REPORTS OF AUDIT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81-00896R000100240004-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 8
• Document Creation Date: December 9, 2016
• Document Release Date: January 18, 2001
• Sequence Number: 4
• Publication Date: August 30, 1976
• Content Type: MF

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3 0 AUK 1976
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MEMORANDUM I~GR:
Director of Training
PROM
Chie Au it Staff, 0/IG
SUBJECT
Reports of Audit
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(a)
1 May 1975 - 31 May 1976
(b) _ Club, 1 June 1974 - 31 May 1976.
1. Attached is one copy each of subject reports.
Please advise the Chief, Audit Staff of action taken on
recommendations conta.ined'in the_ report.
2. We wish to express our appreciation to
officials and staff for the cooperation extended. to the
auditors.
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Attachments:
as stated
Distribution:
'''brig - D/OTR
1 - DDA
]. - 0/Comet/DCI
1 - D/Fin
1 - 0/IG
z -~
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For the Period
1 May 1975 - 31 May 1976
SUA~4ARY ANn SCOPE
1. Controls and procedures at_ are generally
effective and assure the proper utilization and protection
cif Organization resources. Recommendations primarily con-
cern the improvement of GSI Sales Store operations and
property administration.
2. Our findings resulted from a. review of Station
controls, procedures and records. ZVe selectively examined
expenditures to determine that documentation, approval
and financial certification were in accordance with AQenc
directives and regulations.
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AUDIT COMMENTS
GSI Sales Store
4. The GSI Sales Store is using a cash register that
does not (a) produce a customer sales tape, (b) provide a
visual display of the amount of the sale, and (c) provide
control over the entire function by more than one on/off
key lack switch. Station officials are considering replacing
this ca.s}i register. To strengthen cash control, we endorse
the acquisition anal use of a cash register which will over-
come the deficiencies described above.
Recommendatian #1: Acquire a new
cash regist re or the GSI Sales Store.
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5. The GSI Sales Store computes its Cost of Goods
Sold in a manner which mixes inventory prices at retail with
purchase prices at cost. This method results in a.n incorrect
Cost of Goods Sold and Gross Profit on Sales. Accurate
profit data is necessary for management to establish sales
prices which will recover cost.
Recommendation #2: Require GSI to value
inventory at cost for the purpose of
determining the correct Gross Profit
on Sales.
Property
6. The current Accountable Officer for Station non-
expendable property was appointed on 25 August 1975.
No evidence existed that property had been inventoried
and Consolidated Memorandum Receipts (CMRs) verified when
he assumed accountability. During the audit the annual
confirmation of the property CMRs was in process. When
this task is completed the Accountable Officer will be able
to satisfy himself as to the physical existence and the
condition of the property for which he is accountable.
Recommendation #3: Complete the annual
In ntory o~ Station property and updating
of the CMR files.
7. The Deputy Chief of Supply recently assumed
responsibility for the communications property issued an
Station ChtR #40 and- CNiR #17 from the departing
Communications Officer. The Communications Officer
scheduled to arrive in September 1976 would be the logical
person to assume this respalisibility because of the tech-
nical Ilattlr e of the prope~?ty.
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Reconunendation #4: Transfer respon-
slbllity ~or~all. Station communications
property to the newly assigned Communi-
cations Officer.
Motor Vehicles
8. Three motor vehicles (IAN 8131, MV 8378 and. TURF 8227)
were authorized by Headquarters for disposal. and. were dropped
from the Station TVA in. December 1975. These vehicles are
sti11 on hand at the Station.
Recommendation #k5: Physically dispose
o es~~e vehicles or justify their re-
instatement on the TVA.
9. Duplicate motor vehicle usage and maintenance records
are kept by the Station. The Supply Office keeps one set
of records and the Transportation Section keeps the other.
Since the information recorded on these records originates
within the Transportation Section, that Section should be
given the sole responsibility for this record. keeping function.
Supply and Transportation officials and the Chief of Logistics
agree.
Recommendation #6: Assign the respon-
sibility of keeping the motor vehicle
usage and maintenance records solely to
the Transportation Section. .
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For the Period
1 June 1974 - 31 May 1976
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1. Th is a self-
sustaining non-a ro riate -un actxvxty operated under
authority of The Club wa.s organized in April
1955 to provide employees, students, and TDY guests with
racial a.nd recreational activities. The Chief of Station,
assisted by a seven member Club Advisory Committee, is
responsible for Club management. Special Services personnel
are responsible for the day-to-day supervision of Club
activities. Salaries for Club. duties performed by Station
personnel during regular duty hours are paid by the Club
to the Station.
SCOPE OF AUDIT
2. The audit consisted of a review of_ controls and
procedures and such tests of the accounting records as
we considered necessary in the circumstances. The inventory
was verified on a test basis.
SU1~~4ARY OF FINANCIAL INFORMATION
3. Accumulated earnings at 31 May 1976 were $35,703.
Detailed financial information may be found in the attached
Exhibits A, B and C.
AUDIT OBSERVATIONS
4. Records, controls and procedures generally are
effective to assure proper custody and utilization of Club
assets. Minor matters were resolved during the audit..
No recommendations resulted from the audit.
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~It~ ~~ ..a 6ts~ Exhibit A
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31 May 1976
ASSETS
Cash on Hand and in Bank
$14,961
Savings Certificates and Deposits
5,274
Accounts Receivable
273
Inventory
20,338
Fixed Assets, net o~ depreciation
Total Assets
$4~rggg
LIABILITIES AND NE'T WORTH
Accounts Payable
$ 6,636
Taxes Payable
468
Due Recreation Program
2,091
Total Liabilities
$ 9,195
Net Worth, Exhibit B
35,703
_ Total Liabilities and Net Wort3~
$44,898
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Exhibit B
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Statement of. Income and Net Worth
For the Period 1 June 1.974 - 31 May 1976
Cost of Goods Sold:
$185,365
Beginning Inventory, 31 A1ay 1974 $ 16,680
Add Purchases- 131,560
Goods Available for Sale ~
Less: Ending Inventory, 31 May 1976 (20L338)
Cost of Goads Sold
~12~7 9T02
463
$ 57
Grass Profit
Operating Expenses:
Salaries and Payroll Taxes
$ 33,963
,
Miscellaneous Expenses
16,838
erating Expenses
Total O
50,801
p
~
Net Income from Operations
$ 6,662
ellaneous Income
Mi
959
sc
Net Income
$ 7,621
1974
Ma
31
t Worth
N
28082
y
.
,
e
31 May 1976 (Exhi
t Worth
N
bit
A) $ 35,703
,
e
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:- E k t
STATEMENT OF CI-IANGES IN rINANCIAL POSITION
For-the Twa Year Period Ended 31 May 1976
RESOURCES PROVIDED BY
Income from Operations
$ 6,662
Interest on
Savings Certificate
g5g
Increase in
Accounts and Taxes Payable
898
Depreciation
(expense not rec{uiring
outlay of working capital)
1,785
TOTAL RESOURCES PROVIDED
$10,3].4
kESOURCES APPLIED TO
Purchase
of Ec{tzipment
$ 3,373
Increase
of TnventorY
3,658
Increase
in Cash on Hand
1,804
Decrease
in Recreational Program Payable
1,430
Increase
in Accounts Receivable
4g
TOTAL RESOURCES APPLIED
$10,314
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