(Sanitized) AUDIT REPORT, 1 MAY 75 - 31 MAY 76

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81-00896R000100240002-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: January 18, 2001
• Sequence Number: 2
• Publication Date: October 13, 1976
• Content Type: MF

Z44- (~ 7-5g
13 OCT 1976
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MEMORANDUM FOR: Chief, Audit Staff, OXG
FROM
SUBJECT
REFERENCE
Harry E. Fitzwater
Director of Training
1 May 75 - 31 May 76
Audit Report,
Memo for DTR from Chief, Audit Staff, 0/IG
dtd 30 Aug 76 (OTR 76-2792), Subject:
Reports of Audit
1. The following is in response to the recommendations
contained in referent audit report. The responses are keyed
to the recommendations in the report.
Recommendation #1: Acquire a new cash register
For the GSI Safes Store.
Comment: We have acquired a new cash register
ttiat) produces a customer sales tape, (b)
provides a visual display of the amount of the
sale, and (c) provides control over the entire
function by more than one on/off key-lock switch.
Recommendation #2: Require GSI to value inventory
at cost for tTie purpose of determining the correct
gross profit on sales.
Comment: GSI assumed responsibility for the Sales
Store operation in 1965. As indicated in Attach-
ment 1, which is a brief statement from the GSI
Manager at the_ the comptroller of GSI designated
the accounting guidelines under which the Sales Store
operates. It is our understanding that this system
is used by GSI in 137 other GSI retail outlets.
We admit that the procedures being used in the
Sales Store operation are not technically correct
from an accounting standpoint; however, this activity
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May 75 - 31 May 76
is not profit-motivated and by regulation must
not operate at a loss. Therefore, minor differences
in the percentages of profit are not considered im-
portant as long as the percentage remains within
certain parameters, i.e., 10% - 20%. We can readily
determine if the Sales Store is operating at a profit,.
based on the invoices that we pay and the amounts of
money turned in to our Finance Office. Even if we
were to change the profit and loss statement to re-
flect "costs as opposed to retail, we would not get
the true cost of goods sold. The reason for this is
that the prices of some items in the inventory would
fluctuate during the quarterly period but we would
have to use a fixed cost that would either be the
cost of the last purchase or an average of all the
costs for the period. We do not suggest that we con-
tinue to utilize both retail and cost figures but we
do believe that the use of retail figures,for both
the inventory and the purchases will provide us with
the data required to assure that we remain within the
parameters mentioned above and will permit the GSI
Manager t,o report in a manner compatible with other
GSI outlets.
For your information we have included, as Attach-
ment 2, the Sales Store Quarterly Report for the quar-
ter ending 30 June 1976. In accordance with informal
discussions already held with members of your staff,
we request that you reconsider the necessity of valuing
the Sales Store inventory at cost. We have already
initiated procedures to eliminate the mixture of retail
and cost figures on the profit and loss statement.
Pending the requested reconsideration, we will record
both the inventory and the purchases at retail.
Recommendation #3: Complete the Annual Inventory
a- Station property and updating of the CMR.files.
Comment: The Annual Inventory has been completed
an t e CMR files have been updated.
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1 May 75 - 31 May 76
Recommendation #4: Transfer responsibility for
all Station communications property to the newly
assigned Communications Officer.
Comment: All accountable communications property
has een inventoried and picked up on a CMR and
signed for by the Deputy Chief, Supply Section-
We are in the process of transferring appropriate
communications property to the CMR Account of the
recently assigned Communications Officer.
MOTOR VEHICLES
Recommendation #5: Physically dispose of MV8131,
MV 378 and MV or justify their reinstatement
on the TVA.
Comment: A memorandum was forwarded to the Chief,
Supply Division/OL via the DTR on 9 Aug 76
76-6532) which explained why the 90-day vehicle
disposal limitation was not met. MV8.13I. and MV8227
have subsequently been disposed of. In view of its
relative condition we have been authorized to rein-
state MV8378 on the TVA in lieu of MV8316 which had
been deadlined and has now been disposed of.
Recommendation #6: Assign the responsibilities of
keeping the- Motor Vehicle Usage and Maintenance
Records solely to the Transportation Section.
Comment: Duplicate vehicle usage and maintenance
records are no longer being maintained. Responsi-
bility for keeping these records now rests solely
with the Transportation Shop of the Public Works
Section..
2. As indicated above,it is recommended that you con-
sider authorizing the GSI Sales Store accountings to be sub-
mitted using compatible retail figures for both inventory
and purchases. We will. follow this procedure until we receive
further guidance from your office.
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SUBJECT: Audit Report,
1 May 75 - 31 May 76
3. We would like to express our appreciation to the
Auditors who did the report for the assistance and guidance
that they provided to the firing their stay.
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Attachments
Att 1 - Statement from GSI Manager
Att 2 - Sales Store Quarterly Report
Distribution:
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