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CHARTERED ACCOUNTANTS
BARBEQUE NATION HOSPITALITY LIMITED-JANAKPURI INTERNAL AUDIT REPORT FOR THE MONTH OF APRIL -2013 CHECKLIST SCOPE / ISSUES
S.No. I. 1
AREA
BOOKS OF ACCOUNT AND ACCOUNTING Voucher Serial Numbers, Date, Narration, Bill References, and Authorization, supporting Documentary Evidences duly authorized; Filing.
Branch Reply
1. It has been observed that the outlet is very casual in maintaining the vouchers file for all 1. Shall take kind of Vouchers viz Journal, Bank & Purchases. The type of mistakes were as follows:Care in future. They were not filed in chronological order &/or in order of date. Several entries in Purchase vouchers were posted in back date/ later dates (but not on the date of generation of voucher thru ERP). This is evident from the vouchers serial no itself. None of the Journal vouchers, Purchases vouchers, and Bank & cash payment vouchers was signed by the BM. 2. Obtaining of Rate Contracts & maintenance of such contracts are very casual & not up to mark & it needs a quality change. 3. Till January-13 audit, Chq issue register was found in worst condition and chq issue date was not mentioned in register and also not signed. From Feb-13 onwards, it has been informed to us that the outlet has stopped the maintaining chq issue register. 4. The outlet has Debited Rs 1086036/-in Legal exp vide JV no 188 & 199dt 30/09/12. In this regard it was informed that this amount has been paid to DMC and Debited to Landlord a/c in earlier years on a/c of amount of regularization charges demanded by the Delhi M. Corporation during the period 2007 to 2012. Now the land lord has disputed these debits & in turn the outlet has reversed these by Dr. in Legal exp now. While going into the clauses of agreement (clause no 5 page no 4 & clause no III page no 6/7) we are of the opinion that the above payment was responsibility of Landlord only & transferring the same to Legal exp is not justified. A detailed study & legal opinion may be taken in this regard. 1. The accounting of service charges needs to be changed. At present the outlet has a system of crediting the service charges, included in the sale bill, an a/c in the Liability side. At the end of every month, the service charges has been paid to employees after due adjustment of Vat & breakages, which results in the Service charges a/c getting zero. This procedure has following loopholes: The Vat paid does not match the corresponding Income of the outlet. It may create problem at the time of Assessment.
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II.
CASH (Physical verification of main cash and outlet cash needs to be done every month) Reconcile daily Cash Collection Receipt as per Cash Book with Cash Sales as per POS Summary report.
Has the daily cash collection been deposited in bank the next day? Negative Cash Balance as per books Excessive Cash Transactions and substantial Cash Balance
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1. We have reviewed Cash book for the month of April-13 and observed that in 34 cases cash payment exceeds Rs. 1000/Details as per Annexure-2. 2. We recommend in reducing the cash transactions especially in case of fund transfer, ABC cash purchases and salary/wage payment to staff.
We have checked the cash voucher for the month of April-13 and found that: 1. BM sign were not available on any vouchers. 2. Other discrepancies are as per Annexure-3.
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Control over cheques Any signed blank cheques on hand? If yes, whether effective control over cheque stationery? Are idle funds maintained in current account?
1. We checked the bank reconciliation on 21/05/13, the same was found reconciled till 16/05/13. 2. In 2 Cases, Cheques were issued but not presented for payment since more than 15 Days. Details as below: Date Vender Name CHQ NO. Amount 11/4/2013 Friends Welding Work 108519 26404 9/4/2013 Kohli Softdrinks PVT LTD 108506 29098 1. Any blank signed Cheque not found. 2. Cheques on hand were not provided for verification, as informed by CUH there is no any Cheque on hand. 3. Deletion of signature of resigned employees from bank account is still pending.
On several dates credit balance has been observed in bank account. Credit balance is mainly due to posting of payment in bulk on every fortnight. It has been informed that Cheque of Party is hold till balance is available in bank account. Due to this a huge amount remains in the Bank reconciliation under head Chq issued but not presented for payment. Hence it is not possible to categories the idle balance in bank a/c. However a Statement showing per day closing balance as per bank statement & as per Bank book is attached as per Annexure-4.
We have checked bank payment voucher for the month of April-13 and observed that: 1. BM signatures were not available on vouchers. 2. Several entries in Purchase vouchers were posted in back date/ later dates (but not on the date of generation of voucher thru ERP). This is evident from the vouchers serial no itself. POS sale during April 13: ERP sale during April-13: Difference Rs. 6254906.92 Rs. 6254906.92 Rs Nil
Credit balance in bank due to bulk posting, However, any Cheque is not bounced due to insufficient fund. We take care while issuing Cheque.
IV. 1
SALES/INCOME
Reconciliation of sales as per monthly sales summary with the Income accounted as per books.
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Sales bills of 3 days selected at random to be verified with Daily Sales Report/Summary
Sales -Cash and Credit as per POS summary to be reconciled with Cash Book and Credit Card account in books.
We have verified the sales bills of 7th, 14th & 21st April 2013 and same found tallied with daily sales report summary. We have checked cash & credit sale as per POS summary & as per ERP and found as per follows: Description Cash Sales Credit Sale Total Sales As per POS Rs. 62,54,906.92 Rs. 32,61,901.97 Rs. 29,93,004.95 As per ERP Rs. 62,54,906.92 Rs. 32,61,513.13 Rs. 29,93,393.79 Difference Rs. -388.84 Rs. +388.84 Rs. Nil th th st We have checked the entire sale bills of 7 , 14 & 21 April 2013 and found in order.
5 6 V. 1
Sales bills of 2-3 days selected at random to be verified with the KOT/BOT Verification of Master Price List with Menu. (Once every quarter) Other Incomes- Scrap and Sponsorships
1. Paid stamp available on bill in case of cash payment. 2. In case of modification BM & Captain sign was available on bill.
Shall cover in next month audit. Scrap sale was found correctly accounted.
PURCHASES/EXPENSES
Purchase/Expense Register
Vouching
We have checked the purchase for the month of April13 and observed that: The invoice has not been filed in chronological order. Outlet is not preparing purchase order. Several entries of vouchers are posted in back dates/later date, same can be verified from voucher no. itself. None of the vouchers were signed & approved by BM. Outlet is using LQR head for liquor purchase & OTR head for all other type of purchases. Other observations in Vouching are as per Annexure-5. Fish Basa was being received from HO but out let is crediting in BBQ Grillers account, though the challan was being used of BBQ Nation. In this reference we have asked the branch to get the correct date of freezing BBQ Grillers account at Outlets and transfer all
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1. We have noticed that 29 GRN were pending for invoicing as on 21/05/2013.Details as per Annexure-6. 2. Difference of Rs. 81084.10 has been observed in purchase as per ERP and GRN summary. Branch could not offer any comment on same.
Total purchase as per accounts As per Store (GRN Summary) Difference (Excess)/Short in ERP Rs. 969,658.40 Rs. 1,050,742.50 Rs. 81,084.10
VI.
JOURNAL
Reason of Difference: not explained We have checked the purchase order and contracts of vendor and observed that: 1. Overwriting in Rates and in validity date on contract paper has been observed. 2. Period is not mentioned on contract with Vendor as for how much long time contract will valid. 3. The file of contract has been kept in haphazard situation. More than one letter of few parties mentioning rates for same items was found in the file. 4. Item rate was found undated. It is difficult to consider which one is latest & final. 5. Several changes in rates by cutting the figure/rate but the same were not authenticated either by the party or by the any officials of outlet. 6. Several contracts are said to be done by HO but no proof of the same is available in file. 7. The file is without Serial number. Any paper can be inserted/ deleted from the file without any problem. 8. Agreement was not available in some cases. Details as per Annexure-7. 9. Agreement with APS Group for providing manpower for housekeeping/ security and valet parking had been executed, but in the agreement status of APS group had been marked as Company incorporated under companies act, while correct status of APS group is that its a Partnership firm. Further, copy of partnership deed has also not been obtained. We have conducted the journal vouching for the month of April-13 and noticed that: 1. None of the JVs were signed by BM. 2. Several entries are found posted on last day of the month.
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Credit card accounts have been found reconciled. HO account was reconciled till 31/12/12 with a difference of Rs. 30,329,388.79/- as on 22/03/2013. For inter unit reconciliation branch is following the Procedure of intimating HO and concerned branch for posting in inter branch transaction. There are many accounts where balances are lying unpaid since prior to installation of ERP, branch is recommending to W/o the same. Observations on scrutiny of vendor account are attached in Annexure-9. We have checked Loan & advances and observed that:
Security deposit against rent has been given to Shrichand Sharma for Rs. 5500/-, with whom outlet is not having any valid agreement. Observation on scrutiny of Advances & deposits are attached in Annexure-10.
5 Provisions
Expenses
We have checked the same and found that provision made for April -13 Expenses not reversed till date of audit (21/05/2013). We have reviewed the Outlet Expenses, and found that several expenses of other new outlets were also incurred from the Janakpuri by debiting Fund transfer BNHL. However, confirmation of entries posted at respective outlet not ensured. Further electricity bills of Vivek Vihar & Jungpura outlets are paid from Janakpuri outlet. However, confirmation of entries posted at respective outlet not ensured. Mobile expenses of several staffs of other outlets are also paid from Janakpuri outlet. However, confirmation of entries posted at respective outlet not ensured. We scrutinized the ledgers and found that :1. Provision for bonus, leave encashment and depreciation are not made at the outlet. 2. Parking rent of Rs. 30,000/- pm is being paid to Mr. Raj Kumar, for which company is not having any valid agreement. Further HO approval for the same is also not being shown to us. TDS is being properly deducted. 3. Salary payable and leave encashment payable account are not reconciled. 4. Expense made on Mobile is continuously violating the HO norms & full bill is being
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2 3
Physical verification of Store items was carried on 23/05/2013 & differences were noticed on verification. Details as per Annexure 12. We have checked the stores & bar items on random basis, and found no item expired. We have verified the store ledger and observed that: 1. No register is maintained by branch regarding issue or receipt of Requisition slips books. 2. Requisition slip is not signed by head chef & also noticed that some items are issued without requisition. 3. Overwriting/addition observed in quantity issued which has not authentic by chef. 4. Requisition slips are not in Chronological order. Further it was found scattered on the table. 5. Requisition slip related to house-keeping, service, stationery and crockery & cutlery not posted in ERP on daily basis. In this reference it was informed to us that these slips are posted at the end of the month with total quantity.
6. In following items value is appearing as negative in the ERP (accounting module) reason of the same could not be explained by the CUH.
Code of A/c 220010 220020 220060 Head of account Stock-Food Veg Stock-Food Non Veg Stock-Coal Amount -347,572.30 -45,544.44 -93,839.44
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Outlet Bars Physical Verification and Reconciliation with Records Liquors, Cigarettes and Soft Beverages Outlet Physical Verification of Crockery/Cutlery and Linen Stocks (Once every quarter) Item-Wise Reconciliation (Once every quarter)
6 IX. 1
We have checked the salary working on and found in order. All off roll employee were paid through cash as well as 19 On roll employees Salary are paid through Cash. NO. AMOUNT On roll employee 19 Rs.103263/Off roll employee 21 Rs. 67253/Salary was cross checked with attendance register and found in order. System and Records We have checked the attendance for the month of April-13 and observed that: Appointment Letters; Salary 1. Balance leaves of the personnel needs to be mentioned on register. structure; Attendance; 2. As per existing system, On line leave application is being filed and approved, Hard copy Leave - Applications and of leave application also maintained. Records; Advances. 3. While checking hard copy of Leave Application we have observed that in several cases application was not signed by dept head or BM. 4. Manual attendance register was found in bad condition. It needs to be change. We have also noticed that attendance register is not filled by any personnel but the same is filled by guard on the basis of sheet maintained on excel sheet by CUH. Deductions We have checked food deduction from salary and found in order.
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XI. XII.
FOOD COST
Heavy variation in daily costing needs more stringent planning & controls. Moreover a system of written explanation for the day of heavy variation duly signed by all heads (BM/Chef/CUH) may be introduced for proper monitoring.
XIII. 1
Wastage report is being not maintained by Outlet on daily basis hence we are unable to give any comment on the same. Following discrepancies found in Fixed assets: 1. Fixed assets register is not being maintained in physical form but information available in ERP. 2. Coding on Fixed assets is not available. 3. No fixed assets purchased during this month. 4. We are suggested that coding on fixed assets should be made for control on assets and fixed assets register should be maintained and signed by responsible authority. Insurance of Office Premises, furniture's and fittings has been expired on 20.02.12. As informed the same is renewed by HO but copy of the same is not available at outlet. We have reviewed the control over printed stationary viz. blank Sale bill & KOT BOT book etc and found that:
2 3
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4 5 6
Gate Pass- Returnable and Non- Returnable Data Security System of Daily Operations Audit/ System Controls
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Particulars
Balance as per ERP Total PHYSICAL CASH DIFFERENCE
PHYSICAL CASH VERIFICATION REPORT DATED Date of Physical verification of cash: 23/04/2013 Main Cash Branch Comments
27166 27166 27166 0
Particulars
Imprest Cash As per book Add: Cash Sale of dated:----Total Cash in hand
Difference (Excess)
28
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Date
01-04-2013 01-04-2013
Document No.
DJPPCP/APR13/01 DJPPCP/APR13/02
Account Name
ABC Cash Purchase Control BEING CASH PAID FOR THE PURCAHSE SOME ITEM Service Charge Payable BEING CASH PAIDSERVICE CHARGE TO Mr, RAVEKANT FOR THE MONTH OF FEB 13 Establishment Expenses BEING CASH PAID EB B MONTHALY CHARGE Cable TV Charges BEING CASH PAID FOR THE Cable TV CAHRGE Travelling Expenses-Others BEING CASH PAID TO Mr, ROHIT TANWAR FOR TRAIN TICKET BOOKED BY HIM FROM PUNA TO DELHI Salary & Wages Payable BEING CASH PAID SALARY TO CASHUAL STAFF MONTH OF MAR 13 Stipend Payable BEING CASH PAID SALARY TO CASHUAL STAFF DATED ON 03.04.13 MONTH OF MAR 13 Janakpuri-HO Transactions BEING CASH GIVEN TO RAKESH FOR LR SALARY DATED ON 03.04.13 ABC Cash Purchase Control BEING CASH PAID AND PURCHASE OF REQUIRED ABC Cash Purchase Control BEING CASH PAID & PURCHASE OF ITEM Garbage Cleaning Exps BEING CASH PAID FOR THE Garbage Cleaning Exps MONTH OF MARCH 1+3 Janakpuri-HO Transactions BEING CASH PAID SALARY FOR THE HO PRROJECT STAFF AND DABIT TO HO
3 4 5
03-04-2013
DJPPCP/APR13/11
1,25,123.00
03-04-2013
DJPPCP/APR13/12
64,481.00
03-04-2013
DJPPCP/APR13/13
50,000.00
9 10 11
12
06-04-2013
DJPPCP/APR13/21
7,000.00
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17 18
11-04-2013 12-04-2013
DJPPCP/APR13/30 DJPPCP/APR13/34
1,800.00 3,339.00
19
12-04-2013
DJPPCP/APR13/35
79,277.00
20
14-04-2013
DJPPCP/APR13/39
4,031.00
21 22 23 24 25
26
23-04-2013
DJPPCP/APR13/55
1,000.00
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28
27-04-2013
DJPPCP/APR13/58
10,000.00
29 30 31 32 33 34
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Following Discrepancy found in Cash payment: Date Document No. Account Name
14-04-2013 DJPPCP/APR13/39 Staff Welfare BEBEIGN CASH PADI TO DEEPAK FOR STAFF WELFARE EXP PAID Xerox Charges BEING CASH PAID TO VIJAYL FOR STAMP PAPER EXP Mukesh Kumar (Laundry) BEING CASH PAID TO MUKESH FOR LAUNDRY ADVANCE EXP Conveyance Expenses BEING CASHPAID TO DEEPAK FOR GUEST CONVEANCE EXP PAID FOR CAR MIRROR DAMAGE SO SENT GUEST BY CAB ABC Cash Purchase Control BEING CASH PAID FOR SEV AND PETROL PURCHASE Flower Expenses-Cost BEING CASH PADI TO URENDR FOR GUEST FOR BUKE ABC Cash Purchase Control bieng cashg paid for newpapaerm petrl. etc exp dt 30.04.13
Amount
Rs. 4,031.00
Observation
No supporting was available.
18-04-2013 19-04-2013
DJPPCP/APR13/44 DJPPCP/APR13/45
Rs.
220.00
Rs. 5,000.00
23-04-2013
DJPPCP/APR13/54
Rs.
600.00
23-04-2013
DJPPCP/APR13/55
Rs. 1,000.00
23-04-2013
DJPPCP/APR13/56
Rs.
350.00
30-04-2013
DJPPCP/APR13/64
Rs. 1,327.00
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Posting Date
31-03-2013 31-03-2013 31-03-2013 31-03-2013 14-04-2013 21-04-2013 05-05-2013 05-05-2013 05-05-2013 05-05-2013 05-05-2013 05-05-2013 13-05-2013 13-05-2013 13-05-2013 13-05-2013 13-05-2013 12-05-2013 12-05-2013 12-05-2013 12-05-2013 13-05-2013 13-05-2013 13-05-2013 14-05-2013 14-05-2013 14-05-2013 15-05-2013
No.
DJP/PO/1412 DJP/PO/1441 DJP/PO/1680 DJP/PO/1877 DJP/PO/1909 DJP/PO/1980 DJP/PO/2005 DJP/PO/2006 DJP/PO/2007 DJP/PO/2008 DJP/PO/2009 DJP/PO/2013 DJP/PO/2055 DJP/PO/2056 DJP/PO/2057 DJP/PO/2058 DJP/PO/2059 DJP/PO/2060 DJP/PO/2061 DJP/PO/2063 DJP/PO/2064 DJP/PO/2065 DJP/PO/2066 DJP/PO/2067 DJP/PO/2068 DJP/PO/2069 DJP/PO/2070 DJP/PO/2071
Posting No.
DJPPPI/OTR/1399 DJPPPI/OTR/1691 DJPPPI/OTR/1690 DJPPPI/OTR/1639
Amount to Vendor
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 4,199.80 6.00 4,199.80 6,780.00 35,652.15 75,593.53 1,230.00 756.00 441.00 434.00 413.00 2,385.00 120.00 665.00 920.00 980.00 364.00 96,000.00 371.00 4,199.77 2,832.00 455.00 450.00 2,306.25 4,199.77 450.00 1,395.00 750.00
DJPPPI/OTR/1762 DJPPPI/OTR/1763
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Annexure- 7
Name
Pernod Ricard India Pvt Ltd Siti Traders & Distributors Print Kraft Shree Shyam Ji Traders United Interiors Om Enterprises (Beverages)
City
New Delhi New Delhi New Delhi New Delhi Mumbai New Delhi
Observation
Agreement was not available. Agreement was not available. Agreement was not available. Agreement was not available. Agreement was not available. Agreement was not available.
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Observation
No supporting was attached.
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5000 2455
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-8,179.00
8,179.53
0.53
-79,581.81 -86,955.00
982,433.76 217,375.50
902,851.95 130,420.50
-33,400.00
33,400.00
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CU00003243 Salary Advance Control A/c CU00003250 Deposit-TourismDep Govt of NCT CU00003744 Deputy Excise &Tax Commiss. CU00004124 CU00006445 CU00006777 CU00006912 CU00006914 CU00007181 Vijay Pathe Netrapal Singh (Loan A/C) Surender Kumar (Loan A/C) Gurgaon-HO Transactions Janakpuri-HO Transactions Cenvat Credit (Reverse Charge)
Pending entry of last 3 days Pending entry of last 3 days Entry pending Since ERP installation. Pending to be W/o, 25% of FOC Bill. Advance against expenses pending for adjustment since Oct-12. No transaction since 2008. Security deposit to be transferred to license exps. Ex Duty to be paid on liquor purchase, advance payment made during May-13. No collection since long. Int portion to be collected. Int portion to be collected. Account reconciled with Gurgao branch. Reconciled till 31st Dec-12. Not being deposited since last 3 months.
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Annexure-13
DESCRIPTION
Laphonage Talisker Glenlvet Glenliddich Jack Danil JW Black Lable JW Red Lable Chivas Regal JB Rare Jim Bear Absolute Blere Bombay Saphire Gordons Sanja Silver Heniken Bear Finlandian Vodka Vat 69 Blenders Pride Kahalua Beer Corona
BASE UNIT
750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML 750 ML
Difference
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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Annexure-14
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