dabc financial audit progress report - utah · utah state auditor dabc financial audit progress...
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Office of the
Utah State Auditor
DABC FINANCIAL AUDIT
PROGRESS REPORT
September 24, 2013
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Mission Statement
We provide Utah taxpayers and government officials with an independent assessment of financial operations, statutory compliance, and performance management for state and
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Office of the
Utah State Auditor
and performance management for state and local government.
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Objective
• Improve oversight of financial operations, retail business, and inventory control
• Not a traditional financial statement audit
• Worked with Commission to identify key
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Office of the
Utah State Auditor
• Worked with Commission to identify key audit procedures
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Overview of Procedures
• Inventory procedures
• Cash receipting procedures
• Secret shopper procedures
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Office of the
Utah State Auditor
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Retail Stores Tested
• Salt Lake City (#1)
• Sugarhouse (#2)
• Bountiful (#8)
• Sandy (#16)
• Taylorsville (#26)
• Holladay (#29)
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Office of the
Utah State Auditor
• Bountiful (#8)
• Murray (#9)
• Cottonwood Heights (#15)
• Holladay (#29)
• Draper (#31)
• Park City (#37)
• Park City (#38)
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Inventory Procedures
• Observe year-end physical inventory count at warehouse
• Review cycle count documentation at retail stores
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Office of the
Utah State Auditor
retail stores
• Observe receiving procedures at retail stores
• Inspect security at property of common carrier
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Cash Receipting Procedures
• Perform surprise cash counts
• Review log of cashier’s overages/shortages
• Test deposits
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Office of the
Utah State Auditor
• Test deposits
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Secret Shopper Procedures
• Observe:
– Cash handling
– Requests for identification
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Office of the
Utah State Auditor
– Underage loitering
– Security measures
– Restroom accessibility
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Secret Shopper
• Selected:
– Top 10 retail stores based on sales revenue
– High-volume July 4th holiday
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Office of the
Utah State Auditor
• Shopping:
– 15 secret shoppers
– 38 purchases during 2 days prior to holiday
– Made returns after the holiday
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Lack of Receipts
• Receipts only provided upon request for cash sales under $50
• Common practice in retail to offer a receipt on all transactions to reduce the
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Office of the
Utah State Auditor
receipt on all transactions to reduce the risk of skimming
• We recommended offering receipts for all transactions
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Inventory Transport Review
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Office of the
Utah State Auditor
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Unsecured Inventory Identified
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Office of the
Utah State Auditor
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Unsecured Inventory Identified
• We recommended securing inventory when in transit
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Office of the
Utah State Auditor
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Status of Audit Procedures
Warehouse
&
Retail Stores
Inventory:
• Inventory counts
• Inventory valuation tests
• Evaluation of shortages
• Evaluation of security
Completed
Not yet completed
Completed
Completed
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Office of the
Utah State Auditor
Retail Stores Secret Shopper activities Completed
Retail Stores Cash receipting at retail stores Completed
Legally required revenue
distributions
To be completed by Oct.
18th
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auditor.utah.gov
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Office of the
Utah State Auditor
auditor.utah.gov
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Office of the
Utah State Auditor