Document zoLpKMeKrnQRbkwExdxOv8GLm

FILE NAME THAN THAN DATE 1977 Oct 5 DOC THAN028 DOCUMENT DESCRIPTION Audit of St. Louis Branch TO Gene Herndon FROM Rex Wood Tom Starr - : DATE October 5 1977 BRANCH AUDITED St. LouisLouis REPORT NUMBER We audited the St. Louis branch the week of 12 September was celebrating a religious holiday most of that week and our findings mostly with the Office Manager Manager discuss Areas of concern noted during our audit are as follows had - A large product line where numerous products sales volume ger ~- Sales tax exemption procedures Details SUMMARY of our findings OF REVIEW NFID recommende are included in the attached Rex Rex Wood . ToraSte Tom Starr Starr to of Subj Stipulation et al v A.P. Refractories Confidentiality Refractories Refractories al Jackson Case No. Confidentiality & County MO HAR 000022 SUMMARY OF REVIEW I. INVENTORY MANAGEMENT . . Ss (eh) The IC Inventory Valuation Report for August 1977 was reviewed slow moving or overstock items The Product Sales Analysis was reviewed for low sales volume products The following items appeared to be slow moving and require # PRODUCT QUANT VALUE LAST SHIPPED Atrazine 4L 5 Gal 187 $ 8,079 7/77 Stearate Magnesium USP Lite 25 Princep 80W 10 x # | 364 91 6,565 10,238 4 f Off cust spec Slow moving Princep 4 Gran 50 ' Banvel K 5 Gal 240 144 4,560 8,208 ENT Slow moving Slow moving Signal Stipulate 55 Gal 11 4,573 COMMENT These products were discuss certed effort should be made to mo ENT ENT ENTENT ENT ENT Purchased for specific cust but slow moving Manager A con- It was noted in our review of that the branch sells nearly have a low sales volume Theng products sold at various de Et Sales Analysis for August 1977 different products and many of them Theng is a summary of the number of vertimes August 1977 Year Regular Sales T. M. % of Total ON Products Other ^' 7. of Tod Regal Total % of Total Dept. Products 53 7.3 366 27.5 92 15.2 37 5.1 129 9.7 201 to 300 52 8.6 32 4.4 301 to 400 9/19/1 9/19/1 9/19/1 9/19/1 TOTAL PRODUCTS BYDEPT 607 100.0 100.0 724 100.0 84 6.3 56 4.2 1,331 100.0 & Subjto Stipulation of Confidentiality Order Soule af . A.P. Green MO Refractories al Jackson County Case No 207056 HAR 000023 page two St. Louis Audit 157-002-7 Direct Sales T. T. D. % of Total Dept. . Products . 100 or Less te --54 60.7 101 to 200 . 7.9 Other % of Total Dept. Products 2 3.2 - 9 14.5 Total Direct Sales % of Total Dept. Products 56 37.1 16 10.6 201 to 300 301 to 400 2 2.2 oreo NTI NTI TOTAL 62 100.0 151 100.0 Recommendation We feel that the may be too extensive and inventing if some low sales volume produs Branch Manager should review NTI offered by the branch NTI NTI might be reduced liminated We feel that the ze his product line to see if eliminated II SAFETY The following violations we ID the safety inspection of the warehouse Product Storage were stored nex Muriatic Acid found stored sonte Food Grade and Cyanide Poison other 2 Freestyle Oxidizer and Qed next to each other 3 Asbestos was Separate locations in the warehouse - Two exit were unmarked windows were noted on the south side of the fres were noted which should be removed cord ruuning to the water cocier in the shower room be replaced by a permanent grounded outlet near the water Trucks rear wheels have to be run onto railroad ties to get the truck level with the loading dock Consideration should be given to raising the base of the dock - Since asbestos is stored in the warehouse regular checks for asbestos in the air should be made and documented Subj to Supulation of Confidentiality & Ordes Soule et al v A.P. GreER Refractories et al Jackson County MO Case No. 207056 HAR 000024 page three St. Louis Audit 157-002-7 chained - Chlorine cylinders were not the backyard area both in the warehouse and in - Safety skids were not used for moving chlorine cylinderosm COMMENT a These items were brought Manager's at . III CREDIT AND COLLECTION 31/77 dated The Aged Trial Balance Office Manager was reviewed and with the We noted several T. M. D.accounts past due comprise accounts which warrant J 77 of the T. M. D.ba61 - The following days or older of we ACCOUNT . Clean Coverall Lloyds Laundry Real Cleaners Tip Top Cleaners COMMENT Tip Top Cleaners has has been worked out NFIDE NFIDE until the past due NFIDE is NFIDE BALAN OR OLDER 2,987.36 NFIDE NFIDE 16,585.75 NFIDE for collection and an agreement NFIDE NFIDE NFIDE will be paid 200 per month A number of non NFIDE NFIDE ACCOUNT Agricultural Club Pools FRM Chem Wantage Industries had large past due balances NFIDE 61 DAYS OR OLDER NFIDE 1,072.48 NFIDE 8,107.82 NFIDE 34,287.20 NFIDE 5,935.81 $ 1,436.22 $ 18,327.42 $ 3,800.90 $ 28,891.13 $ 7,289.85 Recommendation The Branch Manager should see that a concerted collection effort be directed toward these accounts Suby to Stipulation of Confidentiality & Refractoriesal Jackson County MO Case No. 207056 HAR 000025 . > page four St. Louis Audit 157-002-7 IV CASH RECEIPTS A procedural review of cash sale procedures was performed to determine if controls were adequate cash received . We We noted that the branch was obtaining a cashier's -- and mailing this check directly to the cashier . PR in Kansas City x hCie tyyRe,Boatee{A5 Fi reviewed Recommendation Standard Procedure Bulletin 25 x Pike states with the Office Manager pointing out section which that the cashier's check should be mailed along copy of the check remittance slips to the lock box A copy is of mailed to the cashier in Kansas City Ther Manager check they would begin immediately to mail check only a copy to Kansas City rine to be told us Old open C.O.D. been received invoices were reviewed to det Why Why payment had not The L. C. Laundry Corp. account had an . invoice number 002-82769 for 61.55 Investigation showed duplication of invoice paid 002-85577 which had already been was as a books only invoice which she Aclerk Aclerk had issued invoice 82769 required to clear receivables The branch said they would reverse voice Madrid Cleaners had an open C. A credit invoice to clear thi was a second account for Madri notify Accounts Receivables 002-67139 voice number for 136.0j was found on 002-4951600 account which detail othcrcouurgrheda misunderstan misunderstan thesuing of books only invoices since it was this process that the duplication of invoices V. SALES ORDERS 5 the sales order preparation procedures was performed Prior to phe fof trip a possible problem concerning taxes on debit orders anointed anointed out by the Accounts Receivable Supervisor He supplied us with Mateof the branbchranch status we ? review The accounts which had required tax adjustments While at investigated these accounts to determine their exemption indicated that St. Louis has recently gone through a lengthy process of updating their records on tax exempt accounts The majority of accounts have now responded to a request for exemption certificates by the branch Of the 36 accounts reviewed 30 showed valid exemption certificates and 6 had not responded to a request by the branch for an exemption certificate Subj to Stipulation ofConfidentiality & et Jackson County Order Sunde ef of vA.P. Green Refractories al Case No 207056 MO HAR 000026 . page five St. Louis Audit 157-002-7 St. Louis is charging tax to any account which doesn't have a valid exemp- tion certificate In addition some of the accounts which now have valid exemption certificates were charged tax pending the branch receiving their exemption certificate . receiving Ag Bs certain products attention products - Of the ---_- accounts investigated 6 should be exempt on only certain attention they purchase These accounts should have particular : to assure that tax is charged when applicable COMMENT As St.Louis receives exemption certificates the account is not exempt the problem of tax adjustmen adjustmen adjustmen It appears they corresponded and followed up with all to update their exemption certificate file all accounts termines termines that hould decrease accounts in an effort VI SALES ORDERS - CREDITS container returns We informed the OfficeManager standard procedure only the header saleinsformation number need to be shown on the information H could be completed from the informat the OfficeManager that according to and the container report The credit sales invoice return report Recommendation Considerat completing the credit should be given to only partially onder The time savings here should St. The Louis maintains invoice number a dv by customer of containers charged out dat and number number of containers and date returned are indicated We suggested that they also record the container Number on the card to make reference easier Subj to Stipulation of Confidentiality & Order Soule et ul P. Green Refractories et al Jackson County MO Case No. 207056 HAR 000027