOMATED SYSTEMS • CARS (CASH BASIS) • E-VA • FAACS • LAS • CIPPS (ENTERED BY DOC ON OUR BEHALF) • SYTELINE (ACCRUAL BASIS)

12. SYTELINE

13. SYTELINE • A FULLY INTEGRATED MANUFACTURING AND ACCOUNTING SYSTEM • ON-LINE – REAL TIME • VCE’S PRIMARY INTERNAL CONTROL • RECONCILED TO CARS, FAACS & LAS • INTERFACES TO E-VA AND CARS (VENDOR PAYMENTS ONLY)

14. SYTELINE MODULES

15. MODULES • GENERAL LEDGER/ FINANCIAL REPORTS • ORDER ENTRY/ ACCOUNTS RECEIVABLE • PURCHASING/ ACCOUNTS PAYABLE • JOB & INVENTORY COSTING/ INVENTORY CONTROL

16. MODULES NOT UTILIZED • FIXED ASSETS (DEPRECIATION RECORDS GENERATED IN FAACS WITH MONTHLY JE’S IN SYTELINE • PAYROLL (JE’S ENTERED BASED UPON CIPPS)

17. SYSTEM ACCESS • EACH USER’S PERMISSIONS ARE DEFINED BY THEIR ROLE/ DEPARTMENT • REQUESTS TO ADD/DELETE USERS MUST BE IN WRITING (E-MAIL) TO VCE’S IT DEPARTMENT

18. THE MATRIX • ERP 6.01.00 vce Virginia Correctional Enterprises labarber 05/05/08 14:03:40 • USER-R User Authorizations Report Page: 1 • User Name • ------------------------- • zlooker • Function Run Add Update Delete View Costs • Accounts Payable Yes No No No Yes • Accounts Payable Payments Yes No No No Yes • Accounts Payable Posting Yes No No No Yes • Accounts Payable Vouchers Yes No No No Yes • Accounts Receivable Yes No No No Yes • Accounts Receivable Fin Chg Yes No No No Yes • Accounts Receivable Invoicing Yes No No No Yes • Accounts Receivable Payments Yes No No No Yes • Accounts Receivable Posting Yes No No No Yes • End of Period Posting Yes No No No Yes • Enter out of Date Range Yes No No No Yes • General Ledger Yes No No No Yes • General Ledger Financial Rpts Yes No No No Yes • General Ledger Posting Yes No No No Yes • General Ledger Setup Yes No No No Yes

19. REVENUE CYCLE • CUSTOMER SERVICE RECEIVES ORDERS VIA MAIL, FAX, E-VA, VCE WEB-SITE (E-VA AND WEB-SITE ORDERS CAN BE IMPORTED INTO SYTELINE) • EVERY CUSTOMER HAS A UNIQUE ACCOUNT# • SYTELINE GENERATES ORDER#

20. REVENUE CYCLE • FINISHED GOODS IN SYTELINE HAVE ESTABLISHED UNIT PRICES AND DEFAULT DUE DATES • WHEN AN ITEM IS SHIPPED IN SYTELINE (AND PHYSICALLY), INVENTORY IS DECREMENTED AND A “TO BE INVOICED” TRANSACTION IS GENERATED ALERTING CUSTOMER SERVICE TO INVOICE.

21. REVENUE CYCLE • WHEN THE INVOICE IS PRINTED (INVOICES ARE SEQUENTIAL) ACCOUNTS REVEIVABLE (A/R) POSTS THE TRANSACTION TO THE A/R DISTRIBUTION JOURNAL. SYTELINE AUTOMATICALLY GENERATES ALL JE LINES AND UPDATES THE CUSTOMERS ACCOUNT.

22. REVENUE CYCLE • PAYMENTS ARE ENTERED BY A/R, UPDATING THE CUSTOMERS ACCOUNT AND GENERATING THE RELATED JE IN THE A/R DISTRIBUTION JOURNAL. • FOR CREDIT CARD, EDI OR CHECKS RECEIVED, A DEPOSIT IS MANUALLY KEYED IN CARS.

23. PURCHASING/EXPENDITURES • PURCHASE REQUISITIONS (P/R’S) ARE ENTERED INTO SYTELINE MANUALLY OR ARE GENERATED VIA SYTELINES MATERIAL REQUIREMENTS PLANNING (MRP) FUNCTIONALITY. • P/R’S MUST BE APPROVED IN SYTELINE BY A MANAGER WITH SUFFICIENT DELEGATED AUTHORITY (AMOUNTS ARE SET IN SYTELINE)

24. PURCHASING/EXPENDITURES • ONCE APPROVED, THE P/R IS CONVERTED TO A PURCHASE ORDER (PO) IN SYTELINE BY PURCHASING DEPT. AND THE ORDER IS EXPORTED TO E-VA. • PO#’S ARE SEQUENTIAL • ALL PO LINES REQUIRE G/L CODING

25. PURCHASING/EXPENDITURES • WHEN THE GOOD/SERVICE IS RECEIVED, A RECEIVING TRANSACTION IS ENTERED AGAINST THE PO LINE. THIS GENERATES ENTRIES IN THE PO JOURNAL. THE RECEIVER’S INITIALS ARE LOGGED IN SYTELINE IDENTIFYING THEM. • ACCOUNTS PAYABLE (A/P) PRINTS AN ELECTRONIC COPY OF THE RECEIVING REPORT AND MATCHES WITH THE INVOICE AND PO.

26. PURCHASING/EXPENDITURES • A/P VOUCHERS AGAINST THE PO LINE AND GENERATES PAYMENT IN SYTELINE. EACH NIGHT, THAT DAY’S BATCHES ARE DOWNLOADED TO CARS ENABLING TREASURY TO CUT THE ACTUAL CHECK/EDI.

27. INVENTORY • VCE HAS UNIQUE ITEM#’S FOR ALL INVENTORY ITEMS • VCE MAINTAINS AN INVENTORY OF RAW MATERIALS, WIP (SUB-ASSEMBLIES, CUT PARTS, JOBS IN PROCESS) AND FINISHED GOODS. • INVENTORY IS VALUED AT STANDARD COST, UPDATED BASED UPON FIFO ACTUAL

28. INVENTORY • ALL ITEMS HAVE AN ASSIGNED PRODUCT CODE WITH THE RELATED ACCOUNT STRUCTURE • ASSIGNED SAFETY STOCK LEVELS • ASSIGNED CYCLE COUNT FREQUENCY (A, B, OR C ITEMS) • ALL VALUE ADDED INVENTORY (WIP/FG) HAS A BILL OF MATERIAL AND STANDARD ROUTING

29. INVENTORY • WIP & FG COST IS DETERMINED BY THE STANDARD COST OF RM, THE INMATE LABOR AND PLANT OVERHEAD APPLIED. • LABOR AND OVERHEAD HOURLY RATES ARE DETERMINED BY COST ACCOUNTING AND DISTRIBUTED TO ITEMS BASED UPON THE STANDARD AMOUNT OF TIME IT TAKES TO MAKE THE ITEM.

30. INVENTORY • VCE’S CODES & STANDARDS DEPT DEVELOPES AND ENTERS BOM’S AND ROUTINGS, ESTABLISHES NEW CODES AND RUNS MRP. • MRP CREATES JOBS (PRODUCTION ORDERS) BASED UPON DEMAND (NEW ORDERS) AND GENERATES PR’S, IF NEEDED.

31. INVENTORY - JOBS • JOBS ARE ALSO CUT MANUALLY AND ARE BASED ON DEMAND • JOBS ARE MONITORED BY VCE MGT. • THE SHOP DATA CLERK SENDS A PICK LIST TO THE FLOOR FOR ITEMS REQUIRED. AS ITEMS ARE ISSUED AND THE JOB PROGRESSES, THE CLERK ENTERS THE JOB TRANSACTIONS IN THE SYSTEM, GENERATING JE’S IN THE SHOP FLOOR JOURNAL

32. INVENTORY - JOBS • AS ITEMS ARE COMPLETED, SYTELINE GENERATES JE’S TO CREDIT WIP AND DEBIT FG’S. ANY VARIANCE GENERATED IS ALSO CALCULATED.

33. INVENTORY CONTROL • COST ACCOUNTING ADMINISTERS CYCLE COUNTS TO BE PERFORMED BY SHOPS. • THE SHOP DATA CLERK ENTERS THE RESULTS OF THAT DAYS CYCLE COUNT. COST ACCOUNTING POSTS THE AMOUNTS TO THE INVENTORY CONTROL JOURNAL AND REPORTS VARIANCES TO MGT WEEKLY. • VARIANCES OUT OF TOLERANCE ARE INVESTIGATED BY SHOPS

34. INVENTORY CONTROL • PHYSICAL INVENTORY FOR ALL ITEMS IS PERFORMED THE LAST WEEK OF FEBRUARY. • COST ACCOUNTING POSTS RESULTS AND REPORTS TO MGT. • VARIANCES OUT OF TOLERANCE ARE INVESTIGATED BY SHOPS

35. FINANCIAL REPORTING • ONLY ACCOUNTING PERSONNEL CAN ENTER MANUAL JE’S • BUSINESS MGR. POSTS JOURNALS TO THE GENERAL LEDGER MONTHLY. • BUSINESS MGR. GENERATES FINANCIAL STATEMENTS MONTHLY AND DISTRIBUTES TO MGT TEAM.

36. QUESTIONS??? • PLEASE FEEL FREE TO EMAIL ME @ JAMES.SACHER@VADOC.GOV

37. THANK YOU!!!