Professional Documents
Culture Documents
BACKGROUND
An Internal Audit was performed in store division, which involved procedure of receiving,
issuing, ordering, stock to hold at the most appropriate level for store materials and
delegation of authority. In our audit, we have considered and reviewed transactions for the
month of November 2010. A random physical stock count was carried out to check on the
accuracies of the stock between the physical and store ledger balances. Objective of this
audit is to gain an understanding of the processes and determine the effectiveness of
internal control system. Audit appreciates the cooperation and courtesies extended during
this review.
1.1 Findings
It was found that there is no written standard operating procedure (SOP) and departmental
organization chart available in the store division.
1.2 Recommendation
A duly approved organization chart and written standard operating procedure (SOP) to be
made available immediately, clearly indicate the flow of store procedures
1.3 Findings
Store division unable to achieve their target to reduce store holding by 20% by 01/01/2010
has per mention in the ISO documents. Stock balances show RM7,726,561.02 as at
01/01/2008 and RM7,387,992.01and able to reduce by 4.38%
1.4 Recommendation
A duly approved organization chart and written standard operating procedure (SOP) to be
made available immediately, clearly indicate the flow of store procedures
2.1 Finding
A random physical stock take was carried out and the audit found that there are stock
discrepancies between the physical and book balance in 4 out of 10 items. Below are the
details: -
2.2 Recommendation
3.1 Below are the pending matters, which has been highlighted in our previous audit report but
pending for improvement.
2 Major lapses in The concerned All returnable gate pass Expected date of
controlling the divisions who are will be monitored by receiving back the
returnable items issuing gate stores dept. material still not up-
send to the passes should dated in the returnable
supplier by mention the Monthly reports will be gate pass.
various expected date of forwarded to concerned
departments by receiving back the department to update on Records are yet to be
using Returnable material on the pending returnable gate checked and
gate pass. As per gate pass itself. passes. reconciled.
available records,
there are items The records with After obtaining response The report was send
PVO/STR/VI/002/2010 DATED 30-12-2010
not returned to us security should be from the departments a only in the months of
since 2005 and checked and copy will be forwarded to January, February, and
records were not reconciled with the Sr.Vice.President. March’09. The
updated properly. concerned division response has not been
at least once in received from most of
fortnight the divisions
Follow-up Audit
NO Findings Recommendation Management Response
Comments
This matter has All outstanding However, during the
been highlighted returnable gate follow-up audit an
in our previous passes for more email on the
audit report no than one month outstanding returnable
SEC/RGP/001/2007 should be gate pass has been
dated 07/04/07 forwarded to the forwarded to the
and Sr. Vice President concerned division and
PVO/STRVI/004/08 on the monthly copy to Sr.Vice
dated 18/12/08 basis. President. An
and still pending immediate action has
for In the event of any Expected date of been taken, which
implementation material sent receiving back the outstanding returnable
under returnable material not required gate pass listing needs
gate pass is not due to an immediate to reconcile on weekly
possible to be action has been taken, basis.
brought back, the which outstanding
concerned H.O.D. returnable gate pass
has to get specific will be reconcile on
approval from Sr. weekly basis.
Vice President and
forward a copy to
the security for
squaring up their
records.
Follow-up Audit
NO Findings Recommendation Management Response
Comments
5 GRN is being GRN to be raised To carry on with the GRN is still being
raised for only for goods same method and further raised for all other
services as well received by stores discussions with audit. items such as Works
as for work orders and for all other Order, Natural Gas.
items the bill Diesel.
passing
methodology is to Will be look into this
be modified and to matter when the new
be done without System takes effect.
GRN.
-
7 To fix a minimum Need time to Under progress and
level of stock and update/store books to be expected to complete
the store indent for adjusted. Still under by end of this year.
purchase planning
PVO/STR/VI/002/2010 DATED 30-12-2010
immediately after
the reorder level is Under progress and
reached. expected to complete
by end of this year.
Follow-up Audit
NO Findings Recommendation Management Response
Comments
12 As per the current This lapse of To be discussed with Store manager still
store system, internal accounts and carried out amendment
store manager is control Mr. Raja. after the closing
given authority to system period.
amend the to be
records in the rectified
system after immedi
closing is done for ately. In
any case of
period. any
amend
ment to
be
made
PVO/STR/VI/002/2010 DATED 30-12-2010
after the
closing
period,
it is
recomm
ended
to get
prior
approva
l from
Sr. Vice
Preside
nt and
HOD. A
copy of
the
amend
ment to
be
forward
ed to
finance
manage
r/ Head
of
finance
in
factory.
accounts division. .