C S I POLICY MANUAL FOREWORD - Inter-Searchcsa.intersearch.com.au/csajspui/bitstream/10627/901/1/CSI...

C S I POLICY MANUAL

FOREWORD

The CSI Policy Manual is being progressively developed as an information source

for CSt and other Departmental staff.

The manual is intended to provide an understanding of est philosophy and policy

Issues. Many of those policies derive from the commercial orientation of CSI over

· recent years and of the need to sustain appropriate levels of business probity and

public accountability. In addition to the CSI Policy· Manual staff should remain

conversant with the CSI Standards of Business Conduct included within the CSI

Staff orientation and information package.

The development and maintenance of the CSI Policy Manual is a dynamic process.

I ask that all CSI staff remain conversant with the contents of the manual and I

invite feedback should you wish to canvass areas included or which may require

inclusion.

WAYNE RUCKLEY · Dil'~ctor

Cqrrective Services Industries

Date: 2/f?3 Signature: \ ~

N.S.W. DEPT. OF CORRECTIVE SERVICES LIBRARY

File: 92/0297 Page: i)

SECTION 1.

SECTION 2.

SECTION 3.

SECTION 4.

i POliCY MANUAL TABLE OF CONTENTS

INTRODUCTION

i) ii) - iv) v)

Foreword - Introduction to Manual Table of Contents

1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9

2.1

3.1

Distribution Schedule

CORRECTIONAL INDUSTRY POLICY

Correctional Industry Philosophy Correctional Industry Definition Vocational Development Policy Service Industries Policy Occupational Health & Safety CSI Business Unit - Establishment Quality Policy Statement Corruption Prevention Community Employment

MANAGEMENT/STAFFING

Organisational Hierarchy

DELEGATIONS

Financial

MARKETING

4.1 Marketing Policy 4.2 Pricing Policy 4.3 Donations & Sponsorships 4.4 Customer Liaison/Hospitality Expenditure 4.5 Corrective Services Industries Consultative

Council 4.6 Corporate Image 4.7 CSI Internal Supply Preference 4.8 Management of Sales Contracts 4.9 Sourcing of Community Employment 4.10 Staff Sales 4.11 Acceptance of Customer Orders 4.12 Media Relations 4.13 (Reserved) 4.14 Customer Complaints

I Date: 5/94 File: 92/0297 Page: ii)

i POLICY MANUAL SECTION 5. COMMERCIAL

5.1 Debtors Policy 5.2 Cash Management Policy 5.3 Disclosure of Confidential Information 5.4 Institutional Insert

5.4.0 Introduction 5.4.1 Sales Invoices

5.4.1.1 General 5.4.1.2 Invoice Preparation 5.4.1.2.1 Proof of delivery 5.4.1.3 Customer Numbers 5.4.1.3.1 Creating a new customer 5.4.1.3.2 Cash Customers 5.4.1.4 Transfers to CSI (Regents

Park) 5.4.1.5 Sales to Other Institutions 5.4.1.6 "Sales" to your own Facility

or CSI 5.4.1.7 Credit Notes 5.4.1.8 Sales Tax

5.4.2 Production Transfers 5.4.2.1 Transfers 5.4.2.2 Dispatch Dockets 5.4.2.3 Inter Institution Transfers 5.4.2.4 Works Orders

5.4.3 Purchase Orders 5.4.4 Payment for Goods & Services

5.4.4.1 Payments to suppliers 5.4.4.2 Payments to CSI

5.4.5 Budgets and Allowances 5.4.5.1 General 5.4.5.2 Allowances 5.4.5.3 Expenditure controls 5.4.5.4 Budgets

5.4.6 Receipt of Funds 5.4.6.1 General 5.4.6.2 Remittance Advice

I Date: 2/94 File: 92/0297 Page: iii}

~I CORRECTIVE SERVICES INDUSTRIES POLICY MANUAl

5.4.7 Reporting Returns 5.4.7.1 Monthly Returns 5.4.7.2 (Section Deleted) 5.4.7.3 Due Dates 5.4.7.4 Financial Results 5.4.7.5 Annual Return of Plant and

Inventories 5.4.8 Capital Expenditure

5.4.8.1 General 5.4.8.2 Justification

5.4.9 Cost Centres 5.4.9.1 Account Numbers 5.4.9.2 Usage

5.4.1 0 Stocktake Procedures 5.4.1 0.1 Scope & Timing 5.4.10.2 Inventories 5.4.10.3 Plant & Equipment

5.4.11 Appendices 5.4.11.1 Appendix A: Part Number

List 5.4.11.2 Appendix 8: Customer

Number List 5.4.11.3 Appendix C: Account

Number List 5.5 Purchasing/Supply Management 5.15 Costing Policy

SECTION 6. PRIVATE SECTOR INVOLVEMENT

6.1 Private Sector Correctional Industry Policy Statement

6.2 Private Sector Correctional Industry Process Hierarchy & Checklist

6.3 Economic Evaluation of Proposals

SECTION 7. CAPITAL ASSETS

7.1 Capital Expenditure - Acquisition 7.2 Standard Requirements for the Construction of

Corrective Services Industries Facilities

SECTION 8. OPERATIONS DEVELOPMENT

8.1 Business Unit Summary 8.2 Inmate Wages System 8.3 Commercialisation

I Date: 2/94 File: 92/0297 Page: /

iv) I

i POLICY MANUAL DISTRIBUTION

Copies of the CSI Policy Manual are held by the following positions to which amendment inserts are also issued:

Commissioner Deputy Commissioner Assistant Commissioner Operations Assistant Commissioner Personnel & Education Assistant Commissioner Support Services Director, Legal Services Chief Policy Officer, Co-ordination Planning & Policy Branch Manager, Internal Audit Monitor, Junee Correctional Centre

Regional Commanders - Eastern Central Northern South West

Director, CSI Manager, Business & Operations Development Commercial Manager Business Development Officer Operations Manager, Cortex

CSI Business Managers Eastern Central Northern South West

All Governors

Manager of Industries -(Bathurst, Cessnock, Cooma, Emu Plains, Glen Innes, Goulburn, Grafton, Industrial Centre, John Morony, Kirkconnell, Lithgow, Maitland, Mannus, Oberon, Parklea, Parramatta, Silverwater, St. Heliers, Training Centre, Correctional Centres)

I Date: 2194 File: 9210297 Page: v) I

C S I POLICY MANUAL

1.1 CORRECTIONAL INDUSTRY PHILOSOPHY

The absence, historically, of a clear philosophic statement covering · the

underlying basis of Correctional Industry operation undoubtedly contributed to the

rundown of Correctional Industry in the decade prior to 1988. In turn the infinite

potential of Correctional Industry to contribute positively to inmate rehabilitation

and Correctional Centre management was, tragically, not realised.

It is of particular note, to reflect that the very clear commitment of the New South

Wales Government to revitalising Prison Industry does not arise, as the former

Ministerfor Corrective Services, Michael Yabsley, M.P., observed" ........... so that

the Government can indulge in some kind of chest beating exercise and say that

we have got them all working now and they were not working before. It is very

deliberately a program directed at rehabilitation so as that great goal can be

achieved that is referred to by so many observers and experts in the field of

penology. That is, making prisoners come out of the system better people than

when they went in ready to resume a law abiding life with skills that they did not

have when first they entered the prison system."

In the context of the above a very clear and definite Correctional Industry

philosophy has been developed. That philosophy underpins a comprehensive

program of Correctional Industry revitalisation, and provides an optimised

implementation of policy parameters embracing:

a) Inmate Rehabilitation

i) To develop the 'work ethic'

ii) To develop vocationaiMe skills of inmates complimentary to

education/training programs;

as a basis of enhancing:

a) Correctional Industries employment, and

b) Post-release employment.

Date: 1/93 Signature· File: 86/403 Page: 1

C S I POLICY MANUAL

b) Correctional Centre Management

i) To enhance the personal development and employment skills of

inmates.

ii) To alleviate boredom and/or the pursuit of undesirable activities.

iii) To provide labour to facilitate various Correctional Centre Services

functions.

c) Economic

i) To enable inmates to contribute to reducing the cost of their

incarceration.

ii) To maximise the self-sufficiency of Institutions.

iii) To select and manage Correctional Industries which in connection

with other objectives will provide a satisfactory economic return as

a basis of reducing public funding of Correctional Services.

d) Community Expectations

i) To provide work responsibilities to all inmates to meet community

expectations and reduce the need for public funding of

Correctional Services.

ii) By the provision of inmate workers undertake community projects

as a means of enhancing the public perception of Corrections.


Ql~ 'CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

1.2 CORRECTIONAL INDUSTRY DEFINITION

Correctional Industry is provided through Correctional Centre Services functions, a

diverse range of commercially based business units trading as "Corrective Services

Industries (CSI)" and Community Projects.

i) Correctional Centre Services

Date: 1/93 ..

Inmates carry out a wide range of Services functions such as catering,

laundering, landscaping, building maintenance and construction.

It is unfortunate that over the last two decades a great deal of 'feather

bedding' has been allowed to occur in this area of inmate work. Many

positions have not provided 'full-time' work responsibilities nor in many

cases has an adequate degree of supervision been provided to ensure

inmates are gainfully employed.

Also there has been a reluctance within the Department to maximise

inmate involvement in a number of functions. A clear example is the

area of building maintenance and construction where despite outstanding

examples of what can be achieved, resistance to inmate involvement,

has been apparent. Similar comment could be made in respect of

effective Correctional Centre housekeeping.

Every effort is now being made to remedy this position. Positions of

Assistant Superintendent of Industries (Inmate Employment) have a

clear responsibility to more effectively co-ordinate the utilisation of

inmate labour on inmate Services functions.

Signature· File: 86/403 Page: 1

Ql~ ~CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

ii) Corrective Services Industries (C.S.I.)

CSI commercial based business units within Correctional Centres are

structured through seven (7) business divisions, namely:

'Cormet' Metal Products

'Corturn'- Timber Products

'Correctprint' Printing Products

'Cortex' Textiles, Canvas, Leather

'Corcover' Upholstery Products

'Gencor' General Services

'Agricor' Agricultural Services

Each Business Unit provides responsibilities to inmates which replicate commercial

operating expectations in relation to work habits, output and quality assurance.

The business division concept has an important role in linking a marketing strategy

which can successfully optimise the competing demands of Correctional Industry

operation. Also the linking of each business unit through a business division structure

provides a co-ordination of vocational pursuits to enable inmates to gain progressive

skill development as they 'track' through security classifications.

A range of Private Sector business units (PSBU) models are now in operation under

the auspices of Corrective Services Industries co-ordination and assistance. The

establishment of the M.l. Manufacturing (PSBU) at Muswellbrook in February, ; 991

represented the first pure (PSBU) to be established in Australia.

Date: 1/93 Signature: File: 86/403 Page: 2

C S I POLICY MANUAL

iii) Community Projects

Date: 1/93

There is little doubt that extensive, creative and effective work programs

can be devised for inmates through community projects. Importantly

these programs provide unique opportunities for inmate development

whilst eQhancing the public perception of Corrections.

A pilot road maintenance program was introduced at Glen Innes

Afforestation Camp utilising inmates on various highway maintenance

projects e.g. painting of guide posts, weed control and rubbish removal.

The Roads and Traffic Authority remunerates the Department of

Corrective Services for these services. Further it is expected these

services will be extended throughout the State.

Other services such as park and cemetery maintenance and

construction projects have been carried out on a voluntary basis.

Expansion of community based work programs is to be encouraged.

File: 86/403 Page: 3

C S I POLICY MANUAL

PRISONER VOCATIONAL DEVELOPMENT POLICY

The Prisoner Vocational Development Policy endorsed by the Corrections Corporate

Council allows for prisoners to acquire pre-employment skills to assist employment

while in the Prison system and on re-entry to the community.

Implementation of the policy reinforces the importance of prisoner vocational

development to the effectiveness of Prison Industries and in particular in implementing

aspects of Prison Industry commercialisation. Vocational development encompasses

a range of skills designed to assist prisoners to acquire good work habits and a work

history. These skills include basic literacy{numeracy, self worth, how to become

employed and how to stay employed and therefore become financially independent.

Employment position vacancies in Prisons will be advertised on notice boards and

prisoners will fill out a job application form to apply for the vacant positions. After

applications are received, the normal interview process will then be followed and the

positions allocated on the basis of the results of the interviews. The Program will run

complementary to basic education and in liaison with Education staff.

The Policy will be introduced progressively over a two-year period with different

aspects being introduced concurrently in different Institutions.

The content of the Policy is:

1. Vocational training should be based on the needs of:

1/92

i)

ii)

iii)

iv)

Prisoners

Prison Industries

Community employment shortages

Case management recommendations

C S I POLICY MANUAL

2. Vocational development should give inmates the opportunity to acquire

employment or technical skills:

i) For employment during term of imprisonment

ii) For employment after release

-3. Inmates should be trained to prepare for employment by learning the skills

required to gain and hold employment. Other vocational training should be

technically-based and related to Prison Industries.

4. To encourage self-development by:

i) Developing a work ethic/pre-work skills

ii) Building self esteem

5. To train inmates to become commercially viable employees.

6. Vocational training should allow for inmates to expand their work skills and

continue training when they move to a lower security Institution.

7. Vocational training should give inmates accreditation recognisable and

acceptable in the community e.g. T.A.F.E.

8. Provide for vocational training for inmates with special problems e.g.

developmentally disabled, Aboriginal inmates, young offenders and protection

prisoners.

9. Provide a safe working environment for all workers.

10. Provide training in the Desk-top service industries.

2/91

~~'CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

11. Vocational development programs should be continually monitored and

evaluated.

12. Prison Industries Officers will have access to in-service training to give them the

skills necessary to assist with the implementation of the Program.

2/91

CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

1.4 SERVICE INDUSTRIES - POLICY

The primary objective of inmate employment is to maintain the self-sufficiency of -

the Correctional system. This must be accomplished in a manner which provides

meaningful employment opportunities for inmates and which is functionally and

economically viable.

A traditional range of functions have been embraced by Service Industries

employment i.e. catering, cleaning, ground maintenance, building maintenance,

capital works, laundering etc.

Service Industries employment forms part of the inmate employment profile for

each Correctional Centre. The profile provides a formal basis upon which

Institution inmate employment requirements can be quantified and evaluated. The

profile also provides the formal basis to substantiate inmate wage payments and

the contribution of Service Industries employment to Correctional Industry policy

objectives.

Each Service Industries work position is to be covered by a formal job description

which is utilised to provide details of work expectations to inmates and to evaluate

inmate performance.

Date: 6/93 File: 91/699 Page: 1

C S I POLICY MANUAL

Service Industries employment is to be supported by application of the inmate

vocational development policy covering employability and technical skills training.

In implementing this policy, Institutional personnel are to recognise the priority

expectation to sustain absolute professionalism in the presentation of Correctional

Centres through effective housekeeping and preventative maintenance.

Responsibility for the implementation of this policy at an Institutional level rests with

the Assistant Superintendent of Industries (Inmate Employment) through the

Governor. Assistant Superintendents of Industries (Inmate Employment) are

responsible for submitting quarterly status reports to CSI Business Managers on

the achievement of these policy expectations.

CSI Business Managers (attached to Chief Superintendents) are responsible for

oversighting implementation of this policy and review of status reports.

Date: 6/93 Signature: File: 91/699 Page: 2 I I

[

J I f

C S I POLICY MANUAL

OCCUPATIONAL HEALTH AND SAFETY

Corrective Services Industries provides total commitment to the development and

implementation of Occupational Health and Safety policies and practices which

recognise statutory and moral responsibilities to Officers, Prisoners and members

of the Public.

The aim of Occupational Health and Safety programs is to identify, remove and

control the causes of accidents and health hazards at the workplace. Managers

and Supervising Officers in particular, have an explicit ongoing responsibility to

continually assess the status of safety and health in the workplace.

This assessment is expected to result in the establishment of safety education,

promotion and training programs for the information and implementation of staff

and prisoners. The Occupational Health and Safety Unit of the Department of

Corrective Services has published and has available an information brochure

specifically aimed at the responsibilities of Supervisors.

Operating practices, which will safeguard all employees and result in safe working

conditions and efficient operations must be followed. The performance of individual

Business Units will indeed be judged, in part, on the elimination and restriction of

accidents and health hazards in the workplace.

'OCCUPATIONAL HEALTH & SAFETY IS EVERYONE'S RESPONSIBILITY.'

5/91

al~ ICORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAl

1.6 CSI BUSINESS UNIT - EST ABUSHMENT

In establishing inmate work positions the first priority is to maximise the effective,

efficient and economical self-sufficiency of the Correctional system. The Services

Industries Policy Statement (Section 1.4) specifically deals with this priority.

Inmate work positions represented by the variance between the Correctional Centre

population and work positions provided by Service Industries need to be provided

through CSI Business Units.

The creation of CSI Business Units historically has been carried out on an

extremely adhoc basis. As a result, a diverse functional range of Business Units

have been established which on some occasions have failed to fulfil CSI policy

objectives or reflected market relevance. These units are being progressively

rationalised.


C S I POLICY MANUAl

The establishment of CSI Business Units embraces a range of complex

considerations including:

*

*

*

*

*

*

*

*

*

*

Inmate employment profile requirement

Priority to Private Sector Correctional Industry

Vocational configuration relevance

Labour intensity

Capital infrastructure and fitout requirements

Marketing opportunities and continuity

Inmate classification implications which impact technical competency

Economic evaluation

Institutional management commitment and interface

Assessment of interface with business/labour

Infrastructure support implications

The identification of viable and continuing market opportunities is of overriding

importance in considering the establishment of CSI Business Units. Indeed, this

process has material implications in the ultimate success of the Business Unit. It is

therefore absolutely imperative that market opportunities be identified which

satisfactorily match all of the above considerations.

The establishment of CSI Business Units may only be effected upon approval by

the Director, CSI to ensure establishment policy parameters and ongoing funding

requirements are recognised and provided for. A separate policy statement

providing priority to Private Sector Correctional Industry establishment should be

read in conjunction with this document.

i/J Date: 6/93 Signature: J /u.... ~ File: 93/0067 Page: 2

C S I POLICY MANUAL

1. 7 QUALITY POLICY STATEMENT

Corrective Services Industries (CSI) is the corporate name of over (80) eighty

commercial business units operating throughout the New South Wales Correctional

Centres.

CSI business units embrace manufacturing and service based pursuits including

fabrication of Metal, Timber, Plastic, Textile and Upholstery Products and provision

of Printing, Bookbinding, Data Entry and Packaging services. CSI business units

operate through a number of business divisions trading as Cormet, Corfurn, Cortex,

Gencor, Agricor, Correctprint and Corcover.

The CSI Corporate Office of the Department of Corrective Services, under the

direction of the Director, CSI is responsible for the overall direction and

coordination of operation of CSI business units.

CSI maintains a capability to design, develop and fabricate products principally for

Government Departments on a contract basis and directly to the Private Sector.

Australian Standard (AS) 3902 - 1 987 has been adopted as the model for the

internal quality systems applying to Corrective Services Industries operations.

This standard embraces quality syst for production and installation.


C S I POLICY MANUAL

CSI has an unequivocal commitment to servicing customer needs and wherever

possible to be an extension of our customers marketing capability.

The CSI Quality Policy Manual is designed to assist effective communication with

our customers as well as providing direct guidance to CSI personnel in the

development and operation of quality systems.

The Manager, Business Development is directly responsible for implementing a

hierarchy of authority to systematically reduce quality risks throughout the

organisation. Adherence to our quality systems Is the responsibility of all

personnel and is a condition of employment. Quality System Audits are furnished

to the Director, CSI without intermediary.

The CSI approach to Quality is dynamic in order to control the changes which

reflect the development of the organisation. CSI emphasis is to ensure customer

satisfaction as a natural consequence of the control over all aspects of operations.

Date: 3/93 Sigoarucef)f2 File: 92/0402 Page: 2

C S I POLICY MANUAL

1.8 CORRUPTION PREVENTION

Corrective Services Industries is a dynamic customer oriented enterprise. At all

times CSI staff have an unequivocal responsibility to ensure that their activities are

carried out in accord with the law and with the highest ethical standards of

business conduct.

As an important component of CSI Corruption Prevention all staff are to be

acquainted with the CSI Standards of Business Conduct included within the

attached policy direction.

CSI managerial staff including Regional Commanders, Director, Manager, Business

Development, Commercial Manager, Governors, CSI Business Managers, CSI

Operations Managers and CSI staff working within private sector business units are

to ensure that all staff under their control are aware of the standards of business

conduct. Further, those managerial staff are to ensure that all CSI personnel upon

appointment are provided with a copy of the Standards of Business Conduct and

have signed a copy in accord with the declaration shown. These declarations are

required to be re-signed each six months at the 31st March and 30th September.

Managerial staff are required to retain copies of the signed declaration in secure

storage. On an ongoing basis CSI managerial staff are to remain alert at possible

breaches or compromise of the standards of business conduct expected. Where

by declaration or other sources it is known that an employee may have a conflict of

interest, the onus is upon managerial staff to make further enquiries. This may

include commercial reference checks to ascertain whether a particular employee

retains an interest in a Company or Trading organisation.

Date: 6/93 Signature:YJ~ File: 92/0062 Page: 1


C S I POLICY MANUAL

In addition CSI Managerial Staff are to be vigilant in their supervision of the

following areas:

1. Staff Recruitment

Recruitment orcsl permanent staff is to be carried out in accord with the

requirements of the Public Sector Management Act, the Personnel

Handbook and Departmental procedures.

a) The recruitment of CSI contract staff is to be in accord with Departmental

procedures. The selection of contract agencies or individual contracted

personnel is to be in accord with supply procurement regulations under the

Public Sector Management Act and sound commercial judgement. A

verification check is required to ensure the prospective contractor does not

have a conflict of interest. At the time of selection firm arrangements are

required regarding the assignment requirements and performance

expectations, hours of duty, scheduled rates and indemnity for the

Department in relation to public risk and workers compensation insurance.

b) CSI permanent, temporary or contracted staff are to be provided with a copy

of the Standards of Business Conduct prior to appointment. Potential staff

or contracted staff are to be questioned at the time of employment offer to

ensure their employment will not breach the Standards of Business Conduct.

c) In accord with this policy, a signed declaration is to be obtained from

permanent, temporary or contracted employees immediately upon

appointment.

Date: 6/93 File: 92/0062 Page: 2

C S I POLICY MANUAL

2. CSI Assets including Plant, Equipment and Motor Vehicles

a) The procurement of plant and equipment is to be in accord with the

provisions of the Public Sector Management Act, State Contracts Control

Board directions and Departmental procedures.

b) Plant and equipment is only to be acquired after necessary approval by

delegated officers possessing financial delegation and the authority to incur

expenditure.

c) CSI assets are to be used for official purposes only. Under no

circumstances whatsoever are CSI assets to be utilised for personal gain.

CSI managerial staff are in particular to be conscious that CSI assets are

not used by staff or others to support secondary employment.

d) CSI managerial staff are to ensure that periodic stocktakes of Assets are

undertaken in accord with provisions of the CSI Policy Manual to verify the

security of Assets.

e) Disposal of CSI assets is to be strictly in accord with the requirements of the

Public Sector Management Act and Departmental procedures. Disposal may

only be affected after approval by delegated approving Officers.

3. Purchases

a) Procurement of CSI supply and services requirements is to be in accord with

the Public Sector Management Act and associated regulations, State

Contracts Control Board Directions and Departmental procedures.

Date: 6/93 s;,, •• ,.~ File: 92/0062 Page: 3

\

~~ ICORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

b) The procurement of CSI supplies and services is to be approved by an

officer possessing appropriate delegation.

c) Delegated approving officers are to conscientiously review all purchases to

ensure such purchases are for CSI official use only.

d) CSI managerial staff are to ensure that periodic checks are made to verify

that CSI supplies and services are being utilised for official purposes only

and are properly accounted for.

e) CSI managerial staff are to ensure stocktakes of CSI supply and services

are periodically undertaken in accord with statutory requirements and

procedures included within the CSI Policy Manual.

4. CSI Business Unit Activities

a) Utilisation of CSI Business Unit productive capacity is for official purposes

only.

b) Under no circumstances whatsoever is any job to be undertaken within a

CSI Business Unit without proper formal authority. There is no exception to

this provision.

c) All work carried out within CSI Business Units must be costed in accord with

CSI pricing policy and properly accounted for through a charge invoice.

d) CSI managerial staff are to periodically inspect CSI Business Units to ensure

that no work is being undertaken without authority and which would not give

rise to the issue of a charge 1{r1voice.

Date: 6/93 Signature:]!~ File: 92/0062 Page:4


C S I POLICY MANUAL

e) CSI managerial staff are to in particular be vigilant to ensure that preferential

treatment is not given to members of staff or their associates in the pricing

of supplies and services. A typical example would be where a product is

made where it is suggested that 'off.cuts' are being utilised to minimise job

cost.

f) CSI managerial staff are to ensure that satisfactory internal controls are in

place to safeguard against the misuse or misappropriation of CSI Assets.

This particularly embraces local procedures governing the issue of customer

credits for disputed charges.

g) Adequate arrangements are required to ensure controls are in place to

prevent CSI products and services being transported/made available from

Institutions without proper sale documentation.

h) CSI managerial staff are to provide vigilant oversight that staff working within

private sector business units are not compromising the interests of CSI or

the broader public benefit.

All staff are to ensure that in dealing with existing or potential customers absolute

sensitivity and sensible discretion is applied to the release of information, in

particular costing details. This is to ensure that CSI negotiates the most favourable

economic arrangements having regard to commercial acumen and 'public interest'

accountability intentions.

Any further information or assistance which is required in relation to this policy may

be obtained from the Assistant Commissioner, Operations, the Director, CSI or

Regional Commanders.

Date: 6/93 Signature: (l'l-j_,',~~t------.1 File: 92/0062 Page: 5 l

C S I POLICY MANUAL

CORRUPTION PREVENTION

STANDARDS OF BUSINESS CONDUCT FOR CSISTAFF

Policy:

The operations of Corrective Services Industries are at all times to be conducted

in accordance with the law and in accordance with the highest ethical standards.

The public interest requires a commitment to an adherence to these Standards of

Business Conduct and it is the responsibility of all CSI staff to ensure that this

policy is faithfully applied. Public confidence in the integrity and probity of

Corrective Services Industries is critical to the effective administration and

operation of Prison Industries.

These Standards of Business Conduct, in conjunction with Corrective Services

Industries vision, mission and goals, provide a framework of broad principles

which will assist to avoid or resolve any impropriety or conflict of interest.

CSI staff are also expected to comply with the Department of Corrective Services

"Standards of Conduct and Behaviour".

Compliance with Law:

Corrective Services Industries operates within the same legal and regulatory

framework that affects all other business activity. All company law (both State and

Federal), business regulations, environmental law and consumer protection law

applies to Corrective Services Industries.

5/92


C S I POLICY MANUAL

Particularly because CSI markets a wide range of products and services and

competes in the market place with other organisations, the provisions of sales tax

legislation and of the Trade Practices Act must be adhered to.

Additionally, Corrective Services Industries staff are subject to the provisions of

the Public Finance and Audit Act which regulates financial management within the

New South Wales Public Service.

Conflicts of Interest:

Private interests and pursuits of CSI staff must be regulated to ensure that there is

no conflict, or the appearance of conflict, with public duty or activity which might

inhibit or appear to inhibit impartial business judgement. Formal approval must be

sought through Supervising staff in all cases where any business relationship,

appointment, consultancy, or acquisition might result in a breach of this policy or

might provide a public perception of a breach of this policy.

Competitive Corporate Information:

Competitive Corporate information, such as pricing policy or marketing strategies,

must be treated with appropriate confidentiality and privacy.

Inside Information:

In some circumstances the use of inside information for personal gain is specifically

prohibited by legislation. This is the case, for example, in regard to dealings with

company securities.

5/92

C S I POLICY MANUAL

Information which is not public, concerning the activities or plans of Corrective

Services Industries, shall only be used lor CSI purposes and is not to be used for

personal gain.

Similarly, seeking to take advantage for personal reasons of another person, or to

gossip, on the basis of personal or other information held in official records, would

be deemed a misuse of official information.

Improper Payments:

Any payment made to a third party, such as an agent or a consultant, in connection

with the obtaining of any order or benefit for Corrective Services Industries shall

be no more than an amount which by normal commercial standards would be

properly and openly payable for the services rendered by the third party. Any

payment or benefit in the nature of a bribe or kick-back is contrary to Corporate

policy and strictly prohibited.

Gifts and Gratuities:

CSI staff are not to give or receive monetary or other gifts, personal favours or

gratuities in connection with the business of Corrective Services Industries,

except items of nominal value and reasonable and authorised business related

expenditure in accordance with Corporate customer liaison policy. All situations are

to be avoided in which the appearance is created that a benefit is being received.

Accounts and Records:

All transactions of Corrective Services Industries shall be properly entered in the

Corporate and Business Unit records and accounts, and no false, misleading or

artificial entries shall be made for any reason.

5/92

Policy:

~~ ICORREcnvc ~ SERVICES !NOUSTR!ES

STANDARDS OF BUSINESS CONDUCT FOR CSISTAFF

The operations of Corrective Services Industries are at all times to be conducted in accordance with the law and in accordance with the highest ethical standards.

The public interest requires a commitment to an adherence to these Standards of Business Conduct and it is the responsibility of all CS! staff to ensure that this policy is faithfully applied. Public confidence in the integrity and probity of Corrective Services Industries is critical to the effective administration and operation of Prison Industries.

These Standards of Business Conduct, in conjunction with Corrective Services Industries vision, mission and goals, provide a framework of broad prindples which will assist to avoid or resolve any impropriety or conflict of interest.

est staff are also expected to comply with the Department of Corrective Services MStandards of Conduct and Behaviour~.

Compliance with Law: Corrective Services Industries operates within the same legal and regulatory framework that affects all other business activity. Ali company law (both State and Federal), business regulations, environmental law and consumer protection law applies to Corrective Services Industries.

Particularly because CS! markets a wide range of products and services and competes in the market place with other organisations, the provisions of sales tax legislation and of the Trade Practices Act must be adhered to.

Additionally, Corrective Services Industries staff are subject to the provisions of the Public Finance and Audit Act which regulates financial management within the New South Wales Public Service.

Conflicts of Interest: Private interests and pursuits of CS! staff must be regulated to ensure that there is no conflict, or the appearance of conflict, with public duty or activity which might inhibit or appear to inhibit impartial business judgement. Fonnal approval must be sought through Supervising staff in ail cases where any business relationship, appointment, consultancy, or acquisition might result in a breach of this policy or might provide a public perception of a breach of this policy.

Competitive Corporate Information: Competitive Corporate infonnation, such as pricing policy or marketing strategies, must be treated with appropriate confidentiality and privacy.

Inside Information: in some circumstances the use of inside infonnation for personal gain is specifically prohibited by legislation. This is the case, for example, in regard to dealings with company securities.

Information which is not public, concerning the activities or plans of Corrective Services Industries, shall only be used for CSI purposes and is not to be used for personal gain.

Similarly, seeking to take advantage for personal reasons of another person, or to gossip, on the basis of personal or other information held in official records, would be deemed a misuse of official infonnation.

Improper Payments: Any payment made to a third party, such as an agent or a consultant, in connection with the obtaining of any order or benefit tor Corrective Services Industries shall be no more than an amount which by normal commercial standards would be property and openly payable for the services rendered by the third party. Any payment or benefit in the nature of a bribe or kick-back is contrary to Corporate policy and strictly prohibited.

Gifts and Gratuities: CSI staff are not to give or receive monetary or other gifts, personal favours or gratuities in connection with the business of Corrective Services Industries, except items of nominal value and reasonable and authorised business related expenditure in accordance with Corporate customer liaison policy. Ail situations are to be avoided in which the appearance is created that a benefit is being received.

Accounts and Records: AU transactions of Corrective Services Industries shall be property entered in the Corporate and Business Unit records and accounts, and no false, misleading or artifidal entries shall be made for any reason.

I have read and noted the above policy and declare that I am not engaged in any activity which is in conflict with the above policy. In the event that any occurrence arises which would compromise the above standards 1 undertake to infonn my Supervising Officer.

Signed: ................ .

Date: ............. .

C S I POLICY MANUAL

1.9 COMMUNITY EMPLOYMENT

Correctional Industry plays a pivotal role in the rehabilitation of inmates ,and _.;

facilitating the effective management of Correctional Centres. Correctional IndUstry

philosophy is covered within the CSI Policy Manual, section 1.1.

Community employment, through work experience, training and employment

endeavours, plays a critical role in providing an overall hierarchy of development

programs for inmates. In particular, community employment of inmates supports

education, vocational and work programs provided to inmates in custody. 'Real

world' community based endeavours, towards the end of a sentence, consequently

provides relevant and meaningful opportunities for inmates essential in preparing

their return to the community.

The following specific policy objectives underpin community employment programs:

a) To assist implementation of case management principles and provide a

continuity of inmate development activity through community based 'real

world' training and employment opportunities.

b) To enhance the opportunity tor inmate post-release employment and by

extension reduce the likelihood of inmate recidivism.

c) To facilitate the reduction of public sector infrastructure involved in the

provision of inmate development services.

d) To provide the opportunity for inmates to contribute to reducing the cost of

their incarceration.


C S I POLICY MANUAL

e) To provide the opportunity to enhance the public perception and

understanding of Corrections.

Participation of inmates within community employment programs must be viewed

by Program Review Committees as representing the final development privilege for

inmates prior to release. Inmate inclusion within community employment programs

must arise from a history of positive participation in programs emanating from

application of case management principles. Inmates with a chronically poor history

of participation in education and work programs should not be permitted to

participate in community employment programs.

The successful development and operation of community employment programs

necessitates close liaison with other agencies. In particular, the Commonwealth

Department of Employment, Education and Training (DEET) has significant human

and resource material support available to complement community employment

programs through training and employment sourcing. Continuing liaison with DEET

is required at Corporate, Regional and Correctional Centre level to ensure that the

availability of Commonwealth resources is taken up to fulfil program objectives.

A range of other policy implications arise from community employment programs.

These include:

*

•

Security and classification - covered within Inmate Classification Policy

manual.

Sourcing of employment- covered within CSI Policy Manual section 4.9 .

Responsibility for organisational oversight of community employment programs

rests with the Director, Corrective Services Industries and this is reflected through

CSI Policy Manual, section 2. i.


{jlj CORRECTIVE SERVICES INOUS1RIES POLICY MANUAl

2.1 ORGANISATIONAL HIERARCHY

The Corrective Services Industries (CSI) Division is responsible for

implementing the expectations of the New South Wales Government covering

inmate work.

Responsibility for the direction, management and operation of the Division and for

the overall oversight of CSI rests with the Director, Corrective Services Industries

who reports to the Assistant Commissioner (Operations).

The Corrective Services Industries Division comprises two Branches viz;

Business and Operations Development and Commercial. Each Branch is under

the control of the Manager, Business and Operations Development and

Commercial Manager respectively.

The functions of these Branches are as follows:

BUSINESS AND OPERATIONS DEVELOPMENT

To provide Corporate direction in matching existing and future Corrective

Services Industries productive capacity with marketing opportunities; to provide

a coordinated servicing of customer requirements; and to provide technical and

operations support.

COMMERCIAL

To develop, implement and maintain a commercial infrastructure to support the

CSI Industries Division and CSI Business Units.

The Director, CSI is also responsible for the direction, development and oversight

of Community Employment programs including assistance in the sourcing of

community employment opportunities for inmates.

Date: 1/94 File: 93/0003 Page: 1

I

{ill CORRKTIVE SERVICES INDUSTRIES POLICY MANUAL

The overall direction and functions of the Department of Corrective Services are

set out in published corporate and strategic plans. A business plan for the

Corrective Services Industries Division coupled with Branch plans are prepared

annually.

The ongoing co-ordination of functions of the Department is maintained through

the Departments organisational chain of command and, meetings of the

Executive (including Asst. Commissioners) Senior Officers Meetings and

Regional Commanders (incl. Director, CSI) Meetings.

A Corrective Services Industries Division Executive Committee comprising

the - Director, Manager Business and Operational Development, Commercial

Manager and Business Development Manager meets each Tuesday to monitor,

review and set implementation of strategic objectives.

Responsibility for CSI operations rests with the Governors of Correctional

Centres through their respective Regional Commanders. Within a 'friendly'

Correctional interface the commercial endeavours of CSI are the responsibility of

Correctional Centre staff, through CSI Regional Business Managers and

ultimately, to the Director, CSI.

The CSI Corporate Management Group has the function of co-ordinating and

monitoring the overall management of Corrective Services Industries policy

and implementation issues. The group comprises senior members of the

Corrective Services Industries Division and CSI Business Managers. The

Group meets monthly.

The CSI Operations Management Group which also includes Managers of CSI

Industries meets twice each year and operates as a communication, team

building and business planning forum.

I Date: 1194 File: 9310003

Page: 2

Schedules attached include:

~POliCY MANUAl *

*

*

*

I Date: 1/94

Departmental Organisational Chart

CSI Division Organisational Chart

CSI Accountability Structure

CSI Planning Hierarchy Chart

File: 93/0003 Page: 3

,,·0'"''

Db:.·\.i'HMENT OF CORRECTIVb .-c:RVICES ORGANISATION STRUCTURE

Commissioner

Chief Superintendent Director, Audit Investigations and Security

Executive Support

Deputy Commissioner

I I I Assistant Commissioner Assistant Commissioner Assistant Commissioner,

Support Services: Operations: Personnel and Education: \

• Four operational Regions • Finance/Budge! • Corrective Services • Capital Works • Corrective Services Academy • legal Services Industries • Education • Adm!nislratlve Services • Classification and • Personnel Services • Information Systems Prisoner Movement • Industrial Relations

• Prisoner Development • SES Administration Director, Co-ordination,

Planning and Policy:

• Corporate Plan • Five Year Plan • Planning and Policy • Research • Annual Report • Program Evaluation • Ministerial correspond-

ence and co-ordination • Public Relations

I

l CREDIT

-~ONTROLLER

,-'I CREDIT

CONTROL L.- CLERK

__ ! ____ _

CORPORATE OFFICE

STAFF ESTABLISHMENT . - -

DIRECTOR CSI

~-- ·-···-···~---·---·-···-·--·---------------------~----- ... --

' i

\coMMERCIAL il

L:~~-~-~~: __ J !

__ L_ ________ ~ ,---·· ,----·-__]_ _____ ,

{"'"""-" --------····

\ MANAGER i BUS/CPS 1 I ' L. DEV~.J

I

COR REGIVE SERVICES INDUSTRIES

-----,

~INANCIAL l I ACCOUNTANT I

'

~----· I EXECUTIVE I

~~~TANT I ····i§LJ I BUSINESS I

i DEVELOP . . MANAGER [ --r

TECHNICALi SUPPORT ! OFFICER_j

[ __ 1 --·1

I WAREHOUSE I

~ER f--i-' I

- J !

I

,~-i

I CORTEX i I OPERATIONS[

MANAGER '

:::~~ I RECEP~

DiSBUR;~l [CONTROLLER I

11 DI2Rs~l

I CLERK I '--

__ j_ ___ ,

DATA 1

1

'

ENTRY OPERATOR!

PERSONAL ASSISTANT

TO MANAGER

BD/CM

I,

[

CUSTOM LIAISON OFFICER J CUSTOMER

liAISON L CLERK

,--J~ I CORTEX I

i OFFICER I

LSUTIER I

~ F

l__, ,_L __ 1 )PLy I CORTEX ~ l~FFIC5

,----~-------------------------------j'

i COR~EX ' I PRODUCTION I MANrGER !

I

I CO~T~~ 1 OFFICER j' i TAILOR

---,

I coRr~x-l I OFFICER i 1 DATA INPUt

JANUARY 1994

1 COMMUNITY

I EMPLOYMENT PROGRAMS

I


ACCOUNTABILITY STRUCTURE

MINISTER

I COMMISSIONER

I DEPUTY CORRECTIVE SERVICES

INDUSTRIES CONSULTATIVE COMMISSIONER COUNCIL

I ASSISTANT

COMMISSIONER (OPERATIONS)

I I I

DIRECTOR ------- REGIONAL COMMANDERS C.S.I.

I I I

MANAGER CSI COMMERCIAL BUSINESS

MANAGER 1-- BUSINESS CORRECTIONAL AND OPERATIONS MANAGERS

i DEVELOPMENT CENTRES I I

L ______ L--------~-----~ GOVERNORS

I MANAGERS

OF INDUSTRIES

I I

SERVICE CSI INDUSTRIES BUSINESS UNITS

I I I '

Department of Dept. Policy Manual Corrective Services Corporate Plan

Strategic Plan Executive Group Senior Officers Meeting Regional Commanders Meeting

Corrective CSI Policy Manual Services CSI Business Plan (i) Industries (CSI) CSI Executive Committee (H)

CSI Corp. M'ment. Group (iii) CSJ Operations Management

Group (iv)

~

i) Annual ii) Weekly iii) Monthly iv) Six Monthly

CSI PLANNING HIERARCHY CHART

Security -Community, Staff & Inmate Protection

Dynamic Security - Area Management

Rehabilitation -Work -Education - Professional

Services

Work Programs - Case Management - Structured Day

KEY

Corporate Support

Commercial Ethos

STRATEGIES -Business Planning Process

I ~-Inmate Service lnd/ Business CSICC -~- ) Employment CSI b/unil Development COMMERCIAL

(1\\ CORREG!VE SERVICES INDUSTRIES

Planning & Profiles Vocational Capacity Marketing Customer Promotion Finance Systems HRM cahital Status Grid I Development Analysis Plan Service \

Tar~ets Job Loa~ing Malrketing Mo~thly Promotions

I Devtopment I \ Annual Costing Prof. Dev. Asset Budgeting Review Strategies M'ment

Mo1nthly I J

Reports Pricing OH & S

Review Descriptions Commitment Plan Reports Strategy I I Committees ~~ I (Monthly) Variance/ Action

Utilisation Plans I

Reporting

I Analysis

Ql~ ICORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

FINANCIAL DELEGATIONS OF AUTHORITY

The Premier and Treasurer approved from the 1st of July, 1990 the removal of

Corrective Services Industries funding arrangements from the Department

of Corrective Services Recurrent Funding Budget.

In short this simply means that all expenditure made on behalf of Corrective

Services Industries trading operations is required to be met from income

generated. A key strategic objective for Corrective Services Industries is to

absorb within the next 5 years all expenditure, including salaries of Corrective

Services Industries staff, direct from income generated.

The process of introducing a Working Account and envisaged enhanced financial

performance requires a whole new financial discipline to be adopted. In particular

this insists that a comprehensive and continuing cash management policy be

implemented.

Financial delegations covering operation of the Corrective Services Industries

Working Account were recently reviewed and revised delegations have been

approved by the Minister and reflect the above principles.

The financial delegations are shown as follows:

3/92

I I

C S I POLICY MANUAL

CORRECTIVE SERVICES INDUSTRIES WORKING ACCOUNT FINANCIAL DELEGATIONS

SERVICE DELEGATION DELEGATION LIMIT

1.

2.

3.

All expenditure related to approved . development and operation of Corrective Services Industries.

Purchase of plant and equipment

Purchase of raw materials, consumables

Executive Director, Corrective Services Industries

Manager, Business Development

Commercial Manager

Chief Superintendent

CSI Business Manager

Superintendent Manager CSI



Superintendent CSI Business Manager

Deputy Superintendent CSI Manager

ASI Prisoner Employment, Cooma, Glen Innes, Mannus, Maitland

) ) )

) )

Allocation specified in Corrective Services Industries budget.

$10,000

$5,000

$3,000

$1,000

$25,000

$10,000

$5,000

$3,000

$1,500

l '

4.

5.

6.

7.

8.

C S I POLICY MANUAL

Purchase of Livestock

Procurement of materials, consumables, services and incidentals related to Corrective Services Industries marketing

Payment of prisoner wages

Payment of salaries and on-costs

Payment of operational overheads

2





) ) )

Business Development ) Officer )

Chief Superintendent )


Promotions Officer

Manager, Business ) Development )

Commercial Manager ) Chief Superintendent ) CSI Business Manager ) Superintendent ) Deputy Superintendent ) CSI Managers ) Assistant Superintendent ) Industries, Cooma, Glen ) Innes, Maitland, Mannus )



Commercial Manager

) ) )

$10,000

$3,000

$10,000

$3,000

$2,000

$1,000

Allocation specified for prisoner wages.

Allocation specified for salaries.

$10,000

C S I POLICY MANUAL

4.1 MARKETING POLICY

Correctional Industry provides a fundamental role in:

*

*

*

The rehabilitation of inmates to enhance the opportunity for post-release

employment and to reduce inmate recidivism.

Effective Correctional Centre management.

Reducing the burden upon the taxpayer of providing Correctional Services.

The first priority of Correctional Industries is to sustain the self-sufficiency of the

Correctional system wherever this can be realistically achieved. This includes

functions such as catering, building maintenance and construction, laundering,

landscaping etc.

The remaining inmate workforce participates in the operation of commercial

based business units which trade as Corrective Services Industries (CSI). The

function of these units is to replicate the disciplines and expectations of

community based workplaces to assist inmates to acquire skills and gain and

maintain employment upon release.

Unlike Correctional Industries in other jurisdictions, CSI has no mandatory

marketbase. Work obtained by CSI arises from the market at large in response

to tender invitations and direct requests. Markets which are pursued typically

follow functions in light engineering, textile and furniture manufacture. These

functions have underpinned the CSI market base over many years.

Date: 7/93 Signature. File: 88/1106 Page: 1

'

i-

f I

I I

C S I POLICY MANUAL

The process of competing in the market at large is considered essential to

ensure that CSI is not given an unfair mandatory advantage and by competing on

the open market CSI is continually tested in relation to operating efficiency. It

also enables diversification, skills enhancement and greater Industry significance

for the skills taught and goods produced.

The pricing of CSI products and services is based on the cost of raw materials,

inmate labour and direct overheads of operation. Whilst it is recognised that CSI

does not meet a range of overheads met by private sector organisations, this

advantage is offset by a range of cost factors integrated within the CSI pricing

system which are unique to operating a commercial business within a

Correctional environment.

An independent review has validated that the CSI cost structure conforms with

applicable standards and correctly accounts for all applicable costs. The CSICC

in May, 1993 endorsed the findings and recommendations of the review.

Whilst CSI largely pursues a historical based marketing strategy, CSI

nevertheless operates within a dynamic, competitive environment. From time to

time, representations are made that CSI operations affect other businesses. It is

a reality that because CSI operates within the market at large this automatically

results in some effect to other businesses.

However, CSI strives to not unreasonably or unfairly impact upon other

businesses. A range of business development controls are in place which in turn

are monitored by the ·Corrective Services Industries Consultative Council, the

operation of which is included within Section 4.5 of the CSI Policy Manual.

/)

Date: 7/93 Signature: U f....,.__.--..---- File: 88/1106 Page: 2

I

C S I POLICY MANUAL

In seeking to minimise the impact of Corrective Services Industries on other

businesses, the following broad market parameters prevail in relation to business

development:

*

*

*

*

*

A continuation of marketing endeavours over which CSI has an historical

presence.

An emphasis upon accessing import replacement or off shore

manufacturing prevention market strategies.

Areas of business endeavour which would not affect other Australian

businesses.

Access dominant and growing Industry sectors, where there is already a

high degree of competition and marketing competitiveness.

Access emerging Industries where there is a high degree of reliance on

imported components or whole sector units and the focus is on such

imported materials and not local inputs.

The implementation of this policy is monitored by the Corrective Services

Industries Consultative Council, details of which are included in Section 4.5 of the

CSI Policy Manual.

Date: 7/93 Signature: File: 88/11 06 Page: 3

!

{ill CORREalVE SERVICES INDUSTRIES POliCY MANUAl

4.2 PRICING POLICY

4.2.1 This Policy sets out the basis upon which CSI products and services are

priced for quotation and sale purposes. CSI Policy Manual section 5.15

'Costing Policy' sets out the manner in which CSI direct costs of operation

are assessed. The Pricing Policy does not embrace private sector

involvement arrangements which are covered by specific contract

agreements.

4.2.2 The Pricing Policy relating to t,he supply of CSI products and services

embraces pricing principles employed within the private sector.

Corrective Services Industries products and services are priced at what the

market will bear subject to the total cost being recovered and to the price

falling within 'market rates' relative to the specification of the

products/services supplied.

4.2.3 The CSI product or service price incorporates:

i) Total Cost

ii) Margin

iii) Sales Tax (where applicable)

i) Total Cost

Total cost comprises:

a) Raw materials and consumables

b) Inmate labour and overheads

c) Jig/Setup manufacture

d) Transport

Date: 7/94 File: 93/0131 Page: 1

i POliCY MANUAL ii) Margin

This represents a critical area of responsibility for staff engaged in

pricing. Judgement, common sense and a sound basis for decision

must be exercised. It is stressed that staff engaged in the pricing of

CSI products/services have a fundamental responsibility to apply

margins which maximise the return of income to the Department of

Corrective Services.

iii) Sales Tax

Refer to CSI Policy Manual section 5.

4.2.4 The total cost of producing a product or service is classified into two major

elements:

1. DEVELOPMENT COSTS

Development costs are applicable if a product or service to be

manufactured or provided is not supported by drawings, detailed

specifications and/or a sample provided by the customer.

The cost is calculated using the Development Pricing Form (attached) to

ensure that the cost of development work such as the production of

drawings and sample prototypes is recovered from the client either as an

'up front' charge or amortised over the anticipated sales volume where an

order for the quantity to be amortised is received from the customer.

Development work sought by a customer must be covered by a formal

quotation for the cost of the work. Such work is not to commence prior to

the receipt of a formal order from the customer. Particular attention is to

be given to supplementary formal authority from the customer for

additional charges arising from changes to development work originally

sought.

I Date: 7/94 File: 93/0131 Page: 2

<ill CORRECTIVE SERVICES INDUSTRIES POLICY MANUAl

In the case of the CSI product range a formal request is required from the

CSI Corporate Office Business Development staff or a CSI Regional

Business Manager.

development cost.

That request is to indicate treatment of the

The following summarises detailed areas of the Development Pricing

Form:

A 1 Production of Drawings and Specification

This relates to the time required to develop drawings and

. specifications in accord with customer expectations. If

produced within a CSI business unit the calculation is based

on production time multiplied by the standard overhead hourly

rate. If a contract draftsman is utilised, the total costs are to

be charged to the customer.

A2 Prototype/Sample Costs

Prototype and sample costs include the expected material

value, labour costs and overheads associated with the

manufacture of a 'one-off item. This will be potentially higher

than standard product costs. It assumes more waste will be

generated and increased labour required since a prototype

does not have established jigs and an optimum manufacturing

process.

2. PRODUCT AND SERVICE COSTS

The Product Pricing Form (attached) identifies the following specific

requirements which are to be completed in full:

I Date: 7/94 File: 93/0131 Page: 3

i POLICY MANUAL A. Marketing/Sales Information

The customer and address

Contact Person

Telephone Number

Product with full description

Minimum order quantity (if CSI business unit has calculated

costs based on a minimum order requirement).

The approximate lead time and potential volume (either as a

one off order or annual sales).

Whether development costs are applicable.

B. Materials

Detailed as part of the Bill of Materials and includes scrap

allowance and packaging.

C. Labour

Detailed with respect to different operations and processes

(also embraces overhead recovery).

D. Jig/Setup Manufacture

Costs associated with making the jigs and setting up each

time the product is required for manufacture. This section

also takes up the development cost if to be amortised in

volume terms.

n~r~ Signature: yl J I Date: 7/94 File: 93/0131 Page: 4

E. Transport

<Ill CORREGlVE SERVICES INDUSTRIES POLICY MANUAL

Transport cost, if applicable, must identify what type of

transport will be used for the product delivery e.g. CSI

vehicles or, if more appropriate, outside contractors. The

appropriate decision on vehicle usage and charges should be

established by consultation with the CSI Warehouse

Manager. Customer pick-up of the product should be

encouraged and quoted as Free on Board (F.O.B.) on the

pricing form.

It is emphasised that the completion of all required information is

essential to fulfil CSI interests in the event of later customer dispute.

Adequate consideration and allowance must be provided to possible

fluctuations in forward pricing commitments where particularly fixed

prices are sought and where longer term production implications

may exist.

The Manager, Business Development maintains overall

responsibility for the pricing of stock items in accord with this policy.

In this regard the Cortex Operations Manager and Customer Liaison

Officer have operational responsibility for maintaining prices of

Cortex and Non-Cortex stock. items respectively. These Officers are

required to maintain price currency, including flagging contract price

variations (see CSI Policy Manual section 4.8), and for carrying out

'price audits' at 31st March and 30th September each year. The

price audit results are to be reviewed, corrective action taken where

necessary and certification provided by the Business Development

Officer.

I Date: 7/94 File: 93/0131 Page: 5

{Ill CORRKTlVE SERVICES INDUSTRIES

4.2.5 MARGINS/PRICE QUOTED

The product or service selling price is the sum of the cost

components shown in 4.2.4.1 and 4.2.4.2 plus a contribution margin

based on the following minimum predetermined levels:

Cermet

Corfurn

Cortex

Cor cover

Correctprint

Gencor

15%

15%

10%

25%

15%

15% - 30% (Application relative to CSI b/unit concerned)

In 4.2.3 (ii) the setting of margins was stressed as a critical area of

decision for staff engaged in pricing. Judgement, common sense

and a sound basis for decision must be exercised.

This policy includes a predetermined budgeted level of margin to be

applied within each CSI business division. Where this margin is not

utilised supporting comments are to be provided.

It is stressed that staff engaged in the pricing of CSI

products/services have a fundamental responsibility to apply

margins which maximise the return of income to the Department of

Corrective Services.

4.2.6 AUTHORISATION

i

This policy includes a hierarchy of authority to endorse pricing forms

based on the total value of the product or service to be provided:

Signature: v~ I Date: 719_4 ____ F_ile_: __ 9_3i_0_13_1 ___ P_a_ge_: __ 6__,

i POliCY MANUAl OIC, CSI business unit $ 1,500

' CSI Operations Manager


Business Development Officer


Director, CSI

$ 5,000

$10,000

$25,000

$100,000

Unlimited

CSI Business Managers have an ongoing responsibility to review

pricing forms to verify compliance with this policy.

Pricing forms are contained, in numerical sequence, in duplicate in a

bound accountable book. The original completed and authorised

pricing form is removed and filed with customer papers along with

any additional supporting information. The duplicate remains within

the book.

This policy also needs to be considered in relation to business

development proposals which require endorsement by the CSI

Consultative Council - refer Policy Manual section 4.5.

4.2.7 PRODUCTION TRANSFERS

Specific commercial implications apply to CSI internal transfers -

refer Policy Manual section 5.

4.2.8 CUSTOMERS

Pricing quotations must be made to customers in writing utilising the

sample Quotation Form (attached) and requesting the customer to

quote the CSI pricing form reference number. Particular attention is

to be given to the 'time lapse' of quotations 28 days after issue.

I Date: 7/94 File: 93/0131 Page: 7

C S I POLICY MANUAL

4.3 DONATIONS & SPONSORSHIPS

1. DEFINITION:

i) A donation is a request to provide CSI products or services at no

cost.

ii) A spons-orship is a request for CSI funds.

Whilst there are often sound commercial, marketing and public relations reasons

for donations and sponsorships, care must be exercised to maintain acceptable

levels of probity, commercial reality and public accountability.

In general a donation or sponsorship will only be approved where there is a net

benefit to CSI and where there is no attempt by CSI or its employees to obtain any

undue or inappropriate influence.

2. REQUESTS:

All requests for donations or sponsorships must be made on the designated form

(copy attached). This form must show: ,

i) To whom the donation or sponsorship is to be made.

ii) The precise nature of the donation or sponsorship including the

quantified cost.

iii) The benefit accruing to CSI as a result of the donation or

sponsorship.

Date: 5/93 File: 92/0176 Page: 1 Signature: ,U& )

C S I POLICY MANUAL

3. AUTHORISATION:

All donations and sponsorships are to be signed by the initiator (and certified in the

case of Department of Corrective Services applications) and endorsed for approval

by both the Manager, Business Development (for the marketing implications) and

by the Commercial Manager (for a quantification of the full cost and an analysis of

the probity of the donation).

Individual donations or sponsorships exceeding $250 in value must be approved by

the Director, Corrective Services Industries.

4. ACCOUNTING:

i) The Commercial Manager will file all approved requests for donations

and sponsorships and provide an update of expenditure and

commitments every six months to the Executive Committee.

H) The Manager, Business Development will budget a prudent level of ,

donations and sponsorships in each annual budget.

) Date: 5/93 SignatureY fl _.-- File: 92/0176 Page: 2


C S I POLICY MANUAL

4.4. CUSTOMER LIAISON/HOSPITALITY EXPENDITURE

Corrective Services Industries is a commercial business entity providing a

diverse range of products and services to the public and private sectors. CSI does

not have access to mandatory market sources. All market opportunities need to be

won on the open competitive market.

CSI therefore needs to participate in the marketplace under similar operating

parameters as other commercial enterprises. Costs· associated with legitimate

hospitality for clients and corporation officers are considered an essential expense

of a dynamic commercial enterprise.

This expenditure is deemed acceptable provided that the final result is the

achievement of increased sales turnover and profit. Examples of expenditure

classifications are:

i) Expenditure directed towards a customer: E.g. costs of

meetings, lunches or venues at which the customer and/or key

customer staff are present.

ii) Expenditure aimed indirectly towards assisting a customer:

Date: 5/93

E.g. expenditure related towards the preparation of quotations,

problem solving and general customer satisfaction. In this regard it is

not necessary for the customer or customers' representatives to be

actually present at the venue at which the expenditure is incurred.

Signature: File: 93\0043 Page: 1

C S I POLICY MANUAL

iii) Expenditure in influencing customers who are yet to be specifically

identified: Examples of expenditure on this form of customer liaison

are costs associated with marketing and strategic development

generally.

iv) Expenditure incurred in recognition of outstanding or potential

achievement by staff.

Expenditure should be carefully assessed and accounted for. In general, such

expenditure should only be incurred by senior officers of CSI and must be

adequately documented according to the following procedures.

i) Strict delegation limits apply to Officers incurring such expenditure;

members of the Executive Committee may incur expenditure up to

$100 and, where the expenditure exceeds $100, the approval of the

Executive Director is required.

ii) The requirements of this procedure are in addition to those laid down

in the Treasurer's Directions. Receipts for expenditure are required.

iii) It is not expected that junior Officers will incur customer liaison

expenses and where they do so their expense returns are to be

authorised by a member of the Executive Committee.

Date: 5/93 Signature: File: 93\0043 Page: 2

C S I POLICY MANUAL

2. AUTHORISATION:

All expenditure directed towards customer liaison which exceeds $100 is to be

documented on the attached expense form which is to be attached to the

appropriate voucher or petty cash form. This form shows:

i) What the expenditure was

ii) Who the customer was

iii) What benefit was derived by Corrective Services Industries

A member of the Executive Committee must approve all expense forms. Note that

the same officer should not incur and authorise the expense; a more senior officer

is required to authorise the expense.

Date: 5/93 Signature: File: 93\0043 Page: 3

~I CORRECTIVE SERVICES INDUSTRIES POliCY MANUAL

4.5 CORRECTIVE SERVICES INDUSTRIES CONSULTATIVE COUNCIL

1. Primary Role:

The primary role of the Corrective Services Industries Consultative Council is to

provide confidence to the community at large that the operations of Corrective

Services Industries (CSI) do not unreasonably impact upon other Australian

businesses. This is achieved by monitoring and reporting upon the development

and operation of CSI including the maintenance of an effective grievance

handling mechanism.

2. Composition:

Chairperson

Member

Member

Member

Member

Member

Member/Secretary

Observer

Deputy Commissioner, Department of Corrective

Services

MTIA Representative

Chamber of Manufactures Representative

Labor Council of NSW Representative

Labor Council of NSW Representative

Community Representative

Director, Corrective Services Industries

Manager, CSI Business and Operations

Development

Page: 1 E 1/94 File: 86/0342 ~---~~~~~~~----------~~

i POliCY MANUAl 3. Appointment:

i) The Deputy Commissioner of Corrective Services and Director, Corrective

Services Industries are ex-officio Chairperson and Secretary of the Council

respectively.

ii) Representatives of the Metal Trades Industry Association, the Chamber of

Manufactures and the Labor Council of NSW are subject to nomination by

the organisations concerned and appointment approved by the Minister.

These are appointed on a staggered basis i.e. 2 appointments each 18

months enabling each representative to serve a term of 3 years.

iii) The community representative is appointed by the Minister following public

advertisement.

iv) The Manager, CSI Business and Operations Development maintains

observer status to respond to specific requests of the Council.

4. Term of Appointment:

The term of appointment, for other than ex-officio members, is for a period

of 3 years or such other period approved by the Minister.

5. Qualifications of Appointees:

i) Members of the Council must have a commitment to Correctional Industry

philosophy. and to the broader implications to the community of effective

Correctional Industry programs.

ii) Members must have an extensive understanding of and experience in

Industry and related industrial issues and an understanding of the likely

impact, if any, of market decisions made by CSI.

"'""'"ro ;/2--) I Date: 1/94 File: 86/0342 Page:

2

{ill CORRECTIVE SERVICES INDUSTRIES POLICY MANUAl

iii) Members must maintain professional standards of integrity and not engage

in any activities which might provide a conflict of interest to their Council

responsibilities.

6. Frequency of Meetings:

Meetings will be held each 2 months or of such other duration approved by

the Minister.

7. Fees:

Fees payable to Members of the Council are those set by the Premier's

Department relevant to members of Boards/Commissions etc.

8. Reporting Role:

i) The Council reports directly to the Minister.

ii) The Council provides minutes of all meetings and where necessary

recommendations to the Minister.

iii) The Organisations who are represented on the Council have a

responsibility to establish lines of communication in order that the

community at large can be apprised of Council deliberations.

iv) The Council provides an annual resume of activities which forms part of

the Annual Report of the Department of Corrective Services to the

Minister.

I Date: 1/94 File: 86/0342

Page: 3

i POLICY MANUAL 9. Detailed Role of Council:

i) Reviews the operations of CSI by scrutinising forward business

development plans and generic contract opportunities with an annual value

of $10,000 or more

ii) Reviews CSI operations through Corporate and Regional marketing, sales

and financial reports and promotes the continued importance of the

enterprise.

iii) Where the Council is of the view that a current or proposed business

activity will significantly impact upon other Australian businesses the

Council shall make appropriate recommendations to the Minister.

iv) In the case of major business development proposals, embracing private

sector involvement, an Industry Impact Statement will be provided to the

Council. The 'form of the Statement follows at item 11.

v) Reviews the development and implementation of a CSI pricing model

which demonstrates that CSI does not operate at an unfair competitive

advantage in relation to labour and overhead charges.

vi) Reviews all complaints referred and responded to by the Director of

Corrective Services Industries in accord with the grievance handling

mechanism. The Council will make recommendations in relation to any

specific findings of that review.

vii) Reviews at each meeting, that the formal grievance handling mechanism is

operating effectively.

I Date: 1/94 File: 86/0342

Page: 14 4 I ~ ,

{ill ~~WfPn INDUSTRIES POliCY MANUAl

viii) The Deputy Commissioner, Commissioner or Minister may refer, for the

consideration of the Council, appeals lodged against responses provided

by the Director of Corrective Services Industries.

ix) Reviews the operation of Community Employment Programs in terms of

the primary role charter.

ix) Monitors and reviews the development and operation of Correctional

Industry programs within privatised Correctional Centres.

10. Grievance Handling Mechanism

i) All complaints/representations regarding CSI interface with other

businesses are referred to the Director, CSI for consideration and direct

response.

ii) Every effort is to be made to resolve issues arising under 10. i) above

through direct contact involving the Chairperson, Director, CSI and the

complainant.

iii) All matters arising under i) and ii) above are to be reported to the Council

at its next meeting.

iv) An appeal process direct to the Deputy Commissioner, Commissioner and

Minister is available to complainants who are not satisfied with outcomes

under i), ii) and iii) above.

I Date: 1/94 File: 86/0342

Page:

)

Signature: ft~] 5

<Jll CORR!DIVE SERVICES INDUSTRIES POLICY MANUAL

11. Requirements for Industry Impact Statement

1. Name of sole trader; partnership; company.

2. Name of principal/s.

3. Whether member of employer association/s. If not, why not.

4. What is the nature of the proponents business.

5. What is the nature of the Correctional Industry business proposed.

6. Does the proposal embrace an import replacement or off-shore

manufacturing prevention endeavour.

7. What is the motivation for utilising a Correctional Industry

opportunity.

8. Does the business proposal align with the core business of the

proponent.

9. Who are the competitors of the business proposed.

10. What effect will the proposed business have on competitors. Will

the proposal impact upon the market share of the key players.

11. Will the proposal have an impact upon employment levels of

competitors.

12. How many employees are in the employ of the proponent. Will the

proposal have an effect on the number of employees and/or hours

of work.

13. What trade unions provide coverage to the Industry.

14. Has the proposal been discussed with employees/trade union.

15. Are there any other matters which should be drawn to the attention

of the Corrective Services Industries Consultative Council which

may elicit adverse representations from the community/business or

employee groups.

I Date: 2/94 File: 86/0342 Page:

i POLICY MANUAl 4.6 CORPORATE IDENTITY AND IMAGE

The development of CSI as a professional and respected entity, fulfilling social

and commercial goals, is necessary to provide staff with pride in their workplace

and customers with confidence in our ability to fulfil their needs.

Establishing a positive Corporate identity involves analysing and defining our

vision, mission and objectives and working relentlessly to their achievement.

This also embraces a focused and creative dissemination and promotion of our

goals and attainments.

Corporate identity is about the way CSI staff present their organisation and

themselves and interface with others. It has a profound bearing on the future of

our organisation and those that work in it.

Corporate image is the way others perceive us. Our dress, demeanour, hygiene,

telephone manners, responsiveness, customer service orientation and overall

professionalism are all issues which impact upon the way in which our external

audience perceive us.

Considerable progress has been made and is continuing to be made to improve

and build upon the CSI Corporate Identity and Image. This includes

implementation of the CSI Customer Service Guarantee and implementation of

Corporate promotion strategies (refer to CSI Corporate Promotion Portfolio).

Also the video 'Courtesy, Etiquette and Attitude in the Workplace' is available to

all staff on loan by contacting the Executive Assistant, CSI Corporate Office on

(02) 644 4966 ..

This policy is designed to make CSI a more satisfying and enjoyable workplace

and encourage the continuing support of our customers. Our success in

embracing the principles of this policy will have a significant bearing on the future

of CSI and 2h member of staff.

Signature: V lP--.//1 r~-0-at-e: ________ Fi-le-: - P~~ I . 1/94 93/0055 ~ I

f,

<a~ ICORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

4.1 CSI INTERNAL SUPPLY PREFERENCE

The implementation of policy expectations in relation to Correctional Industry places

a high priority on improving, where feasible, the self-sufficiency of the New South

Wales Correctional System.

The Department of Corrective Services constitutes a principal customer of

Corrective Services Industries. However, considerable opportunities remain to

expand the Corrective Services Industries market base to generate additional

inmate employment positions.

To promote this expectation, Corrective Services Industries maintains a

preferential supply entitlement over internal purchases. Therefore, where

Corrective Services Industries can satisfy internal requirements, Departmental

personnel are required to utilise Corrective Services Industries products and

services.

The application of this preference is based on Corrective Services Industries

fulfilling customer expectations in relation to delivery, quality assurance and pricing.

CSI Regional Business Managers are responsible for co-ordinating implementation

of this policy including the servicing and response to customer inquiries and orders.

File: 92/0019 Page: 1

C S I POLICY MANUAL

MANAGEMENT OF SALES CONTRACTS

The function of CSI Corporate Marketing is to match Corrective Services

Industries productive capacity with market opportunities in accord with formal

marketing strategies.

The priority of the Corrective Services Industries Business Development Plan is

to facilitate the introduction of Private Sector Prison Industry. This transition will

however take some time during which Corrective Services Industries market

opportunities will continue to rely heavily on seeking sale contracts.

Recognising this reliance, it is important that formal procedures exist to identify and

manage contract marketing opportunities. That is the purpose of this policy

document.

1. SUPPLY AUTHORITIES.

Principal sources of sales contracts are:

N.S.W. Government Supply Office (State Contracts Control

Board)

Roads and Traffic Authority of N.S.W.

State Rail Authority 2/92


C S I POLICY MANUAl

Department Of Defence

Telecom

Australia Post

Department of Public Works

Department of Administrative Services

Australian Government Publishing Service

Department of Veteran Affairs

Department of Urban Services

Electricity Commission of N.S.W.

Various Private Sector construction organisations

2. IDENTIFICATION OF SALES CONTRACTS

8J. Strategic

The identification of sales contract opportunities has tended historically to be

reactive. This has prevented a strategic approach to both the identification

and management of the submission of sales contracts.

The CSI Business Manager (Central) is responsible for maintaining a moving

forward grid (3 years) of sales contract opportunities by Product Division.

The function of this process is to match identified Corrective Service

Industries productive capacity needs with strategically based sales contract

opportunities. 2/92

C S I POLICY MANUAL

The grid is developed through liaison with supply authorities to schedule all

known sales contract opportunities. The CSI Business Manager (Central) is

responsible for coordinating brainstorming sessions to identify business

opportunities ol interest to Corrective Services Industries. This process

includes involvement of CSI Corporate staff in a consulting and support role

and to provide input to ensure the constant development of the Corrective

Services Industries market base.

The sales contract opportunities which now form part of the grid provide the

basis for strategic decisions to be taken on priority opportunities. Naturally,

the priority of opportunities will be linked to productive capacity shortfalls

within individual Product Divisions. This process will also have important

implications on the availability of Corrective Services Industries resources

and for Tender pricing decisions. It is also expected to resolve the constant

dilemma of timing difficulties for development of prototypes and samples.

The CSI Business Manager (Central) is responsible for submitting to the

Executive Committee on a calendar quarterly basis, a grid detailing the

identified sales contract opportunities matched to forecast productive

capacity utilisation for the ensuing 3 years.

2/92

Ql~ ~CORRECTIVE llldilil1 SERVICES INDUSTRIES

C S I POLICY MANUAL

ill Operational.

Inevitably, strategic identification of sales contract opportunities will not occur

in all cases. ft is therefore important that a mechanism exists to scan

advertised or reactive opportunities. In this regard, the CSI Business

Manager (Central) is responsible for the scanning and scheduling of

opportunities by the following means.

a) Daily review of The Sydney Morning Herald, The Australian and the

Australian Financial Review newspapers. The Sydney Morning Herald

is the main source of tender opportunities - especially for the Public

Sector. The Australian lists tenders which are more of a National

characteristic and The Australian Financial Review occasionally

carries an advertisement from a private concern requesting a tender

to be submitted.

i) The Sydney Morning Herald is received at reception where the

relevant "Tenders" section is removed and given to the

Contracts Manager daily.

ii) The Week-End Australian is received on Monday of each week

and the relevant tender section removed by the Contracts

Manager. 2/92


C S I POLICY MANUAL

iii) The CSI Business Manager (Central) daily scrutinises the

relevant sections of newspapers to identify possible market

opportunities. Also trends which may impact the sourcing of

future opportunities.

iv) Supply authorities are subsequently contacted to provide

tendering documents. Close attention is given to the closing

date and by extension the amount of time required to submit

the tender.

b) Daily monitoring of the Telecom Viatel network to access "Discovery"

and in particular the 'Gateway Tendering Service'. The procedure for

accessing this service is included within the Corrective Services

Industries Net Business System Manual.

c) Contract opportunities circulated by Supply Authorities. The majority

of the supply authorities circulate tenders to tenderers on their mailing

lists who are capable in the designated areas. Corrective Services

Industries has issued letters to all known supply authorities to ensure

receipt of relevant tender documents as soon as possible after their

release.

2j92

C S I POLICY MANUAL

d) Scanning of Tenders Australia and Australian Defence News

publications published weekly reinforces the information researched

from the Viatel and daily newspapers.

e) The Cordell Weekly Construction Reports is a valuable source of

Private Sector information regarding construction and refurbishment of

commercial and community buildings. These reports contribute to our

ability to source outlets for textile type products as well as furniture

and furnishings (both timber and steel), via the "Community" and

"Commercial" categories.

3. PROCESSING OF TENDERS

a) Link with Strategic Grid.

The CSI Business Manager (Central) is to maintain intelligence over

the forward productive capacity utilisation of Corrective Services

Industries Business Units. The Strategic Grid is to be continuously

updated based on programmed, sales contract opportunities, tenders

submitted and contracts won.

The Strategic Grid will enable forward programming of Corrective

Services Industries Business Units for sales contract implications.

This may involve tender pricing decisions based on prioritisation of

productive capacity needs. 2!92

C S I POLICY MANUAL

b) Reactive Opportunities.

Reactive opportunities are to be monitored as in Section 2.(8).

The difficulty with reactive opportunities is that Corrective Services

Industries would be operating in a 'knee jerk' ad-hoc mode to

previously unknown opportunities.

Reactive opportunities do not allow Corrective Services Industries

to forecast productive capacity utilisation in a planned manner and

thus the 'filling of gaps' in the Strategic Grid' also becomes ad-hoc.

Nevertheless, reactive opportunities currently form a large part of the

available market for Corrective Services Industries.

c) Receipt of Tenders.

Tenders received by the Contracts Section are scrutinised by the CSI

Business Manager (Central) for suitability and ramifications.

d) Registration of Tenders received.

The tenders received are registered on the Database and given the

next sequential file number.

2/92

C S I POLICY MANUAL

Fields include:

File Date.

Closing Date.

Period Contract or not.

Client.

Tender Number.

Status as per the following legend.

C. Current, submission being worked on.

T. Tender submitted, waiting decision.

U. Unsuccessful submission.

N. Did not tender a submission.

S. Successful, and still current.

0. Now obsolete, but was successful.

Description of goods.

Quantity.

Value per annum.

Division as per the following legend.

Tl. Timber products.

ME. Metal Products.

TE. Textile products.

PL. Plastics products.

GE. General Services.

Comments where relevant. 2/92

C S I POLICY MANUAL

e) Liaison with Operations Development Personnel.

The CSI Business Manager (Central) in liaison with other CSI

Regional Business Managers, is responsible for the scrutiny of tender

documents for marketing relevance, practicality of manufacture,

costing, delivery scheduling, suggested margin depending on the

degree of competition expected, any known ramifications and for the

manufacture of samples if required.

The Manager, Business Development is to sight all tender documents

prior to submission to assess strategic and corporate implications.

f) Pricing.

Pricing of tenders is to be carried out in accord with the CSI Pricing

Policy. The tender pricing information is to be correlated with that on

the micro-fiche if the tender is for a period contract issued by the

State Contracts Control Board, or for a period contract issued by the

Department of Administrative Services - Purchasing and Sales Group.

2/92

C S I POLICY MANUAL

The reason to correlate the information in the submission with the

micro-fiche information is to determine the existing pricing structure

for the existing successful contractor and to determine that our pricing

is relevant to existing pricing. This information is to be assessed in

the light of the Strategic Grid for necessity of work and is to be

determined in consultation with the Manager, Business Development.

g) Approval.

The Manager, Business Development is to approve the pricing

structure of all tenders. This is to give every opportunity to the

maximising of margins without jeopardising the ability to win the

contract. The degree of necessity to win the contract will be

determined by referencing the Strategic Grid and the workload of the

particular Institution which will be effected by the contract if the tender

submission should be successful.

All tender submissions are to be endorsed by the Executive

Committee.

2/92

~~ !CORRECTIVE ~ SERVICES INDUSTRIES

h) Submission.

C S I POLICY MANUAL

The tender documents are to be submitted to the tendering body in

ample time to ensure that the documents are received prior to the

closing time of the tender.

If there is a departure from specification, it is necessary that the

person responsible for issuing or control of the tender is aware of the

reason for the departure (and this must be noted in the submission) in

an attempt to highlight the benefits to the recipient and gain a

favourable response for our submission. This is to be coordinated by

the CSI Business Manager (Central).

A key aspect of tender processing is the responsibility of the CSI

Business Manager (Central) to maintain on-going liaison with Supply

Authorities to cultivate intelligence advantageous to Corrective

Services Industries.

2/92

t

I r i ' I I


C S I POLICY MANUAL

4. TENDER DECISIONS BY SUPPLY AUTHORITIES

a) Monitor Progress.

Continual contact is to be maintained with the supply authorities, not

only to determine the status of our submission, but to enhance our

knowledge of how the tender selection criteria is set. This continual

contact will also enhance our ability to win tenders as our relationship

with the relevant supply authorities improves. It should also result in a

faster receipt of the tenders and the possibility of our products being

specified in future tenders.

b) Ascertain and Analyse Decision.

Decisions handed down by supply authorities are to be analysed for

both 'wins' and 'losses'. The information should be gleaned to

determine the real reason and not just the superficial reason.

This information is to be provided to the Executive Committee.

2/92

C S I POLICY MANUAL

c) Report to the Executive Committee.

A report to the Executive Committee is to be prepared on a quarterly

basis highlighting in summary form the various trends in

i. The Strategic Grid,

ii. The 'Strike ratio' of won contracts to tenders submitted.

iii. The contracts won in each of the Product Divisions.

iv. Reasons why various tenders were won.

v. Reasons why various tenders were lost.

vi. Apparent opportunities.

vii. Reasons why tenders were not submitted.

viii. Number of current contracts.

ix. Number of contracts which became obsolete.

x. Pricing updates for existing contracts.

xi. Various tenders outstanding awaiting decisions.

d) Maintenance of Contracts.

Each contract is to be assessed for current costing where relevant to

ensure that no product is contracted for supply at a loss margin. For

Corrective Services Industries, factors which will alter the cost

structure are primarily raw materials and overhead recovery. Pricing

updates are usually only granted on providing proof of cost increases

in either labour rates or raw material costs. 6/91

<a~ ICORRECTIVE ~ SERVICES INDUSTRIES

C S I POLICY MANUAL

Supply of goods against Period Contracts is to be monitored for

changes in lead time, quality control problems and supply against

projected supply as per the tender documents.

Liaison with the supply authorities is to be maintained to enhance the

opportunities of winning the renewed contract and to be more fully

informed as to how various customers (who contact the supply

authorities) perceive the performance of Corrective Services

Industries.

6/91

<a~ ~CORRECTIVE ~ SERVICES INDUSTRIES

C S I POLICY MANUAL

4.9 SOURCING OF COMMUNITY EMPLOYMENT

• The role of community employment programs in providing an overall hierarchy of

inmate development programs is covered within CSI Policy Manual, section 1.8.

The development and maintenance of a formal infrastructure to source potential

employers and maintain a business friendly interface is fundamental to the

effectiveness of these programs. Potential and existing employers must be viewed

as 'the customer' without whom community employment programs would not exist.

The sourcing of training and employment opportunities for inmates in a depressed

economic environment is not easily facilitated. Successful sourcing and importantly

employment retention, requires profound commitment from Departmental staff and

the support and perseverance of inmates.

It is imperative that staff responsible for the sourcing of potential employment

opportunities match the requirements of the employer in relation to employment

conditions, geography, skill and industry implications with the capacity of the

Correctional system and the inmate to successfully interface. Failure to undertake

this fundamental task will result not only in individual default, but will discredit the

system generally.

It is therefore absolutely imperative that Departmental staff adequately consult and

brief potential and existing employers over the opportunities and constraints

provided by community employment programs. This must also involve regular

follow-up liaison with the employer. In all circumstances, potential and existing

employers must be provided with formal advice over the objectives of community

employment programs together with spe · ic responsibilities of employers.


Ql~ ICORRECTNE SERVICES INDUSTRIES

C S I POLICY MANUAl

The Second Chance Business Register provides the opportunity to cultivate the

business sector to the employment of former inmates generally and through

community employment programs specifically. The Co-ordinator, Comm.u.nity

Employment Programs is available to assist Departmental staff in this regard.

The Commonwealth ~Department of Employment Education and Training has

extensive resources available through the CES network to assist in the sourcing of

employment for inmates. Staff at Corporate, Regional and Correctional Centre

level must ensure that these opportunities from DEET are taken up. Departmental

staff should remain aware of allowances made available by DEET in order that

precise and correct information can be conveyed to potential and existing

employers. The availability of for example the Jobstart Allowance is a specific

marketing strategy for community employment programs.

The contribution of inmates to source potential employment opportunities should be

encouraged, but should be balanced against the need to ensure that security

implications are not compromised.

The sourcing of community employment opportunities should recognise the

sensitivity of inmate employment on other members of the community. Sourcing

should not occur where it might be perceived as provocative on the part of

business and employees. In this regard, the Corrective Services Industries

Consultative Council has an ongoing role in reviewing that inmate community

employment does not unreasonable impact upon members of the community - CSI

Policy Manual, section 4.5.

A range of promotional material is available to facilitate the understanding and

commitment of potential and existing employers to community employment

programs.

YJ/ File: 88/1106 Page: 2 Date: 1/93

<ill CORR[(JIVE SERVICES INDUSTRIES POliCY MANUAL

4.10 STAFF SALES

The sale of CSI products and services to Departmental staff forms an important

part of the CSI market base and provides the opportunity for staff to access the

unique and diverse range of CSI products and services.

However, as an essential component of the CSI Standards of Business Conduct

it is absolutely essential that staff not be perceived or actually receive personal

advantage by such sales. For this reason, the following controls apply to CSI

staff sales:

1) The product or service supplied must be within the capability and technical

competency of the relevant business division and business unit.

2) As with general orders sale of non-stock products must be covered by a

formal request from the staff member setting out clearly the specification of

the item/s concerned to avoid the opportunity for dispute.

3) In the case of orders for CSI stock items, the sale price will be the

approved list price.

4) In the case of non-stock sales, the sale must be covered by a product

pricing schedule constructed in accord with the CSI pricing policy. It is

stressed that no discount applies to CSI staff sales.

5) Where applicable, sales tax is to be charged on staff sales.

6) All staff sales are to be strictly cash (i.e. C.O.D.)

I Date: 2/94 File: 94/0008 Page: 1

<Jll CORRECIIVE SERVICES INDUSTRIES POLICY MANUAL

7) Staff sales must not be permitted to dislocate production schedules at the

expense of fulfilling existing customer delivery or stock production

requirements.

Signature: I Date: 2/94 File: 94/0008

Page:

4.11

<ill CORRECTIVE SERVICES INDUSTRIES POliCY MANUAL

ACCEPTANCE OF CUSTOMER ORDERS

Corrective Services Industries (CSI) is a major commercial enterprise providing a

diverse range of products and services.

Because of that diversity it is difficult to formalise in a prescriptive sense the

technical competency considerations which might impact whether a client order

may or may not be accepted.

For internal control purposes however, it is necessary to outline the following

general parameters which should be considered prior to the acceptance of

customer orders:

1) All customer orders must be submitted in writing providing a clear

specification of what is required (except sale of stock products for cash).

2) Before proceeding, the nature of the sale i.e. cash or credit needs to be

determined and in the case of credit CSI credit management policy

applied.

3) Whilst there is no generic policy limitation to whom CSI might supply

products or services the following issues should be considered:

i) In the case of credit sales, the customer must be an approved

customer.

ii) In the case of private sector involvement arrangements CSI security

and assessment considerations should be fulfilled and accepted.

[Date: 2/94 File: 93/0093 Page:

<ill CORRKTIVE SERVICES INDUSTRIES POLICY MANUAL

iii) The sale must only take place to an individual or organisation who

would not bring discredit upon CSI.

iv) An order should not be accepted where it is believed such a sale

would contravene the commitment of CSI to be sensible and

sensitive in its impact upon other businesses.

4) The product or service sought must be within the broad technical

competency of the business division/business unit concerned. This implies

that orders should only be accepted where factors such as business unit

technical competence, capital and Correctional Centre capability factors

are appropriate.

5) Orders should not be accepted where acceptance would seriously impede

capacity to fulfil existing production commitments.

6) Conservative caution must be exercised over the acceptance of orders

dealing with product development in terms of 4) & 5) above. Further in the

case of product development specific costing implications must be

considered to ensure all costs are applied in accord with the CSI pricing

policy - Section 4.2.

Reference should also be made to other complimentary policy considerations

included within the CSI Policy Manual.

Signature: Date: 219_4~~~~~F~ile~=~~9-3/~0~09~3 ____ P~a~ge~=~~

C S I POLICY MANUAL

4.12 MEDIA RELATIONS

~I CORREGIVE SERVICES INDUSTRIES

The development and implementation of a proactive approach to media relations

as part of an all embracing community awareness program, is in accord with

Corporate and strategic objectives of the Department. Similarly and by

extension, CSI has a proactive commitment to maintain a positive and continuing

commitment to community awareness programs.

The implementation of community awareness pursuits forms a fundamental

component of the responsibility of all CSI Managers. This however needs to be

conducted in accord with Departmental and CSI policy parameters and

undertaken in a manner which fulfils the broad interests of the Department.

The strategic objectives of CSI in relation to community awareness are embraced

within the Promotions business plan developed by the Promotions Manager of

the CSI Corporate Office annually. The Plan is distributed to Correctional

Centres through CSI Business Managers.

From time to time, CSI Managers will be placed in a position where both

proactive and reactive action needs to be taken in relation to media relations.

The following notes are intended to provide guidance to staff to ensure that such

liaison attracts positive outcomes:

1) Internal delegations apply on whom may liaise with the media, the breadth

of the issues covered and the form of the media involved. This must be

religiously followed,


C S I POLICY MANUAL CORREITIVE SERVICES INDUSTRIES

2) When considering interviews or liaison with the media the broader picture

must be considered. Does the topic to be discussed have broader

implications on other functional areas of the Department which should be

considered.

3) Where staff are approached by the media in connection with Corrective

Services ·Industries, in addition to instructions issued by the Manager,

Public Relations, consultation is to be made with the Director, CSI prior to

any interview. This is to assist identifying whether there are broader

implications to such an interview which must be addressed and

considered.

4) Subject to Executive consultation the Director, CSI has authority to deal

with the media on issues dealing with Corrective Services Industries.

5) Has attention and preparation been given to the underlying basis for the

interview including possible negative implications.

6) Has adequate preparation been given to the interview. This should be

achieved by completing the attached "Approaching the Media Interview"

schedule.· This embraces the subject nature of the interview, the broad

objective and the key points to be considered. It also identifies,

particularly in relation to radio or TV interviews, potential problem areas of

communication.

7) There are also a number of broad guidepoints which must be embraced

and include:

Date: 8/93 File: 93/0096 Page: 2

*

*

*

*

*

*

*

*

*

*

C S I POLICY MANUAL

Avoid studios.

Avoid telephone interviews.

Never do interviews until you find out what is required.

Never do interviews without knowing origin of interviews.

<Ill CORREGIVE SERVICES INDUSTRIES

Never do interviews without knowing context in which it will be used.

Never do interviews without discussing terms of reference.

Never do interviews without getting to know the interviewer.

Never do interviews without having clear 'game plan'. This should

include broad statement objective, specific communication

objectives (i.e. where to start, what is the flow, develop linkage for

delivery).

Identify makeup of audience.

Tape record all personal interviews.

A proactive and positive community awareness program is essential to provide

the community with an understanding and, by extension, an acceptance of

Departmental and Corporate objectives. Conversely, unless appropriately

managed, poor interviews can be utilised to denigrate both the organisation and

the individual.

Proper contemplation of all of the above issues will enable CSI Managers to

maximise the positive impact of community awareness endeavours.

Date: 8/93 signature:QJ~ _ _____., File: 93/0096 Page: 3

I t I f l

I I

CORRECTNE SERVICES INDUSTRIES

APPROACHING THE MEDIA INTERVIEW

SUBJECT:

BROAD OBJECTIVE:

KEY POINTS:

a)

b)

c)

d)

e)

f)

POTENTIAL PROBLEMS:

• Directional Control ( )

• Terminology ( )

• Points Communicated ( )

• Eye Contact ( )

• Posture ( )

• Gestures ( )

• Expression ( )

• Voice ( )

• Directness ( )

• Authority ( )

• Flow ( )

<Jll CORRECTIVE SERVICES INDUSTRIES POliCY MANUAl

4.14 CUSTOMER COMPLAINTS

It is unfortunate that from time to time customer service defaults will occur and

CSI staff are placed in a position of needing to react to a customer who has been

inconvenienced and in many cases is very angry.

Such occasions must be utilised as an opportunity to convey a professional

perception of the way in which CSI operates. It is imperative that customer

anger not be responded to with aggression or fire. A warm and concerning

approach provides the opportunity to restore our credibility and indeed to 'win

bacl< the customer'.

The response of staff to customer complaints must be directed to gaining a full

understanding of the circumstances including why the default · occurred and to

ensure strategies are adopted to prevent a recurrence.

The customer must be contacted personally and our concern for the customer

conveyed in a caring manner. On each occasion formal follow up is required by

letter in which the following is embraced:

a) Reference to the complaint.

b) Acknowledgment of the circumstance and our regret for the inconvenience

caused.

c) Reference to our overall commitment to customer service and for our

caring attitude towards customers. We should indicate ..that whilst

customer default may occur on occasions this is not the norm, is not

accepted and we are deeply embarrassed.

I Date: 5/94 File: 92/0349 Page: · 1

POliCY MANUAL

d) The customer should be assured that the default has been thoroughly

investigated and organisational initiatives taken to prevent a recurrence. .tl is incumbent upon all staff to indeed ensure that this occurs and that there

is adequate demonstration of remedial action being taken to prevent a

recurrence.

e) Wherever possible adequate compensatory measures should be taken.

This may include a discount, a refund, a voucher for a future purchase or

provision of a CSI promotional item. In many cases however a simple

gesture of our concern and commitment to future service may be all that is

required.

f) A closing message should be included again reiterating our concern and

inviting further contact should any additional assistance be required.

Customer service is fundamental to our business and to our future existence.

Every staff member within CSI has a personal responsibility to ensure that we

provide a customer focus and orientation and that the above principles are

adhered to in relation to customer service defaults. Managers of Industries are

also responsible to ensure customer service defaults are recorded within the

Monthly Management Report - Form 6.

Signature: {1; . I Date: 5/94 File: 92/0349

:Page: 2


""' 15 April 1994

>

=

'-'

=

> 0

Mrs. B. Smith President Stockinbingal Village Fair Ring Events "Maleeja" MIL VALE Via YOUNG N.S.W. 2594

Dear Mrs. Smith,

I refer to your letter of 5th April, 1994 and to our telephone discussion of 15th April, 1994 concerning the supply of ribbons from the Berrima Sign/Screenprinting, CSI business unit.

As indicated in our conversation I am deeply embarrassed by what has occurred and the inconvenience which you have suffered. This certainly is not typical of the way in which CSI operates. We recognise that our customers are the most important part of our business. It is for this reason that the customer surveys, to which you refer in your letter, are conducted.

As I indicated, as an expression of our concern I have enclosed a full refund of $413.22. Also, in the desire that you might provide CSI a further chance to service your requirements, this letter serves as a voucher, to the value of $100.00, which may be deducted from the cost of a future order from the Fair.

Whilst I cannot correct the unfortunate inconvenience in which you have been placed, I trust the above arrangements provide some relief to the Fair. You can rest assured that a number of organisational initiatives will be taken within the business unit to ensure that this unfortunate incident does not recur.

I appreciate your patience and of the very constructive and warm manner in which you permitted our conversation to take place. Please do not hesitate to contact me if I can be of further assistance.

Yours sincerely,

WAYNE RUCKLEY Director Corrective Services Industries

Block ( · Unit 2 391 Pmk Rood P.O. Box 116 Regents Pmk NSW 2143 Tel: (02) 644 4966 Fox:(02) 644 4772

C S I POLICY MANUAL

5.1 DEBTORS POLICY

This policy sets out the requirements for maintaining customers accounts in good

order to achieve fast cash return and minimise collection risk.

The maintenance of this procedure is the responsibility of the Credit Controller

unless shown otherwise.

1.

~ . ---


CREDIT TERMS

i) No credit will be extended for any sale under $250.

ii) Corrective Services Industries provides credit terms of 30

days from date of invoice.

iii) No cash settlement discount is offered.

iv) Freight is on charged to the customer.

v) Variations to these terms are to be approved by the Director,

CSI or Commercial Manager.

vi) A target of achieving and maintaining debtors at an average of

40 days collection has been established.

2. SECURITY

i) All customers must prepare an application for credit before

being accepte stomer. (Sample attached)


ii)

C S I POLICY MANUAL

Products are not shipped to a customer until a credit

application has been received and a customer number

allocated to that customer.

iii) A credit reference check is to be obtained for all new non

government potential customers who require credit in excess of

$i ,000. A credit check is performed both using a credit bureau

(such as Dunn & Bradstreet) and by phoning customer

supplied credit references. New customers with a credit limit of

less than this amount are to be monitored closely and their limit

only raised after a period of satisfactory payment history.

iv) Credit Controller will notify new customers of their customer

number and credit limit by form letter.

v) The Credit Controller will notify the Correctional centre of the

new customer number and credit limit.

vi) All adjustments to the debtors listing in the Officer system are

to be reviewed by the Financial Accountant.

vii) All credit limits and credit notes are to be approved by the

Commercial Manager.

3. COLLECTIONS

i)

Date: 3/93

All mail is to be opened by the Receptionist and date stamped

before distribution. Neither the Credit Controller, the Credit

Control Clerk noc ny work releasee is to collect or open mail.

Signature: File: 9i/205 Page: 2

<a~ 'CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

ii) All cheque remittances received in the post are to be written up

in the "Postal Remittances Book".

iii) All receipts from customers are to be aged and applied as they

arE received. If the customer's remittance cannot be matched

to that customer's account, then the customer should be

phoned to ascertain the purpose of the remittance.

iv) All funds are to be banked on the same day that they are

received. A separate copy of the computer generated debtors

movement listing is to be filed daily and compared to the daily

bank deposit book.

4. OVERDUE ACCOUNTS

i)

ii)

The ageing of the debtors invoice will commence from the date

of the invoice. It is therefore important that the CSI office copy

of the invoice is sent to the CSI Corporate Office within 48

hours of preparation via the internal courier system.

All unpaid customer balances which are over 30 days old are

to be queried with the customer by phone.

iii) All customers with balances over 40 days old are to be sent a

reminder letter similar to the sample attached. If the invoice

was generated direct from a Business Unit, then the relevant

CSI Business a ,ager, Production Manager or ASI is to be

asked to assist tn 1

~ction of the debt. . '


C S I POLICY MANUAL

iv) A debtors account that is not paid within 45 days, the customer

should be sent a form letter stating that payment is required

within 7 days or legal action will follow.

v) A debtors account that is not paid within 60 days, from date of

invoice will be placed in the hands of the Crown Solicitor.

vi) Where a customer has exceeded their credit limit or has not

paid within 60 days, that customer is placed on a Doubtful

Customer list which is circulated to all Correctional Centres and

Customer Liaison Officers.

vii) The Doubtful Customer list prevents any further orders being

processed by Correctional Centres without firstly being

forwarded to the Credit Controller for appropriate action.

viii) On the second Tuesday of each calendar month the Credit

Controller and the Sub-Accountant will brief the Executive

Committee on the status and progress on all debtors which are

90 days overdue.

ix) Write off of customers account balances must be endorsed by

the Commercial Manager and approved in accord with financial

delegations of authority.

X)

Date: 3/93

Statements are to e mailed to customers within five days of I

the close of the alen ar month.

Signature: File: 91/205 Page: 4

C S I POLICY MANUAL

4. RECONCILIATION

i) All customer accounts are to be reconciled each quarter.

ii) All customer queries regarding their statements are to be

handled on the day that the query was received and resolved

with 7 working days.

iii) The debtors ledger is to be reconciled with the general ledger

control account at the end of each fiscal month. Responsibility:

Sub-Accountant

iv) Cash and debtors are to be reconciled at the end of each fiscal

month. Responsibility: Sub-Accountant.

5. CREDIT APPLICATIONS

Scope:

This procedure covers the process of granting a customer's request to be

allowed to trade on credit terms and must be followed in the granting of

credit to all non-government customers.

It should be noted that Corrective Services Industries only extends credit to

customers who will provide a long term relationship and who will repay their

debts. Credit is not extended as a matter of course.

Responsibility for maintenance of this procedure: Credit Controller.


C S I POLICY MANUAL

This statement becomes operative when either:

a) A prospective customer requests to be given credit or,

b) When a customer places an order but does not appear to have a

customer number. In this case it is likely that Corrective Services

Industries has never traded with that customer before.

Procedure Statement:

i) All prospective non-government customers must complete a credit

application form (sample attached).

ii) All prospective customers must provide at least two credit references.

These references are to be phoned and checked by the Credit

Controller. If necessary additional credit references can be

requested. A credit reference check must show evidence of the

customer meeting satisfactory payments with other suppliers.

iii) For all Private Sector Business Unit proponents and for potential

customers requesting a credit limit greater than $5,000 an Australian

Securities Commission search is to be conducted. This search is to

be ordered by the Sub-Accountant utilising Dunn and Bradstreet with

whom Corrective Services Industries has an account. The results

of all Dunn and Bradstreet searches must be sighted by the Financial

Accountant who will approve the credit application only if the search

was satisfactory.

( Date: 3/93 Signature: File: 91/205 Page: 6

C S I POLICY MANUAL

iv) The Commercial Manager must sign all approved credit applications.

v) Under no circumstances are goods to be shipped to a potential

customer without credit approval having been granted. Urgent

purchases by non-approved customers are to be on COD basis.

6. CASH CUSTOMERS

Many customers who purchase direct from a Correctional Centre are either

making an infrequent purchase (often their only CSI purchase) or else are

paying in cash or else are making only a small purchase (less than $250).

In all of these instances a new customer number is not to be created for

such small or infrequent purchases. Instead the selling Correctional Centre

should insist on the customer paying cash. There is no commercial

advantage in providing credit terms to an infrequent purchaser.

Cash Sales Procedure Statement

When a customer/staff places an order on a CSI Business Unit, on a cash

sale basis, the following steps should apply:

a) The CSI Operations Manager will notify the customer or CSI staff

member payment is to be made on receipt of the goods.

b) As a general rule, Correctional centres should only accept either

cash, bank cheque or money order.

c) If the Correctional centre has the facility, bankcard may be accepted.

d) Personal cheques should not be accepted unless the following details

are supplied:



C S I POLICY MANUAL

i) Customer's full name and address.

ii) Sight customer's drivers licence and record licence number and

expiry date.

iii) Authorisation from CSI Commercial Manager on orders

exceeding $500.00.

e) When the goods have been produced, delivered into store and are

ready for pick up, the Storeperson/CSI Operations Manager will notify

the customer of the same.

f) CSI Operations Manager/AS! is to prepare, or arrange for an invoice

to be raised by the storeperson on the Correctional Centre's cash

sale account, with delivery details as follows:

i) Full name and address of customer

ii) Customer order number given

N.B. Mark invoice "CASH SALE"

Include Sales Tax, where applicable

g) The customer copy of the invoice is to be raised and issued to the

customer (staff or public), to enable payment to be made at the

administration office.

h) The monies are to be paid at the Correctional Centre Administration

Centre. The customer is given a receipt quoting the invoice number

for goods purchased.

i) The customer must n show the receipt to the storeperson to ' enable release of go d 1

• rchased. /



C S I POLICY MANUAl

The Storeperson will:

*

*

*

*

*

Have the customer sign for the goods purchased on the invoice

raised.

Keep the acquittance copy of the invoice as to delivery and

receipt of goods ordered.

Send the Commercial Branch's copy of the invoice to the CSI

Corporate Office for processing.

The Correctional Centre's Administration Centre will:

Bank the monies received to the CSI Remitting Account within

48 hours from receipt.

Fax a copy of the remittance advice (being a copy of the

invoice) to the CSI Corporate Office's Credit Controller for

allocation of the monies received. (Administration Office)

7. ACCOUNT NUMBERS

The nature of computerised accounting systems such as the "Officer"

requires that all customers have a distinct account number which references

their "Master" or unique data. After a customer is approved for credit, the

Credit Controller will assign an account number to that customer and

process all necessary customer information into the customer's Master File.

8. MAINTENANCE

It is the responsibility of the Credit Controller to process all amendments to

the customer master file (e.g. change of address, contact name etc) within

24 hours of being notified.


~~ ICORRECTIVE ~ SERVICES INDUSTRIES

C S I POLICY MANUAL

CASH MANAGEMENT POLICY

The establishment of a Corrective Services Industries Working Account insists

that a whole new financial discipline be developed. The effectiveness of our cash

management is an integral part of this discipline. Cash management in a

Government body is unique due to the general inability to obtain funding from

other than Government approved sources. This is especially so in the case of

Corrective Services Industries as a result of its indeterminate legal status

(which is as a non-incorporated organisational unit of the Department of

Corrective Services).

Short Term:

The aim of Corrective Services Industries in the short term is to avoid a

liquidity shortfall in both its Consolidated Funds allocations account and the

Corrective Services Industries Working Account. This period of time will be

utilised to assess actual cash receipts and expenditure patterns and to test the

accuracy of Corrective Services Industries cash forecasts.

3/92

Cash management will be optimised by:

i) Repaying treasury advance during the period.

ii) Overseeing all payments (whether recurrent or capital) to minimise

outgoing cash.

iii) Maximising collections from debtors by targeting a 40 day average

collections outstanding and maximising the use of treasury

transfers.

iv) Maximising the use of the overdraft facility on the NAB drawing

account (currently at $500,000 0/D).

C S I POLICY MANUAL

v) Recovering all A and B classified expenditure from consolidated

fund account. Prepare supplementation requests as necessary.

iv) Extending creditors terms to the maximum that the supplier will

allow.

vii) Clear out cash balances in remitting account daily and credit to

interest bearing Treasury Working Account. Hold all cash balances -

in Treasury Working Account.

viii) Forecast cash monthly.

Long Term:

In the long term Corrective Services Industries will have a funding position that

is less dependent on Government sources. Progress towards this state will be

gradual and will entail the reduction in high cash balances (which do not earn

high interest). Instead Corrective Services Industries will attempt to hold cash

in high yield instruments and only withdraw cash to meet outgoing commitments.

Hence a high level of cash forecasting is required.

3/92

The use of cash will be optimised by:

i) Reduce interest expense by repaying the Treasury advance. A

prudent level of funds is to be kept at all times and for the

foreseeable future this level will be $1.0 million. That is no

repayment is to be approved unless a minimum of $1 million of

funds remains.

ii) Maintain all cash funds on deposit (either 24 hour or seven day

call).

iii) Utilise NAB overdraft to its fullest whilst ever the interest expense

is not charged to Corrective Services Industries. Thereafter

discontinue overdraft for short term funding.

3/92

C S I POLICY MANUAL

iv) Forecast cash requirements daily; prepare cheque runs at set

intervals (such as weekly) and withdraw cash only at the time.

v) Facilitating Private Sector involvement to reduce working capital

needs. If new facilities require to be funded by Corrective

Services Industries then wherever possible they should be leased

back to private Sector participants at a charge that includes the -

funding cost.

vi) Continue with all of the above cash management techniques.

C S I POLICY MANUAl

DISCLOSURE OF CONFIDENTIAL INFORMATION

1. DEFINITION:

All businesses routinely collect and utilise and hold information that is confidential.

For the For the purposes of this procedure, confidential information is information

given to Corrective Services Industries, by any person or corporation (but most

usually customers and staff) which that person would not want made available to

the world at large.

2. DISCLOSURE OF EMPLOYEE INFORMATION:

No information pertaining to employees is to be provided to inquirers. If the

information requested is urgent then the employee concerned may phone the

inquirer back.

3. DISCLOSURE OF CUSTOMER INFORMATION:

All inquiries regarding customers are to be responded to by the Commercial

Manager. The only information pertaining to customers that will be provided is the

following:

i) Corrective Services Industries will disclose to inquirers the fact that

it does sell to individual customers.

ii) If the customer has offered Corrective Services Industries as a

trade reference, brief details may be enclosed of the customer's

payment record (along the lines of whether payment is regularly

received in 30 days, 60 days etc), but not details of the customer's

sales history.

No other information is provided.

2/92

I i

~~ ~CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

4. SECURITY INFORMATION:

i) Any confidential employee records are to be kept within secure and

locked filing systems.

ii) Customer records are to be retained in the Commercial Branch under

the supervision of the Commercial Manager who should ensure that

only Commercial Branch staff or Executive Committee Members have

access.

iii) The Commercial Manager maintains security passwords over all

aspects of operation of the Corrective Services Industries Net

computerised business system.

5. PRIVATE SECTOR PRISON INDUSTRIES:

2/92

All contractual agreements between Corrective Services Industries and

Private Sector partners contain a confidentiality clause:

"Details of this Agreement shall be kept confidential and shall not be made

available to any third party by CSI or 'Company' without the prior written!

approval of the other party."

Under no circumstances is commercial information relevant to such

agreements to be disclosed by members of staff. The Corrective Services

Industries standards of business conduct also embraces this matter.

C S I POLICY MANUAL

COMMERCIAL INFRASTRUCTURE INSTITUTIONAL INSERT

TABLE OF CONTENTS

5.4.0 INTRODUCTION

5.4.1 SALES INVOICES 5.4.1.1 General 5.4.1.2 Invoice Preparation

5.4.1.2.1 Proof of delivery 5.4.1.3 Customer Numbers 5.4.1.3.1 Creating a new customer 5.4.1.3.2 Cash Customers

5.4.1.4 Transfers to CSI (Regents Park) 5.4.1.5 Sales to Other Institutions 5.4.1.6 "Sales" to your own Facility or CSI 5.4.1. 7 Credit Notes 5.4.1.8 Sales Tax

5.4.2 PRODUCTION TRANSFERS 5.4.2.1 Transfers 5.4.2.2 Dispatch Dockets 5.4.2.3 Inter Institution Transfers 5.4.2.4 Works Orders

5.4.3 PURCHASE ORDERS

5.4.4 PAYMENT FOR GOODS AND SERVICES 5.4.4.1 Payments to suppliers 5.4.4.2 Payments to CSI

5.4.5 BUDGETS AND ALLOWANCES 5.4.5.1 General 5.4.5.2 Allowances 5.4.5.3 Expenditure controls 5.4.5.4 Budgets

5.4.6 RECEIPT OF FUNDS 5.4.6.1 General 5.4.6.2 Remittance Advice

Date: 8/93 Sign•M;J2~ File: 92/184

CORREaJVE SERVICES INDUSTRIES

Page

1

4

14

17

17

19

25

Page: i)

C S I POLICY MANUAL

5.4.7 REPORTING RETURNS 5.4.7.1 Monthly Returns 5.4.7.2 (Section Deleted) 5.4.7.3 Due Dates 5.4.7.4 Financial Results 5.4.7.5 Annual Return of Plant and Inventories

5.4.8 CAPITAL EXPENDITURE 5.4.8.1 General 5.4.8.2 Justification

5.4.9 COST CENTRES 5.4.9.1 Account Numbers 5.4.9.2 Usage

5.4.10 STOCKTAKE PROCEDURES 5.4.1 0.1 Scope & Timing 5.4.1 0.2 Inventories 5.4.1 0.3 Plant and Equipment

5.4.11 APPENDICES 5.4.1 0.1 Appendix A: Part Number List 5.4.1 0.2 Appendix B: Customer Number List 5.4.1 0.3 Appendix C: Account Number List

Date: 8/93 File: 92/184

<Ill CORREOlVE SERVICES INDUSTRIES

27

30

31

33

41

Page: ii)


5.4.0. INTRODUCTION:

C S I POLICY MANUAL

i) This section of the Policy Manual provides guidance to staff in the

commercial principles and procedures of Corrective Services Industries.

Commercialisation:

There is a need for Corrective Services Industries to commercialise

operations, for two broad reasons:

a) Commercialisation involves the acceptance and understanding of a

whole range of disciplines relating to achievement of the organisations

functional expectations. The process of commercialisation increases

the level of accountability of individuals and units within the

organisation by setting objectives, procedures and monitoring

subsequent performance. The attainment of these disciplines will by

extension, satisfy the requirements of the Public Finance and Audit

Act and Treasurers directions.

1


C S I POLICY MANUAL

b) The second reason for commercialisation is the transfer and

development of general business acumen and commercial standards.

equivalent or better than those prevailing in the Private Sector , into

the Public Sector. Corrective Services Industries needs these

disciplines and skills to advance it's business base.

Corrective Services Industries is partially funded from the Department of

Corrective Services recurrent funding allocation, and hence must maintain the

highest levels of probity and economic effectiveness and efficiency.

Commercialisation, with an emphasis upon results, is a primary means of achieving

these aims.

ii) Whilst much of the manual details specific procedures, it does so in order to

improve the commercial operations and the flow of data throughout the

enterprise. As a Manual it is intended to assist Officers in the field rather

than to dictate.

If you have any comments or require clarification please contact staff of the

Commercial Branch, Corporate Office on (02) 644 4966.

2


C S I POLICY MANUAL

iii) Note that all businesses are continually growing and improving and

Corrective Services Industries is no exception. Accordingly this manual

will be updated from time to time as changes to operating systems occur.

Wherever possible such impending changes have been shown in italics to

draw attention to the proposed changes.

iv) This section of the Policy Manual is to be read in conjunction with the

Treasurer's Directions and any pertinent Departmental directives.

v) At a later date, a supplementary section will be added to this Manual,

detailing commercial procedures which are applicable to the Corporate

Office, Regents Park.

3

C S I POLICY MANUAL

5.4.1. SALES INVOICES

5.4.1.1

i)

General:

A Sales Invoice should only be used where the Institution is selling it's

goods (or invoicing it's services) directly to a customer. Invoices are

prepared by Institutions and a copy (see below) is attached to the

goods which are despatched to the customer (this is known as invoice

with goods). Invoice copies are to be distributed as follows:

i)

ii)

iii)

iv)

Blue Copy

Green Copy

White Copy

Yellow Copy

To Customer

To Customer (for certification of delivery)

To Commercial Branch, Corporate Office

Remains in book for audit purposes

Corporate Office utilises the white invoice copies to prepare sales

summaries for use in the monthly financial reports that are generated

for each Business Unit. The white copy is also used to update the

Corrective Services Industries Net System with details of the

customer's debt. This financial information is to monitor customer

purchasing patterns and to collect their outstanding amounts. (Note

that it is not necessary for officers in Institutions to collect

outstanding customer balances, unless requested).

4

C S I POLICY MANUAL

ii) Before a sales invoice can be raised, the Institution must have a

works order, authorising the productive activity which results in the

goods being shipped to a customer. An operational instruction has

been issued concerning works orders.

iii) Invoices are accountable documents and you will be asked to account

for them (see Section 7). For Institutions which have several

Business Units records of invoice books issued to individual Units are

required.

Invoice books issued to Institutions for Corrective Services

Industries use are not to be used for other purposes. Please send to

the Corporate Office the white copy of any invoice which has been

cancelled from a Corrective Services Industries invoice book; this

is essential for Corrective Services Industries to account for

"missing invoices".

iv) Invoices are to be prepared and dated on the day that the goods are

shipped. White copies are to be despatched to the Corporate Office

daily (or at least weekly, in the case of Institutions where a limited

number of invoices are issued).

5

~~'CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

Note that for some Agricultural Business Units, it is acceptable to

issue one summary invoice per week for the aggregate of sales of

agricultural produce (e.g. eggs) where there are frequent sales of very

low value. This provision is to avoid the necessity to write out

invoices for very small amounts (e.g. one or two dollars). Please

provide details of the aggregate sales on the summary invoice.

5.4.1.2 Invoice Preparation:

The following information is required on each invoice:

i) Customer name and customer number (see Section 1.3). Insert in

section marked "Debit". There is no need to provide a credit number.

ii) Customer address and 'ship to' address (if different).

iii) Part numbers of items sold. Description is optional if a part number

exists; otherwise provide a recognisable description. A fist of part

numbers is attached at Appendix A.

6

C S I POLICY MANUAL

iv) Show separately the price charged per unit as well as sales tax (if

applicable). See section 1.8 for details on sales tax.

v) The works order number authorising the production of the goods. If

the customer order was locally sourced, ensure that the customer has

provided a purchase order requesting the goods; a works order is still

required from Corporate Office authorising the productive activity.

Insert in section marked "Ref/Order No."

vi) Name and designation of officer preparing the invoice.

vii) An identification stamp or description of the Institution issuing the

invoice.

viii) Delivery information; provide details of the number of packages and a

con-note or similar in the box marked "Consignment Note"). See

section 5.4.1.2.1.

An example of a correctly prepared invoice is shown in Section

5.4.1.0.

7

C S I POLICY MANUAL

5.4.1.2.1 Proof of Delivery:

5.4.1.3

Proof of delivery of goods to a customer is important in the event that

a payment dispute arises with the customer. Although the green copy

of the invoice is sent to the customer for certification, these are not

frequently returned.

Accordingly all invoices must have some proof of delivery. The best

method is to list the consignment note details (freight company and

con-note number on the invoice). If the customer picks up the goods

have him/her sign the complete invoice.

Please file all such consignment notes in date order in case

Corrective Services Industries requires a copy to provide to a

customer.

Customer Numbers:

It is essential that the customer number is shown on the face of the

invoice so that the customers debt can be correctly recorded at the

Corporate Office. A list of customer numbers is attached at Appendix

B. This list is updated regularly.

8


C S I POLICY MANUAL

Take care when selecting the customer number since many

customers have a multitude of delivery points e.g. T AFE or the Police

Service. If in doubt contact the Credit Controller, Corporate office.

5.4.1.3.1 Creating a new customer

If a customer does not appear to have a customer number it is likely

that Corrective Services Industries has never traded with that

customer before. The Credit Controller can advise who will advise

you if a customer number has been allocated to that customer.

If no number has been allocated to the customer, then that customer

is a new customer and a credit check is necessary. If the customer is

a government authority then such a check is simple; however for a

Private Sector customer, a credit application must be completed and

approved by the Credit Controller. The credit search could take a few

days. A sample credit application is provided at the end of this

section.

In all cases where a proposed customer is not an existing customer,

the goods are not to be shipped to that customer without the formal

approval of the Credit Controller.

9

I '

C S I POLICY MANUAL

5.4.1.3.2 Cash Customers

Many customers who purchase direct from an Institution are either

making a.n infrequent purchase (often their only Corrective Services

Industries purchase) or are making only a small purchase (less than

$250). In all of these instances mark the sale a "cash" sale and the

customer is "cash". Mark the invoice "cash", collect the payment

(either cash or cheque) and include in your remittance advice (see

Section 6) the invoice number used and the amount received. Issue

the customer with a receipt.

Do not create a new customer number for a small or infrequent

purchaser; instead insist on a cash sale. There is no commercial

advantage in providing credit terms to an infrequent or small

purchaser.

10


C S I POLICY MANUAL

5.4.1.4 Transfers to Corrective Services Industries (Corporate Office}

If you are transferring goods to Corrective Services Industries,

Corporate Office (for example in fulfilment of a stock order) then

Corrective Services Industries is not your customer; transfer of

goods to Corrective Services Industries are deemed to be a

production transfer at cost. The procedure for processing production

transfers is provided in Section 5.4.2.

5.4.1.5 Sales to other Institutions

The same procedure applies to transfers of goods in intermediate

stages of production (e.g. steel table frames transferred from a Metal

Business unit to a cabinet Business unit). These are not sales but

are production transfers and the transfer should be recorded by a

Dispatch Docket.

5.4.1.6 Internal Sales

i) It is quite common for a Business Unit to sell goods or services

to its "host" Institution or other Institutions. An invoice should

be used in exactly the same manner as if the sale were to a

third party customer. Frequent examples are the sale of

rations, furniture etc.

11

5.4.1.7.

C S I POLICY MANUAL

ii) If the sale is to your own Business Unit (e.g. to an individual

workshop) then the sale must be processed on an invoice with

the customer marked as "C99999". This is the customer

nu-mber for a Corporate Office overhead account. Be sure to

provide details of the purpose for which the goods were

provided in order to enable correct account coding at

Corporate Office.

Similarly if you are selling individual items to Corrective

Services Industries for consumption rather than for stock

holding (e.g. the sale of milk or the sale of printing items or

samples, but not stock quantities) then an invoice should be

used and marked customer "C9999".

The difference between a sale and a stock transfer can

sometimes be quite fine. If in doubt contact either the

Management Accountant or the Commercial Manager,

Corporate Office.

Credit Notes

Institutions should not issue credit notes. Instead prepare a request

for a credit note (copy attached at the end of this section) and forward

to the Corporate Office.

C S I POLICY MANUAL

5.4.1.8 Sales Tax

The subject of sales tax is quite complex; however the following

guideline-s should help in most cases.

i) Tax is not paid by Government Departments or by bodies

which quote a tax exemption certificate. This will be shown on

the purchase order and must be signed by the public officer of

the organisation. If a customer shows no evidence of being tax

exempt then tax is to be charged.

ii) Tax is only charged on "goods"; services are exempt from

sales tax.

iii) There is no sales tax on food items (except wine which is

taxable at 20%) or on used goods (such as upholstery repair).

Goods sold as an aid to production or for use in primary

production or sold to another wholesaler are all exempt from

sales tax. Clothing and surgical goods are exempt.

iv) Office furniture is taxable at 20% and household furniture is

taxable at 1 0%.

13

C S I POLICY MANUAL

PRODUCTS AND SERVICES

Taxable Rate% Exemption Item

Desk Top Publishing Services

• Brochures 0 100(1)- Sch 1*

• Newsletters 0 100(1)- Sch 1*

• Flyers 0 100(1)- Sch 1*

• Catalogues 20 1 - Sch 4

• Annual Reports 20 1 - Sch 4

• Booklets 0 1 00(1) - Sch 1 * 4 Comprehensive design service** N/A Commercial Mgrs advice

Production art/artwork 0 24(3) - Sch 1

* Advertising matter is taxable ** The provision of a service is not taxable

Printing/Offset

• Cards 20 1 - Sch 4

• Stationery 20 1 - Sch 4

• Forms 20 1 - Sch 4

• Letterheads 20 1 - Sch 4

• Carbonless Pads 20 1 - Sch 4

• Bookbinding Commercial Mgrs advice

• Decals 20 1 - Sch 4

• Labels 20 1 - Sch 4 Recycled Paper 0 108 - Sch 1

Signs

• Acrylic 20 1 - Sch 4 • Timber 20 1 - Sch 4

• Metal 20 1 - Sch 4

• Feather Board 20 1 - Sch 4 + Screenprinting 20 1 - Sch 4 + Engraving 20 1 - Sch 4 + Industrial Safety Signs 0 20 - Sch 1 • Building Signs* 0 39 - Sch 1

* A specific ruling from the ATO should be obtained

Date: 1/93 Signature: File: 86/0309 Page: 13 i)

~~~CORRECTIVE ~ SERVICES INDUSTRIES

Office Furniture

+ Desks and or Returns + Bookcases

• Tables

• Storage Units + Pin Boards + Visitors Chairs + Screens - free standing + Footrests - GRP + Computer Printer Trolleys

'= ating

• Lounges

• Dining

• Typist

• Clerks + Drafting

• Executive

• Visitors

• Stools

Conference Room Furniture

• Tables

• Credenzas

• Chairs

[ ;ktop Accessories - Acrylic

• Document Trays, 1 & 2 tier + Computer Trays

• Calendar Stands

• Side Opening Clipboards

• Name Plates

PVC Folders

C S I

• Folders - A4, AS and Foolscap

• Ring Binders - 2 & 3 rings

• Clipboards

• Binders with pocket and pads ,

• Motor Vehicle running folders( .fl

Date: 1/93 Signature: j if.

POLICY MANUAL


20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4

10 1(a) - Sch 2 10 1 (a) - Sch 2 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 10 1 (a) - Sch 2 10 1(a) - Sch 2

20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4

20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4

20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4

File: 86/0309 Page: 13ii)

Flags

• • • + •


NSW State National - all nations Union Jack MSB CSI

Outdoor Furniture

Table & Chairs y Mall Tables + Benches

• Planter Stands

• BBQ Stands

Household Furniture

C S I

+ Beds - single, double & bunks

• Desks - optional attached hutch

• Bedside Tables + Chest of drawers

• Dressing Tables - optional mirrors

• Wardrobes

~bles

• Children

• Dining

• Coffee + School

• Drawing + Occasional + Trapezoidal

Date: 1/93 Signature:

POLICY MANUAL


0 191 - Sch 1 0 191 - Sch 1 0 191 - Sch 1

20 1 - Sch 4 20 1 - Sch 4

10 1 (a) - Sch 2 20 1 - Sch 4 10 1 (a) - Sch 2 .10 1(a) - Sch 2 10 1 (a) - Sch 2

10 1 (a) - Sch 2 10 1 (a) - Sch 2 10 1 (a) - Sch 2 10 1 (a) - Sch 2 10 1 (a) - Sch 2 10 1(a) - Sch 2

I 10 1(a) - Sch 2 ' 10 1 (a) - Sch 2 10 1 (a) - Sch 2 20 1 - Sch 4 20 1 - Sch 4 10 1 (a) - Sch 2

I 20 1 - Sch 4 ~ f

File: 86/0309 Page: 13 iii)

C S I POLICY MANUAL


Miscellaneous Products & Services

• Flag Poles - free standing office style 20 1 - Sch 4

• Crutches - Wooden (Axilla) 0 93 - Sch 1

• Poles & Pickets 0 39 - Sch 1

• Therapeutic Shapes & Mats 0 93 - Sch 1

• Data Processing N/A Commercial Mgr advice

• Envelope & Mailing N/A Commercial Mgr advice

• Assembly & Packaging N/A Commercial Mgr advice

• Electronics Commercial Mgr advice A Upholstery Commercial Mgr advice

Demountable Buildings 20 Commercial Mgr advice

" Livestock 0 65 - Sch 1

• Livestock by-products 0 65 - Sch 1

• Horticulture 0 158 - Sch 1

• Timber Milling 0 42 - Sch 1

• Bricks 0 59 - Sch 1

• Wine - Full Alcohol 20 1 - Sch 4 + Wine - Low Alcohol 10 15 - Sch 2

Steel Storage Equipment

• Bench Frames 20 1 - Sch 4

• Trolleys, Laundry & Linen 20 1 - Sch 4

• Mobile TV/video Trolleys 30 12 - Sch 5 + Planter Boxes 10 1(a) - Sch 2

Clothing Bins 20 1 - Sch 4 Metal Scrap Bins 20 1 - Sch 4

+ Shields - Heat Treatment 20 1 - Sch 4

• Benchtops - Heat Treatment 20 1 - Sch 4

• Powder Coating 20 Commercial Mgr advice

t E

Bags ~-

• Calico 20 1 - Sch 4 I • Laundry 10 1 (t) - Sch 2 J • Body 20 1 - Sch 4 ' • Shoulder 20 1 - Sch 4

• Cricket 20 1 - Sch 4

• Sport 20 1 - Sch 4 ! f '

Date:. 1/93. Signature: File: 86/0309 Page: 13 iv) I I

C S I

Schools

+ Desks + Paint Easels + Fire Boxes

• Bike Stands

• Signs

• Workbenches + Carpenter Benches + Tables A Stools ' Chairs

" Book Bins + Waste Bins + Pottery Benches

• Trolleys

• Test Tube Frames

• Play Mats

Textiles

+ Bedlinen

• Theatre Garments + Clothing + Shifts + Aprons

Pyjamas Nightgowns, adult & childrens

• Nursery Gowns + Bunny Rugs + Drop Sheets

Date: 1/93 Signature:

POLICY MANUAL


10 1 (a) - Sch 2 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 10 1(a) - Sch 2 10 1 (a) - Sch 2 10 1 (a) - Sch 2 20 1 - Sch 4 10 1 (r) - Sch 2 if domestic 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4 20 1 - Sch 4

10 2 - Sch 2 0 75 - Sch 1 0 75 - Sch 1 0 75 - Sch 1 0 75 - Sch 1 0 75 - Sch 1 0 75 - Sch 1 0 75 - Sch 1

10 2 - Sch 2 20 1 - Sch 4

File: 86/0309 Page: 13 v)

t

I '

i I I

I

C S I POLICY MANUAL

v) In general all other items are taxable at 20%. If in doubt,

contact the Commercial Manager, Corporate Office.

Wfien preparing an invoice, show the price of the goods and

the sales tax separately.

5.4.2 PRODUCTION TRANSFERS

5.4.2.1 Transfers

A transfer of goods to the Corporate Office is not a sale; a sale only

occurs when the title to the goods passes to a third party. This is not

the case when goods are transferred to the Corporate Office and the

transaction is referred to as a production transfer.

The originating Institution is entitled to receive a "production credit"

which acquits the Institution's production cycle and provides a basis

against which to measure the performance of the individual Business

Unit.

14


C S I POLICY MANUAL

5.4.2.2 Dispatch Dockets

i) All transfers of finished goods to the Corporate Office are to be

on- a Dispatch Docket. Both the blue and the pink copies are

to be forwarded along with the goods. The pink copy is used

by the Commercial Branch in order to calculate the financial

consequences of the transaction.

ii) Dispatch Dockets must show details of the originating

Institution and details of the goods being transferred (especially

part numbers).

iii) Details of the requesting Corporate Office purchase order or

works order are to be shown on the body of the dispatch

docket.

iv) If the delivery of the goods is via a carrier other than

Corrective Services Industries transport, then mark the

dispatch docket with some delivery information such as a con-

note number and name of carrier.

15

C S I POLICY MANUAL

5.4.2.3 Inter Institution Transfers

See Section 1.5. These transfers are to be detailed on a dispatch

docket as are transfers to the Corporate Office. The pink copy is to

be sent to the Corporate Office to ensure that the issuing Institution

obtains a production credit and the receiving Institution is charged for

the materials.

Note all such transfers are at cost; no profit is recorded on a sale to

another part of the same business. There are accounting reasons for

this, such as the need to eliminate intercompany profit from inventory

stocks. In future as the sophistication of Corrective Services

Industries systems increases, it may be possible to transfer goods

between Institutions at an intercompany profit.

The requirements of works orders impact upon the commercial

operations of Corrective Services Industries due to the necessity to

maintain data on outstanding works orders and to check that invoices

can be matched against individual works orders.

16

C S I POLICY MANUAL

Note that procedures on works orders and invoicing may change

within the next six months. The possibility exists for Corrective

Services Industries to use a returned works order to produce an

invoice. If this is implemented then the current invoice will not be

written out at the Institution but will be replaced by a (differently

worded) delivery docket.

5.4.3 PURCHASE ORDERS

ii) Purchase orders are to be authorised by an Officer with an

appropriate financial designation. Where Institutional staff

have insufficient delegation of authority the purchase order is to be

forwarded to Corrective Services Industries for approval.

5.4.4 PAYMENTS FOR GOODS AND SERVICES

5.4.4.1 Payments to Suppliers

i) Payment for goods and services (especially production inputs

such as materials and bonus earning) are paid by the

administration office within each Institution. That is, supplier's

invoices are authorised by the Business Unit Manager who

passes them to the administration office for payment.

17

I

Q~ ~CORRECTIVE ~ SERVICES INDUSTRIES

C S I POLICY MANUAl

5.4.4.2 Payments to Corrective Services Industries

Although this section is not of great importance to the Managers of

Business Units, it may be useful for the Institutional Administration

staff.

i) Progressively Corrective Services Industries will be

implementing a transition to have Institutions pay to Corrective

Services Industries via cheque all invoices sold by Corrective

Services Industries facilities to that Institution. (Currently

Corrective Services Industries is paid via Treasury transfer

from the Department at Head Office).

Accordingly all Business Unit Managers should check that a

copy of their invoice (whether the original or a subsequent

copy) reaches the Administration Officer of the Institution

purchasing the goods. Subsequent cheques are to be mailed

to Corrective Services Industries, Corporate Office.

18

I I I I

i f

I ' t • I


C S I

5.4.5 BUDGETS AND ALLOWANCES

5.4.5.1 General

POLICY MANUAL

i) Corrective Services Industries no longer operates along traditional

Government cash accounting lines. From 1st July, 1990, Corrective

Services Industries became self funding for its "E" item expenditure.

Effectively this means that Corrective Services Industries must fund

all expenditure for production costs (i.e. materials, labour and minor

plant) from the revenue that is earned from sales.

ii) Corrective Services Industries maintains it's own cash balances in a

"Working Account" and must operate within this level of funding for

production costs. This requires tight cash control.

iii) Other overhead items such as salaries and industrial overheads etc

are still being met from the consolidated fund for each Institution.

This is known as "Program 5" expenditure. It is intended in the near

future for Corrective Services Industries to absorb the cost for

these overheads also.

19

C S I POLICY MANUAL

5.4.5.2 Allowances

i) Allowances now only apply for those overhead items for which an

allowance has been made from the Institution. Managers are

expected to remain within the allowances given and may request

supplementation as necessary. Within reason Managers may utilise

the unused portions of various allowances on other similar

expenditure items. Generally these allowances are salary related

items and industrial overheads (such as electricity, safety clothes etc)

within Business Units.

ii) Now that Corrective Services Industries is "off-budget" for

expenditure items relating to production (material, labour and minor

plant etc), the concept of an allowance has a different meaning.

Effectively the traditional limit to expenditure has been relaxed.

20

C S I POLICY MANUAL

Instead budgets are set for the following items for each Corrective

Service Industries Business Unit:

* Sales

* Materials expense

* Consumables expense

* Freight

Repairs and Maintenance

* Direct Labour (prisoner wages)

* Plant

Management monitor the expense levels in these expenditure

accounts, partly to see that they remain within allowance, but also to

see that the expenditure is generating a sufficient return.

For these items it is acceptable to exceed an expenditure allowance

provided that a commensurate increase in sales is achieved.

iii) Corrective Services Industries is undertaking the process of

commercialising it's business. One of the measures of commercial

success is the achievement of return or profit. Corrective Services

Industries is concentrating on seeking a return (or surplus of income

over expenditure) rather than attempting to limit expenditure to pre-set

limits. 21

C S I POLICY MANUAL

iv) There will also be some remaining allowances from Corrective

Services Industries (e.g. overtime). To utilise these funds requires a

request to be made to the Operations Development Manager,

Corrective Services Industries.

5.4.5.3 Expenditure Controls

Considerable control is to be exercised over expenditure.

i) For all expenditure approvals the relevant Manager must remain

within his/her delegation limit and be sure that the expenditure is

justified.

ii) In the case of expenditure for production items any request to exceed

delegation limits must be made by fax to the Operations Development

Manager.

iii) The Executive Committee monitors financial performance of each

Business Unit. If expenditure is not matched by sales incorporating

an appropriate margin then the Manager will be asked to provide an

action plan to correct the situation.

In extreme cases it sales are unlikely to recover in a given Business

Unit then all further expenditure will be terminated.

22

=

I =

:il

h

11

I

ti

n

E

~~ ICORRECTIVE ~ SERVICES INDUSTRIES

C S I POLICY MANUAL

iv) In the case of Program 5 expenditure, this is to be monitored using

the current fortnightly reports from the "Chairman" system issued by

Head Office. Corrective Services Industries does not monitor this

classification of expenditure and hence advice as to progress against

allocation will be given by the Institutional Administrative Officer.

5.4.5.4 Budgets

If Corrective Services Industries is to achieve the goal of self-

funding, there will be a need to increase both the level of sales and

profitability on sales. One of the tools to achieve this is the budget

or forecast. A well prepared budget provides an overview in advance

of likely performance and allows Management the ability to put plans

in place to correct potential poor performance. It also provides the

ability to measure the subsequent performance of Business Units.

i) A budget submission is prepared by each Business Unit Manager and

provided to the Corporate Office in April each year.

23

C S I POLICY MANUAL

5.4.6 RECEIPT OF FUNDS

i) It is not intended that Institutions should receive funds remitted from

customers. Institutions should only collect outstanding amounts from

customers if special authority has been provided. In the event that

funds from customers are received at Institutions, these should be

remitted direct to the Corporate Office (i.e. P.O. Box 116, Regents

Park, 2143.

ii) Note that Institutional invoices are still marked as requiring the

customer to send remittances to Head Office (i.e. Roden Cutler

House); these are to be amended prior to release.

iii) If you have any problems with remitting funds to the Corporate Office

please contact the Credit Controller.

25

C S I POLICY MANUAL

5.4.6.2 Remittance Advice

i) From time to time some remittances will be received at the Institution;

generalli these will be the result of "cash sales" or (rarely) customers

who mail cheques to an Institution. Such remittances are to be

deposited in the "Corrective Services Industries Remitting Account".

Precoded deposit books have been distributed to all Institutions.

Simply fill out the deposit slip and deposit the funds at the nearest

National Australia Bank branch.

ii) With each bank deposit a remittance advice is required to be faxed

that same day to the Corporate Office. This advice should show:

a) Invoice No.

b) Customer No. (if the customer has no customer No. and

paid in cash, then the customer is "Cash")

c) Amount of remittance

An example of a remittance advice is attached.

26

C S I POLICY MANUAL <al COR REGIVE SERVICES INDUSTRIES

5.4.7 REPORTING RETURNS

5.4.7.1. Monthly Returns

Reviewing performance is important to demonstrate results and

provide information to enable objective business decisions to be

made. Timely and accurate financial inputs, in particular, provide

the source for informative and reliable financial statements upon

which to assess commercial performance.

The Monthly Reporting System is a fundamental component of CSI

business planning, reporting and reviewing. The report in the form

shown at the end of this section consists of:

Form 1 - Monthly Performance Reporting System - (Cover Sheet

to be submitted by CSI Operations Manager/AS!

Inmate Employment).

For.m 2 - Management Report - Employment, Wages, Productive

performance inputs

Form 3 - Management Report - Financial expenditure and

income

Form 4 Month End Accruals

Form 5 Stock Balance Summary

5a - RaJ Materials & Consumables

Date: 7/93 Signature:fi)Y 1 File: 92/184 Page: 27

I

5.4.7.2

5.4.7.3

C S I POLICY MANUAL

5b - Work in Progress

5c - Finished Goods

5d - Nursery/Livestock Inventory

Form 6 - Customer Service

Form 7 - Occupational Health & Safety

(Section deleted)

Due Dates

~I CORREGIVE SERVICES INDUSTRIES

Returns are required to be submitted to Corporate Office within two

days of the close of each month.

5.4.7.4 Financial Results

i) The financial results for each Business unit are prepared and

distributed monthly. A sample profit and loss statement (P & L) is

included at the end of this section and shows all sales and all

expenditure (except on capital equipment). Note the results are

compared against budget; monthly budgets are apportioned from the

annual budgets.

ii) The Profit & Loss information is drawn from information emanating

from Correctional Centres (whether by way of a formal return or

otherwise).

iii) If you have any disagreement with the P & L supplied (for example

differing sales and expenditure), contact should be made with the

Financial Accountant.


C S I POLICY MANUAL <Ill CORREITIVE SERVICES INDUSTRIES

5.4.7.5 Annual Return of Plant and Inventories

Date: 7/93

At the conclusion of each year, a return of plant, equipment and

inventories is required. Details of this return are indicated on the

attached pages.



MONTHLY PERFORMANCE REPORTING SYSTEM - Form 1

Correctional Centre

Month of.. ........................................ 199 .... .

Management Report

Commercial Status

Customer Service

Occupational Health & Safety

Employment, Wages, Production Performance

Financial Inputs Accruals Stock Balance Summary * Raw Materials & Consumables * Work in Progress * Finished Goods * Nursery/Livestock Inventory

F2

F3 F4 F5 F5a F5b F5c F5d

F6

F7

...................................................... Date Signature/Designation

TO BE FORWARDED TO COMMERCIAL MANAGER, CSI CORPORATE OFFICE WITHIN 2 DAYS OF THE CLOSE OF EACH MONTH.


MANAGEMENT REPORT • FORM 2

CORRECTIONAL CENTRE:. ____________ _

EMPLOYED UNEMPLOYED NONWORKERS REMAND

TOTAL

BUSINESS UNIT

TOTAL

SERVICE INDUSTRIES

AVE. EMPLOYED AVE WEEKLY PROFILE UNEINON-WORK HRSWORKED

& REMANDS PER INMATE

C.S.I BUSINESS UNITS

PROFILE I AVERAGE lAVE WEEKLY EMPLOYED HRSWORKED

PER INMATE

PRODUCTION EFFICIENCY

STANDARD HOURS I MONTH ACTUAL HOURS I MONTH X 100

PRODUCTION LOADING

OUTSTANDING ORDERS IN STANDARD HOURS AVERAGE ACTUAL WEEKLY HOURS X %EFF

MONTH: _____ _

AVERAGE TOTAL TOTAL WEEKLY WEEKLY WEEKLY EARNINGS ACTUAL BUDGET

i

AVERAGE PROFILE No ACTUAL No WEEKLY OFFICER OFFICER EARNINGS DAYS DAYS

-

"======'!II % EFF

WEEKS

SIGNATURE I DESIGNATION •---------------

f

t

I I I I [


MANAGEMENT REPORT • FORM 3

CORRECTIONAL CENTRE:

BUSINESS UNIT:

R.T.S SALES

MATERIALS

CONSUMABLE$

REPAIRS

INMATE WAGES

PACKAGING

;>PERATE SUP.

STATIONERY

SAFETYEQU.

NET TOTAL

!

BUDGET

PREP BY:

FINANCIAL EXPENDITURE AND INCOME

(WHOLE DOLLARS ONLY)

MONTH YEAR TO DATE

I ACTUAL Jv'-'-A.:R._.__IA.::..N:.:::c.=:E_~if's=-=u:.:::D...c.G:.:::ET:::._~+-A...c.c.__Tu.::.:A.....:L::.__~t-v-A_.R_IA.__N.__c.__E--J

1---1 --·-t-----+------il-----·1---ii ---t----------1

~-----1~----+-----+---~

I I I r--~~~-----·-·-+~~~~-jr--~---~·---+-~~~~+-~------;

I I r--~~~-r~---~~~-~~.~~~~~~-~-~~--~

I

I '

SIGNATURE I DESIGNATION •---~--~-----! i l I i r


MONTH END ACCRUALS - FORM 4

CORRECTIONAL CENTRE'------------DATE: ________ _

BUSINESS UNIT'------------- PREP. BY: ___________ _

ORDER DATE OF COMMITIED NO ORDER SUPPLIER TYPE OF GOODS I SERVICE VALUE

I

I

f-- I

,_-::± .. l -+-------1 I I

'

'

--

TOTAL

SIGNATURE I DESIGNATION'-------------

!NOTE I

DATE RECEIVED

THIS FORM IS FOR ORDERS ON WHICH GOODS HAVE BEEN RECEIVED BUT SUPPLIERS INVOICE HAS NOT BEEN PROCESSED.

DATE COST PAID

- CENTRE__j

~

--

I


STOCK BALANCE SUMMARY - FORM 5

CORRECTIONAL CENTRE: ________ _ MONTH:

BUSINESS UNIT: PREP BY:

RAW MATERIALS: $

CONSUMABLES: $

WORK IN PROGRESS: $

FINISHED GOODS: $

FERTILISER I SEED: $ -~---~----

LIVESTOCK: $

TOTAL: $

SIGNATURE I DESIGNATION :


RAW MATERIALS & CONSUMABLES - FORM 5(a)

CORRECTIONAL CENTRE: ________ _ DATE: ______ _

BUSINESS UNIT: _______ _ PAGE: ______ _

STOCK DESCRIPTION STOCK I ACTUAL UNIT CARD NO CARD I COUNT COST

QUANTITY ($)

-----j····

. I I I

'

!

I

' / !

PAGE TOTAL

SIGNATURE I DESIGNATION :. __________ _

RAW MATERIAL IS DEFINED AS STOCK IN STORE THAT HAS NOT BEEN PROCESSED. IE NO LABOUR OR OTHER PROCESSING HAS OCCURED.

TOTAL COST

~ ~ ~ '

~ J ' I 1 J

' ---------

' --1 ·~-·-j

' I

' ' I ' I

.......;

'

i

' : ' I I

i ' !

---j i ~~

i I I ~

l

I I

I I


WORK IN PROGRESS RETURN* • FORM 5(b)

CORRECTIONAL CENTRE: _________ _ DATE: _____ _

BUSINESS UNIT:, __________ _ PAGE NO: _____ _

PART DESCRIPTION QUANTITY MATERIAL TOTAL NUMBER IN USE COST($) COST

-

PAGE TOTAL

SIGNATURE I DESIGNATION:

*WORK IN PROGRESS IS DEFINED AS STOCK THAT HAS BEEN TAKEN FROM THE RAW MATERIAL STORE AND IS BEING PROCESSED IN THE WORK AREA BEFORE BEING RETURNED TO STORE AS FINISHED GOODS.

CORRECTIVE SE:RVICES INDUSTRIES

FINISHED GOODS RETURN - FORM 5(c)

CORRECTIONAL CENTRE: _________ _ DATE: _____ _

BUSINESS UNIT: _______ _

PART NUMBER

I I

DESCRIPTION

PAGE NO: _______ _

STOCK CARD ACTUAL UNIT QUANTITY COUNT COST ($)

TOTAL COST

E--~----

----L-----------~---------+------~---------+---------I i ;--~- - --->---------~--- -------l------------+-------l------------+---------1 ' r-----+------------f-~-----f--------!--------+-------

r--------+---------------~------+-----4--------+-------

~--+-----------------+--------+------+----~

~----+------------------~----------1--------+---------+---------l r----~-------------------~----------+-------1------------+---------f ¥

PAGE TOTAL

SIGNATURE I DESIGNATION: ____________ _


NURSERY\ LIVESTOCK RETURN • FORM 5(d)

CORRECTIONAL CENTRE:, _________ _ MONTH: _____ _

BUSINESS UNIT: _______ _ PAGE NO:, _____ _

$ ! $ TYPE DESCRIPTION COUNT UNIT VALUE

COST

-

·---

I -:_:t I -I

!

+ ?

I I

PAGE TOTAL

SIGNATURE I DESIGNATION:, ____________ _

--1 I

I J

I

! il I


CUSTOMER SERVICE REPORT - Form 6

CORRECTIONAL CENTRE: ................................................................................................. .

BUSINESS UNIT: ............................................................................................•......................

MONTH: ................................................................................................................................•.

Orders Processed

The first Sales Invoice Number for the month: The last Sales Invoice Number for the month: Number of Cancelled Invoices:

Reasons: 1. Double invoiced 2. Wrongly invoiced 3. Cancelled invoiced 4. Other ............... .

No. of Production Transfers for the month: Outstanding Customer Orders (Past required delivery date, or likely to go past delivery date)

Customer Job No. Order Client Item Reason for Expected Customer Order No. Date Type Delay Del Date Contacted

Comment: ........................................................................................................................................... .

Customer Enquiries/Complaints

Customer Job No. Order Client Item Detail Action Taken Order No. Date Type (Dei./Qual.)

Comment: .................................•..........................................................................................................

Signature/Designation: .................................... . Date: ............................ .

I

CORAECllVE SERVICES INDUSTRIES

OH & S INCIDENT STATISTICS - Form 7

CORRECTIONAL CENTRE: ........................................................................................................................ .

CSI BUSINESS UNIT: ................................................................................................................................. .

MONTH: ....................................................................................................................................................... .

INCIDENTS RELATING TO INMATES

NEAR MISSES INCIDENTS LOST TIME INCIDENTS

NUMBER OF NEAR NUMBER OF INCIDENTS NUMBER OF LOST HOURS LOST MISSES FOR THE REPORTED RELATING TO TIME INCIDENTS FOR DURING THE MONTH INJURIES TO A PERSON AND THE MONTH MONTH DUE

OR DAMAGE TO EQUIPMENT TO L.T.I. (Includes lost time incidents)

II I I I

INCIDENTS RELATING TO STAFF

NEAR MISSES INCIDENTS LOST TIME INCIDENTS

NUMBER OF NEAR NUMBER OF INCIDENTS NUMBER OF LOST HOURS LOST MISSES FOR THE MONTH REPORTED RELATING TO TIME INCIDENTS FOR DURING THE

INJURIES TO A PERSON AND THE MONTH MONTH DUE OR DAMAGE TO EQUIPMENT TO L. T.l. (Includes lost time injuries)

I I I I DEFINITIONS:

Near Miss: Incident in which no-one was injured or any equipment damaged.

I

I

Lost Time Incidents: Applies to those incidents where the injured person is unable to attend the next working

day following the injury.

Signature/Designation: .............. ..................................................... .


C S I POLICY MANUAL

5.4.8 CAPITAL EXPENDITURE

5.4.8.1 General

Expenditure on plant and equipment must be closely controlled in

order to conserve the Corrective Services Industries liquidity base.

All requests for expenditure on plant and equipment where each

individual item of plant has a value exceeding $1 ,000 must be

approved in advance.

A properly completed capital expenditure justification form must be

completed, submitted to the Corporate Office and approved by the

Executive Committee.

5.4.8.2 Justification

i) As a rule, only those items of plant which can demonstrate a payback

or less than three years (i.e. the cost of the plant is recovered in three

years from generated savings), will be approved.

ii) Items of plant and machinery which are required to meet

Occupational Health and Safety standards are exempt from this

requirement. However, these items will still require a capital

expenditure request in advance of purchase.

30

t f

I ( ' t

I '

C S I POLICY MANUAL

5.4.9 COST CENTRES

5.4.9.1 Account Numbers

i) Cost Centre numbers (also known as account numbers) are provided

through the Corrective Services Industries Net Business Information

System. A chart of accounts is included as Appendix C. Note that a

cost centre number now consists of two components:

a) A Department number. For example Cessnock Metal Business

Unit has a department No. 010 361; where 010 refers to the

Business Unit; 36 is the Institution location number for

Cessnock and 1 is the first (and only) metal unit at Cessnock.

b) An account number; account numbers are common for all

Institutions; for example 511 is the account number for metal

materials regardless of which Institution or Business Unit

utilises that account number.

31

5.4.9.2.

i)

C S I POLICY MANUAL

Usage

It is unlikely that industrial Institutions will require the use of the

fufl range of the chart of accounts. However as Corrective

Services Industries assumes the funding responsibility for

overhead expenditure that is currently being funded from the

Department's allocation, this may change. Managers who

believe that they have a need for additional account numbers

should send their request to the Financial Accountant.

ii) The most likely numbers used by Industrial Facilities will be:

a) Sales 4PO

b) Materials 5 p 1

c) Consumables 5P2

d) Direct Labour 5P3

e) Repairs 5P4

f) Freight 5P5

32

5.4.1 0


C S I POLICY MANUAL

where P denotes the product group:

1 = Metals

2= Timber

3= Plastics

4= Textiles

5= Upholstery

6= General Services

7= Agriculture

STOCKTAKE OF BUSINESS UNITS AT 30TH JUNE

A stocktake of inventories including plant and equipment is required for each

Corrective Services Industries Business Unit at 30th June each year. This

information is required:

i) To satisfy the accountability requirements of the Treasurer's

Directions.

ii) To enable the preparation and promulgation of Financial Accounts at

the 30th June, which reflect commercial and accrual accounting

principles.

33

C S I POLICY MANUAL

iii) To determine the asset base that leads to the performance of each

Business Unit including determination of an adequate level of

depreciation for each Business Unit.

5.4.1 0.1 Scope & Timing

i) All inventories of raw materials, consumables, work in progress and

finished goods; plant and equipment; and livestock on hand at 30th

June, are to be counted and evaluated.

Other sections of the Department of Corrective Services may be requested

to conduct stocktakes at other dates. However, the conduct of stocktakes

for Corrective Services Industries Business Units on 30th June, is

mandatory given commercialisation and reporting requirements.

ii) Returns are to be completed (samples attached) and returned to the

Commercial Manager, Corrective Services Industries in accord with

the timetable provided. Where relevant 'Nil Returns' are to be

submitted.

iii) Separate returns are required for each Business Unit.

34

C S I POLICY MANUAL

iv) Each Institution is to nominate an officer, upon request, responsible

for co-ordinating stocktake requirements and to whom future inquiry is

to be directed.

5.4.10.2 Inventories

A stocktake of all inventory items, i.e. raw materials, consumables (e.g.

adhesives, paints etc), work in progress (i.e. partially completed goods) and

finished goods is to be conducted.

i) Schedule S1: Raw Materials and Consumables

a) Wherever possible, please enter the stock card or other local

inventory reference for the raw material or consumable.

Please provide an understandable description.

b) Please describe the quantity that is on hand and the unit of

measure. List the cost (per unit, e.g. per metre or per kilo etc)

and then multiply quantity by unit cost to give total cost.

35

C S I POLICY MANUAL

ii) Schedule S2: Work in Progress

a) Valuation of these items is to be at cost value (i.e. do not

include a markup for any profit in your valuation). Cost is what

the material originally cost plus any value added in the interim

(e.g. some labour value may have been added in processing).

b) Give a good description of the article in Work in Progress.

List the unit cost of the completed product.

c) Estimate the percentage completion of the product (e.g. has

30% or 90% of the materials and labour to complete this

product been consumed).

d) Now multiply the quantity counted by the percentage completed

by the cost of a completed product. This gives the cost in

Work in Progress.

e) For products which have no part number (e.g. demountable

classrooms), estimate the amount of material and labour which

has been put into this product since the job began. This is the

Work in Progress value (at cost).

36

I I


C S I POLICY MANUAL

iii) Schedule S3: Finished Goods

a) The cost of any finished goods is to be taken at cost. Simply

count the quantities of product on hand and multiply that

quantity by the cost of the product.

iv) Schedule S4: Livestock

a) List the type and breed of livestock. This description will be

used by the Agricultural Manager to determine if the value of

the livestock is adequate.

b) Provide the cost price of the livestock. If the market price of

the livestock has fallen since the livestock was purchased, then

please provide an estimate of the current market value of the

livestock.

c) Stocks of seeds and fertilisers are to be counted and valued (at

the cost paid for these items).

37

J

I

I

~~ ~CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

v) Schedule S5: Raw Materials Discrepancy Return

a) Provide details of adjustments necessary for raw materials and

consumables.

b) Explanation is necessary for abnormal discrepancies.

5.4.10.3 Plant and Equipment

i) Schedule P1: Plant and Equipment Return

a) Provide a listing of the individual items of plant and equipment,

with a purchase price of $1 ,000 or more. This list should

include items of equipment, actually in your custody. The list

should include items of machinery, office equipment, motor

vehicles and tractors and large items of plant. Provide a

separate return for each category. Do not include details of

Buildings.

b) Show the relevant plant card number for the plant item.

38 I' I y

[ I r f


C S I POLICY MANUAL

c) Valuation of items of plant is to be at cost. If you are unsure of

the cost, please make an estimate of the replacement cost and

mark your listing accordingly. If any item is, in your opinion of

no value, please indicate this.

ii) Schedule P2: Unserviceable, Missing or Surplus Plant:

a) Provide in this schedule, a list of all plant items which are not

at full serviceability (ignore the need for minor repairs).

b) Provide details of all plant and equipment which is on the plant

cards but which could not be located (for whatever reason).

c) Provide details of any equipment which is surplus to

requirements (e.g. was not shown on the plant cards; it may be

an unrecorded transfer) or which is on your plant cards but

which is no longer required (some other Business Unit may

require this equipment).

39

I I

C S I POLICY MANUAL

iii) Schedule P3: Plant and Equipment Discrepancies

a) On this schedule please provide details of any adjustments that

are necessary to the plant and equipment records. Some of

this information could be determined from Schedules P1 and

P2, however it is more consistent if all requested plant

adjustments are shown on one schedule.

b) Provide reasons for the surplus or shortage.

c) This schedule must be certified by both the Manager (or ASI)

of the Business Unit and by the Superintendent.

40

~

"' p

"" 8 @

I p 8

"' @ !!l "' 8 "' "' "' "' s s @

"' ~

~ il "' p ~

-, ' I

l ~ I ~ I

~ f5:---· ·-1 i ; . .~ 1 a~l I :;;~~~ I

I ~ I ~~"i 1

I l __ i ~- __ --~-~J

I

L~ wO o~

l ;: J

I ::; I I ~

I I

' !

·- --1 ' ! ~

0 z " :::g___.. o> 0

'" ~

L--~-J

"' :;~ <"

lr: I

~--~

_j

- - -~·1

~ 0"' I ._

-~ "' = "8(!ij

I ,_ ~ ~ oiji&(;j <" """' ~~;;]i':ltl r: ' €l~ <!>

I g d~ty

0

!':!'" @,~€1 fe;;> z

d 0~ ~~; " ~ ~ "' ''"'' "'"' .. ;':~g&l':!

I wO

I @.@

eJ ::3@!-3

o-' ~

I ; ' t1 E3 « C-1

"' "' 0

"' '" >5 "'

J ~

I i '

i I I I

CORRECTIVE SERVICES INDUSTRIES I fORMs 1 I

RliW MliTERIALS &COI\ISUMliBlES RETURN

'INSTITUTION: OflTE: I PREPflREO BV: I PflGE No , of l

STOCK OESCRI PTION STOCK CflRD flCTUlll UNIT TOTAl CflRil No QUflNTITV COUNT COST ( $) COST

I

I I

!

I I

'

r

!

' i

I

ICERTiflfO; MANflGER OR liS I OF I NOUSTRIES:

CORRECTIVE SERVICES INDUSTRIES FORM S2

WORK IN PROGRESS RETURN

!INSTITUTION:

PIIRT DESCRIPTION QUIINTITY IN NUMBER PROGRESS

i

I

jCERTifiEO; MIINIIGER OR liS I Of INDUSTRIES:

Oil n:: PREPARED BY: PAGE No of

I% WORK I UNIT COMPlETE COST ( $)

'

! i l

~

I

TO Till COST

! !

I I

i I

!

r f f f

CORRECTI'H SERVICES INDUSTRIES FORM 53

fiNISHED GOODS RETURN!

I INSTITUTION: PREPARED BY: I DIITE: I

PIIGE No of I

Pi\RT DESCRIPTION STOCK CARD ACTUAl UNIT TOTAl NUMBER QUIINTITY COUNT COST {$) COST

-

.··

!CERTIFIED; MANIIGER OR ASI Of INDUSTRIES:

I CORRECTIVE SERVICES INDUSTRIES I FORM 54

liVESTOCK RETURN

'INSTITUTION: 01\TE: I PREPARED BY: I PIIGE No of I

TYPE DESCRIPTION NUMBER IESTit'lATEDI TOTI\l UNIT COST COST

.

.

I

••

jCERTlffED; MIINI\GER OR 1151 Of INDUSTRIES:

CORRECTIVE SERV :r~ !iDUSTRI ES -FORM Ss

RAW MATERIALS DISCREPANCY RETURN

~ NSTITUTIOPF .. --- u. -- I BUSINESS UNIT:

DATE: PREPARED BY: PAGE Ho of

STOCK DESCRIPTION STOCK CARD ACTUAl DiSCREP-CARD NO QUANTITY COUNT IINCY -

- 1------

r------

1------ --

-- ---------- ----·

I

-- ----·--- ------- ______ ,_

-- ------ ----'---- '--

1 I

UNIT TOTAl REASON COST ( $) COST

i

'

1-- - -

[CERTIFiED- MANAGER OR ASI Of INDUSTR!ES:_ ----· ____________ ::] )APPROVED; EXECUTIVE DiRECTOR: ---- I

CORRECTIVE SERVICES INDUSTRIES FORM P 1

PlANT AND EQUIPMENT RETURN

I' NSTITUTION: DAH: I PREPARED BY: I PAGE No of I

PlANT PURCHASE PURCHASE CARD NO. DESCRIPTION DATE COST QUANTITY

I

i I

I

fcERTifiEO· MANAGER OR /lSI Of INDUSTRIES:

CORRECTIVE ~"i!VICES INDUSTRIES fORN P2

DETAILS Of UNSERVICI\BLE, MISSiNG OR SURPlUS PlANT & EQUIP'T

DATE: I ~~;~~[~~~~IT~ .. ··~- l PREPARED BV:

I

PI\GE No of J

PlANT PURCHiiSE PURCHASE QUiiNTITV CARD NO. DESCRI PT!ON DATE COST MISSING SURPlUS

-

--

'

1--·

f--· - --1--·----

----~. ---!_ ____ ·····-----

-

[f_ERI_! fi ED- MANAGER OR 1\SI Of INDUSTRIES:

..

I

UNSERVIC'Bl REASON

------- -----···--···-- ~------- - -----------

CORRECTIVE SERVICES INDUSTRIES fORM P3

DETAilS Of PlANT AND EQUI PM"T DISCREPANCIES

I INSTITUTION: BUSINES UNIT:

PAGE No of

DETAILS Of PLANT PURCHASE SURPLUS/(SHORTAGE)

CARD NO. DESCRIPTION COST QUANTITY $ VAlUE COMMENT

I

I

.

'

I

I

I 1 I

i

jCERTIFIED; MANAGER OR ASI Of INDUSTRIES:

POLICY MANUAL

5.4.11 APPENDICES

5.4.1 0.1 APPENDIX A: PART NUMBER LIST

5.4.10.2 APPENDIXB: CUSTOMER NUMBER LIST

5.4.10.3 APPENDIXC: ACCOUNT NUMBER LIST

41

C S I POLICY MANUAL

5.5 PURCHASING/SUPPLY MANAGEMENT

Corrective Services Industries (CSI) is a major commercial organisation involved in

the manufacture and supply of a diverse range of products and services.

As a commercial based entity, the policies, practices and procedures adopted in

relation to purchasing and supply management are fundamental to the effective

and efficient performance of CSI.

CSI is committed to implementing the requirements of the Public Sector

Management Act (Stores and Services Regulations), directions issued by the State

Contracts Control Board and Departmental Policies covering purchasing and

supply.

As CSI operates within a competitive market environment, a dynamic approach is

taken to purchasing and supply management. Every effort is to be taken to ensure

that purchasing and supply practices are pursued which:

are cost effective and embrace an overall competitive advantage;

fulfill CSI responsibilities to customers;

------------------------------------------- rl.~:L.-------------------------------------------------------------Date: 4/93 Signature: DZ~ File: 88/1881 Page: 1 ~~M---------------------------------------8------------------~--------------------------------------------------

C S I POLICY MANUAL

provide commercial viability;

provide products and services which conform to quality accredited

standards;

place stringent expectations upon suppliers to fulfill their responsibilities and

obligations to CSI and by extension CSI customers.

CSI staff at all levels have a responsibility to implement in principle and spirit the

above policy. The Supply Manager, CSI Corporate Office, is responsible for

ensuring the overall implementation of the above policy including ongoing

monitoring and reporting of results.

........................................... 11-~;? ........................................................... . Date: 4/93 Signature: lJ~l File: 88/1881 Page: 2 ~~----~-~----~----------------------------------------------)!-------------------------------------------------

I

{ill CORRECTIVE SERVICES INDUSTRIES POliCY MANUAL

5.15 COSTING POLICY

table of contents page number

1 PURPOSE ................................................................. 1.1 Costing - Pricing; The Distinction: .............•.......•...............••..

2 THE CSI COST ENVIRONMENT: .•..•....•.••....••...••..•..•..•.•...•..••..••. 2.1 Source of Funds: ...••••••...•....•..••........•.......•••...••.•...•. 2.2 Recovery of Funds: ....••......................•..•.•..........••...•.

3 CSI COSTING OVERVIEW: .•......•.••.•..•...............•••••..........•..... 3.1 Product Cost Content: ....••••....••.•...•• : • ••..•...••.....•••..•.•.•• 3.2 Apportionment of OVerhead: ••.•.••.•••..•.••.••••.••........••.•.•••••.• 3.3 Gross Averaging: .•••..••••....•..•..•••...••••••...........••..•••••• 3.4 Detailed Costing Methodology: •••............•..••.......•.••..•...•..••.

4 FINANCIAL REPORTING: ..•.•..•...•••.•••..................••..........•...•• 4.1 Cost of Sales: •....•..•••••••...•••.......••..................•.....• 4.2 Social Obligations: •.••.•.•..••••...•..•....•....•....•....•..•.•••••••

5 APPENDIX A: DETERMINING THE COST RATE ...•.......•••..•...•.•.•.•...••••• 5.1 Components of Overhead: ••.•..•.•.............•....•.....•..•..•..••.

5.1.1 Supervision/Officers' time •••..................•.......•...•.... 5.1.2 CSI Staff Salaries and Regional Business Managers: ••••.••....••••.•• 5.1.3 CSI Business Unit Expenses ••••...•..•....•..•••••••......••.•• 5.1.5 Building Depreciation: ••••..••.••....•....•.....••...•..•.•.•..

5.2 Inmate Hourly rate •.•.•••••......•.•.........................•....•.. 5.3 Cost Rate Worksheet. •...•...•....•.............•................•••..

6 APPENDIX B: DEFINITIONS •.•.....•••.................•...........•.....••.•.

7 APPENDIX C: DATA SCHEDULES .•......•.•.••...............................•. 7.1 Schedule 1: Calculation of Inmate Working Days: ........................... . 7.2 Schedule 2: Calculation of Inmate Labour Costs: ......•.•..................•• 7.3 Schedule 3: Calculation of Inmate Employment Levels: ...................•.... 7.4 Schedule 4: Calculation of Inmate Working Hours: ....•........•..•......•....

I Date: 2/94 File: 93/0161

2 3

4 4 5

7 7 7 8 8

9 9 9

10 10 10 11 11 12 12 13

14

16 16 16 16 16

Page:

~ l

~

{ill CORREGlVE SERVICES INDUSTRIES POLICY MANUAl

5.15 COSTING POLICY

1 PURPOSE Over recent years significant progress has been made in developing a

commercial infrastructure for CSI which adequately responds to business acumen and public accountability requirements. However much still needs to be done to ensure that CSI is provided with a commercial infrastructure in keeping with its operational development and performance over recent years.

The transition of CSI from a range of poorly performing, uncoordinated, "hobby mentality shops" to a professional commercial enterprise fulfilling both social and economic goals has been necessary to accord with Government and Departmental policy and, through a customer orientation, to provide CSI with a secure future.

Central to this performance transformation has been the establishment of clear CSI policy objectives which seek to optimise the three principal policy objectives, ie inmate rehabilitation, Correctional Centre management and economic performance. The commercialisation of Corrective Services Industries which commenced in 1988 has seen a positive transformation in the economic performance of CSI. Traditional costs borne by the Department of Corrective Services are now absorbed through income generated by CSI sales. This forms part of a much longer term objective (5 years) to achieve economic self sufficiency in relation to all direct costs of operation.

Fundamental to this improvement in economic performance was the cultural impact of the establishment of the CSI Working Account from the 1st July, 1990. This provides CSI with the responsibility, authority and autonomy to operate as a commercial entity.

The commercialisation has reached the point where broadly, all commercial operating costs except staff salaries are borne by the Corrective Services Industries Working Account. The significance of this transformation and the effort required to achieve and sustain that progress can never be underestimated.

Proper and appropriate costing procedures are now being introduced. It must be recognised that historically, a primary difficulty in developing and implementing a sound costing system has revolved around the difficulty in identifying and extracting financial information and in developing a culture which maintains an acceptable level of commercial discipline and reporting.

'""'"" ail; I Date: 2/94 File: 93/0161 Page: 2

,_

1-

' ~ I i_ ~ f

' f ~ g ~

ii-

' ' f ¥ ' ' I r g lf ~ f I


The CSI Costing System analyses the direct costs of commercial operation contrasted to the forecast available productive capacity in labour hours to determine the hourly recovery rate for inmate labour and overheads. This recovery rate is quoted in dollars per hour and forms the basis of the labour and overhead charge out rates for work undertaken by CSI.

In this context a function of this report is to document the key assumptions and processes of the CSI costing system. Several important schedules are used in the calculation of the inmate labour rate and the cost rate and these schedules are contained in Appendix C.

1.1 Costing - Pricing; The Distinction: Costing and pricing are different matters. Cost is the total amount which CSI expends to produce the product or service; price is the amount which CSI charges the customer for that product or service. The CSI pricing policy requires that all products and services to be sold at a price which is higher than cost.

Specific pricing methods are detailed within policy section 4.2. The starting point however, for correct pricing of products and services is correct costing of those products and services.

If the cost for CSI products and services has been correctly determined, then the subsequent price consists of the product or service cost plus a margin. This margin is a profit component and is meant to cover:

o The expenditure items which need to be recovered but which have not been taken into price.1

PRODUCT COST PRODUCT PRICE

llllil COST IIIII MARGIN I Figure 1 COST AND PRICE: To determine price, apply a margin or profit component to the product cost.

0 An allowance for profit. This allowance should be an acceptable return on capital2

1 For example. these i terns could be coat of financil"'g or transport. In CS!' s case there are no

financing charges and transport is recharged to the customer.

2 Details ?'i\the selection of a margin are contained in the CSI Pricing Policy.

Signature: PL~ I Date: 2/94 --F-i-le-: ~~93-/0_1_6_1" ___ P_a_g_e_: --3--,1

(ill CORRKTIVE SERVICES INDUSTRIES POliCY MANUAL

2 THE CSI COST ENVIRONMENT: CSI has a unique costing environment in so much as:

o The funds to operate CSI are received from a number of sources.

o However all of the relevant costs of producing CSI products and services are incorporated into the CSI cost and price for that product, regardless of the source of the funds to meet the costs.

o Not all of the total CSI costs are recovered from the commercial sale of CSI products. The costs which are unrecovered are represented by: o Production variances which represent the difference between

planned product cost and actual cost. o The resultant cost of meeting the social objectives of CSI.

These social objectives include contributing towards inmate rehabilitation and Institutional management and security.

A schematic representation of the flow of these funds is shown in Figure 2. An explanation of this flow of funds is shown below:

2.1 Source of Funds: CSI receives its funds from a variety of sources. (i) The largest source of funds is the CSI working account. This account

contains the balance of CSI working capital and is continually being replenished from the collections which result from sales of CSI products and services. The working account is used to fund

o Raw material purchases. o The cost of inmate labour used in production. o All production overheads such as consumable tools, safety equipment

and repairs and maintenance. o All relevant utility costs such as electricity, telephone etc. o Relevant rentals and motor vehicle costs. o Replacement plant and equipment. o All Corporate overheads including marketing and commercial

expenses.

(ii) The Consolidated Fund funds Corporate and Regional salaries and associated on-costs and general insurance.

(iii) The Consolidated Fund funds managers and custodial supervision staff and relevanlJn costs of Institutions.

Signature:~~{__~ Gate: 2/94 File: 93/0161 Page: 4 I I j

1-' ~ l f i t

i-R

I I '

~I CORR[(JIVE SERVICES INDUSTRIES POLICY MANUAl

(iv) Department of Corrective Services Capital Works funding funds the costs of major capital building projects. The identification and creation of new inmate employment is initiated by the Government as part of the over riding requirement to achieve the social objective of the Department (including rehabilitation, education and security) rather than the commercial objectives of CSI. Accordingly this investment is regarded as a social investment which is met by the Department.

The CSI Working Account will progressively absorb an increasing level of expenditure which was previously funded as part of the social objective.

2.2 Recovery of Funds: All of the costs listed above contribute to make up the totality of CSI

operating costs. These costs are then recovered in the following manner.

2.2.1 Commercial Recovery: The largest form of cost recovery is the commercial recovery which derives

from the sale of products and services. CSI will recover from these sales, the cost of the products and services which it sells, plus a profit margin.

The profit component is used in part, to offset the cost of CSI production variances. These variances arise if the actual production cost is different to the planned production cost.

2.2.2 Cost Borne By the Community: Many CSI activities have a rehabilitation and a security aspect to them.

These costs cannot be recovered by incorporating them into the product cost, since these costs have nothing to do with the production of products and services. Instead these costs are separately identified and charged off as a social cost; the costs represent the social output achieved by CSI in assisting in the social objective of rehabilitating inmates.

Page: 5

1-

(JJ <0' :::J

'" c ;;;

t::: ~ l'',j .. ·:·J·'--------,-___,..J ~ '''.1,:.:.~

Capital ~Major Works

.ti!

I

~I ~ <0 w 0 ~

())· -:lo.i

OJ g

"" ())

salaries and on costs t

Supero,slon

'"'""

~ Corporate

Salaries and on costs

~

~ Raw Materials, Inmate Labour, All Production Overheads, Utility &

Energy Costs, Plant and Equlpment and some

Capital Works -._.,,..,~ ""~o o,.,~

c:<""

~~ ~ 0

( ) I

r~ --.....

s ::t:: :::::::a

-.:z=: l.

I :::::;;;:a.

I

{ill ~Wffil~ INDUSTRIES POliCY MANUAL

3 CSI COSTING OVERVIEW: The costing approach adopted by CSI incorporates the following common principles.

3.1 Product Cost Content: The CSI approach is to

develop a cost for each· product and service. This cost includes the cost of raw materials, an allowance for inmate labour and an appropriate proportion of the overheads which are incurred in supporting the CSI operation.

The make up of a cost rate is diagrammatically shown in figure 3.

ll!li!Overhead

Otabour

t!ll Material

Figure 3: A CSI cost Wlcludes material, direct labour (itlmate labour) Md appropriate overheads.

3.2 Apportionment of Overhead: CSI uses a method of relating all labour and overhead costs to production hours; that is, overhead is measured as the cost of providing one hour of productive time.

Hence in all cases the method of determining the overhead cost, is to apply the overhead cost to the estimated number of hours which the task will take. [The overhead rate is simply the calculation of all of the applicable overheads which would be incurred in a year, apportioned over the total production hours expected in than year. See item 5.2].

Signature tl L~ ~te: 2/94 File: 93/0161 Page: 7

3.3 Gross Averaging:

~I CORRECTIVE SERVICES INDUSTRIES POliCY MANUAl

Labour paid to inmates varies; similarly the overheads incurred in institutions can vary, even when the Institutions produce similar products. To produce an individual cost rate for each institution is complex and impractical and would result in similar products having different costs (dependent on the Institution of manufacture). Accordingly CSI sets an average for the:

o Inmate direct labour rate o The overhead rate per hour

and these set rates are used in all cost calculations.

3.4 Detailed Costing Methodology: The development of a cost base is fundamental to the costing of CSI

products and services. Figure 4 (shown in Appendix A) provides a layout for all of the necessary data input and calculations. Note that, some of the data is defined in the related schedules to this insert.

I I &

~.2/94 File: 93/0161 _'""' ~~ I

i POLICY MANUAl 4 FINANCIAL REPORTING:

The effects of CSI costing procedures flow through to the financial reports which include two components:

o That component which is included in the body of the accounts o And that component which is a note to the accounts

4.1 Cost of Sales: Products which are sold are shown as having a cost of sales as computed in

these procedures. Also shown in the cost of sales area are unrecovered costs such as variances. Variances can occur in any manufacturing organisation and represents the difference between actual cost and forecast cost.

4.2 Social Obligations: It was noted from Figure 2, that unrecovered commercial costs were

represented by either production variances or by social costs. The costs of social obligations are borne by the community through the transfers to CSI from The Consolidated Fund.

A quantification of these costs will ultimately be shown as a note to the CSI accounts.

2/94 File: 93/0161 Page: 9 I ' ~

~ CORRECTlVE SERVICES INDUSTRIES POliCY MANUAl

5 APPENDIX A: DETERMINING THE COST RATE The overhead rate is the total gross overheads applied to the total number

of inmate labour hours. The information for both overheads and inmate labour should be based on historical data and indexed if warranted. The determination of an overhead rate is composed of three parts. o The first is to determine the total annual overheads applicable to CSI; o The second part is to determine the total annual inmate labour hours.

The actual number of inmates should be used. o The third component is to divide the total annual overhead cost by the

total annual direct labour hours to arrive at a measure in $/hour.

The frequency of generation of the cost rate is annual. Especially note, that in all cases the data to be used is annualised data for the actual financial year. The cost rate is to apply from 1 August to 31 July.

5.1 Components of Overhead: Before calculating the overhead rate, it is necessary to identify and sum the gross overheads applicable to CSI commercial operations. Figure 4 in Appendix A, should be used for this purpose. An explanation of each of the components of overhead is detailed below.

5.1, 1 Supervision/Officers' time: (i} The time which CSI Overseers devote to supervision of CSI production has been measured at 50% of the officer's day. Accordingly the cost of supervision which is taken into the cost rate is 50% of the total staff establishment of CSI personnel. This percentage should be periodically checked by appropriate diary studies.

(ii) The total (100%} of the salaries of CSI Business Managers is taken into the cost rate.

(iii) Labour on costs (ie holiday pay, sick pay, superannuation, workers compensation insurance, long service leave etc) is added to these costs at the rate of 30% of the total salary cost.

(iv) All of the above costs should be marked up by an appropriate amount for anticipated salary movements during the course of the current fiscal year; eg if a general salary increase of 2% was expected on 1 April of the fiscal year then the salary estimate would be increased by%% (ie V.. of 2%)

(v) All of the above costs should be multiplied by 92% to take account of vacancies. Vacant positions may be omitted if it is the intent not to fill those positions throughout the course of the current fiscal year.

I Date: 2/94 File: 93/0161 Page: 10

{ill CORRECTIVE SERVICES INDUSTRIES POLICY MANUAl

5.1.2 CSI Staff Salaries and Regional Business Managers: (i) The staff establishment salary costs for CSI staff within the Corporate Office are to be included in the computation of overhead. The amount taken is the gross amount, adjusted for allocation of staff to other non CSI activities. This allocation will be available in a schedule provided annually by the Commercial Manager.

(ii) Labour on costs (ie holiday pay, sick pay, superannuation, workers compensation insurance, long service leave etc) is added to these costs at the rate of 30% of the total salary cost.

(iii) All of the above costs should be marked up by an appropriate amount for anticipated salary movements during the course of the current fiscal year; eg if a general salary increase of 2% was expected on 1 April of the fiscal year then the salary estimate would be increased by%% (ie 14 of 2%)

(iv) All of the above costs should be multiplied by 92% to take account of vacancies. Vacant positions may be omitted if it is the intent not to fill those positions throughout the course of the current fiscal year.

5.1.3 CSI Business Unit Expenses: There is a range of expenses which are incurred in Institutions and are related to CSI production activities and are accordingly taken into the cost rate. In all cases these expenses are recouped by the Institution from the CSI Working Account and hence are shown in the CSI financial accounts and thereby are included in the cost rate.

0 Electricity and telephone charges. 0 Safety equipment and OH&S 0 Repairs and maintenance 0 Water Rates 0 Cleaning 0 Insurance 0 Consumable Tools 0 Transport

5.1.4 CSI Corporate Cost: The cost of operating the CSI Corporate Office is an indirect overhead for CSI business units. The CSI Working Account also meets other Corporate costs such as:

0 0

Corporate rental Repairs, and Maintenance

Signature:~~ File: 93/0161 Page: 11

I I l

~

f

{j]j CORRECTIVE SERVICES INDUSTRIES POLICY MANUAL

o Electricity and telephone for the Corporate Office o Transport o Marketing and commercial expenses.

All costs shown in the Corporate Office financial accounts are included in the overhead.

5.1.5 Building Depreciation: Depreciation on CSI facility buildings and plant and equipment is to be included in the cost rate. The annual depreciation charge to overheads is calculated as follows. Note that CSI plant depreciation is already included in the CSI financial accounts and hence should not be included again.

Where a depreciation figure for a building is not available then the depreciation can be estimated by taking the original cost of the building and dividing that number by 50. This represents an amortisation of the building over 50 years. The original cost of the building is available from the Department's asset register. Provision of this data is the responsibility of the Manager of Industries for the relevant facility.

Note: Before entering depreciation figures into the overhead calculation, the following points should be checked. o The building depreciation quoted only pertains to the CSI facility

building in question D The depreciation amount has not already been included in the

Departmental accounts for the program and recharged to CSI. o Plant and equipment: Depreciation for CSI's plant and equipment is

available from CSI's asset register which is maintained on "Asset Cat". The annual depreciation charged in the CSI financial accounts should be reconciled to that shown in the asset register. This is the responsibility of the Commercial Manager.

5.2 Inmate Hourly rate: The CSI inmate hourly rate is set annually. The figure may be changed from time to time and will be approved by the Director CSI.

I Date: 2/94 File: 93/0161 Page: oZ

5.4: Cost Rate Worksheet

INSTITUTIONAL SALARY COSTS Gross satary cost Take 50% apportionment Add on oosts(@30%) Allowance for vacancies (92.%} TOTAL OVERSEER'S COSTS

CSI CORPORATE AND REGIONAL STAFF Gross salary cost Less non CSI salary rosts Total Add on oosts(@30%) Allowance for vacancies (92%) TOTAL CSI STAFF COSTS

INSTITUTIONAL EXPENSE Electricity Safety and OHS Repairs &maintenance Water Rates Oeaning Insurance Transp::>rt TOTAL

CSI CORPORATE COSTS

BUILDING DEPRECIATION

TOTAL CSI OVERHEAD (line 10)

DAILY INMATE HOURS (line 30)

IAe!NlJAL PRODUCTIVE DAYS (line 40)

INMATE LABOUR RATE (line 60)

COST RATE

~ CORRIDIVE SERVICES INDUSTRIES POliCY MANUAl

FIGURE 4: CSI COST RATE WORKSHEET

YTD actual

estimate balance of year

FULL YEAR

TOTAL DATA

SOURCE

r---,-----,----,Chainnan system accounts

/'----'--1---'--/----' /<CSI financial accounts: all expenses except Corporate salaries

/,__ ___ L_I ___ J_I __ --' Building asset data from the Department

6.25

204

L J

[D:e: 2/94

ACTUAL INMATE NUMBERS ACTUAL INMATE NUMBERS ACTUAL INMATE NUMBERS ACTUAL INMATE NUMBERS ACTUAL INMATE NUMBERS ACTUAL INMATE NUMBERS

SCHEDULE4

SCHEDULE 1

='line 20 *

PROVIDED BY DIRECTOR CSI

=line 60 + (line l 0 /line 50)

File: 93/0161

f

6 APPENDIX B: DEFINITIONS

~ CORRECTIVE SERVICES INDUSTRIES POliCY MANUAl

Business Unit: In this insert, a facility or business unit, is a reference to a CSI productive operation and includes workshops and work areas throughout the CSI business division structure.

Cost: Cost is the sum of the inputs required to produce a product.

Price: Price is the amount which CSI receives for the product. CSI pricing policy requires that selling price must be whatever the market will bear (ie the highest price for which customers will continue to purchase the CSI product), provided that price is never less than the calculated cost of the product.

Direct Labour: Direct labour is the inmate labour which actually produces the product or service.

Direct Labour Rafe: Direct labour is paid for by CSI, on an hourly basis, at rates which vary on the skill, capability and experience of the particular inmate.

Overhead: All costs, other than direct labour, which are incurred by CSI or by the host lnstitution,in the process of producing a CSI product or service. Included in overhead are non cash costs such as depreciation. Other related terms are:

o Variable overhead: This is overhead which varies in line with the level of production: for example electricity costs.

o Fixed overhead: This is overhead which is constant throughout the year and is not dependent upon the level of production. An example would be the depreciation charged on a building. Even with no production at all, such depreciation is still charged.

Overhead Rate: The overhead rate is the total forecast annual overhead divided by the forecast number of inmate hours. The overhead rate is measured in dollars per hour.

Cost Rate: A cost rate is the sum of: o The cost of direct labour for the product, measured in dollars per hour o And the overhead rate, measured in dollars per hour

Effectively the cost rate is the calculation of the total cost of one hour of inmate labour based on the number of working inmates and the overhead costs which are necessary to operate CSI at Corporate, Regional and Institutional levels.

Inventory Item: An inventory item is a product which CSI regularly produces and which may be held in inventory (stock) in anticipation of future sale. Inventory items have part numbers to identify them and have set or predetermined costs called standard ~o~J~ Regardless of the actual cost which may be incurred in production,

Signature: J__J{~ I Date: 2/94 File: 93/0161 Page:

aJl CORRKllVE SERVICES INDUSTRIES POLICY MANUAl

an inventory item is valued at its standard cost.

Recovery: This term refers to the credit which CSI receives when CSI sells a product or service and recovers the cost of its production (plus an additional amount for gross margin). · Recovery can also be achieved when CSI produces a product, transfers it to inventory and recovers the production expense of the product.

BOM: A BOM is a Bill of Material. This is an indented list of all of the material which makes up an individual product. A BOM can include other part numbers (such as sub assemblies) as well as hardware items such as screws etc, provided that such items can be reliably estimated as being part of a product. For items which cannot be estimated (eg sanding discs etc) these are included in an overall category of overhead called consumables.

I Date: 2/94 File: 93/0161

Page: 15

<ill CORRECTIVE SERVICES INDUSTRIES POliCY MANUAl

7 APPENDIX C: DATA SCHEDULES. 7.1 Schedule 1: Calculation of Inmate Working Days:

Number of days in calendar year 365

Less: Weekends 104 Public Holidays 12 Rostered Days Off 13 Rostered Security Searches 12 Rostered Security/Union Implications 10 Plant Maintenance Shutdown/ Staff Recreation Leave 1Q 1lll

Assumed number of days CSI business units available for operation 204

7.2 Schedule 2: Calculation of Inmate Labour Costs: The precise calculation of inmate labour costs is made difficult by the high turnover of inmates, the diverse range of inmate competencies and the range of constraints which hinder CSI commercial performance.

Wages of inmates working within CSI business units average $20-$30 per week with an average 30 hour working week. The calculated labour input rate is rounded to $1 per hour.

7.3 Schedule 3: Calculation of Inmate Employment Levels: For the purpose of calculating inmate employment level rates, the employment input level is based on the actual employment as distinct from profiled employment.

This method ensures that labour and overhead recovery is based on realistic actual circumstances and recognises that the actual employment is always less than profiled employment.

7.4 Schedule 4: Calculation of Inmate Working Hours: An annual survey of inmate working hours is conducted by the CSI Technical Support Officer- refer papers 87/1307.

The review carried out at the 12 October 1993, reflected average inmate working hours of 6 hozo s 10 minutes per day.

"'""'"" flj ~ . ~~-0-at_e_: -2-19-4-----F-il_e_: -9-3-/0_1_6_1 -----Pa_g_e_: -16-,


6.1 PRIVATE SECTOR CORRECTIONAL INDUSTRY POLICY STATEMENT

Private Sector involvement in Correctional Industries can take many forms. In its

most diluted form it simply involves the sale of CSI products and services to the

Private Sector. The most pure form of Private Sector Correctional Industry is the

complete management and operation of a Correctional Industry by the Private

Sector (e.g. M.l. Manufacturing Pty Limited Private Sector Correctional Industry,

Muswellbrook).

The various levels of Private Sector Correctional Industry are:

Level 1:

Level 2:

Level 3:

Level 4:

Level 5:

Private Sector management and operation of business unit

Business unit dedicated to a Private Sector organisation with

private sector managerial support

Subcontract work - continuous basis

Subcontract work - ad hoc basis

Sale of Corrective Services Industries products/services to

Private Sector

The introduction of Private Sector Correctional Industry in New South Wales

evolves directly from an ideological policy commitment of the New South Wales

Government. That policy commitment is based on:

a) Reducing the scale of the public sector by providing the private sector

opportunities to manage and operate traditional public sector functions.

b) Minimising infrastructure required to manage and operate Correctional

Industries.

I Date: 2/94 File: 88/0351 Page: 1

I I l'-

<ill CORRECTIVE SERVICES INDUSTRIES POliCY MANUAl

c) Fulfilling Correctional Industry policy objectives by providing 'real world'

work responsibilities to inmates as a basis of enhancing post release

employment opportunities.

d) Maximising the opportunity for Correctional Industries to contribute

positively to reducing the cost of managing Corrections.

The rate of expansion of Corrective Services Industries productive capacity is

such that traditional markets provide inadequate market opportunities. Access to

Private Sector Correctional Industry market opportunities is therefore a non

optional operational reality.

All new CSI business units are therefore to be offered for private sector

involvement. Concurrently with this process conventional Corrective Services

Industries business units will be offered for private sector involvement on a

programmed basis.

I Date: 2/94 File: 88/0351 Page: J


6.2 PRIVATE SECTOR CORRECTIONAL INDUSTRY PROCESS HIERARCHY AND

CHECKLIST

The attached Private Sector Correctional Industry process hierarchy and

checklist is to be observed and applied in relation to all potential Private Sector

Correctional Industry business opportunities.

The process indicates that the overriding responsibility for co-ordinating Private

Sector Correctional Industry rests with the Manager, Business and Operations

Development supported by the Business Development Manager and Regional

Business Managers. The checklist is to serve as a cover sheet on all Private

Sector Correctional Industry proposals and is to be placed at the top of relevant

registered files.

Responsibility for completion of the checklist and confirmation that the process

hierarchy has been actioned rests with the Manager, Business and Operations

Development.

Signature: 2/94 File: 88/0351 Page:

~I CORRECTIVE SERVICES INDUSTRIES POLICY MANUAL

PRIVATE SECTOR CORRECTIONAL INDUSTRY PROCESS HIERARCHY & CHECKLIST

A. BUSINESS DEVELOPMENT

1. Enquiry D OR

Business Development Representation D OR

Response to Expression of Interest invitation D

2. Discussions/Site Visit to determine interim

feasibility.

3. Initial feasibility report to clarify

continuation of our interest.

4. Submission to/not to proceed to Executive Committee D

5. Status letter to client (i.e. feasible or not feasible)

I Date: 2/94 File: 88/0351 Page:

<Ill CORRECTIVE SERVICES INDUSTRIES POLICY MANUAl

B. EVALUATION

6. Formal proposal from Company

7. Create registered file

8. Co-ordination of proposal review D

a) Company structure/Individual

credibility D

b) Criminal Record check of Principals

c) Credit Reference Check

d) Economic evaluation

e) Operations feasibility/location

I

Signature: I Date: 2/94 File: 88/0351 Page: 3 J

{ill CORRECTIVE SERVICES INDUSTRIES POliCY MANUAL

C. EXECUTIVE CONSIDERATION

9. Formal evaluation of proposal to Executive Committee

incorporating reference to steps 1 to 8

10. Consideration by Executive Committee D

11. Status Letter to client D

12. Submission to Corrective Services Industries Consultative D Council

13. Submission to Departmental Executive/

Assistant Commissioner (Operations)

14. Acceptance/Non Acceptance letter to client D

15. Operations Implementation D

16. Commercial Implementation D

17. Opening/Promotion


C S I POLICY MANUAL

ECONOMIC EVALUATION OF PROPOSALS

PRIVATE SECTOR PRISON INDUSTRY

This statement formalises the process of providing economic evaluation of Private

Sector Industry proposals. The process should enable business development staff

to perform initial evaluation and cull out proposals which are of no benefit to

Corrective Services Industries and to suggest areas which need to be improved

upon by the proponent.

1. PREAMBLE:

6/91

i) This procedure only covers the calculation of financial benefits

to Corrective Services Industries and leaves the

quantification of non-financial benefits for separate evaluation.

Essentially this procedure covers the arithmetical techniques of

financial evaluation.

ii) It should be stressed that business evaluation cannot always

be performed according to rules and formulas. There will be

many and frequent cases where other techniques are

warranted.

iii)

iv)


C S I POLICY MANUAL

These techniques are available in a series of iterative programs

(running on Lotus/Symphony) on disc for staff use. Samples of

each technique are attached.

C(Jmmercial Branch staff are available for discussion and

clarification. Advice should be sought from the Commercial

Manager, and/or the Financial and Management Accountants.

The flowchart attached discloses the financial evaluation steps which follow two

broad evaluation paths.

The first is a simple cost-benefit analysis (Section 4). Most proposals fall into this

category since the operation will be constant over several years with no significant

fluctuations in prices, costs and output. Accordingly the analytical technique used

is to determine profitability in annual increments with the anticipation that all annual

results are similar. Procedures are detailed for Simple Cost Benefit Analysis

(Section 4.1) and for more detailed cases where an individual evaluation model is

required (Section 4.2 "Individual Model").

In the second case, where the proposal is complex (eg requires significant

Corrective Services Industries funding, has long periods of time before

Corrective Services Industries generates revenue or has widely fluctuating costs

over time) then a discounted cashflow technique should be adopted (Section 5). In

this process, the cost of funds and the varying value of funds is taken into account.

i

I f

l l f t I

I I

~~ ICORRECTI SERVICES INDUSTRll

C S I POLICY MANUAL

2. DATA COLLECTION:

Before any evaluation can proceed the following minimum data should be collected.

i) Is Corrective Services Industries producing a product (ie

providing materials etc from its' own funds) or a service (ie sale

of inmate labour only). Who pays for 'on costs' such as

transport.

ii) How much material and labour goes into each product (note

that labour will be measured in minutes or hours). Ask the

customer for copies of planning sheets and standard times (this

makes for good comparisons with Corrective Services

Industries productivity).

iii) Will the private sector manage the business unit or does

Corrective Services Industries need to provide the

supervision. Does the business unit require Corrective

Services Industries staff.

6/91

Ql~ !CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

iv) Does Corrective Services Industries have to invest in the

project; i.e. Corrective Services Industries investment for

capital equipment, or inventory.

v) How much will the customer be prepared to pay for the

product. If possible avoid telling the customer the Corrective

Services Industries projected cost; instead elicit a price from

the customer.

3. START-UP COSTS:

Generally there will be limited start-up costs associated with Private Sector Prison

Industry. These are frequently in the nature of initial low productivity during the

training phase.

If Corrective Services Industries is funding the cost (eg Corrective Services

Industries revenue is likely to be related to productive output) then the start-up

time should be estimated and the associated lost production and revenue

quantified. If the revenue loss is in the order of 5% of the annual revenue, then it

can be ignored. If greater than 5% then the additional labour cost is to be taken up

in the first year as start-up costs.

6/91

~~ 'CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

Similarly any expenditure (but not capital) which is incurred should be taken up in

year one and offset against the first year's revenue.

Experience to date has shown that most Private Sector Prison Industry has minimal

start-up costs and that expected profit performance in the first year is similar to that

in all other years. If the performance in subsequent periods is radically different to

the first year performance it is more likely to be the result of the customer changing

the mode of operations rather than due to the effects of a learning curve. [Before a

customer changes the mode of operations, Corrective Services Industries should

be consulted and the resultant proposal treated as a new evaluation].

Note that full private sector involvement requires the private sector contractor to

perform all training and hence Corrective Services Industries will not be

responsible for inmate training and productivity. The Department is however

required to provide an effective (friendly) institutional management interface

including proper screening of inmates referred to Private Sector Prison Industry

business units.

4. COST BENEFIT ANALYSIS

4.1 Simple Case:

The simplest analysis that should be performed is a cost benefit analysis to

cost out the product and see if the cost of the product is less than the

anticipated sell price.

l ' f

6/91

C S I POLICY MANUAL

In calculating the cost, the standard time for the product should be extended

out using the average direct cost rate. The current hourly rate which is

reviewed each quarter should be utilised.

This cost rate includes the hourly labour rate paid to inmates, the cost of

institutional staff associated with Prison Industries (currently 65% of an

officer's time), cost of institutional overheads (such as electricity), an

allowance for depreciation and an allowance for the Corrective Services

Industries corporate office. 1

To this labour and overhead cost must be added the cost of any materials

provided by Corrective Services Industries. An appropriate bill of material

should be obtained from the Operations Development Manager. An

allowance for scrap and a quantification of consumables (eg hardware items,

welding rods etc) should also be included.

If the cost per product is less than the customer's price then the proposal is

likely to be accepted.

1The cost rate does not include the costs associated with the custody, security or welfare of inmates.

Ql~ !CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

4.2 Individual Model:

If the simple cost benefit analysis on the individual product does not show a

profit, then an individual computer model can be employed. In this method,

which is more accurate, all costs are listed and quantified rather than

assumed to be at the hourly recovery rate charge.

Generally an individual model will result in a higher profitability since the

(average) direct cost rate quoted above, is based on average, whilst an

individual model more accurately assesses all costs. For example Private

Sector Prison Industry frequently requires less officers (who constitute the

largest component of cost) and individual inmate salaries may be less than

the labour charge assumed in the direct cost rate.

An individual model is also required where the proposed operation has

several production stages, one of which constitutes a limiting operation (ie a

"bottleneck"). In this case an individual model will accurately determine the

total cost of the limiting operation (ie one or more inmates continuously

employed) and the lesser cost of the supporting operations (eg one or more

inmates only partially engaged on that activity.).

6/91

C S I POLICY MANUAL

However, if an individual model is utilised careful consideration must be

given to the identification of all costs involved, such as electricity, repairs

and maintenance and depreciation (normally taken to be 10% of capital

cost).

i) If the building is purpose built for the customer (whether funded

by Corrective Services Industries or not) then an implied

rental should be one of the costs.

ii) Also if the proposal involves the utilisation of existing facilities,

then a cost needs to be included to recover the cost of

Corrective Services Industries corporate overheads.

This recovery (see section 7 on "Marginal Costing") represents

the cost of maintaining the corporate infrastructure, spread over

the existing workload. Since existing Business Units are part of

that base workload, proposals utilising existing facilities must

continue to carry their share of the existing overhead burden.

This recovery rate is reviewed quarterly.

6/91

t i r

I t

I I ' I ' '

iii)

C S I POLICY MANUAL

If the proposal requires the utilisation of new Business Units

then generally no corporate overhead recovery rate is charged.

However, an abbreviated Corporate Office overhead employed

to evaluate Private Sector Prison Industries proposals and to

provide ongoing supervision must be factored into the

economic evaluation.

An estimate of these costs (which are primarily related to the

time of executives) is $7,000. Accordingly, if a prospective

Private Sector Prison Industry shows no promise of returning

this amount. then the proposal should be abandoned.

If the proposal reflects a profit, then the next step (of determining the

adequacy of that profit) can be completed.

5. INVESTMENT PAYBACK:

Regardless of the method utilised to determine a profit (ie surplus of price over

cost), the project should be evaluated to determine if that profit is sufficient to

recover the capital investment. Capital investment does not include investment in

working capital such as inventories etc as generally Private Sector Prison 1 ndustry

does not include additional inventory investment.

C S I POLICY MANUAL

It is planned in the future to develop this technique further to include recovery of

working capital. A technique will be used to determine the return on average

capital employed (RACE). However this technique is not necessary at the moment.

Corrective Services Industries requires that all capital investment be

recovered from profits generated by that investment within three years of

purchase. This time period is the generally accepted recovery period in the

private sector. An investment which takes longer than three years to recover will

suffer from the effects of technology change (which might render the investment

obsolescent) and the effects of inflation (which reduces the real annual profit

required to "repay" the investment).

Note that the definition of capital includes capital which is funded by Corrective

Services Industries together with that funded from either Building Services or

Public Works Department.

A payback is simply the capital investment divided by the anticipated annual profit

arising from the project. A resultant number of less than three is acceptable.

6/91

C S I POLICY MANUAL

6. CONCERNS

In evaluating Private~ Sector Prison Industry the following Concerns should be

heeded:

i) Many proposals are marginal operations which seek to utilise

the Department's access to funds. In effect many ventures are

simply disguised requests for subsidised funding or subsidised

facilities.

Corrective Service Industries will not pass over to the private

sector, publicly owned assets at less than commercial terms.

This implies that if Corrective Services Industries funds an

operation (probably a rarity) then a commercial rate of interest

will be charged. Similarly if the private sector wishes to occupy

Corrective Services Industries facilities, then a rental will be

charged (this may be implied in the cost rate).

6/91

J

I

I_

( ' • i I I

C S I POLICY MANUAL

ii) Avoid marginal costing1; it produces a reduced cost which is

then passed onto the customer as a reduced price. If the

workload assumptions are not met, then the reduced price is

often less than real cost. The closest that Corrective

Services Industries will come to marginal costing is the use of

an individual project evaluation model which, for a new

incremental business, would include limited recovery for the

cost of the Corrective Services Industries corporate office

(which would have been assumed to have been absorbed over

existing business units).

iii) Corrective Services Industries is not exploiting "cheap

labour". Some private sector proposals assume that they can

re-create third world labour conditions (and wage rates) within

NSW. Private Sector Prison Industry will only be accepted if

Corrective Services Industries both recovers its' full costs

(including if necessary, an interest component) and if the

project meets government policy objectives which include

inmate training and development.

6/91

1Marginal costing assumes that the fixed costs of a business are being fully absorbed by some existing level of workload. Marginal costing assumes that any additional workload need only be casted at variable cost whidl results in a lower calculation of cost The best e'xamp!e of marginal costing is the costing of a second shift.

C S I POLICY MANUAL

This note is particularly relevant for proposals which offer the

benefit of import replacement only, at less than full cost

recovery for Corrective Services Industries. The

Department's aim is not the abolition of imports per se at any

price.

7. DISCOUNTED CASHFLOW

As previously mentioned, a DCF is a specialised technique to be utilised where

either the project has significant investment from Corrective Services Industries

or where the cash flows of the project (such as revenue and cost) are irregular.

Basically the project is modelled out for a period of years(by month) and the

individual revenues and costs determined for each month.

The sum of the net monthly surpluses is then "discounted" back to eliminate the

effect of the cost of funds (including inflation) to arrive at a Net Present Value

(NPV) which represents the project profit in constant (ie today's) dollars. Note that

in NPV analysis funding costs (eg interest) are not considered (since they are

taken up in the discount rate).

6/91


C S I POLICY MANUAL

An average NPV (per annum) is determined; the project payback is simply the

capital investment divided by the average (pa) NPV.

The best way to utilise this technique is to use the Lotus model supplied and to

liaise with the Commercial Manager. Similarly if an Internal Rate of Return is

required (IRR).

6/91

((;;@~~[g!btrn ~~ @[g~ ~ D (b[g@ a IT!lliD(lJJ@lf'~ D [g@

[]D~[f)O [g~ ~[L(!JJ~ lfO©IT!l

COLLECT DATA FROt1 r:UST01"1ER AND OPERATIONS

. . . . . . . . ·: · Slt1PlEPROPL•3til ·. ·: ·: iJsE cost BENEf'tt : ·. • COMf'~E~ )"Rl;IVOSAL ..

< O!;:E :G•JS:G :cA?f') FL()W : . I

VES

NO

<:::;::::: NO ________ r_·m------111>-·:::"4:~11---

:; EE r; AF'P POVAL OF E!:EC UTI \IE COt-lf"ll TEE

YES

YES

I I i I ~

I I I ~

''I :) " ,.1--------------------------- ---------------c-----------------------------~------------------

"i----------------------------------------------------------~-------------------------------" "1------------------- -----~~-----~----- '""'C!RR EeT I u E .::- E [;! ll I C' ES 1 N-D-U-S.XRJ..E..:~'-'"---------" SAMPLE ~IANUFACTUR I NG COMPANY PROPOS!\ L "1--------------------~-- --~- ----~---------~-------~~·=·-=-=--=-=--=======~·~-'"-=-=--=-=-=====-~---41

"I----------------------------------------------~TTH~IS£-~'$c~o~~~I4~~X~A~M~P~IUE~·~O~S~o~'~'-LINNUD~!llll~IUDU11AO~I-MMDI\~DL-«

"1-----------------------~-----------~-------------------------------------~----------------.. VARIABLES: "1----~~~~~~-=-~-=-~-~~=------------~----------------------.. AVAILABLE WEEKS: 39.6 198 days per yea•·

"1------------------------------------------------------------------------------------~ INMATE WAGE $48.00 per wee~ "1--------------------------------------------------------------------------------------------" No. of SUPERVISORS 3 ::-----:~~l~'PPE8RRVV+I&SOgR~S~f~.L~P~.R~Y~------~$~4+1~,2~C~100-------------------------------------------------------

111---~Rt6~0~U~I~RH8~9~F~6~0~0~R-££~P~A~G~8~------~2~5~0~----------&sqq-mm~n~t~G4r~c~----------------------------" 11 !---fP~R~O~D~U~G~T~<------------------------~P~R~I~C~8~;----+INNMMAA~T~E~L~P~.B~O~I~IR~T~IMM&E---------------------"· AARDVARKS $0.90 each 6 rn ins each "\~--~B~O~OO~NIDDOOGCCChLE~S~--------------$~0~.0~6&---~g~a~c~h~-------1~~444--~m~i+n~~~@ka~c~h~----- --------------" CRICKS $0.07 each 0. 8823529 rn ins each

WIDGETS $0,09 - per doz- 1. 3333333 m ins each

"0' lli?MENT JNIIESTMENT· $ 0 0,000

I s 1

3

•

E ' ' '

I

sl 0

I

:I '

' ' ' I 1

J

• I

" . 1 I

' ' 0

I 1

I 3 3

' I

'

ANALYSIS: --- - --- - ----PRODUCT: nnRf\llfiRl(<: BOONDOGGLES rPTC'l(<: >IIDGETS

·'

SALES

COSTS ~~~=~~~==============

INMATE 6All011R SUPERVISOR !'! l'f''l'RTf'I'l'V REPAIRS RRNTJU.

DEPRECIATION NPU"O 1

OTHER 2 'l'n'T' nt f'A<:'l'

PRC)l'T'l'

OTY /week 1 7()(\

51000 ~(\ /, (\(\

13,500

$177,131

$56,390 $80,340

"""" $1,000

<:1A 7SO

$3,000

<'co OAA

,. p 1 sn

OTY pa SALES INMATES pc1 "- 7 ->~r. !tnO ';PA c "'' ~ -

198,000 $11,880 4 Q(\7 Q/,(\ ~sc; co a 1(\

534,600 $48,114 10 ' ,t;177 1~1 10

' ' i I

I 1 ! ' assume 65% of officers time devoted Lo CSI

;

<:7>; ()() Pl'R <:C>!!ftRR MRTRR

i I

! •

!

;

' )

C S I POLICY MANUAL

CAPITAL EXPENDITURE

ACQUISITION AND PROCEDURES

PART 1 ACQUISITION

Capital expenditure is expenditure required to purchase plant and equipment and

fixed assets. Special delegation limits and approval processes apply to the

incurring of capital expenditure. This process is necessary for all capital

expenditure with an aggregate value of greater than $1 000.00.

The attached form should be used to submit a request for capital expenditure. It

should be accompanied by any additional notes, details, drawings, brochures etc,

that are relevant.

This form should be submitted to the Manager, Business Development, Corrective

Services Industries, before expenditure is incurred.

In preparing requests for capital expenditure, consideration must be given to Prison

Industry policy objectives. Implementation of the compulsory prisoner work

program embraces maximising labour intensive operations. Mechanisation should

only be proposed to satisfy consistency of quality assurance requirements.

l

7/91

Ql~ ICORRECTIVE SERVICES INDUSTRIES

1. PROPOSAL

The proposal must include:

C S I POLICY MANUAL

a) A brief description of what the proposal intends to achieve.

b) Details of equipment that it is proposed to acquire including cost.

2. CALCULATION OF SAVINGS

In general capital expenditure must generate savings or a return to justify the

expenditure. In this section of the proposal please detail how the expenditure will

generate a saving (for example does the plant and equipment operate faster,

produce less scrap, improve quality assurance).

If you have difficulty phone either the Manager, Business Development or

Commercial Manager of the CSI Corporate Office for assistance in calculating the

value of savings. If no savings can be determined, then provide details of the

expenditure justification.

3/92

C S I POLICY MANUAL

3. APPROVAL

The approval process~for capital expenditure greater than $1000.00 is:

a) An application should be submitted through the Institutional Manager,

Corrective Services Industries or Assistant Superintendent

Industries (where no Production Manager, Corrective Services

Industries is domiciled) and Superintendent.

b) The proposal requires approval by the Manager, Business

Development.

c) The Commercial Manager will calculate a pay back or, return to

determine if the proposal is financially justified. To do this a payback

period is used - simply put this method calculates the number of

years of generated savings required to cover the cost of the

investment.

In general any investment in plant and equipment which does not generate

sufficient savings to pay for itself within 3 years will not be approved unless special

circumstances apply.

3{92 i f

I


C S I POLICY MANUAL

The Commercial Manager will also determine the ability to finance the investment.

Following approval the Commercial Manager will return the completed capital

expenditure proposal to the requestor along with a cost centre number. The

requesting Institution will then purchase the required equipment in the usual way.

The Commercial Manager will retain a copy of all submitted capital expenditure

forms.

It is stressed that financial delegation of authority does not of itself provide singular

authority to purchase plant and equipment. All requests are to be processed in

accord with procedures included within this policy.

3/92

I !

I ! I

' f f

I I

PART2


C S I

ASSET CONTROL

4. PURCHASE APPROVAL

POLICY MANUAL

After a capital expenditure request has been approved, the capital expenditure form

will be passed to the Management Accountant who will create an allocation to allow

the purchase of that asset. A copy of the authorised capital expenditure form will

be returned to the originator who will process a purchase order requisition to

purchase the asset.

5. ASSET IDENTIFICATION

i) All fixed assets must have an identifying number. After an asset purchase

has been approved, the capital expenditure expense form will be passed to

the Management Accountant who will assign the asset number for that

asset.

3/92


C S I POLICY MANUAL

ii) All fixed assets will be recorded in the Asset Register with the following

details:

• Asset number

* Description

* Asset Code (attached is current listing of asset codes)

* Serial No. (if appropriate)

* Purchase Date

* Purchase Cost

* Business Unit

* Location

* Institution

* Detail of Funding Source

* Method of Depreciation

This information will be entered into the asset register by the Sub

Accountant.

iii) All assets in all locations will be identified by an indelible marking showing

the asset number. The responsibility to affix this number is that of the CSI

Manager or ASI of that Institution.

3/92

C S I POLICY MANUAL

The Sub Accountant will keep a supply of pre-numbered asset identification

tags which will be supplied to each CSI Manager or ASI when a new asset

is approved. Overall responsibility for tagging all assets rests with

Institutional personnel.

6. TRANSFER AND DISPOSAL OF ASSETS

i) All assets transferred must be accompanied by a Plant Transfer Authority.

ii) The white copy of this form is to be transferred to the Sub Accountant at the

Corporate Office, Regents Park who will record the asset movement.

iii) Assets can only be disposed of, following approval of the Manager, Business

Manager provided that the financial delegation for the position is greater

than the written down value of the asset to be disposed of. Notification of

asset disposals must be made to the Sub Accountant who will record the

disposal.

7. RESPONSIBILITY FOR ASSETS

i) The responsibility for maintaining the asset register is that of the Sub

Accountant.

3/92


C S I POLICY MANUAL

ii) The responsibility for maintaining assets in safe custody and good order is

that of the CSI Production Manager or ASI through the Superintendent.

iii) At least once each year, the Sub Accountant will provide each

a list of all assets under his/her control to enable a stocktake of those

assets.

iv) The Sub Accountant will maintain asset lists by type, by location, by function

etc.

PART 3

7/91

CODE

M AB AC AD AE AF AG AH AI AJ AK AL AM AN AO AP AQ AR

ASSET CODES

MAJOR

METAL

MINOR

WELDERS GUILLOTINES LATHES/MILLS DRILLS/BORERS COMPRESSORS METAL PRESSES JIGS PAINT/COATING EXTRACTION NOTCHES BRACE PRESSES PAN BRACE BENDING MILL SURFACE GRINDER PROFILE CUTTER OTHER 1 OTHER 2 OTHER 3

<a~ !CORRECTIVE c s I p 0 L I c y M A N u A L ~ SERVICES INDUSTRIES

CODE MAJOR MINOR

CA TIMBER OUST EXTRACT SYSTEM CB PANEL SAW cc RADIAL ARM SAW co PLANER CE WIDE BELT SANDER CF STROKE SANDER CG SPINDLE SANDER CH OVERHEAD ROUTER Cl MULTI BORER CJ BAND SAW CK WOODTURNING LATHES CM COMPRESSOR AIR SYST CN SPRAY BOOTHS co PAINT SPRAY SYSTEM CP OTHER 1 CQ OTHER 2 CR OTHER 3

EA PLASTICS GUILLOTINE EB MOULD UNIT EC WORK BENCHES ED OTHER 1 EE OTHER 2 EF OTHER 3

GA UPHOLSTERY BENCHES GB CABINETS GC STAPLING MACHINE GO OTHER 1 GE OTHER 2 GF OTHER 3

lA TEXTILES PATTERN MAKING MAC IB LAYING TABLES IC LAYING MACHINES 10 SAND BLASTERS IE PAINT SPRAYING IF AIR COMPRESSORS IG TENSILE TESTING MA IH FLAT BED SEWING MA II TWIN NEEDLE SEWING IJ ZIG ZAG SEWING MAC

7/91

' r

I f i [ ;

l !

i i

I l f-I I

CSI POLICY MANUAL

CODE MAJOR MINOR

IK ELASTICA TOR SEWING IL OVERLOCKER SEWING IM CUTTERS IN SPOT FUSER 10 COLLAR FUSER IP BAR TACKER IQ EMBROIDERY MACHINE IR BUTTON SEWER IS BUTTON HOLER + KEY IT AUTOMATIC HEMMER IU BLIND HEMMER IV MOCK SAFETY STITCH IW POCKET SETTERS IX POCKET CREASERS IY ELECTRIC DRILLS IZ CIRCULAR CUTTERS JA SOCKET & STUD MACH JB KICK PRESS EYELET JC CUTTING CUTTER MAC JD BACK LATCH SEWING JE COLLARETTE

LA AFFORESTATION BAND SAW LB CIRCULAR SAW LC KILN LD PLAINER LE LATHE LF SNIGGER LG LOADER LH OTHER 1 Ll OTHER 2

MA DAIRY REFRIGERATION UNIT MB PRESSURE CLEANER MC TRACTOR MD CHAFFCUTTER ME SILO MF OTHER 1 MG OTHER 2 MH OTHER 3

7/91

Ql~ !CORRECTIVE c s I SERVICES INDUSTRIES

POLICY MANUAL

CODE

NA NB NC ND NE NF

OA OB oc OD OE OF

PA PB PC PD PE PF PG

QA QB QC QD QE QF

SA SB sc SD SE SF

TA TB TC TD TE TF

MAJOR

MARKET GARDEN

AGRICULTURE GENERAL

PRINTING

MATERIALS HAND

BUILDINGS

OFFICE

MINOR

GENERATOR ROTARY HOE PLOUGH OTHER 1 OTHER 2 OTHER 3

COVERING HARROWS IRRIGATION EQUIPMENT SEED BED ROLLER FERTILIZER SPREAD OTHER 1 OTHER 2

OFFSET PRINTER GUILLOTINE BINDING MACHINE OTHER 1 OTHER 2 OTHER 3 OTHER 4

FORKLIFT PALLET TRUCK SHELVING PALLET RACKING CRANES OTHER 1

GENERAL LEASEHOLD IMPROVE WORKSHOPS OTHER 1 OTHER 2 OTHER 3

FURNITURE EQUIPMENT STORAGE OTHER 1 OTHER 2 OTHER 3

~ I ' t ;; ' 1 f r t [ f t

i

I I I f:

I f !

7/91

CODE

NA NB NC NO NE NF

OA OB oc OD OE OF

PA PB PC PO PE PF PG

QA QB QC QD QE QF

SA SB sc so SE SF

TA TB TC TO TE TF

CSI POLICY MANUAL

MAJOR

MARKET GARDEN

AGRICULTURE GENERAL

PRINTING

MATERIALS HAND

BUILDINGS

OFFICE

MINOR

GENERATOR ROTARY HOE PLOUGH OTHER 1 OTHER 2 OTHER 3

COVERING HARROWS IRRIGATION EQUIPMENT SEED BED ROLLER FERTILIZER SPREAD OTHER 1 OTHER 2

OFFSET PRINTER GUILLOTINE BINDING MACHINE OTHER 1 OTHER 2 OTHER 3 OTHER 4

FORKLIFT PALLET TRUCK SHELVING PALLET RACKING CRANES OTHER 1

GENERAL LEASEHOLD IMPROVE WORKSHOPS OTHER 1 OTHER 2 OTHER 3

FURNITURE EQUIPMENT STORAGE OTHER 1 OTHER 2 OTHER 3

7/91

CODE

VA VB vc VD VE

WA WB we WD WE WF

XA XB XC XD XE XF

CSI POLICY MANUAL

MAJOR

COMPUTER

VEHICLES

GENERAL

MINOR

PC PRINTER FAX COPIERS OTHER 1

MOTOR CARS TRUCKS TRACTORS ATTACHMENTS OTHER 1 OTHER 2

CONVEYOR BENCHES OTHER 1 OTHER 2 OTHER 3 OTHER 4

'

I t

CORRECTIVE SERVICES INDUSTRIES PROPOSAL FOR CAPITAL EXPENDITURE

Requested By:---------------- Institution: ------------

Designation: Facility:-----------

Date: ________________ __

DESCRIPTION OF PROPOSAL: I

. ··.

"' DETAILS OF EQUIPMENT & MATERIALS REQUIRED:

COST ($)

TOTAL COST

CALCULATION OF SAVINGS: I

h . .:

ENDORSED BY: ____________ _ PAYBACK: _______________ _

MANAGER CSI/ASI: _________ _ ENDORSED: ____________ _

COMMERCIAL MANAGER SUPERINTENDENT: ____________ _

ENDORSED: ___________ _

MANAGER BUSINESS DEVELOPEMNT

DATE: ____________ _

ACCOUNT NO. ___________ ___

APPROVED: __ --:=:---::--:-,.,-------EXECUTIVE DIRECTOR

I


C S I POLICY MANUAl

STANDARD REQUIREMENTS FOR THE

CONSTRUCTION OF

CORRECTIVE SERVICES INDUSTRIES FACILITIES

Introduction

Historically facilities for Prison Industries have been custom built and in

many cases have involved a high degree of emphasis upon architectural

merit.

This in turn has failed to provide Corrective Services Industries Facilities

in a timely, cost effective and functionally flexible and appropriate form. The

provision of standard specifications for Corrective Services Industries

Facilities is therefore intended to fulfil the following expectations:

a) Timely provision

b) Cost effective

c) Functionally appropriate and flexible

Every effort is therefore being made to ensure that prefabricated 'off the

shelf' buildings are utilised as far as practicable to fulfil the above

expectations. That is the purpose of the following brief.

7/91

C S I POLICY MANUAL

1. Scope - Generally

1.1 Separate industrial facilities are to be provided for each security

classification accommodated at any Institution.

1.2 A minimum of 70% of inmate population is to be employed in

commercial based industries with a maximum of 30% working in

prison service positions.

1.3 The necessary footprint of the workshop area shall be calculated at a

rate of 22m2 per cell x 70% for light industrial industries (max.) or

13m2 x 35% for bench-top industries (max.).

1.4 The preferred size of Corrective Services Industries Facilities is 40 I prisoner work positions. I

2. Facility - Requirements

2.1 Each functional area is to include the following:

One Prisoner Lunchroom:

Area is to be calculated at the rate of 1m2/worker. Up to 40m2

otherwise I unch is to be taken in split breaks.

7/91

I ' I

C S I POLICY MANUAL

The lunchroom is to be sited and constructed so as to enable

staff to have total supervision of occupants from both the

production area and from a seated position in the office,

(usually on a raised level).

The lunchroom is to be fitted with a suitable kitchenette for tea

making, wash-up and refrigerator to service the section's

workforce.

To achieve construction and staffing economies, the lunchroom

should also double-up as a trade training room for the section.

2.2 One Staff Office of 12m2 (min.) adjoined by a prisoner clerk

office of 9m2 (min.).

The staff office should have a kitchenette facility for the section

staff. This office is equipped with internal and external phone

lines. Air conditioning is subject to climatic conditions of the

region.

Where the security classification requires, the office is to be

fitted with an officer escape route in preference to a safety

capsule.

r ~~

t

I I I I

7/91

C S I POLICY MANUAL

Supervision capability by staff is paramount, therefore the office

should be raised above the general section floor to maximise

clear sight lines.

2.3 Officers Toilet

A unisex W.C. and hand basin with hot and cold water, is to be

provided at a convenient location for staff.

2.4 Prisoner Toilet Facilities

A bank of prisoner ablution facilities is required within each

Facility. The number of fixtures should be provided in

accordance with the 'Shop and Factory Act'.

The siting of these facilities is to suit the security classification.

It is required to separate the officer toilet from this facility.

Generally showers are not provided in the facility.

7/91

C S I POLICY MANUAL

2.5 Tool Store

A secure tool store may be required to hold tools for issue to

the workforce in each section.

This facility can be located under the officers office if roof

clearance permits.

Access to this facility is controlled. Door must face production

area.

2.6 Services Generally

The level of services provided in each Facility is dependent on

the activities and function.

Electrical Services

• Provision of power is to suit function, activities and size .

C S I POLICY MANUAL

• The preferred reticulation system is via overhead

busbars and wall mounted outlets. Electric cupboard to

be located in an easily supervised and secured position.

* In special circumstances method and sizing of power

required will be specified.

* Lighting shall be sufficient to enable industrial operations

to be carried out on a night shift when required.

Compressed Air

• Very often provision for, or installation of a reticulated

compressed air supply is required.

Fire Hose Reel

• Fire hose reel, or extinguishers are required.

7/91

I

I ' t

I I

7/91

C S I POLICY MANUAL

2.7 Access

*

Access to each Business Unit is to cater for vehicular as

well as pedestrian access and egress.

Vehicular access is via one roller door of 4.3m wide by

full height of section (up to eaves).

The roller door opening is fitted with outer mesh gates,

with a removable top panel subject to height.

Pedestrian access can be via key controlled personnel

access (panel in the roller door) or personnel access

door fitted with a chubb morticed lock.

2.8 Equipment and Fixtures

Bundy Clock: Each Business Unit is to be provided with a

Bundy Clock.

The Bundy Clock and its power supply is to be located near the

prisoner entry door and preferably in view of the office.

C S I POLICY MANUAL

Drinking Water Fountain: A drinking water fountain is to be

provided external to the lunchroom.

Corporate Siqnage:

2 type 'A', 1 type 'B' and 1 type 'C' corporate signs are

to be prominently mounted inside each Business Unit.

• 1 type 'A' sign is to be mounted on the exterior wall near

or above the prisoner entry door.

Loose Furniture

All required loose furniture is to be supplied by Corrective

Services Industries.

2.9 'Food' and 'Bench Top' Sections

In sections where functions are related to food and bench top

activities, the sections are to be designed and finished such

that the environment is suitable to the functions e.g. lining of

walls and ceiling in food production areas.

Finishes to such areas are to comply with statutory

requirements.


C S I POLICY MANUAL

3. Building Structure and Envelope

In existing Institutions industrial buildings are to be pre-engineered

portal frame structures of a common stock dimension.

According to site conditions and accommodation requirements the

dimensions of the structure shall be selected from the following

standard/stock dimensions.

• Length of building structure - to be in modules of 6,000mm

bays.

• Soan of portal frame - from 9,000 to 36,000mm in 3,000mm

increments.

• Height of portal frame (from floor slab to the underside of portal

frame knee), 3,600mm to 7,200mm in 600mm increments.

The height of the building is to be selected to provide a good passive

environment within the structure.

Reference should be given to locating sections of a similar security

rating under a common roof, with each section being separated from

adjoining ones by a walling system, suitable for future changes.

7/91


C S I POLICY MANUAL

Multi column spans are acceptable providing their spacing does not

adversely affect the function of the building.

Columns are not to be a type which can be easily climbed.

The roof support structure can be of open web joists, universal beam

or on smaller buildings cold rolled sections. Roof and column bracing

must not impede the function of the building. Minimum roof pitch is 7

degrees.

The specification of hot dip galvanising of frame members is to be

restricted to the Long Bay site or to locations where it is known to be

a corrosive environment.

The roof and external wall cladding is to be of prefinished stock profile

metal unless a special duty or security requirement warrants

otherwise.

The building is to be suitably insulated to provide a reasonable

comfortable and productive environment especially in locations of

extreme climatic conditions.

C S I POLICY MANUAl

Preference should be given to use translucent sheeting in the roof to

provide good natural lighting. The use of translucent sheeting in walls

will only be approved where it can be shown that it's use in the roof

will cause condensation problems.

Natural ventilation through windows and appropriate vents are

preferred to powered ventilation systems. Roof ventilation via turbine

ventilators is acceptable.

The Section floor slab is to be designed with a live loading of 5kPa

generally. The floor is to be finished with a suitable, non-slip

pigmented sealant.

Hydraulic services such as water and sewerage mains should be

installed outside the foot print of the building to enable easy access in

the event of blockage or future additions.

The use of masonry walling is to be restricted to wet areas only.

Where security classifications permit, physical division of areas should

not be carried out in masonry.

I i

7/91

' I

C S I POLICY MANUAL

Flexibility and ease of response to change are key considerations.

Box gutters and saw tooth roofing systems are not to be used in

industrial buildings.

When designing Sections, relevant statute regulations are to be

adhered to as far as possible.

4. Corrective Services Industries Business Office

In both new and existing Institutions, the Corrective Services

Industries Business Office is preferred to be designed with an 'open-

plan' layout. The Managers office is to be defined with semi-glazed

partitioning system.

The Business Office is to be sized and equipped to provide up to 25

'office type' work stations with phone facility and 240 volts power

supply.

As the office is staffed with officers and long term prisoners, separate

toilets and kitchenette facilities are required.

I ' i I

I i

C S I POLICY MANUAL

The office should provide for an informal conference area for

meetings, general discussions and occasionally double up as a lunch

area.

5. Goods System

The preferred option is that, all raw materials and finished products

will be received and dispatched from a store facility which is to be

located in proximity to the Institution's General Store.

Additional area may be required to load and off-load cargo containers

from road and Institutional vehicles.

Consideration is to be made for the storage of an inbound and an

outbound 6 metre truck lots of materials and products, in each high

security work section.

OR

This requirement may be fulfilled by making area provision to park

and couple two cargo containers into the roller door opening of each

Section. Ensure there is enough room for vehicle manoeuvring to get

in position.

C S I POLICY MANUAL

6. Security

Prisoners are to enter each work Section through a pedestrian

entrance located in a position such that they do not have to pass in

close proximity to materials and product storage areas.

Where circumstances permit it is desirable to have an interview facility

for each Industrial Complex, so that professional interviews can take

place during work hours without requiring a prisoner to leave the

workplace.

At high security Institutions, it is essential to have a prisoner

processing facility located at the entry to the Industrial area. This

processing facility will have a 'walk-through' metal detector, change

room and search facility.

Industrial Sections are to be where possible sited so as to enable

goods and materials to be transported between the external goods

store and the Sections along a route which does not pass through a

prisoner occupied zone of the Institution.

7/91 ,_

'

f §

7. Shifts

7/91

C S I POLICY MANUAL

The layout of the Industrial Sections shall be such that overlapping

supervision and sight lines are provided to the office and floor staff.

The design and fabric of the industrial building shall be selected to

minimise the opportunity for prisoners to conceal contraband and

weapons within walls, service ducts or behind columns.

Generally, provision in Sections is to be made for prisoners to work a

minimum of seven hour shift for five days or equivalent.

In designated Institutions multiple shifts may be required to facilitate

prisoner employment and to minimise capital infrastructure.

(Refer to Item 3.4, for the purpose of calculating areas required for

sections footprint).

{jll CORRECTIVE SERVICES INDUSTRIES POliCY MANUAL

8.1 CSI BUSINESS UNIT SUMMARY

CENTRAL REGION

Emu Plains Correctional Centre

Mulawa Correctional Centre

Norma Parker Correctional Centre

Parklea Correctional Centre

Parramatta Correctional Centre

Silverwater Correctional Centre

EASTERN REGION

Industrial Centre

Special Purpose Centre

Training Centre

Cormet - scrap metal Agricor - dairy & milk processing Agricor - poultry Agricor - farm PSBU - Smorgon PET Recycling

Cortex Correctprint Gencor - handicapped inmates unit PSBU - Panama Developments P/L

Cortex Gencor - envelope services

Cermet Corfurn Correctprint

Corcover Cortex

Cermet Gencor - portable buildings Gencor - road maintenance PSBU - Statue Shop

Cortex Gencor - laundry Gencor - General Services PSBU - Hard Rock Bakery PSBU - Gum Tree Ply Ltd PSBU - Bilprau Ply Ltd

Cortex

Corfurn Gencor - plastics PSBU - Panama Developments P/L

Remand Centre Cortex

SiO'"'""~ I Date: 2/94 File: 93/0050 Page: 1 J

NORTHERN REGION

<ill CORRECTJVE SERVICES INDUSTRIES

Cessnock Correctional Centre

Grafton Correctional Centre

Glen Innes Correctional Centre

Maitland Correctional Centre

John Morony Correctional Centre

St. Heliers Correctional Centre

Tamworth Correctional Centre

SOUTH WEST REGION

Bathurst Correctional Centre

Date:

POLICY MANUAL

Cormet Corfurn Corcover Gencor - portable buildings Agricor - farm

Corfurn Correctprint Gencor - bookbinding Gencor - laundry Agricor - plant nursery

Gencor - brick and blocks Gencor - timber mill Gencor - afforestation Agricor - farm

Corcover Cortex

Cormet Cormet - powder coating Gencor - handicapped inmates unit PSBU - Prestige Group (Aust) P/Ud Gencor - packaging and assembly

Cormet Agricor - farm PSBU - M.l. Steel P/Ltd

Corfurn

Corcover Cortex Gencor - plastics Gencor - electronics Gencor - map digitising

2/94 File: 93/0050 Page: 2

I ~-

f

I

<ill CORRECTIVE SERVICES INDUSTRIES

Berrima Correctional Centre

Broken Hill Correctional Centre

Cooma Correctional Centre

Goulburn Correctional Centre

Kirkconnell Correctional Centre

Lithgow Correctional Centre

Mannus Correctional Centre

Oberon Correctional Centre

POliCY MANUAL

Gencor - screen printlsignwriting

Agricor -farm

Cortex Gencor - Corcraft Agricor - farm

Cormet Corfurn Cortex (1) Cortex (2) Corcover Gencor - portable buildings Gencor - handicapped inmates unit Agricor - farm

Gencor - cardboard products Gencor - afforestation

Corfurn Cortex

Gencor - motor repair Gencor - afforestation Agricor - farm

Corfurn Gencor - afforestation Agricor - farm

I Date: 2/94 File: 93/0050 Page: 3 I I

f

CS I POLICY MANUAL

8.2 INMATE WAGES SYSTEM

The function of the inmate wages system is to provide an incentive and reward for

inmates to positively participate in work/education programs as part of an overall

hierarchy of inmate privileges. This policy should be read in conjunction with CSI

Policy Manual sections 1.1, 1.2, 1.4 and 1.6.

The operation of the inmate wages system is underpinned by a number of key

principles:

a) All inmates are expected to participate in work/education programs as an

essential component of both inmate development and effective Correctional

Centre management.

b) Inmates are expected to adopt a co-operative and participatory attitude to

work/education programs. Whilst all supervisory staff have a fundamental

responsibility to 'manage' inmates, those habitually unco-operative or

disruptive inmates are to be removed from programs. This includes

unsentenced/unconvicted inmates who elect to work and are subsequently

dismissed because of habitually unco-operative or disruptive conduct.

c) Where inmates are classified as unemployed Assistant Superintendents of

Industries (Inmate Employment) are to ensure that those inmates are

prepared to positively participate in work programs. A register of

unemployed inmates is maintained and inmate work positions are

subsequently allocated in sequenced order.

)

Date: 6/93 Signature:)2:.f~ File: 90/0257 Page: 1

&

I

C S I POLICY MANUAL

d) At Correctional Centres where there are vacant work and/or education

positions no unemployed wage payments are to be made. Inmates who do

not participate in these programs are to be considered non-workers.

e) The policy seeks to develop an equitable and uniform inmate wages system

common to all-Correctional Centres. In these circumstances no departure

from the principles included within this policy is permitted.

This policy includes:

Page 3

Page4

PageS

Classification & Rates Table

Job Description Schedule

Service Industries Distribution & Rates Table

• Page 6 Service Industries -Generic Position Terms

• Page 7 Operational procedures -

Page 7 & 8 Section 1 - Generic Instructions

Page 9,10 & 11 Section 2 - Service Industries

Page 12,13 & 14 Section 3 - CSI Business Units

The responsibility for the development and maintenance of this policy rests with the

Director, CSI. Responsibility for implementation of the policy rests with

Correctional Centre Governors. CSI Business Managers, through Regional

Commanders, maintain a monitoring role as indicated in the operational

procedures.

Date: 6/93 File: 90/0257 Page: 2

l f

I I

<a~ ~CORRECTIVE C S I POLICY MANUAL SERVICES INDUSTRIES

INMATE WAGES SYSTEM

CLASSIFICATION, RATES AND OPERATIONAL PARAMETERS

CLASSIFICATION AND RATES TABLE

SERVICE INDUSTRIES

DISMISSED OR LEVEL 1 LEVEL 2 LEVEL3 UNEMPLOYED NON-WORKER

Basic Wage (per hour) 40c 50c 60c

Special Loading (per hour) - - 30c

Inmate prepared to work $9.00 per week but no work available

Inmate not prepared to No payment work or dismissed worker

CSI BUSINESS UNITS

LEVEL1 LEVEL 2 LEVEL 3 LEVEL 4 PRIVATE SECTOR BUSINESS UNITS

Basic Wage (per hour) 30c 40c SOc 60c Rates in accord with

Performance Allowance (per 30c 40c SOc 60c specific contract ~lour) max. per hr. max. per hr max. per hr max. per hr arrangements


I i l I

<a~ ~CORRECTIVE SERVICES INDUSTRIES

C S I POLICY MANUAL

INMATE WAGES SYSTEM

Job Decription Schedule

Level 1 (Services and CSI)

* recurring process/service functions

* high level of training/supervision required

Level 2 (Services and CSI)

*

*

recurring process/service functions with limited technical requirements

medium level of training/supervision required

Level 3

*

*

*

*

extensive technical functions

limited training/supervision required

high level of commitment required

provides training to other inmates

Level 3 with Special Loading (Services) Level 4 (CSI)

.. *

*

*

Date: 6/93

extensive technical functions

limited training/supervision required

exceptional level of commitment required

team leader to work location

' ~~ I .··

Signature:)Jb File: 90/0257 Page:4

C S I POLICY MANUAL

INMATE WAGES SYSTEM

SERVICE INDUSTRIES DISTRIBUTION & RATES TABLE

Classification Level Distribution

Level 1 (Formerly Unskilled): 70% Level 2 (Formerly Semi-skilled): 20% Level 3 (Formerly Skilled): 9% Level 3 with Special Loading: 1 %

Weekend Worker Distribution

5 day week employment: 6 day week employment: 7 day week employment:

70% 10% 20%

Wages Rates Table 5 Day Week

Level 1 = 40c per hour x 30 hours Level 2 = SOc per hour x 30 hours Level 3 = 60c per hour x 30 hours Level 3 plus Loading = 60c plus 30c per hour x 30 hours Unemployed = 40c per hour x 30 hours

6 Day Week

Level 1 = 40c per hour x 36 hours Level 2 = 50c per hour x 36 hours Level 3 = 60c per hour x 36 hours Level 3 plus Loading = 60c plus 30c per hour x 36 hours

7 Day Week

Level 1 = 40c per hour x 42 Level 2 = SOc per hour x 42 Level 3 = 60c per hour x 42 Level 3 plus Loading = 60c plus 30c per hour x 42

Date: 6/93 Signature: File: 90/02S7

= $12.00 = $15.00 = $18.00 = $27.00 = $9.00

= $14.40 = $18.00 = $21.60 = $32.40

= $16.80 = $21.00 = $2S.20 = $37.80

Page: S

C S I POLICY MANUAL

INMATE WAGES SYSTEM

SERVICES INDUSTRIES - GENERIC POSITION TERMS

1. CATERING (eg. Head Cook, Butcher, Vegetable Cook)

2. MAINTENANCE (GENERAL) (eg. Motor Mechanic)

3. MAINTENANCE (BUILDING) (eg. Plumber, Electrician, Carpenter)

4. MAINTENANCE (INTERNAL/GROUND) (eg. Labourer, Boiler Attendant)

5. MAINTENANCE (EXTERNAL/GROUND) (eg. Gardener, Tractor Driver)

6. LAUNDRY

7. HYGIENE (eg. Cleaner)

8. CLERK (eg. ASI Clerk, Deputy Governors Clerk)

9. EDUCATION (STUDENT)

10. UNEMPLOYED- No work available

11. NON WORKER - Unwilling to work

12.

Date: 6/93

UNSENTENCED ')

Signature: ~ File: 90/0257 Page: 6

C S I POLICY MANUAL

Section 1 - Generic

INMATE WAGES SYSTEM

OPERATIONAL PROCEDURES

i) Payments are made weekly by extending the hours worked (to nearest half

hour) by hourly rate. Attendance records and/or bundy clocks are to be

maintained for all inmate workers to support wage payments.

ii) All wage rates are paid at single time including weekend work.

iii) Where approved work positions involve work on a public holiday wage rates

are paid at single time extra for that day provided the inmate has worked the

day before or after the public holiday.

iv) Where an inmate incurs an authorised absence from program activity,

payment is made at the unemployed rate i.e. 30c per hour. Authorised

absences include attendance at court, sick (when supported by a certificate

from nursing staff), approved visits, approved leave programmes.

v) Unauthorised absences, at the discretion of Governors, attract no payment.

vi) Inmates engaged in approved Capital Works projects may be remunerated

at rates and conditions applying to CSI business units subject to project

approval by the Capital Works Unit.

vii) Payments to individual inmates in any one week are limited to a ceiling of

$50.00. Variations to the maximum, in the case of unique circumstances,

require written approval by Director, CSI.


I

l

CS I POLICY MANUAL

viii) Inmates who are removed from work/education programs assume 'dismissed

worker' status and are not to participate in work programs for a minimum

period of 14 days and a maximum period of 28 days. During this period

inmates are not to receive wage payments and are restricted to a 'maximum

spend' of $10.00 per week (i.e. the same entitlement as a non-worker).

Supervising staff are to provide reports to the ASI (Inmate Employment)

justifying 'dismissed worker' status. The period inmates are ineligible to

participate in work programs is at the discretion of Governors.

Date: 6/93 File: 90/0257 Page:S

I ! i

i


C S I POLICY MANUAL

INMATE WAGES SYSTEM


Section 2 - Services Industries (including Education)

i) All Services work positions are to form part of the Inmate Services

employment profile for each Correctional Centre. Each profile, and any

progressive change, is to be approved by Regional Commanders. All

payments are to be in accord with approved position hours, classification

and day status.

ii) At each Correctional Centre the Assistant Superintendent of Industries

(Inmate Employment) is responsible for the maintenance of the profile in

accord with section 1.4 of the CSI Policy Manual and these procedures.

Governors are required to provide Regional Commanders with a certificate

of compliance at the end of each month.

iii) A job description for each Service Industries work position is to be

established. The job description should contain duties and work

expectations of each position. Job descriptions should be available to all

supervising officers to ensure inmates are carrying out the tasks assigned.

iv) Financial allocations for Service Industries wages are based on a costing of

the Service Industries employment profile. Governors of Correctional

Centres are accountable for maintaining expenditure within budget.


C S I POLICY MANUAl

v) Inmates undertaking approved education courses (those courses made

available by Inmate Development Services) of full-time study, may progress

from wage classification Level i through to Level 3 subject to fulfilling

attendance and examination requirements. The approval of the Governor is

required in each case.

vi) The following positions are recognised as essential positions and are the

only positions that are to be remunerated at Level 3 plus loading:

i) Catering (e.g. head cook)

2) Maintenance General (e.g. motor mechanic)

3) Maintenance Building (e.g. plumber or carpenter etc)

4) Clerk (e.g. ASI clerk)

vii) The maximum profiled hours to be worked by inmates employed in Services

positions in any one week is 42 hours (7 days x 6 hours). Subject to the

approval of the Regional Commander inmates may be employed for more

than 6 hours per day providing they are gainfully employed and wage costs

can be met from the funding allocation.

viii) It should be not necessary to make extra time payments to inmates if the

weekend worker distribution is effectively maintained. In exceptional

circumstances (e.g. a plumber for an emergency situation on the weekend)

extra time payments will need to be made. In such instances the payment

must be justified and certified necessary on the inmate wage summary by

the Assistant Superintendent Industries (Inmate Employment).

Date: 6/93 Signature: File: 90/0257 Page:10

I [

f

C S I POLICY MANUAL

ix) Where extended industrial disputes occur and Services workers are

prevented from attending work they should receive the normal weekly wage

for the first week, and revert to the unemployed rate for the remainder of the

dispute. Non workers receive no payment.

x) Inmates who are not employed in Service Industries or CSI business unit

employment must nevertheless be employed in accordance with conditions

applicable to Service Industries employment.

xi) Productivity allowances no longer apply to Service Industries wages.


l I '

I

<a~ ICORRECTIVE C S I POLICY MANUAL SERVICES INDUSTRIES

INMATE WAGES SYSTEM


Section 3 - CSI Business Units

i) Each CSI business unit encompasses an inmate employment profile which is

established by- the CSI Regional Business Manager through the CSI

Corporate Office. Maintenance of the profile is the responsibility of the CSI

Operations Manager or ASI (Inmate Employment) at smaller CSI Centres.

ii) The classification level distribution for the purpose of calculating financial

allocations is:

Level4 15%

LevelS 20%

Level2 30%

Level1 35%

iii) Where CSI Business Units are closed either through Industrial disputes or

the diversion of officers to custodial duties, inmates are to be paid at their

basic hourly skill wage entitlement, to a six hour day maximum, without the

inclusion of a productivity allowance. Where longer periods of closure occur

i.e. over one week, inmate wage payments are to be returned to the

unemployed rate.

iv) CSI Operations Managers or ASI (Inmate Employment) at smaller CSI

Centres are to ensure each position is covered by a job description which

provides details of work expectations and facilitates evaluation of inmate

performance.

n Date: 6/93 Signature: 'Jj /li.J,..'l.ol,...------> File: 90/0257 Page: 12


C S I POLICY MANUAL

v) a)

b)

c)

Date: 6/93

The performance productivity allowance is intended to provide a

positive incentive to inmates to adopt a conscientious approach to

their employment as reflected by their attitude, output and quality of

work. The allowance is therefore not an automatic entitlement, but

rather an incentive for positive achievement. Maximum performance

allowances would only be envisaged where an inmate has provided

an exceptional level of performance.

i) The proportion of performance allowance granted is to be

related to the performance of individual CSI business units in

relation to:

meeting sales budgets

fulfilling production commitments

quality assurance

level of inmate employment

operating efficiency; and

customer service management

ii) the contribution of an individual inmate in relation to work habit,

output, quality assurance and customer focus.

Where it is' impractical to impose meeting sales budgets as a regular

parameter e.g. agricultural activities, the performance criteria is

related to the business unit meeting its pre-determined management

plan e.g. the application of a planting programme in relation to market

gardens.


i I '


C S I POLICY MANUAL

vi) Where inmates are employed in Cortex Business Units (Garments/Fiatwork)

the classification level rate of .30c per hour is paid as a Base Wage rate.

The performance allowance is based on the approved 'piece work rate'.

vii) Inmate wage levels within Private Sector business units are subject to

specific arrangements included within and through Private Sector

Correctional Industry contract agreements.

r

I Date: 6/93 )J Signature: ~ File: 90/0257 Page: 14

I f

~I CORRECTIVE SERVICES INDUSTRIES POLICY MANUAl

8.3 COMMERCIAUSA TION

Commercialisation represents the process and drawing together of those

elements which contribute to both the effectiveness and efficiency of CSI inmate

work programs. A perception often exists that commercialisation simply reflects a

desire to achieve a level of economic performance which is unrealistic given the

unique aspects, particularly constraints, of Correctional Industry programs. This

perception is quite inaccurate.

The three prong policy objectives upon which Correctional Industries are based

i.e. inmate rehabilitation, Correctional Centre management and economic

performance have now been enunciated over a long period. Economic

performance is but one of the three objectives. The real test and indeed central

role of Correctional Industry programs in New South Wales is to provide an

optimised implementation of these policy objectives.

The function of Correctional Industry commercialisation is to ensure that

Correctional Industry programs replicate community work environments. This is

absolutely essential to ensure that inmates are exposed to 'real world' work

responsibilities which develop the work ethic, technical and commercial skills of

direct relevance to facilitating post release employment.

Commercialisation encapsulates programmed working hours; productivity and

quality assurance targets and achievements; understanding the concepts and

having a customer focus; maintaining a sound commercial infrastructure; fulfilling

occupational health and safety considerations and professional housekeeping.

Adoption of an inmate hierarchy of privileges including appropriate application of

the inmate wages policy is a further important structural imperative.

Date: 2/94 File: 94/0005 Page: 1

~I CORRECTIVE SERVICES INDUSTRIES POLICY MANUAL

Commercialisation in a practical sense is therefore about developing Correctional

Industry programs that reflect a positive and productive rapport between staff and

inmates and which provide meaningful and sustained activity. This embraces the

notions of praise and sanction where necessary. Importantly this facilitates

adoption of important contemporary Correctional management concepts including

area management, case management and the structured day.

CSI commercialisation has provided positive results over recent years. CSI

business units now reflect, in large part, the operation of community work places.

Further, development of production schedules, application and achievement of

production targets and adoption of a customer focus have positively improved

program effectiveness.

Corrective Services Industries has been transformed from a chronic economic

loss maker to an enterprise providing benchmark Correctional Industry economic

performance. CSI will continue to fund an expanding range of overheads which

were traditionally met ,from Correctional Centre budgets. A long term CSJ

strategic objective is to become completely self-funding in relation to all direct

overheads of operation including that portion of staff salaries which is devoted to

achieving the commercial objective.

In embracing commercialisation it is of fundamental importance however that

CSI operations continue to fulfil a social objective. This objective necessarily

impacts severely on the level of economic performance that might otherwise be

achieved.

Commercialisation also involves a great deal of attention towards developing a

commercial infrastructure that adequately reflects the direct costs of CSI

operation and provides a steady improvement in CSI economic performance.

This however will not be at the expense of, or ignore, the fundamental CSI social

objective. /''

"'""""¢&; 2/94


File: 94/0005 Page:

C S I POLICY MANUAL FOREWORD - Inter-Searchcsa.intersearch.com.au/csajspui/bitstream/10627/901/1/CSI...

Documents

Transcript of C S I POLICY MANUAL FOREWORD - Inter-Searchcsa.intersearch.com.au/csajspui/bitstream/10627/901/1/CSI...