PRIVATE AND CONFIDENTIAL

From : Internal Audit Department

Re : Cash Audit – CFFI CEBU BRANCH

EXECUTIVE SUMMARY

We are pleased to submit an audit report Cash Audit – CFFI Iloilo Branch. This audit is a regular
unannounced cash count at least once a month or twice a month as necessary. Audits were made on
funds handled by respective custodians for Cebu Fortune Foods, Inc.(CFFI).

The audit included three objectives:

1) To determine whether company funds under the cash custodians are made available to
support the operational fund requirements of the companies.
2) To assess the current cash funds processes and controls are in place.
3) To ensure all funds are intact and reported completely.

What Audit Found?

Cash funds for Cebu Fortune Foods, Incorporated with accountabilities of P100,000.00 were handled
by Ms. Denise Flores found an overage of P75.85 and remaining balance could not support
operational fund requirements of company but not enough.

Should there be any questions, clarifications and additional information needed in this report, please
let us know.

Respectfully Yours,

Joel N. Navarra, CPA

Internal Audit Manager
February 19, 2019

Staff:

Kennedy Barrientos
Junior Auditor – Visayas

Jim Eupeña
Junior Auditor – Davao

Jonathan Parreño
Senior Auditor - VisMin

Ramil Fernandez
Audit Officer-Vismin
Audit Methodology

The audit was conducted in accordance International Standards for the Professional Practice of
Internal Auditing issued by the Institute of Internal Auditors. The standards require that we plan and
perform the audit to obtain sufficient evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives.

The procedures performed by audit include physical count of cash kept by the custodian documented
through cash count sheet. Bank statement was used to check the current balance of revolving bank.

Findings and Recommendations

1. Funds in form of cash is not available to support immediate operational requirements of Cebu
Fortune Foods, Incorporation.

Criteria:

Cash fund provided to custodians should be made available to serve the purpose it was created.

1.1. Funds in form of cash is not available to support immediate operational requirements of Cebu
Fortune Foods, Incorporation.

Unannounced Cash count was conducted on February 11, 2019 at 1:30PM to 2:00PM for
revolving fund held by Ms. Denise Flores – Finance Analyst of Cebu Fortune Foods,
Incorporated with accountability of P100,000.00. RF incurred an overage of P75.85. The fund
was established to provide funds for various operations of Commissary, Purchasing,
Maintenance and Engineering and other necessaries.

2. Bank Statement shows commingling of revolving fund and personal account of finance analyst.

Criteria:

The company strictly prohibited the commingling of funds between revolving fund and personal
account.

2.1 Bank statement showing the commingling of FA's personal account and Revolving fund. (See
Annex V)
 CEBU FORTUNE FOODS, INCORPORATED
BILLS AND COINS PHP 274.00
OTHER CASH ITEMS
Outstanding Request for Replenishment 87,633.04
Outstanding Petty Cash Vouchers 4,736.50
Official Cash Advance 4,000.00
Checks on Hand -
Bank Balance (BPI) - Cash in Bank1 3,275.44
Bank Balance (BDO) - Cash in Bank 23.63
Bank Balance (BDO) - Cash in Bank 54.80
Bank Balance (BDO) - Cash in Bank 84.05 99,807.46

TOTAL CASH ACCOUNTED FOR 100,081.46

TOTAL FUND ACCOUNTABILITY 100,000.00

(SHORTAGE)/OVERAGE 81.46
Reconciling Items:
Interest earned3 7.01
w/h tax3 (1.40) 5.61
2
NET (SHORTAGE)/OVERAGE 75.85

1
Bank balance is based on bank statement within the day and BDO bank balances was just copied from
previous balances.
2
Net overage is P75.85 was transferred from revolving fund account# 4749240879 to Leslie account#
1531004562 last Feb. 18, 2019. (See Annex IV)
3
Revolving fund incurred an interest of P7.01 and withholding tax of P1.40.

Audit Recommendation:

1. Revolving Fund cash balance exhibited not available from the average Cash level requirement

Revolving Fund level for CFFI exhibited not available and cannot hold the minimum
processing time of 2 weeks which can affect the ability of the fund to support immediate
and emergency operational and administrative expenditures.(See Annex I).

Transactions with notable amounts incurred contribute to below the required optimum level
of cash to be maintained, to wit:
 Replenishment
Date PCV# Payee Amount Remarks
Doc.
 1/11/19 126 2019-005 Romel Bioco 3,401.63 E-worker salary
1/11/19 128 2019-005 E. Bazarte 1,500.00 Pick-up and re-delivery of stocks
1/12/19 131 2019-005 John Malinao 2,629.25 E-worker Salary
1/14/19 132 2019-005 G. Quisido 6,000.00 70kg of cabbage & 10 sacks of onion
1/14/19 137 2019-005 E. Bazarte 1,300.00 Pick-up and re-delivery of stocks
1/14/19 138 2019-005 E. Bazarte 2,138.50 15gal of Catsup
1/14/19 140 2019-005 E. Bazarte 1,500.00 Pick-up stocks from airport
1/17/19 146 2019-005 G. Quisido 8,250.00 80kg of cabbage & 15 bags of onion
1/18/19 152 2019-005 Romel Bioco 3,281..00 E-worker salary
1/21/19 154 2019-007 E. Bazarte 1,500.00 Pick-up stocks from airport
1/22/19 160 2019-007 G. Quisido 6,210.00 70kg of cabbage & 10 sacks of onion
1/23/19 163 2019-008 G. Quisido 4,900.00 80kg of cabbage & 6 bags of onions
1/24/19 166 2019-008 E. Bazarte 1,500.00 Pick-up stocks from airport
1/25/19 167 2019-008 G. Quisido 5,540.00 100kg of cabbage & 6 bags of onions
1/25/19 168 2019-008 Romel Bioco 3,498.13 E-worker salary
1/25/19 169 2019-008 E. Bazarte 1,500.00 Pick-up patties from airport
1/28/19 174 2019-009 E. Bazarte 2,340.13 E-worker salary
1/28/19 175 2019-009 E. Bazarte 1,500.00 Multicab rental for pic-up
1/28/19 176 2019-009 E. Bazarte 1,500.00 Multicab rental for pic-up
1/28/19 177 2019-009 E. Bazarte 1,500.00 Multicab rental for pic-up
1/29/19 181 2019-009 G. Quisido 2,730.00 7 sacks of onions
1/31/19 188 2019-010 G. Quisido 5,930.00 100kg of cabbage & 7 sacks onion
2/1/19 190 2019-011 Romel Bioco 3,401.63 E-worker salary
2/2/19 194 2019-011 G. Quisido 4,900.00 6 sacks of onion & 80kg cabbage
2/4/19 195 2019-012 Joe Malinao 2,702.00 E-worker salary
2/5/19 200 2019-013 G. Quisido 5,690.00 8 sacks of onion & 80kg cabbage
2/7/19 207 2019-014 Romel Bioco 3,474.00 E-worker salary
2/8/19 208 2019-015 G. Quisido 4,900.00 80kg of cabbage & 6 sacks of onion

2. Remaining balances from 3 BDO ATM Cards of Mr. Cherdee Retonda, Ms. Lalaine Rosalita
Denise Flores was liquidated and the cards will be send to head office. (See Annex III)

Annex I – CFFI LEVEL OF FUND ASSESSMENT

CEBU FORTUNE FOODS, INC.

Level of Cash in Weeks Computation

Imprest Fund 100,000.00

Replenishment for the last 4 weeks

Date LIQ # Amount
01/11-14/19 2019-005 22,689.38
01/15-18/19 2019-006 20,083.42
01/21-22/19 2019-007 10,403.00
01/22-25/19 2019-008 21,001.53
01/28-29/19 2019-009 13,681.13
01/30-31/19 2019-010 8,135.50
 02/01-02/19 2019-011 9,934.53
02/04-05/19 2019-012 10,743.20
02/05/19 2019-013 7,994.50
02/05-07/19 2019-014 6,247.40
02/08/19 2019-015 9,895.25
Total 140,808.84
Ave. Replenishment/Week (140,808.84/4weeks) 35,202.21
Multiply: Ave. Processing Time (2 weeks) X 2 weeks
Ave. In-Process Balance 70,404.42
Add: Ave. PCVs not yet sent to HO 4,736.50
Ave. Weekly Replenishment 35,202.21
Ave. Total Hanging Balance 110,343.13

Ave. Cash Bal. on Hand (100,000.00-110,343.13) (10,343.13)

Level of Cash in Weeks
Ave. Cash Balance (10,343.13)
Divide: Ave. Weekly Disbursements / 70,404.42
Level of Cash in Weeks 0 week/s

Annex II - CFFI CASH COUNT SHEET

Annex III
Annex IV

Annex V