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1118-1219-3189-4054-0424-2579
INVESTIGATIVE AUDIT REPORT
BACKGROUND OF BRANCH:
The Lucknow Branch started its operations in November 2008 where it handled the
security and diesel filling in generator to operate concerned telecom towers of
Wireless-TT Info. Services Limited in eastern Uttar Pradesh. M/s Orion Security
Solutions provided above mentioned services till December 2009 and thereafter its
services were limited to providing security services only for the towers of telecom
operators.
As per the confirmation given by management of branch during the period under
review they were providing services to 600 sites which consisted following two
types of tower sites:
CDMA Towers
There were total 309 CDMA Towers sites which were not vary in that period.
GSM towers.
There were total 291 GSM Towers sites which could be varied time to time to
the extent between 10 to 40 sites.
Two security guards were employed on daily basis for each site viz. one guard
for day shift and another for night shift. At some of sites the management had
appointed only one guard for whole day including night such sites were called
care taker site. One field officer was appointed for a group of 10 to 15 sites. All
the security guards were controlled by field officer and the field officer were
controlled by the branch manager. Vice president stationed at Lucknow was
responsible for controlling overall affairs of the branch.
OPERATIONAL PROCEDURE:
The branch had mainly two heads of expenditure first was salary for site security
guards and field officer and another was towards diesel expenses for running the
generator power backup. It was explained that most of the salary and diesel
expenses were incurred in cash. All the security guards use to receive their salary
in cash only at site. The Field officers was responsible for supervising the guards
of respective sites and to distribute salary etc. who used to collect cash as imprest
from the Branch for payment of salary to the respective security guards. After
payment of salary to the guards, the field officer gives the detailed account of his
imprest at the Branch supported with the acknowledgement of receipts by the
concerned guards. The diesel expenses are paid against the bill provided by the
dealers/venders after authorization by appropriate authority.
The revenue of branch was from the bills raised against security and management
services for towers for various sites. The invoices raised to Telecom Companies
are based on Management Information System (MIS) sheets approved by resident
technician appointed by telecom operators. The Management Information System
(MIS) sheets so approved by the resident technician contained details such as
guards duty record, hours of power failure and running of generators etc.
The most of the transactions of branch were in cash and the branch maintained
only cash book to record the transaction. Only few payments are being made
through bank account of branch.
The objective of the Audit is to review and report on the manner of cash handling,
control its accounting and management in a timely manner and in accordance with
the authorities delegated by the management. The objective of the audit is also to
find out any intentional deviations from the guidelines and resultant
discrepancy/misappropriation of funds on the basis of the documents/ records
available for verification. During the course of audit, suitable analytical review of
data and test check commensurate with the scope of audit were conducted. The
audit scope also includes determination of financial impact on the company during
the audit period in case non-compliance of procedure included above.
The period of the audit was from 01 September, 2009 to 31 October, 2010.
It has been observed that the control over recording of transaction regarding
payment made towards salary to security guards and diesel expenses were
unconvery poor and it requires a lot of improvement/review. Similarly the branch
did not follow proper rules and regulations for internal control operation such as
not maintaining the records of invoices/bills from the dealers supplying diesel etc,.
Pay roll register_____ proper payment to security guards for particular
month/quarter, proper handling of cash transaction and issuance of cheque.
1. The audit also found that there was a lack of compliance with policies and
procedures, weaknesses regarding supervision, segregation of duties of
management and Field Officer appointed for respective task. Policies,
procedures, Rules etc. issued from the head office from time to time were
not maintained in consolidated manner for easy reference. Management and
Field Officer did not regularly review operations to ensure that deficiencies
were detected and corrected efficiently.
2. We have found some vouchers which were not proper in respect to cash
imprest and other payments made to Field Officer, diesel dealers and staff.
The above mentioned vouchers contained following types of irregularities:
iii. In addition to the above mentioned cases we also observed that one
Field Officer, (Mr. Bechan Singh) complained that after
handover/takeover of sites he had sacked some of security guards at
his own risk and paid compensation to security guards. As per his
letter we found that he had right to receive total amount of
Rs.5,69,000/- out of this he had received a part payment of
Rs.2,00,000/- from the past vice-president Mr. R. P. Singh and not
received balance amount of Rs.3,69,000. The same facts were not
reported by Mr. R P Singh to Head office which seems that there is
misappropriation. The letter available is enclosed herewith as per
Annexure-4.
iv. It has beeen observed that some of the security guards filed complaint
through “Rashtriya Janadhikar Sanrakshan Sansthan” regarding non-
payment /short payment of salary for various months which were
mentioned in their complaint letter as enclosed herewith as per
Annexure-5. Additionally some guards complained directly to branch
regarding unpaid salary. The same facts were not reported by Mr. R P
Singh to Head office which seems that there is misappropriation. The
details of those part payment and balance amount payable as per that
letter have been enclosed herewith as per Annexure-6.
5. we observed in our Audit that the branch had not reconciled any accounts
related to imprest and vendors.
6. On analytical review of data provided to us, we found that the branch made
excess payment towards purchase of diesel and salary of security guards as
compared to the actual consumption of diesel and salary payable to security
guards. As per our analytical review the total excess amount towards salary
of guards and diesel expense were Rs. 2,02,93,937 during the period under
review. The details regarding actual consumption of diesel, salary payable to
security guards and total payment made for diesel and salary to security
guards are attached herewith as per Annuxure-7.
8. In our Audit we found that the bank transaction of the branch was not
maintained properly by the branch management. During the audit we have
found that the branch management used to issue numbers of cheques without
having sufficient balance in bank account.
9.
10.It was also observed that there are many imprest and advance account which
are still to be settled.
The followings are the summary of all the annexures stated above :