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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 offinancial operations, statutory compliance,

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Office of the

Utah State Auditor

local government.

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Objective Improve oversight of financial operations,

retail business, and inventory control Not a traditional financial statement audit

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Office of the

Utah State Auditor

Worked with Commission to identify keyaudit 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)

Hollada #29

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Office of the

Utah State Auditor

Murray (#9)

Cottonwood

Heights (#15)

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

Observe receiving procedures at retailstores

Inspect security at property of commoncarrier

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Cash Receipting Procedures

Perform surprise cash counts

Review log of cashiers overages/shortages

Test de osits

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Utah State Auditor

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Secret Shopper Procedures

Observe:

Cash handling

Requests for identification

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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

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Office of the

Utah State Auditor

rece pt on a transact ons to re uce t erisk of skimming

We recommended offering receipts for alltransactions

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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 ProceduresWarehouse

&

Retail Stores

Inventory:

Inventory counts

Inventory valuation tests Evaluation of shortages

Evaluation of security

Completed

Not yet completedCompleted

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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Office of the

Utah State Auditor

au or.u a .gov

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Office of the

Utah State Auditor