Internal Audit Weekly Report of Bangalore Suits for the

month of July 2017:

A) Audit of Payroll Activities:
1) We have verified on a sample basis around 72 employees for valid employee ID cards
on July 11th, 2017 and did not observe any discrepancy
2) We verified the exit slips with register maintained at security on sample basis till to July
7th, 2017 and did not observe any major discrepancy.
3) We verified new employee personal details around 50 employees and did not observe
any major discrepancy.total number of employees and relating to what month?
4) We verified the OT details till to July 12,2017 on sample basis and observed the
following:
a) In many cases details such as number of employees required, time and reason for
OT were kept blank.
b) In many cases details such as number of employees in OT Register and number of
employees in Punching report is not matching

B) Audit of Production Process:

a) On test check of the lay slips of around 5 days in the cutting section we observed the
following
i) Shortage was observed in the following cases:

Date Slip No Suit No Rolls Meters Shortage Percentage

1/7/2017 504 9996 7 838.7 10.98 1.31%
1/7/2017 505 9996 7 611.4 11.5 1.88%
3/7/2017 426 9996 7 606.2 10.24 1.69%
3/7/2017 507 9996 7 683.5 12.8 1.87%
1/7/2017 506 9996 6 719.6 7.14 0.99%
3/7/2017 427 9996 5 564.8 5.92 1.05%
1/7/2017 467 9869 6 315.5 3.6 1.14%
4/7/2017 475 9869 5 262.2 3.25 1.24%
5/7/2017 478 9869 5 256.5 7.5 2.92%
6/7/2017 484 9869 6 296.5 4.1 1.38%
3/7/2017 472 9869 5 270.2 4.3 1.59%
5/7/2017 479 9869 7 244.25 4.02 1.65%

ii) Shortages of more than 3 meters were observed in the following cases

Date Slip No Suit No Rolls Meters Shortage Percentage

1/7/2017 466 9996 7 771.7 28.16 3.65%
3/7/2017 428 9996 17 119.6 3.88 3.24%
 4/7/2017 292 9996 2 126.7 6.9 5.45%
3/7/2017 473 9869 6 211.15 6.91 3.27%
3/7/2017 474 9869 6 216 6.5 3.01%

b) DPR Vs. MMR Vs. Manual Records:

i) We have highlighted the Discrepancies observed between DPR and MMR in the daily
meetings to the Management of the Factory. But Still MMR and DPR is not matching,
and details are given below.

 Differences were observed in Total Cut Quantity

Date Suit No. MMR DPR Difference

04/7/2017 9996 4516 4366 150
05/7/2017 9898 818 686 132
06/7/2017 9869 3700 3640 60

 Differences were observed in Total Load Quantity:

Date Suit No: MMR DPR Difference Remarks

4/7/2017 9802 6126 5875 251 Note 1
Not
6/7/2017
9869 Updated 355 355
6/7/2017 9898 1425 938 355

Note 1:- In this case both Report quantities also they have mentioned wrongly the actual
total load quantity is 6005,
After us highlighting the issue they have changed quantity in both reports also.

 Differences were observed in Total Stitch Quantity:

Date Suit No MMR DPR Difference Remarks

9996 1600 1750 -150 Note 1
4/7/2017
9802 6126 5871 255 Note 2
9902 2385 1900 485
6/7/2017
9904 1408 2405 -997
9898 743 1459 -716
12/7/2017 9902 2391 1906 485 Note 3
9904 1436 2427 -991 Note 3

Note 1: After us highlighting the issue they have corrected the quantity in MMR report

Note 2: In this case both Report quantities also they have mentioned wrongly the actual total stitch
quantity is 6005, after us highlighting the issue they have corrected the quantity in both report.
Note 3: After we highlighting the issue Explanation given from the IE department, suit no 9902 &
9904 they have stitched combined so they are not getting the exact stitched quantity in each suit
number. Combined stitched quantity as per DPR 4333, but as per MMR 3827, the difference is 506.

 Differences were observed in Total Packing Quantity

Date Suit No: MMR DPR Difference

9892 7100 3750 3350
Not
4/7/2017
9903 Updated 1087 1087
10031 250 312 -62
9902 665 0 665
6/7/2017 9851 1334 0 1334
10031 250 312 -62
9902 650 0 650
8/7/2017
9851 24 0 24
10/7/2017 9902 815 0 815
12/7/2017 9904 78 0 78

 Daily packing details is not updating in DPR report, we already informed in factory
meeting with factory management, but still is not updating..
 Rejection Details are also not updated in MMR on daily basis.

ii) We have cross checked the daily Stitching and packing quantity registering at finishing
section with MMR report , and we have observed the differences
 Differences were observed in Daily Stitching

Date Suite No MMR Manual Register Difference

8/7/2017 9904 548 440 108
10/7/2017 9904 28 730 -702
10/7/2017 9996 317 1254 -937
11/7/2017 9996 1205 1371 -166

 Differences were observed in Daily Packing

Date Suite No MMR Manual Register Difference

 9902 650 0 650
8/7/2017
9851 24 69 -45
9902 815 0 815
10/7/2017
9904 0 300 -300
12/7/2017 9904 78 375 -297

Note: Above Difference we have discussed with Packing Incharge and IE Department, They
are not given proper reason for the difference.

(a) Audit of Stores Section

We verified the purchase invoices and related documents from 1st July
2017 to 11th July 2017 and observed the following

Goods
Invoice Receipt Party
Date Invoice No. Date Name Description Quantity UOM Rate Amount
266/112CM/White
10/7/2017 11330 10/7/2017 Dyna Sales Stiff 6 Mtrs 45 270
266/112CM/Black
10/7/2017 11330 10/7/2017 Dyna Sales Stiff 29 Mtrs 47 1363
266/112CM/Black
10/7/2017 11329 10/7/2017 Dyna Sales Stiff 43.2 Mtrs 47 2030
Orion
Apparel OSF-150 Sleeve
NW/0101/17- Trims Pvt. Head Felt-150
28/6/2017 18 11/7/2017 Ltd GSM Black 100 Mtrs 74 7400
Plyster Woven
MLB Interlining White
11/7/2017 236 11/7/2017 Enterprises 150CM 700 Mtrs 86 60200
Plyster Woven
MLB Interlining Black
11/7/2017 236 11/7/2017 Enterprises 150CM 2000 Mtrs 88 176000

What is the observation in the above table?

  Differences was observed in DC Quantity and Inward register Quantity marinated at
Security for Inward Number 1957 dated 8th July 2017, DC Quantity 2535.6 but in
Inward security mentioned quantity was 2536.6,
 Differences was Observed in DC inward time and Register time maintained at security
for inward number 1490 dated 3rd July 2017. DC time was 16:30 but in Security Inward
they have mentioned 9:00.
 Differences was observed in Security Inward register, They have mentioned wrong DC
number in their Register Book , Actual DC number was 01982 but they have
mentioned in Inward as a 01992.
 After we highlighted above all cases they have corrected in Security Inward register

(b) Audit of RTG Godown:

We have observed FCR number 9851 Balance fabric sent to RTG. But in
Godown they are not updated in register for received fabric.

(c) Audit of OCR, FCR and TCR:

We have audited OCR & FCR for Suit number 9851, 10031, 10036 &
9880 and we didn’t observe any discrepancy.

C) Physical verification
I. Needle Stock at Needle Zone:
Needle stock register is not updated from 1st July 2017, we have informed to
update the register.on what date you verified?

II. Electrical Items at maintenance section

There are no stock details available hence physical verification was not
conducted. We suggest maintaining a register containing details such as receipt
from HO and issues on daily basis, even after highlighting in the daily meetings
no action has been taken yet.

III. General items maintained at Stores section:

We conducted physical verification on 15th July 2017, out of 10 items verified
differences were observed in 6 items, details are given below:

Sl.N Physical Book Quantity as Per

o Item Qty Qty Material Issue Slip Difference
Long Note Book -
1 100pgs 28 28 0 0
2 1+1 DC Book 10 10 0 0
3 A4 Sheet 5 Rim 5 Rim 0 0
 4 Carbon Sheet 11 9 0 2
5 Marking Chock 8 9 1 0
6 Stapler Pin small 32 42 4 -6
Double side
7 Gumtape 0.5 inch 18 25 5 -2
Double side
8 Gumtape 1 inch 10 17 5 -2
9 Black Pencil 515 537 21 -1
10 Powder 7 4 1 -2
11 Cortage 4 4 0 0

Note: They are not given any proper explanation for the above differences.did u
discuss this in the meeting?

D) Audit of Canteen Bill submitted by the Vendor:

We verified the Canteen Bill for the month of June 2017 on 10th July 2017 and didn’t
observe any major discrepancy. however the tea expenses are paid on average basis.

E) Audit of Security Bill submitted by the Vendor

We have audited Security Bill for the month of June 2017 and didn’t observe any major
discrepancy.

F) Expense Vouching
1. We verified the petty cash vouchers for the month of July 2017 and didn’t
observe any discrepancy.
2. Surprise verification of cash was conducted on July 14th, 2017 and observed the
following

Particulars Amount
OB 98
Received From
HO 15880
Total 15978
Expense
- Voucher 11298
= Balance 4680
- Physical Cash 4680
Difference 0
G) Audit of Diesel and Generator for July 2017
We verified the diesel barrel and number of hour reading KW reading and observed
following discrepancy.

Log
DG-1 380KV Physical Book Difference
Diesel level in
tank 500 648 -148
Hour Reading 2745.6 2745.8 -0.2
KWR 2799.1 2773.4 25.7

Log
DG-2 500KV Physical Book Difference
Diesel level in
tank 798 897 -99
Hour Reading 1745.9 1729.8 16.1
KWR 1960 1953.9 6.1

Diesel in Barrel 420 Ltrs

Note: For above difference expiation given from Maintains department, They are not
updated log book from July 1st 2017. Discuss this in the meeting.

H) Audit of Wood for the month of July 2017

 We were present during the wood weighment process held on July 3rd, 5th, 7th, and
10th 2017 and observed the same was conducted in order.,
 We verified wood weighment slip and Invoice and found in order. Apart from the
above mentioned wood received on July 10th 2017 Invoice was not yet received,

Invoice Weighment Invoice

Date Supplyer No Qty Qty Amount Per Kg
Maruthi
3/7/2017 Enterprices 10 5490 5490 26352 4.8
Maruthi
5/7/2017 Enterprices 23 5470 5470 26256 4.8
Maruthi
7/7/2017 Enterprices 38 5350 5350 25680 4.8
Invoice
Maruthi Not
10/7/2017 Enterprices Received 4890 4890 23472 4.8
I) Audit of Chindi:
We were present during the chindi weighment on July 1st & 13th 2017 and found the
same was conducted in order.

Cover all areas as mentioned in the format sheet.