Document NG5ZQXOqqmrzX0Xxe7Vav76vb

FILE NAME: Thane (THAN) DATE: 1977 Mar 18 DOC#: THAN026 DOCUMENT DESCRIPTION: Audit Report of Nashville Plant AUDIT REPORT TO: P. L. Lonnecker H DATE: 18 March 1977 PROM: E. K. Herndon BRANCH AUDITED: Nashville REPORT NUMBER: 144-031-7.' J * The branch audit through March 3, new personnel. of Nashville vas 1977, consisting v f !'~ p conducted during the veek o ^ F e b r u a r y 28 of an operational reviev a^i^ajs istance to ' 4M0& Areas in which major exceptions were noted are: (1) Sales tax exemption certificates require uodatinju&'i' (2) A large percentage of Accounts R e c e i v a b l e ^ M pira^due, ` (3) Several old items open in the cash s a l e ^ ^ (4) Several possible O.S.H.A. violations wgrq|jj (5) A VL error rate was noted in listing^ warnings on shipping papers. The majority of the exceptions noted are t W office. The correct procedures were expl>4ih& that prompt corrective actions will be a " "of new personnel in the [ng the audit, and v e feel by the office personnel. We discussed all findings and answer es with branch management. Detailed findings and recommeudatj OF REVIEW. ontaJned in the attached SUMMARY Based on our reviev, we rec a. Constant to insure that, with M , policies, and governmental regulations understand and are In compliance anch management of this report to insure that Ve action is taken on all noted exceptions. Tger reply in writing to the Director of Internal Audit days of this report concerning comments of the audit, ion of recommendations M>d any other pertinent comments. EKHicjb E. K. Herndon Director of Internal Audit cc: Ra y Gibbs - Nashville Ray Fitzgerald Harold Howard R. S. Voda Carter Marberry - Memphis Reg. Office Hurdman 4 Cranstoun Ralph Ripley NAP Internal Audit Jim Fulton File Copy (2) Bob Hale Sab), to Sopubtfo ofC onM catkfity k Onto,Jbvfc fot u t/, Crttn ftpattar* H mL,M wb County,MO, H A R 000028(2) SUMMARY OP REVIEW I. CREDIT AND COLLECTION )) We reviewed the Aged Trial Balance (ATB) for January 31, 1977 for'past due account and accounts over their credit limit. We also reviewed; the, credit approval procedure at the branch. One customer had been allowed to considerably exceed his estab\is,hed credit limit. This customer vss Mid States Plating with an e s t ^ l & h e j j ^ i m i t of $7,500 and open charges of $35,300. As of February 28, 3 ^ 7 ^ Jfhe account bad en open balance of $36,102 ' Four accounts had no imita listed and two accounts showed credit limits which differed^fqgg*^ ` credit authority letter received from the Kansas City Credit Hanager.,^ Recommendation: The Branch Manager Kansas City Credit Manager before lished credit limit. The Branch limits as posted on the ATB and approval from the redit above the estabuld review the credit anges where required. Approximately 23X of the open accounts for amounts in the 91 days and over c< had grown to approximately 36Z. In ei larger past due accounts at March made some progress in collecting still need attention. CUSTOMER at January 31, 1977 were the February ATB, this figure the status of some of the noted that-the branch has 'ese past duo amounts hut others m T Days <? 3/10/77 91-Over Days Metro Govt. Nashville Mid States Plating Schrader Automotive Briggs Bros. . 22,102.70 21,210.27 9,823.94 3,935.50 $ 6,789.70 17,412.19 9,823.94 153.23 The February ATB s counts in the 91 and over past due column. ... The Branch Manager should w o r k with the Kansas Manager in a concerted effort to clean up these past I. e sales order processing procedures was performed to determine :rs were prepared completely and correctly. We also reviewed ton certificates on customers granted exempt.status. We found that the branch was not matching their branch copies of invoices from the billing branch to the blue copy of the sales order to determine that the invoice was billed properly. Su* H HR 000029(2a) page two Nashville Audit 144- 031-7 W Recommendation: ThjfeJbranch should keep the blue copy of the com pleted sales order in a suspense file until the branch invoice copy is received. At this point, they should match the invoice to the blue copy of the sales order to determine that,the b i l l i n g operator picked up all the information correctly. Thett'^ the two ~ ' documents should be filed in the customer file.*" ~.&7* We found that of 2S customers granted tax exempt status, ^ha^^^'ex e m p t i o n certificate on file. .*#' We examined all 22 exemption certificates for customera^hO/,abated they were taxable and found that 5 of these customers had not''been taxed. The taxes not billed on these 5 customers amounted to.^,*10.6$ for 1976 and 1977 year to date. In a test of 74 signed exemption certifiestes they were tax exempt. rtiot list a reason that Recommendations: The branch emption certificates prior tinue till all cards are u. 5 customers who stated due. update of their tax ex it. This work should cone also recommended that the ire^vtaxabla be billed for any taxes III. SAFETY INSPECTION A safety inspection of th there were any O.S.H.A. cility was performed to determine if We noted the following exceptions: be posted as "flaomable - no smoking" . . reliable in the acid filling area, lift was inoperative. the gas mask had expiration dates of October, 19 74. Ter bags of asbestos with no plastic covers were stored They did not have the proper hazardous warning ;*lgns `the material. 'room was net marked with "No Exit"'signs. The men's restthe plant area was not marked. feiectric cord was strung across the floor in a doorway in the tee area. (8) ^tfo one had been oficially appointed as safety coordinator and no safety meetings had been held since November, 1976. (9) None of the personnel had completed a current first aid course. Recosmendatlon: These exceptions were discussed with the Branch Manager who took immediate action on some of the points. A face Cu.K.0V-jWW` HAR000030(2a) page three Nashville Audit 144-031-7 shield was purchased} replacement gas mask cannisters were ordered, the horn on the fork lift was repaired and the electric cord in the office was covered. We forwarded a copy of the Federal Regu lations regarding tlia handling and marking of asbestos^. to:;the Branch Manager. Corrections of the other exceptions.. Jho'uld b e accomplished as soon as possible. ---- IV. CASH SALES A listing of all open cash and C.O.D. sales as of Febsflj was re- viewed and the open Items traced back to the shippin; .oWSSj-Jf* the sales order. The cash sale procedures were also reviewed for prpS " ontjrol. M We noted that there were 8 open items on the ce .to 1976. The remaining 7 items were for sale 1977. Most of the open Invoices were for sa. count: dating back anuary 20 to February 9, cash, was not collected at the time the goods were delivered and t' invoice copy. We contacted the customers them for payment. These transactions Manager took over at the branch. had not received an dad an invoice copy to before the current Office Recommendation: The css] month. Any transactic ount should be rev':-wed eech nth old should be reconciled. DIRECT SHIPMENTS We reviewed the direct s products normally hand! fores and tested the profitability of 7 at sales. It was noted that on* resulted in only a we found that the amount for the pjbUuct The Branch Mai would be iss lie through P.P.G. on purchase order 5312 had' it. In discussions with the Branch Manager id agreed to hill, on a one time basis, a lesser However, the billing had been at the usual amount, ted the supplier who said a credit memo for $432.50 suld increase our profit margin on the sale to 8.81. No other eptionc were found. VI. TRANS A block of 100 shipping papers was reviewed to determine if the required hazardous warnings were listed. We noted a 47. error rate in failing to list the required hazardous warning. Oxidizer and Flammable Liquid warnings were not shown on some shipping papers. It was noted that shipping papers listing hazardous S u ti lo StipuUhoa o fComWcndafity fc Order,SowA; $taLk Af.Cnm Rgfroaortu, *1at, Jeckx Cowgy, MO, HAR 000031(2*) page four Nashville Audit H4-031-7 products were not tabbed)t;o set them off from others. Costly fines could result if shipping papers are not marked properly. Recommendation: These errors should be pointed out to''the' office personnel to avoid their reoccurrence. B. Vehicle Inspections We performed a safety inspection of the two truc^^ft /thfe-branch. Unit #411 had a fire extinguisher Which vas in/t^rja recharge zone on the meter. It was replaced immediately af ter^Uj^,'iQspectlon. Recommendation: Drivers should inc extinguishers in their pre-trip i their fire V I 3 . CYCLE INVENTORY In the preparation for our audit ve,*S w at Inventory Control had not received a cycle inventory from thei^ran^?Since September, 1976. Upon our arrival at the branch, we found Office Manage*, had t-uen a physical count of 30 items at January had submitted 6 cycle on Februarv 26, 1977. Recommendation: cover all pro^ ment or hlgh^ct the year to^ee}: its should be taken monthly and should Ifventory throughout the year. High moverial should be counted repeatedly throughout sntory records correct. riii i Sufcj. to Slipulttic of Confidtnili Order,Jbeid, tiai%.P.Qrtm Rtfiaoon*.*1 wLIdanaCouy.V50. CeNo.#60-CV-T070W HAR000032(2a)