Audits Process Notes

AUDIT PROCESS
PROCESS NOTES FOR

TAJ AUDITS
Page 1
AUDIT PROCESS
INDEX
S.No Area Page No
1. Front Office……………………………………………………...3
2. Food & Beverages…………………………………………….17
3. Banquets……………………………………………………….25
4. Purchases……………………………………………………...27
5. Stores…………………………………………………………...31
6. Fixed Assets……………………………………………………34
7. Accounts………………………………………………………..36
8. Credits…………………………………………………………..41
9. Engineering…………………………………………………….45
10. Housekeeping………………………………………………….47
11. Human Resources…………………………………………….49
Page 2
AUDIT PROCESS
Area: Front Office

I. National Accounts Rate Maintenance
Document/Report required:
 M10 Report from Sales Manager
 GIH spool (Fidelio), Stayers Report (Amadeus)
Checks to be performed:
1) Obtain the M10 Report from the Sales Manager. Select a sample of top 10
corporate accounts on the basis of the room revenue/ Room Nights.
2) Choose a sample of NAT customers for whom the rates have been fixed on
the basis of the room nights they have agreed to give the unit.
3) Use the GIH to identify the room rates applied for the above sample.
Compare it with the contract and identify whether the number of nights,
revenue charged etc is as per the contract.
II. Local Contracted rates – territory accounts
 M10 Report from Sales Manager
 GIH spool (Fidelio)/ Stayers Report (Amadeus)
1) Obtain the M10 Report from the Sales Manager. Select a sample of top 10
Travel agent accounts on the basis of the room revenue/ Room Nights.
2) Use the GIH to identify the room rates applied for the above sample.
Compare it with the contract and identify whether the number of nights,
revenue charged etc is as per the contract.
III. Long Stayer
 GIH spool (Fidelio)/ Stayers Report (Amadeus)
 Long Stayer contracts
1) Long stayers are identified based on the rate codes (SGR). Filter for ‘SGR’
rate codes in the GIH/Stayers Report.
2) Verify whether the rates charged for long stayers are as per the contracts.
The above procedure is to be followed for airline crews.
IV. Non contracted rates: BAR, Ad-hoc rates
 GIH spool (Fidelio), Stayers Report (Amadeus)
 BAR rates for a sample of one week from Sales Manager.
BAR Rates – They are the best available rates. They are usually the least rates
applicable for each category of room.
Page 3
AUDIT PROCESS
Adhoc Rates – They are the adhoc rates given by the unit. As in, the rate field can be
altered and a rate as the unit may decide to provide can be given.
1) Filter for bar rate codes in Stayers Report/GIH (T04- b/f excluded, T05- b/f
included) and check whether rate applied is correct by comparing it with bar
rate prevailed at that time. This will help one identify whether rate alteration
can be done in that rate code.
2) Also, filter for ‘RR’ Rate code in Stayers Report/GIH and verify whether the
rates applied are as per the tariff maintained at Front Office.
3) Identify whether anyone other than the FOM has rights to alter rate codes by
performing a spot check.
4) Filter for Adhoc rate codes ‘T20’ GIH/Stayers Report and a statistical analysis
is made – no. of times Adhoc rate codes are used and percentage of usage.
Verify whether an ‘Adhoc Report’ is generated on a daily basis and authorised
by the FOM & Night auditor.
5) Rate Variance report to be checked to ensure that it has been reviewed by
FOM and Night Auditor on daily basis.
6) Compare the adhoc rates given for a particular period (using GIH Report/
Stayers Report or Adhoc Report) with the BAR Rates for the same period.
Discounts given under adhoc rates are to be identified and authorised as
below.
- <10 of BAR : GM/SM/FOM
- > 10% of BAR : COO/Sr. VP-Sales and Marketing / VP-Sales / VP-
Marketing
V. Packages
Document/ Report required:

 List of packages with its validity and terms from the Reservations Manager.
Also obtain the rate codes fixed for each package.
 GIH Report (Fidelio), Stayers Report (Amadeus)
1) Select a sample of guests under each of the packages valid during the audit
period. Verify whether the rates charged for the selected sample is as per the
rate list.
VI. Global Distribution System (GDS)
Get the GDS rates from sales team and check whether rates updated online are as
per the rates given by the sales team. The updation happens now at corporate level.
Hence the sales team may be reluctant to let the audit team know the email
correspondence about GDS rates from Corporate. They may say as it happens only
at corporate, it need not be verified at units. But the audit team can insist that it has
to be checked on sample basis.
VII. Up selling
 Upsell register maintained at Front Office.
 Commission calculation
Upselling is a process by which the front office executive induces the guest to opt for
a higher category room than previously booked/ preferred by him. Thus, in this case,
Page 4
AUDIT PROCESS
due to the effort of the front office personnel, the unit enjoys additional revenue. To
encourage the front office personnel to indulge in upselling, a percentage
commission is paid on the incremental revenue owing to the upsell.
1) Obtain the up sell book and ensure by checking the ‘Upgrade Report’ that
such up sell have not been booked as upgrade or vice versa.
2) Check the calculation of the up sell commission. Normally Ten percent on the
difference between the rate of higher category room and the lower category
room is paid as commission to the staff who has upsold the room.
3) Ensure that all up sells have been authorised by the Duty Manager/Front
Office Manager.
VIII. Registration Cards/ C forms
 Registration cards for a sample period.
 C Forms for the same period.
 C Form register.
 Arrivals Report from Amadeus/ Fidelio.
1) C Forms have to be compulsorily filed with the local police station for all
foreign nationals staying in the hotel. This is a statutory requirement. C Forms
will contain details like Guest Name, Room No, Arrival Date, Departure date,
Nationality, Passport No, Visa details, billing instructions etc. Units may either
preserve C Forms or not. In case they preserve them, obtain the C Forms and
cross verify whether for all arrivals for a sample period C forms have been
prepared and submitted to the local police station. (To identify foreign
nationals among the arrival for the day, cross verify with the registration
cards)
2) In case C forms are not preserved, obtain the C Form register. C Form
register will give details of the C Forms submitted on each date. Using the
arrivals report and registration cards in Pt. 1 verify whether for all foreign
national arrivals C forms have been submitted.
3) While performing the above check, verify whether the registration cards are
complete with the following details – Guest Name, Room No, Address, Arrival
date, Departure date, Rate Code, Rate, Nationality, E-mail address, Credit
Card details, Duty Manager’s Signature, Guest Signature.
4) Ensure that the credit card number is masked and only the last four digits are
visible on the face of the registration card.
5) Also ensure that the E-mail address obtained is not a generic ID.
IX. Upgrades (i. RNA and ii. Others)
Documents/Reports required
 Upgrade report
 Guest in house spool
Upgrades refer to the process of allotting a higher category of room to the guest than
what was actually booked for. This may be due to non availability of rooms in the
category booked or due to guest patronage, etc.
Checks to be performed
Page 5
AUDIT PROCESS
1) Ensure that upgrade report is generated on a daily basis along with reasons
for such upgrades.
2) From the GIH spool for the sample period, filter for cases of upgrade (non
blank in ‘upgrade from room type column). Ensure that all these cases are
actually captured in the upgrade report.
3) For a sample period, ensure that upgrades are authorized as required by the
TPAM (Refer HIJ 85-89) or as per the approved internal policy.
4) Validate the reasons mentioned in the upgrade report. For example, if the
reason for upgrade is mentioned as RNA (Room Not Available) ensure that
on that particular day, all the rooms in the category booked are actually
occupied or are under repair.
5) Ensure that upgrade reports are sent to the COO on a monthly basis.
6) Luxury tax check –
 In states where the Luxury tax is charged on rack rates, ensure that
differential LT is charged properly by checking JBD from manual
posting with respect of this. {Differential LT: LT on (Rate of upgraded
room- Rate of booked room)}
 If luxury tax is payable on actual, ensure that LT is calculated and
remitted on the actual room tariff.
X. Reservations process
Document/ Report required: NONE
1) Check on sample basis for the reservations made all relevant documents
such as letter from company in case of bill to company, credit card numbers
in case of individual guests, and such other information to ensure that
reservation made is valid , are collected.
2) In case of reservations made through telephone, ensure that the manual
reservation forms are filled in so that the System can be updated with correct
details. This cannot be checked comprehensively as the audit team may not
know how many reservations were made through phone calls. Hence the
audit team has to check whether there exists process in place and check the
manual reservation slips filled in if any.
3) In case of block bookings, advance needs to be collected. ARCL/ ORION
can be checked to see whether for such bookings advance has been
collected and accounted for.
 Check compliance with Adhoc SOP and Reservations SOP.
XI. Complimentaries and House Use
 Monthly complimentary report.
 Departure list spool.
 Registration card
 Journal By department code
1) Obtain the complimentary report for all the months.
2) Filter for complimentary/house use rooms from departure list (zero in rate
column and rate code does not equals “SHARER”) and compare this with the
complimentary report. Obtain reasons for differences if any and report
accordingly.
Page 6
AUDIT PROCESS
3) Ensure that monthly complimentary report is sent to COO.

4) Ensure that rate code usage in case of complimentary are in line with the Taj
internal policy and unit policy as applicable.
5) Ensure that registration cards are filled and signed even in cases of
Complimentaries and house use.
6) If as per the state LT law, luxury tax is to be paid on rack rate, the unit has to
bear the luxury tax for the complimentary rooms. If LT is payable on actual,
then no LT will be paid on complimentary rooms.
7) In cases where the billing instruction specifies that some services are on
complimentary basis and others to be charged, on a sample basis verify from
JBD that the guest has been charged as per the billing instructions. Ensure
that billing instructions are correct by checking the registration card of those
guests which has been authorized by the Duty manager.
XII. Check-in process
 Registration cards
 Travel agent vouchers
 Company letter/fax
 GIH spool
1) Filter for travel agent/company guests from GIH for a period and check
whether their physical registration card copies maintained at the front office
and duly authorised by the duty manager are being attached with the original
copy of travel agent voucher/company letter/fax as the case may be and for
such cases the guest signature shall be obtained on the bills.
2) Filter for check ins in the user log and on sample basis check whether for
those check ins there is a registration card filled in with required
details ,signed by the guest and authorised by the duty manager.
XIII. No Shows & Cancellations
 No Show Report
 Cancellations Report
 JBD (Fidelio), Journal Report (Amadeus)
No shows are when the guest has made a booking but has not turned up.
Cancellations are cases when the guest, after booking a room has cancelled it before
check-in. The unit has blocked the room in anticipation of the guest’s arrival, Hence,
the unit charges retention depending on the number of days prior to which
cancellation has been done.
1) Obtain the unit’s policy for charging retentions on no shows and cancellations.
Obtain the No shows & Cancellations report for a sample period and verify
whether retentions have been charged as per policy. (Refer TPAM for
retention policy). Retentions charged can be verified using the JBD/Journal
Report.
2) If retentions have not been levied ensure that waiver of the charge is
documented and is duly authorised by the Front Office Manager on a daily
basis.
Page 7
AUDIT PROCESS
3) The Night Auditor to track the amount o00f retention charged and verify
whether it has been charged correctly. He is also to ensure that authorisation
for waivers are duly obtained.
XIV. Day-use billing process
 Departure List Spool (Fidelio), Day Use Report (Amadeus)
 Journal by department Spool (Fidelio), Journal Report (Amadeus)
1) Verify whether room charge has been posted for all day use cases. Room
charges levied can be checked using the JBD/ Journal Report.
2) If room charges have not been levied ensure that waiver of the charge is
basis.
3) The Night Auditor to track whether the room charges have been posted and
he is also to ensure that authorisation for waivers is duly obtained.
XV. Late Checkouts & Early Check-ins
 Late checkout Report(Amadeus)/ Filter for checkout beyond the time set by
unit in ‘Checkouts for the day’ spool (Fidelio)
 Early check-ins Report(Amadeus)/ Filter for checking before the time set by
unit in ‘Check-ins for the day’ spool (Fidelio)
 JBD (Fidelio)/ Journal Report(Amadeus)
The unit has a specific checkout and check in time. If the guest either checks out late
or checks in earlier, retention is charged based on the policy.
1) Obtain the unit’s policy for charging retentions on late checkouts and early
check-ins. Obtain the Late checkout & Early check-in report for a sample
period and verify whether retentions have been charged as per policy. (Refer
TPAM for retention policy). Retentions charged can be verified using the
JBD/ Journal Report.
2) If retentions have not been levied ensure that waiver of the charge is
basis.
3) The Night Auditor to track the amount of retention charged and verify whether
it has been charged correctly. He is also to ensure that authorisation for
waivers is duly obtained.
XVI. Foreign Exchange rate updation
 Exchange rates from Thomas Cook.
 Userlog (Fidelio) for a sample period.
 Foreign Encashment certificates
1) Obtain the exchange rates as per e-mails received from Thomas Cook. Filter
for ‘Exchange’ in the description column of the userlog file to identify all the
Page 8
AUDIT PROCESS
rates fed in. Compare the rates sent by Thomas cook with those fed in to
identify differences. Ensure that the exchange rates have been fed in the
system for all the currencies on all the dates.
2) In case of any differences, quantify the loss/ gain by verifying the amount of
encashment made on that date for the wrong rate.
3) Verify whether the encashment certificates have been signed by the guest for
a sample period.
XVII. Extra Bed
 Extra bed register
 JBD (Fidelio), Journal Report (Amadeus)
1) Obtain the extra bed register maintained at the housekeeping department that
records extra bed placed in each room.
2) Cross verify whether charges have been posted in the Journal Report for
each of those rooms.
3) If LT is chargeable on the actual, ensure that LT has been posted on the extra
bed charge.
XVIII. Walk ins
 Walk-ins for the day spool/ report
 JBD spool (Fidelio), Journal Report (Amadeus)
1) Select a sample of walk-ins to be verified. Cross verify whether advance of at
least one night’s room rent has been collected. Else report.
XIX. Master Key Usage

 Master key register (In case of ving card/ manual keys)
 Ving Card Log (In case of ving card system)
In case of manual keys:
1) Obtain the master key register maintained at the front office to record usages
of the master keys. Ensure that each usage has been authorised by the DM
and FOM. The signature of the person using the key and the one receiving it
after the usage to be obtained. The reasons for using the key also to be
mentioned.
2)
In case of ving cards:
of the master keys. Ensure that each usage has been authorised by the DM
and FOM.
4) Also cross verify with the ving card log whether all usages of master keys
have been entered in the master key register and authorised by the DM and
FOM. The reasons for using the key also to be mentioned.
5) Ensure that the security manager or Front Office Manager is generating the
log and verifying it on a periodic basis.
Page 9
AUDIT PROCESS
XX. Sharing of user IDs
 JBD spool (Fidelio), Journal Report (Amadeus)
 List of Users with Name and User ID for Fidelio/Amadeus from the IT
Manager.
 Leave Cards of Employees (Sample Selected).
1) Using the JBD spool/ Journal Report, identify the users of Fidelio/ Amadeus
from the ‘User ID’ column.
2) Select a sample list of users to be verified.
3) Obtain the leave cards for those employees.
4) Report cases where transactions have been posted in the employee IDs on
any day that a leave has been availed by them. These are cases of sharing of
user IDs which could be dangerous as it would be difficult to fix responsibility
on anyone in case of misuse.
XXI. Allowance/Negative posting
Allowances are deductions from revenue on account of guest dispute, guest

dissatisfaction, etc. All major revenue codes will have an allowance code to make
any adjustments to the revenue.
Negative postings are adjustments made through revenue code itself. For example,
reversal, rectification, etc are done through revenue code and not allowance code.
Documents/Report required
 Allowance voucher
 Exception report
 Allowance report
1) Obtain allowance vouchers for a sample period and ensure that these are
authorized as required by the TPAM (Refer H156) or as per unit policy.
2) Verify whether reasons have been documented in all cases and are logical.
3) In certain properties there will be no practice of generating allowance
vouchers. In such properties, ensure that allowance report is generated on a
daily basis along with reasons for all allowances. This report has to be signed
by the FOM as a post facto approval.
4) Ensure that all revenue codes also have an allowance code.
5) In case unit receives exception report from our spooling team, verify for a
sample period whether the exceptions pertaining to allowances (Allowance
after check out, allowance after settlement) are reviewed on a daily basis and
reasons for such checkouts are documented and signed off.
6) In case the unit does not receive an exception report, manually generate the
following exception for a sample period –
 Allowance after check out
 Allowance after settlement
 Negative postings
7) Instructions to generate these exceptions are available in ___.
8) Review these exceptions and obtain reasons for the same. Ensure that the
reasons are logical and there are no anomalies in these transactions.
Page 10
AUDIT PROCESS
9) Ensure that all allowances are passed through allowance code and not
through the revenue code itself.
10) In case of negative postings (filter for negatives in debit column and all
revenue codes in department code column), ensure that no allowance is
made as negative posting. Only reversals and rectification can be made
through the revenue codes.
XXII. Check out process
 JBD, userlog and GIH spool
 PAN card details
 User right and user group details from IT manager.
 Information bill and final bill copies
1) Filter for “> 25,000” in credit column and “900” in “Dept Code” column in JBD
to get the cash settlement. The above list is then checked with the cash
register maintained for PAN details.
2) Check for billing instructions. For all those Direct billing instructions there
should not be transfer to city ledger. Obtain reasons if at all there are
instances
3) Check the user rights report taken from Fidelio to check whether delete
option is given to any personnel. Scrutinise user log to see whether any
transaction has been deleted
4) Transfers should be filtered from user log. Each transfer should be analysed
to see whether it is between related parties. Guests may be considered as
related if their travel agents or company are the same. Detailed process
under the head Fraud Checks
5) Filter for checkouts in user log. Concatenate room number and guest name.
Draw a pivot to know the number of checkouts for a particular guest. If the
number of checkouts is more than 1, check whether any transaction has
happened between 1st checkout and the last checkout. Also estimate the
time difference between the two checkouts. Check whether such
transactions have been brought to notice specifically to the FOM and the
same is documented.
6) Do surprise verification at the front office to see whether the folios are closed
for all the guests who have checked out.
7) From 11Fidelio database files, USERS and USER GROUPS are taken and
the rights given to the employees are checked to ensure whether they are
online with the IT guidelines.
8) Filter for checkout in user log. On a sample basis check whether signatures
of those guests have been obtained in the final bill and not in information
copy.
9) In cases where signature has been obtained on the information copy, ensure
that there is no variation between the final and information bill.
XXIII. Front office bills on hold
 JBD and user log spool.
 PX report.
 Open invoice report(Amadeus)
Page 11
AUDIT PROCESS
1) "Filter for ""PX"" in Room column in JBD. Then filter for ""Contains PX__"" in
description column in user log to find the corresponding room number. The
user log is then analysed to find when the PX is checked out. After check-out,
it is to be transferred to city ledger. This is called settlement. If the settlement
does not happen within 7 days from the date of putting the bills on hold, it is
reported.
2) Ensure that PX folios report is prepared and reviewed by the FOM on a daily
basis.
3) Spool the open invoice report from Amadeus as on a particular date.
Compute the difference between the departure date and that particular date
and obtain reasons where the same is pending for more than 7 days.
4) Filter for "PM" in room column in JBD. Ensure that such PMs are settled
appropriately. Any allowances/ Negative postings in PMs are to be specifically
reviewed.
5) Ensure that Permanent Folios (PFs) are checked in and checked out on daily
basis. PF are used to ensure that Credit card / Cash / city ledger settlements
are recognised in Fidelio. If they are not checked in on a daily basis such
settlements would get posted in lost postings account as Fidelio will not be
able to link that any particular room and hence gets posted in Interface lost
postings Account.
6) Similarly any posting in ZZZ lost posting account should be checked to
ensure that it has been transferred to correct account. All postings in this
account should be specifically reviewed by the night/income auditor.
XXIV. Occupancy verification process
 Occupancy Discrepancy report from Fidelio.
 Daily occupancy sheet updated by the housekeeping department.
 User right/user group list.
 Guest in house spool
Housekeeping department updates the occupancy status of all rooms twice a day on
a daily basis. Based on these sheets, occupancy status is updated in the pox column
in housekeeping module. Occupancy discrepancy report is later generated and
reasons for discrepancy should be documented and signed off.
1) Obtain the occupancy sheets updated by the housekeeping department for a
sample period.
2) Compare the occupancy as per these sheets with pax as per GIH.
3) Ensure that discrepancies arising on such comparison are captured in the
occupancy discrepancy report.
4) Verify for a sample period if the occupancy discrepancy report is signed off by
the duty manager along with reasons for discrepancy if any.
5) It should also be ensured by looking into the user rights/user groups that
housekeeping personnel has access only to edit the housekeeping status in
the house keeping module. Also, front office should not have access to the
housekeeping module.
XXV. Paid Outs
Page 12
AUDIT PROCESS
Paid outs are small amounts given to the in-house guest from the front office for
paying the taxi fare, purchasing medicines and such other purposes. These are
posted to the guest room folio and are recovered along with other charges.
 Paid out vouchers
 Journal by department code(JBD) spool
 Exceptions report with respect to paid out
1) Obtain all paid out vouchers for a sample period.
2) Ensure that all paid outs during the sample period are supported by a paidout
voucher. Report cases of missing paidout vouchers.
3) Check if guest signatures have been obtained as acknowledged for receipt of
money.
4) Ensure that paidouts are authorized as required by TPAM (Refer HIJ 207).
The levels set can be modified depending on the level of activity of the
property. Obtain the internal policy in this regard and ensure adherence to the
same.
5) Analyze the following exceptions and ensure that there are no anomalies in
these transactions –
 Paidout after check-out
 Paidout after settlement.
Ensure that reasons for the above exceptions are documented and are
logical.
6) Scrutinize the JBD for the period and filter for cases where the paidouts (dept
code 800) are equal to any allowance posted to the same room folio on the
same day. Ensure that signature of guests is obtained is these cases on the
paidout vouchers and both allowance and paidout are properly authorized.
7) Analyze in detail those cases where paidouts have been made after
settlement and there is also allowance or the same amount.
Fraud Checks
 Exception report for missing room revenue:
 Base file: Journal by department code & Guest in house report with
rate and rate code
 Process: Compare the entries made every day in the department

code (in JBD file) in which room charges are posted, which is
property specific and the Guest In House(GIH) report to identify the
cases where no room charge has been posted to a guest’s folio in
spite of the guest being in-house that night. Eliminate those cases
where the guest is a sharer in a room and hence room charge has not
been charged. Hence the exception report will include only the rooms
for which the room charge has not been charged.
 Exception report for Difference in Rate charged in JBD and Rate as per
GIH:
 Base file: Journal by department code & Guest in house report with
rate and rate code
Page 13
AUDIT PROCESS
 Process: Compare the entries made every day in the department

code (in JBD file) in which room charges are posted, which is
property specific and the Guest In House(GIH) report to identify the
cases where the room charge which has been posted to a guest’s folio
is different from what has been indicated in GIH .
 Exception Report for allowances after checkout:
 Base Files: Journal by Department Code and user log.
 Process: First filter JBD for allowances and then the user log for
Checkouts. Create two sheets, one for allowances and one for
checkouts. Compare the two sheets (Vlookup) & bring in the check out
time from Checkout sheet to the Allowances sheet with the help of
unique key field which is a combination of room & guest name.
Calculate the difference between the allowance time & checkout time.
The exception report will include all those allowances which take place
after the guest checks out.
 Exception report for rate changes:
 Base file: User log
 Process: When the room rate is changed, the user log records those
transactions. Filters those cases where the description column
indicates that rate has been changed. Identify the original rate and
the new rate. Check Whether rate variance report includes all these
entries
 Exception report for Splits and transfers:
 Base files: User log
 Process: Filter the split and transfer entries from user log. It is then
taken as base file for analyzing splits and transfers. A report is then
generated for identifying splits and transfers on the same day for a
particular guest. It will indicate from which department code the
charges have been split and transferred. It will facilitate the
identification of those cases where an amount has been split from one
guest’s folio and posted in a different guest’s folio. The cases where
the guests are unrelated should be analysed further. Draw a pivot as
indicated below for the above mentioned process.
Page 14
AUDIT PROCESS
 Exception report for transfers made to unrelated parties:
 Base files: User log
 Process: Filters the transfer entries from user log. It is then taken as
base file for analyzing the transfers. A report is then generated for
identifying transfers made where the names of guest from whom and
to who the charges are transferred varies. Use the Formula indicated
in the Function bar in the figure given below. Enlarge the document for
better view
 Exception report for Paidouts after checkouts:
 Base Files: Journal by Department Code and user log.
Page 15
AUDIT PROCESS
 Process: First Filters JBD for paidouts and then the user log for
Checkouts. Creates two sheets, one for paidouts and one for
checkouts. Compares the two sheets (Vlookup) & bring in the check
out time from Checkout sheet to the Paidouts sheet with the help of
unique key field which is a combination of room & guest name.
Calculate the difference between the paid out time & checkout time.
The exception report will include all those paidouts which take place
after the guest checks out.
 Exception report for Sharer:
 Base files: Guest in house report with rate and rate code
 Process: Check for the Sharer rate code assigned to guest folio. If the
rate code is ‘Sharer’ check whether there is any main party attached
to it with the help of room no. The GIH report is sorted room & name
wise. Thus if the rate code is ‘sharer’, check whether there for the
same room is there a record with nonsharer rate code.
 Exception Report for allowances after Settlements:
 Base Files: Journal by Department Code
 Process: Filters JBD for allowances. Create two sheets, one for
allowances and one for Settlements made. Compare the two sheets &
bring in the Settlement time from settlement sheet to the Allowances
sheet with the help of unique key field which is a combination of room
& guest name. Calculate the difference between the allowance time &
settlement time. The exception report will include all those allowances
which take place after the guest folio is settled.
 Exception Report for Paidouts after Settlements:
 Base Files: Journal by Department Code
 Process: Filters JBD for Paidouts. Creates two sheets, one for
Paidouts and one for Settlements made. Compare the two sheets &
bring in the Settlement time from settlement sheet to the Paidouts
sheet with the help of unique key field which is a combination of room
& guest name. Calculate the difference between the Paidouts time &
settlement time. The exception report will include all those Paidouts
which take place after the guest folio is settled.
 Exception report for Profile name changes:
 Base file: User log
 Process: When the Profile name is changed, the user log records
those transactions. Filters those cases where the description column
indicates that profile name has been changed. Identify the original
name and the new name and check cases where the names are
sounding completely different.
Page 16
AUDIT PROCESS
Page 17
AUDIT PROCESS
Area: Food & Beverages

I. Menu master comparison
Document/Report Required:
 Menu card for all outlets.
 Rate master from respective cost controller/IT manager.
 Item sales summary from VPOS/product mix report from Infogenesis.
1) Compare the rate for all items as per menu card with that in the master.
2) Report rate differences quantifying the revenue loss (which should be
computed by multiplying the differences with the quantity sold as per item
sales summary/product mix report).
3) Report cases where there are multiple codes for the same item in the rate
master. Quantify revenue loss due to price’ differences (same method of
computation as above).
4) Report cases where codes have not been created in the master for items in
menu cards.
5) Generally, rates of items in Room service and specialty restaurants will be
higher than the other outlets. Thus, analyze common items sold in these
outlets to ensure that the above pricing strategy is adhered to. If not, verify if
items of the same group are priced in the similar way. Eg. : If tomato soup is
priced higher in other outlets verify if all other soups are also prices higher
than IRD and specialty in the other outlets. Few other such groups can be
considered like Indian specialty, salads, etc.
6) If the above criteria are also not satisfied, ensure that such a pricing strategy
is deliberately adopted by the management.
II. Menu engineering
 Evaluation/comparative statement for major competing hotels in the vicinity.
 Approved recipe costing for all food/cocktail items in the menu.
1) Verify whether rates of the competing hotels in the vicinity have been
compared and prices fixed accordingly.
2) Ensure that the menu engineering process has been performed at least once
a year.
3) Ensure that ‘Standard Recipes’ has been prepared for each and every item in
the menu (food & cocktails).
4) Costing to be prepared for each item once a year so that profit margin can be
assured.
5) Also portion sizes of each dish to be documented along with the recipes.
III. User Rights
 Bills Printed Audit Report from VPOS or ‘Closed Check Report’ from
Infogenesis for any month.
 List of Users with Name and User ID for VPOS from IT Manager.
 Leave Cards of Employees (Sample Selected).
Page 18
AUDIT PROCESS
5) Using the Bills Printed Audit/Closed Check Report, identify the users of
VPOS/Infogenesis from the ‘User ID’ column.
6) Select a sample list of users to be verified.
7) Obtain the leave cards for those employees.
8) Report cases where bills have been printed/settled in the employee IDs on
any day that a leave has been availed by them. These are cases of sharing of
user IDs which could be dangerous as it would be difficult to fix responsibility
on anyone in case of misuse.
IV. Delay in Settlement of checks
 Bills Printed Audit Report for the entire audit period in case of VPOS.
 Physical bills for any one month in case of Infogenesis.
1) The ‘Bills printed audit’ report gives details of the ‘Print Time’ and ‘Settlement
Time’. The difference between the two times will highlight the cases of delay
in settlement.
2) Usually, a shift close is performed after every shift to demarcate each shift.
However, it is possible that the shift end has been performed in the night only
after 2
3) a.m or so. In that case, all the bills printed/settled after 12 a.m will be
reflecting wrong date and time. Since the shift end has not been performed,
the system will not recognize the date change. Thus for all bills printed/settled
after 12 a.m, the time will be picked up correctly but the date will remain the
same. Hence, to compute delays in those cases, the following formula should
be used: 24+ Early morning time-Previous day late night time.
4) In case of Infogenesis, there is no specific report that gives the details as in
‘Bills Printed Audit Report’. Hence, physical bills need to be vouched and a
comparison needs to be drawn between the print time and settlement time
mentioned in them.
5) Report cases of delays beyond 1 hr.
V. Delay in opening table
In case of VPOS
 Bills Printed Audit
 Bill-KOT Reconciliation Report
 List Bill/KOT Report
Obtain the above reports for any 10 days
In case of Infogenesis
 All Events Report from Infogenesis.
1) Obtain the ‘Bill-KOT Reconciliation’ report from VPOS.
2) Using the List Bill/KOT Report, look up the KOT time to the Bill-KOT
Reconciliation Report using the KOT number as the unique key.
Page 19
AUDIT PROCESS
3) Using the ‘Bills Printed Audit’ Report look up the ‘Bill Print Time’ to the ‘Bill-
KOT Reconciliation’ Report using the Bill Number as unique key.
4) The Bill Reco Report will prominently have the Bill No, The KOTs against the
bills, The KOT time, and the Bill print time.
5) Compare the Bill print time and the KOT Time to identify cases where the
time difference is less than 15 mins.
6) The above are cases where there has been delay in punching KOTs. This
implies that the food has technically been prepared without any KOT.
7) In case of Infogenesis, Obtain the ‘All events’ report which will give details of
the KOT Time and Settlement time by itself.
8) Perform comparison as in point 5 and report discrepancies.
VI. Void/ Split/ Reprint Checks
 Void/ Split/ Reprint Checks and Void KOTs for a month or two.
 Hierarchy of authorizations for the above checks.
1) Obtain the Void/Reprint/Split checks and Void KOTs for the sample selected.
2) Ensure that all the bills are authorized by the Chef, F&B manager & Outlet
Manager on a daily basis with reasons written on the face of the bill. Also
ensure that the F&B Cost Controller is verifying the above process on a daily
basis and reporting discrepancies. The discrepancies are to be escalated to
the F&B Manager, Chef, FC, Night Auditor & GM.
3) Report instances of non-adherence.
VII. Discounted Bills
 Discounted Bills Report from VPOS/ Closed Check Report from Infogenesis.
 Contracts/ authorizations for the discounts given.
1) Select a sample of discounted bills to be verified from the ‘Discounted Bills’
Report/Closed Check Report.
2) Verify whether there are any supportings authorizing the discounts given.
3) The authorizations can be in the form of signatures on the bills by the
respective HOD, e-mails directing the F&B Manager to approve the discount
or any contracts with clauses that approve of the discounts given.
VIII. Complimentaries/Staff Meals

 Complimentary bills and Entertainment slips for sample period.
 Complimentary Report from VPOS.
1) Verify whether all complimentaries given have been authorized by the Outlet
Manager, F&B Manager and GM.
2) All entertainment slips to duly contain details of the Dept Head entertaining
the guest, name of the guest and number of pax. These slips are to be
attached along with the complimentary bills and duly authorized by the Outlet
Manager, F&B Manager and GM.
Page 20
AUDIT PROCESS
3) Ensure that the above is cross-verified by the F&B Cost Controller and
discrepancies highlighted to F&B Manager, FC and GM on a daily basis.
IX. Open Item billing
Document/Report required: NONE
1) There are two ways to bill items out of menu. Either the unit creates a
separate code to bill such items or it is billed under a similar item using
the modifier option. (eg) If the guest orders for ‘Aloo Puri’(which is out of
menu), it can be billed as ‘Sev Puri’(within menu).
2) If the unit has a separate code to bill open items, obtain the report giving
details of all the items billed under that code. Analyse the report and
identify items that have been sold repeatedly. Advise the management to
incorporate such items in the menu.
3) Also ensure that for all open items, the chef’s decides the prices to be
fixed.
X. Guest Signatures
 Physical bills for all outlets for a particular sample.
1) Verify whether all bills settled to room have been signed by the guest.
2) This is to ensure that the guest’s confirmation of the services availed. It is
logical to check the same only for room settlement bills as in all other cases
the payment is immediate. To avoid disputes at the time of settlement of final
bill, this check has to be performed.
XI. Inter-Departmental Transfers
Document/Report required
 IDT books maintained at each outlet
1) The IDT books are under the control of Income auditor / F&B controller.
2) The Income auditor / F&B controller keeps a track over the number of IDT
books issued to each of the outlets. Also a serial order control is exercised.
3) The receiving department retains the first copy, second copy is given to
issuing department and the third copy is given to the F&B controller for his
record.
4) All IDTs are to be authorized by the Chef.
XII. Manual KOT Books
 Manual KOT/Bills
1) Verify whether a manual KOT/Bill book is maintained to ensure smooth billing
at the time of system failure. Report if not maintained.
Page 21
AUDIT PROCESS
2) If maintained, ensure that the Manual KOT/ Bill book is serially pre-printed.
Also ensure that the F&B Cost controller is having a track of all the manual
KOTs/ Bills raised during the day and verified the same for accuracy and
genuineness. Cross referencing the KOT No in the bill and vice versa would
aid in better tracking.
XIII. Recording of consumption in Orion
 Sub-Inventory Transfer Report (or) Consumption Edit Report from Orion
 ‘Item Sales Analysis Report’ from VPOS/ Product Mix Report from infogenesis.
1) Select items which can be directly sold without further processing. (Example -
Beer).
2) Arrive at the quantity sold for one month from item sales summary (VPOS) or
product mix report(Infogenesys).
3) Spool the sub inventory transfer report only for movements to “R_(outlet)” from
Orion. (There are three different buckets in inventory booking. The first being
“S_(outlet)” which is the inventory at main stores, “B_(outlet)” which is the
inventory at the respective outlet and “R_(outlet) which is to book
consumption. Thus, a movement S_Liquor to B_(Outlet) will imply the
movement of inventory from main stores to the outlet and B_(Outlet) to
R_(Outlet) will be consumption in the respective outlet(Sales)). Incase you
are using the consumption edit report, spool the report for all ‘B_(Outlet)’. The
consumption figures as per that report will represent the sales made at the
outlets.
4) Make sure the sales report generated from VPOS is inclusive of
complimentaries.
5) Compare the Sales as per Item sales with the consumption figures as per
Orion and reconcile differences. Report if differences are huge.
6) Ensure that the F&B Cost controller is performing this exercise atleast on a
quarterly basis to keep control over consumption booked.
XIV. Food Cost Report
 Food Cost Report prepared by F&B Cost Controller for any one month
 Trial Balance From Orion for the sample selected.
1) Compare the Food Cost Report with the trial balance to ensure that the report
is accurate.
2) Ensure that the Food Cost Report prepared is circulated to the F&B Manager,
Chef and FC on a monthly basis.
XV. Buffet Tracking
 Buffet tracking register maintained for any one month
 Bills raised for the above sample.
Page 22
AUDIT PROCESS
1) Obtain the buffet tracking register maintained by the hostess at the restaurant
giving details of the No of guests consuming the buffet, table number, no of
guests billed and bill no reference.
2) Cross verify the register with the bill to ensure that the guest has been
correctly for the actual no of pax consumed.
3) Report cases where guests have been short billed or not billed at all. Also
Report cases where the buffet tracking register has not been updated with the
guest details.
XVI. Wastage Report
 Wastage report prepared by the Chef.
1) Ensure that a wastage report is prepared by the guest giving details of the
wastages for the day.
2) Chef to monitor that the wastages are not beyond tolerance level.
XVII. Microbiological Tests
 Microbiological tests reports for the entire audit period.
1) Verify whether microbiological tests are being performed atleast on a monthly
basis.
2) Ensure that any anomalies noted while performing those tests have been
rectified immediately by taking corrective action.
XVIII. Butchery Yield Tests
 Standard Yields fixed for all butchery items.
 Actual Yield Test Reports for all months in the audit period.
1) Verify whether actual yields are measured atleast once a month.
2) Check whether comparisons are drawn up between the standard yield fixed
with the actual yield to ascertain discrepancies.
3) All discrepancies to be highlighted to the Ex.Chef, F&B Manager, F&B Cost
Controller and FC.
XIX. CCG Inventory Controls
1) CCG Inventory Sheet for a month.
2) Breakages Report for the same month.
3) Physical Verification sheets of inventory for that month.
1) Verify the accuracy of the inventory sheet. (Cl stock carry fwd as opening, data
entry of closing stock figures based on the PV sheets, Entry of the breakages
details from the Breakages report).
Page 23
AUDIT PROCESS
2) Ensure that the PV Sheets are signed by those performing the PV as well as
the Stewarding Manager/F&B Manager.
3) Ensure that breakages are tracked on a daily basis in an excel sheet to aid in
accurate inventory figures.
XX. Signages
1) Verify whether the following 5 signages have been displayed in all the kitchens
as it a requisite under the PFA Act.
 Nothing is sold here
 Curd not for sale
 Refined vegetable oil used
 Toned milk and milk products used
XXI. Cold Storage temperatures
 Cold Storage Temperature Log
1) Verify the Cold Storage Temperature log to ensure that temperature is
maintained below 5 degrees on an average on all the days.
2) Perform a spot check of all the freezers maintained in the kitchen and verify
the same.
XXII. Outlet Liquor Controls
 Liquor register maintained for excise purposes.
 List Of Dry Days
 KOT analysis Report from VPOS
 List Bill-KOT Report from VPOS
1) Obtain the excise register. Compare the sales recorded in the excise register
with that as per the KOT Analysis Report from VPOS for a sample period. (It
will be easier to do this analysis for beers as they are sold in exact numbers.
Spirits and other alcohol will be sold as pegs and mixed in cocktails. It will
hence be difficult to exactly match consumption).
2) Use the ‘KOT Analysis Report’ to identify whether any liquor has been sold on
any of the dry days or after the licensed liquor hours as per the liquor license.
3) Verify whether a license has been obtained to serve liquor in all the outlets
where it is being served.
4) Ensure that the management is carrying out monthly physical verification of
liquor in outlets and escalating differences to F&B Manager, F&B Cost
Controller and FC.
5) Enquire when happy hours are effective in the unit. Verify whether the billing
during those hours is accurate on a sample basis.
XXIII. Pastry Shop Controls
Page 24
AUDIT PROCESS
 Control Register maintained at the pastry shop.
 “Item Sales Summary’ Report from VPOS.
1) The control register maintained at the pastry shop is to contain the following
details – Opening Stock, Fresh stock for the day, Sales for the day, spoilage
and closing stock. Ensure the arithmetical accuracy of the register. Compare
the sales as per the item sales analysis with that of the register. Report
differences.
2) Pastry items produced during the day are recorded in RG1 Excise Register by
the Bakery department on daily basis. Ensure that Excise Duty is being paid
correctly on the pastry production.
3) A Spoilage report to be prepared on a monthly basis and forwarded to the Ex
Chef, F&B Manager, FC and F&B Cost Controller.
4) The shop attendant to tag stock is such a way as to identify the expiry dates
of each lot to ensure issue on FIFO basis.
XXIV. Minibar Controls
 Daily Stock Sheet
 Room-wise placement sheet
 Physical verification s heets
 ‘Item Sales Summary’ Report from VPOS
1) The daily stock sheet maintained at will contain the following details –
Opening stock, Stock in rooms, Expired stock and Closing Stock. Verify the
arithmetical accuracy of the register. Cross verify the figures in ‘Stock in
rooms’ with that of the Room Placement Sheets. The Room placement sheets
are those sheets that record qty of stock kept in each room (item-wise).
Report differences.
2) Placements will be effected in rooms only when the guest has consumed the
item placed in the minibar. Thus the room-wise placement sheet can act as a
consumption sheet as well. Hence, compare the consumption as per the
room-wise placement sheet with the actual bills raised for those rooms.
Report differences.
3) Ensure that a physical verification of minibar stock is carried out on a monthly
basis. Physical stock to be compared with the stock as per the Daily Stock
Sheet to identify discrepancies. Shortages/Excess to be reported to the F&B
Manager, F&B Cost Controller, Ex- Housekeeper (If the exercise is carried
out by housekeeping), and FC.
4) Perform a random check of minibar stock in unoccupied rooms to identify any
shortage/excess. Also verify whether any of the stock kept in rooms are
expired and report accordingly.
Page 25
AUDIT PROCESS
Area: Banquets
 Banquet Contracts for sample selected.
 Bills Printed Audit Report from VPOS
 Physical banquet bills for sample selected.
1) Verify whether the unit has a practice of monitoring premium dates. (Premium
dates are days where the unit can capitalize on and earn maximum revenue.
For eg. Muhurtham days in case of south Indian weddings, New Year or
another occasions of prominent nature). The unit is to track such dates and
forecast expected/desired revenue.
2) The unit is to also prepare a ‘Event Based Costing model’ (EBCM) for each
and every event. The EBCM Compares the revenue earned by each event
against the expenses incurred for the event to ascertain its profitability.
3) The Banquet Manager is to generate a ‘Cancellations Report’ on a monthly
basis giving reasons for the cancellations. This report is to be forwarded to
the FC, GM and F&B Cost controller.
4) A banquet diary to be maintained giving details as mentioned in TPAM.
5) Contracts to be entered into with each party clearly detailing the rates, terms
of payment, advance to be collected, menu, requirement of miscellaneous
items with rates for each (LCD Screen, Mikes etc). All Contracts to be signed
by the Banquets Manager as well as the guest in agreement to the terms
mentioned therein.
6) Advances of atleast 75% to be collected before the event. If no advances
have been collected, adhoc credit forms to be filled up duly authorized by the
Credit Manager, FC and Banquet Manager .
Billing
7) Obtain the Banquet Contracts for the sample selected and verify the terms
mentioned therein with the actual bills raised. (Ensure that the minimum
guaranteed pax has been billed correctly. Also ensure that the additional
services have been billed for accurately).
8) Ensure that the guest signature had been obtained on the banquet challan in
confirmation of the services rendered.
9) For payments in cash above Rs 25,000 ensure that PAN number has been
obtained.
10) To those whom credit has been extended check whether settlements have
been made before expiry of the credit period.
11) Ensure that the settlement
Liquor controls
12) A register to be maintained to track movement of liquor from the bar to
banquet. The register to give details such as Item, qty sent from bar to
banquets, qty received back after the function, signature of the person
handing over the stock to banquets and of the person retuning the stock back
to the bar.
13) Compare the consumption as per this register with the quantity actually billed
to ensure that liquor billing has been done correctly.
14) Ensure that corkage has been levied correctly as per the contract.
Outdoor Catering
15) Ensure that billing has been effected based on the contract entered into.
Page 26
AUDIT PROCESS
16) Returnable gatepasses to be prepared for all items sent out on outdoor
catering. The same to be cross verified when the items are returned after the
event to ascertain any shortage etc.
17) Service Tax is not applicable to outdoor catering. Thus, ensure that not
service tax is being levied on such services.
Page 27
AUDIT PROCESS
Area : Expenditure
Sub Area : Purchases
1. Annual Rate contracting procedure
Documents/report required
 List of all items and method of purchase.
 Tender request published in local newspaper.
 Documented negotiating and vendor evaluation process.
 Comparative statements.
 Logic notes/note for record.
 Vendor master
1) Verify if tender notice has been published in the local newspaper for inviting
quotations for supply of various items. Tender notice should specify the last
date for submission of quotations and should be addressed to the head of
purchase.
2) Ensure that annual rate contracts are entered for all major purchases and
where the same could not be entered into, document the reasons by way of
logic note/note for record.
3) Ensure if minimum of three quotations are obtained for all items and where
not available the same should be supported by way of logic note.
4) Report if quotations are not fully complete but are accepted by the unit.
Ensure quotation has all the details as specified in the TPAM.
5) Obtain the comparative statements prepared by the purchase head and
compare the rates stated in these with the actual quotations received. Ensure
that the comparative statement include item by item comparison of rates
quoted.
6) Verify the notes for record for finding out the final vendor selected and final
price agreed. This record will also contain justification for selection of the
vendor.
7) Scrutinize the vendor master to ensure that alternate vendors are available
for all items.
2. Cash/emergency purchases
Documents/report required
 Monthly cash purchase report.
 Logic notes.
 Receiving register report
1) Report if comprehensive cash purchase report is not being forwarded to the
FC and head of materials (CPC) on a monthly basis. Ensure this report
contains all details as required by TPAM.
2) Compare the cash purchase as per receiving register and those as per
monthly cash purchase report. Report differences, if any.
3) Report cases where cash purchases above Rs.5000 are not supported by
logic notes.
4) Ensure that all cash purchases are approved by the FC and purchase
manager. If immediate approval could not be obtained post facto approvals
atleast should be obtained. Report cases where the above approvals are not
available.
Page 28
AUDIT PROCESS
5) If the annual contract has a clause stating that the unit can recover the
excess cost paid by it due to the inability of regular vendor to supply
materials, verify if the same has been recovered from the contracted vendor.
6) Sometimes, cash purchases will be routed through vendor account itself.
These may not be captured in the cash purchase report. To find out these
cases, scrutinize the cash book and see if cash payments have been made to
any supplier of material. Report those cases where cash purchases are
routed through vendor account and hence, not getting captured in monthly
cash purchase report.
7) Huge/long pending IOUs may also be due to cash purchases getting routed
through vendor account. Analyze and report these cases also.
3. Order placing procedures
 Purchase register from orion.
 Pending indents report from orion.
 Pending purchase order report from orion.
1) Ensure that there is system control whereby Purchase order can be raised
only upon receipt of approved indent from stores.
2) Ensure that indents are immediately converted to purchase order without any
delay. Spool the pending indent report from orion and obtain reasons for long
pending indents. Also, ensure that these indents are reviewed by the
purchase head on a periodical basis and reasons for delay are analysed and
forwarded to FC.
3) Scrutinize the PO register for the audit period and filter those cases where
purchase orders have been raised on parties other than the contracted
suppliers. Verify the logic notes supporting the same and where the liquidated
damages can be recovered from the contracted supplier verify if the same
has been claimed.
4) Ensure that the purchase order raised by the unit contains all the details as
required by the TPAM (Expenditure sheet – H61 & H62) and is authorized as
per the authority schedule.
5) Ensure that pending purchase orders are reviewed on a periodical basis and
purged if not required. This can be done by spooling the pending PO report
from orion and verifying the same. Report cases where purchase orders are
pending for more than 100 days.
4. Adherence to CPC/RPC
 Central purchase contract and Regional purchase contract copies.
 Logic note/note for record
 Purchase register
1) Ensure that wherever CPC or RPC suppliers are available materials are
purchase only from these suppliers. If not, the deviation has to be approved
by the purchase committee and documented with logic notes.
2) Obtain the annual contract copies and verify the rates agreed with the rate
actually charged by vouching purchase invoices on a sample basis.
Page 29
AUDIT PROCESS
3) For certain regular purchases where there is an annual contract, blanket

purchase orders will be created in orion to ease order placing. Filter for these
PO s from the purchase register ( Filter condition – contains ’/’ in PO number
column) and ensure that these are created only for those items where annual
rate contract exists.
4) Also, report those cases where rate fed in the blanket PO is different from
those agreed in the annual rate contract.
5) Ensure that unit sends a list of purchases which are eligible for free stocks or
discounts to Central Purchase on a quarterly basis.
5. Analysis using Receiving register
Documents/Reports Required
 Receiving register for multiple units.
1) Spool the ‘receiving register for multiple unit’ report from orion for the
respective unit.
2) Format the same and put a min max pivot in the following format –
Material Code Material Description Max Rate Min Rate Variance Variance %
3) Filter for all major variances and analyze the reasons for these variances.
These variances may be because of any of the following reasons
o Items booked under wrong material code.
o Materials are purchased from non contracted vendors.
o Emergency purchases where materials will be locally purchased at
higher costs.
4) Analyze these and report cases of abnormal variances.
5) Also, put another pivot in the following format –
Material Code Material Description Vendor Name Quantity Rate
6) Following analysis can be done using the above pivot

o Purchases have been made only at the rate contracted with the
supplier. Report if contracted rates are not adhered to.
o If a particular item has been purchased from a non contracted supplier
despite availability of annual rate contract, verify if such purchases are
supported by approved logic note. Verify if the liquidated damages
have been claimed from the contracted supplier if applicable.
o If huge purchase of a particular item is made but there is no annual
rate contract, ensure whether such purchases are justified. Enquire as
to why rate contracts have not been entered into.
6. Analysis using Supplier’s Supply report
 Supplier’s Supply report
 Purchase budget for a particular period
Page 30
AUDIT PROCESS
1) Spool the supplier’s supply report from orion.

2) Format the same using a special macro created. The macro will be available
either in previous year file or can be obtained from office.
3) This report can be used as a basis for finding out the top suppliers and
selecting sample for further vouching/analysis accordingly.
4) Also, this report gives the actual purchase for a particular period. This can be
compared with the budgeted purchase and justifications should be obtained
for huge variances.
7. Inter unit comparison
 ‘Receiving report for multiple units’ report for selected units.
1) Inter unit rate comparison can be done in cases where 2 or more properties
are situated in the same city/region.
2) This analysis can be done based on receiving register for a particular period.
3) Take the receiving register for the properties to be compared for a particular
period and arrive at the item wise average rate for that period.
4) Compare the rates of different units and analyze all major variances.
5) Obtain reasons for such variances from the purchase manager and ensure
that these variances are justified.
Page 31
AUDIT PROCESS
Area : Stores
1. Receiving procedures
 ‘Receiving register for multiple unit’ report from Orion.
 Sample purchase invoices.
 Receiving reports.
 PO summary (localized) for PO date.
1) Spool the receiving register for multiple unit report for the respective unit.
2) Select few months as sample, based on the level of transaction in the unit
and obtain purchase invoices for the selected period.
3) Ensure that security seal is affixed on these invoices which will indicate the
actual date of receipt of material.
4) If security seal is not affixed, verify if there is some other record to show the
actual date of receipt of materials.
5) As soon as the materials are received by the stores, ‘Receiving Report’
should be raised in Orion.
6) Compare the actual date of material receipt with the date on which RR
(Receiving Report) is raised and report cases of delay in raising RR.
7) Such comparison will also reveal confirmatory purchase orders raised during
the period. For those cases where there is delay in raising RR, verify the PO
date which will be available in the PO summary (localized) option in purchase
module. Cases where PO date is after the date of actual receipt of material
represent confirmatory PO. Verify is these confirmatory POs are authorized
by the FC.
8) Verify if a report of confirmatory POs is being sent to the GM/FC/Head of
materials on a monthly basis.
9) Ensure that there is system control whereby RR cannot be raised without a
PO. Test check if this control exists actually.
10) Once the materials are received the quality should be inspected by Receiving
personnel as well as user department either on sample basis or 100% and
the receiving report must be acknowledged by them as a evidence for check
performed. Verify if the above control exists and report cases of non
adherence.
2. Rejection controls
 Purchase Register from Orion
 Receiving register from Orion
 Debit notes
A. If materials are rejected before raising RR

1) If the materials will be replaced by the same supplier, ensure that RR is
raised only for the accepted quantity. PO will be pending to the extent of
rejected quantity. Follow up should be done based on this and materials
should be accordingly received.
2) If materials will not be replaced by the same supplier, ensure RR is raised for
the accepted quantity and PO is purged to the extent of rejection.
Page 32
AUDIT PROCESS
B. If materials are rejected after raising RR

1) If materials are expected to be replaced by the same supplier, ensure that RR
is reversed to the extent of rejected quantity and a manual list/record is
maintained to track the same.
2) If materials are not expected to be replaced by the same supplier, ensure that
RR is reversed and PO is purged to the extent of rejected quantity. Also, an
advice should be sent to accounts department by stores through an inter
office memo for booking invoice and raising debit notes accordingly.
C. Where invoices are booked

1) Where invoices are booked prior to such rejection, ensure that a debit note is
raised by the accounts department to the extent of rejection so that liability
can be accordingly adjusted.
D. Other check
1) In cases where due to material rejection, items are procured from the open
market at a higher cost, verify if the loss suffered is recovered from the
vendor.
3. Issue Controls
 Taj stock in hand report from orion
1) Ensure that there is a system control whereby issues can be booked only
after there is approved requisition from stores.
2) Surprise physical verification has to be undertaken during the course of audit.
This will reveal the following control lapses –
 Delay in booking issues i.e., materials have been physically moved
but issue has not been booked in Orion.
 Expired items.
 Goods not issued on FIFO basis
 Reorder levels are not adhered to.
3) For the purpose of undertaking physical verification, spool ‘Taj stock in hand
report’ from Orion as on a particular date.
4) Ensure that the stores keeper prints out a copy of the requisition and receives
acknowledgement of person receiving the items from him.
5) Expiry track – Ensure that the stores keeper tracks expiry of items either
manually or through system. Learn the process in place to track expiry and
ensure that its satisfactory.
4. Slow moving and non moving items
 Non Moving item report from Orion.
 Slow moving item report from Orion.
 Taj provisioning policy for stock
1) Spool the non moving item report (more than 1 year) from Orion and format
the same.
Page 33
AUDIT PROCESS
2) This report gives the date of last issue, date of last receipt, current stock level,
etc for all non moving items.
3) Compare the last issue date and last receipt date. Filter for those cases
where Last receipt date is after last issue date and difference is more than
100 days. These are cases where items have been purchased even when
they are non moving. Report these cases where quantity purchased is high
and there is no justification also.
4) In case of slow moving items, obtain reasons for such slow movement. Also,
ensure that the unit is taking some reasonable steps towards moving of these
items.
5) Ensure that the unit is adhering to Taj policy for provisioning of slow moving
and non moving stocks.
6) Ensure that slow moving report is prepared on a quarterly basis by stores
department and forwarded to FC for review and then circulated to GM and
department heads.
5. Physical verification and adjustments
 Physical verification sheets.
1) Ensure that monthly physical verification of food, liquor and general stores are
carried out on a monthly basis in the presence of F&B cost controller and that
of engineering stores in the presence of accounts personnel.
2) Verify if the verification sheets are signed off by the stores keeper, F&B cost
controller and FC.
3) Verify whether large variations are investigated and the reasons for such
huge variance and action taken thereof are documented in the PV sheets.
6. Inventory levels
 Manual sheet containing the reorder, maximum and minimum level for all
items.
 Min max report
1) Verify whether reorder, maximum and minimum levels are set for all items.
This can be either set in the software or maintained separately.
2) Ensure that these are periodically reviewed and revised to avoid any over or
under stocking of materials.
3) At the time of physical verification during the course of audit, on a sample
basis ensure that items are maintained at reorder levels.
4) This can also be verified by obtaining any of the monthly physical verification
sheets and comparing the stock level with reorder level.
7. Other checks
1) Ensure that the store room is adequately secured with lock and key and
access is restricted only to assigned inventory clerks.
2) Ensure inventory valuation is done as per Taj policy and test check the
valuation for few materials. This can be done using the Taj – Stock ledger
report - itemwise.
Page 34
AUDIT PROCESS
Area : Fixed Assets
 Approved budgets from Corporate.
 ‘Taj -Asset Additions Report’ from Orions.
 ‘Taj – Asset Retirement report’ from Orion.
 Fixed Asset Register from Orion.
Budgeting Process
1) Obtain the budgets approved giving details of and the budgeted cost of each
item. Compare the actual cost incurred on such assets with the budget
approved by the corporate. Reasons for deviations are to be documented and
forwarded to the COO for approval.
Evaluation process
2) For every purchase made during the year the unit should invite tenders from a
minimum of three parties. The party with the lowest bid should be selected. If
not, a logic note is to be prepared stating the reasons for not selecting the
lowest bid. The Logic note has to be signed by the FC, Purchase Manager,
User Dept Head, Engineer (If reqd).
3) Performance parameters to be set based on which vendors are selected.
Details of the vendors like turnover, manufacturing capacity and customer list
are to be obtained in case of high value purchases.
Confirmation of order
4) Purchase indent to be raised by every user department. The purchasing
department makes purchase orders with details like quantity specification,
asset coding, rates and delivery period. Purchase orders and purchase
requisitions are approved and are documented. Purchase orders and indents,
which are not pending execution, are cancelled and are periodically reviewed.
5) Purchase orders to have the following details: Quantity, Rates, Specifications,
Modes of payments including advances, Modes of dispatch /delivery
periods, Warranty period and liquidated damages and penalties. Purchase
orders mention the time period for deliveries and penal clause for delays.
Receipt of Material
6) Quality check to be done on receipt of the assets. Inspection report to be
prepared and signed off. A security seal to be affixed on the date of receipt of
material by the security. Receiving Report to be prepared within reasonable
time. Delays to be analysed and authorised.
7) Ensure that the material has been received as per the delivery schedule
mentioned in the purchase order/contract.
8) In case of damaged goods, gate pass is made and purchase order made
originally is cancelled. In case of replacement or quality reasons, returnable
gate pass is to be prepared accounts is to be intimated to raise a debit note.
Accounting Process- For Additions
9) Obtain the list of additions from the ‘Taj- Asset additions Report’. Verify
whether all additions are supported by the original copy of the invoice. Ensure
that the accounting of cost has been done correctly.
10) Obtain the policy for capitalization of assets if any and ensure compliance.
Using the FA register, verify depreciation computations based on the policy.
Ensure whether classification of additions are done under the correct
head.The Fixed Asset Register to be updated on a regular basis (Atleast
quarterly).
11) The date of installation of the asset to be noted on the invoice and signed off
by the User Department.
Page 35
AUDIT PROCESS
Accounting Process – For Deletions

12) Obtain the list of deletions from the ‘Taj- Asset Retirements report’. Verify
whether the process of vendor evaluation as mentioned in pt.2 has been
followed for sale of assets. Ensure that the Vendor offering highest value is
selected. Else, a logic note to be prepared stating the reasons and signed off.
13) Ensure whether replacements have been effected for the assets sold off
during the year.
14) Using the FA register, verify whether the asset has been removed from the
block and check whether the appropriate treatment has been effected for the
accumulated depreciation provided.
Others
15) Verify whether adequate insurance cover has been obtained for assets.
16) The User Department/ Engineering Department to maintain a log of purchase
warranties which would aid the unit to enter into AMCs on the expiry of the
warranty period. Repairs and maintenance expenses paid during warranty
period to be authorised by GM.
17) Tagging of fixed assets to be done. Register giving details of the Asset
number, Asset Name, Location etc to be maintained.
18) Physical Verification of fixed assets to be done periodically and discrepancies
verified. Fixed asset verification plan to be made and authorised. Idle Asset
identification to be done.
19) Scrutinise the R&M accounts and ensure that nothing capital has been taken
as repairs and maintenance.
Transfer of Assets
20) Transfer of assets to be monitored and authorised by FC or GM. The same
acknowledged by both the sending and receiving department. Transfer to be
recorded at book value. The transfer information contains the following:
Asset number, Asset description, Transferor and transferee unit, Gross block
and WDV as at the beginning of the year.
21) Intercompany transfers to be recorded as a sale. Sales tax should be
reflected on the invoice.
Paintings & Artifacts
22) Separate Log of the paintings and artifacts to be made which gives details of
all paintings purchased, the date of acquisition, the name of the artists and
the value at which it is purchased. The log is maintained for review of such
artifacts. In case of sale, realisable value to be arrived at with sufficient
caution.
23) Physical verification of the paintings to be done periodically. Insurance cover
to be obtained for the paintings.
Page 36
AUDIT PROCESS
Area : Accounts
I. Creditors
 Spool creditors ageing report.
 Suppliers TB
 Relevant creditor’s ledger
 Breakup of advance to suppliers
 Bank statement
1) Spool the creditors ageing report from Orion as on the last date of the audit
period.
2) Scrutinize the ageing report and obtain reasons for creditors pending over 90
days.
3)
4) Filter for creditors with debit balance in the aeging report and analyse the
same.
5) In cases, advances have been made to suppliers, obtain reasons for such
advances. Scrutinize the accounts and ensure that goods or services have
been subsequently received against these advances.
6) Also, ensure that payment to creditors have been made after adjusting these
advances.
7) Obtain the since paid details for the creditors and trace the same to bank
book.
8) For cases where since paid details are not available, spool the respective
creditors ledger and vouch the invoice-wise break up.
II. MIS
Documents/reports required
 MIS for the audit period
1) Obtain the MIS for whole audit period.
2) Ensure that MIS contains all the details required as per the TPAM (Refer
Financial mgmt and reporting sheet - H66) and as required by the corporate.
3) Also, ensure that MIS includes figures for current period, variance with budget
and previous period figures, next month forecasting.
4) Tally the budget figure as per MIS with the actual budget approved by the
board.
5) Ensure that expenditure variance analysis forms part of the MIS report.
6) Select a sample of two months and tally MIS and financials. Obtain reasons
for all major differences.
7) Ensure that unit prepares a reconciliation statement between MIS and
financials.
8) Check if all external adjustments/estimates are supported by approved
documents and explanation.
9) Ensure that MIS for a particular month is prepared and sent to corporate by
8th of the following month.
10) Ensure that unit adheres to the standard format prescribed by the corporate.
Page 37
AUDIT PROCESS
Income
Income pertaining to room, food and banquet are already covered above. Checks to
be done for other incomes are detailed below –
III. Rental Income
 Trial balance
 Break up of rental income
 Rent income
 Rental agreements
1) Obtain the break up of rental income and tally the same with trial balance.
2) Obtain all rental agreements and ensure that these are renewed as and when
it expires.
3) Ensure that rent is received as per the rental agreements.
4) Where electricity charges are recovered from the party, ensure that sub
meters have been installed and recovery is done as per the agreement.
5) Scrutinize the rent income account and verify if TDS has been correctly
calculated and accounted.
IV. Wifi revenue sharing
 Wifi revenue and expense ledger
 Wifi revenue sharing agreement
Background
Generally, all units will have an agreement with some party for the purpose of wifi
connections in the unit. Both the parties will agree to share the wifi revenue at some
percentage.
Checks to performed
1) Spool the wifi revenue and expense ledger from the accounting software.
2) Obtain the wifi revenue sharing agreement and check if it is renewed as and
when it expires.
3) Compare the wifi revenue account(unit’s part of income) and wifi expenditure
account(revenue share of the other party) and ensure that sharing of revenue
is as per the agreement.
V. Scrap Sale
 Scrap sales ledger
 Scrap invoices
 Contracts, quotations, etc
1) Scrap should be identified by the user department and stored separately.
Page 38
AUDIT PROCESS
2) Ensure that contracts are entered into for regular scrap items. Minimum of
three quotations should be obtained and where not available the same should
be supported by logic note.
3) Verify scrap invoice on a sample basis and ensure that these are raised as
per the agreement.
4) Verify if TCS have been deducted and remitted at the correct rate where
applicable.
VI. General check for expenses
 Trial balance for the current and previous audit period.
 All relevant supporting and vouchers.
1) Compare the trial balance of current and previous audit period and compute the
variances between the two periods in the following way –
Account Account Balances of Balances of Variances Variance Reasons
code head current audit previous audit (C) = (A)- %
period period (B) (C)/(B)*100
(A) (B)
14. 15.
2) Obtain reasons for all major variances and check if these are logical. For
example, if there is a huge variance is purchase costs, check if there is either
commensurate increase in revenue or increase in purchase price or both.
3) In case where the expense account balance is high and/or variances are also
high, undertake the following checks –
 Understand the nature of expense.
 Vouch these expenses with valid supporting.
 Scrutinize the relevant expense ledger accounts and verify if there are
any abnormal transactions.
4) Verify if expenses have been accounted in the correct head of account. For
example, scrutinize the repairs and maintenance account and verify if any
capital expenditure is accounted under this head.
VII. Specific expense checks
Performing artist
1) Obtain the performance artist contract and ensure that these are renewed as
and when the agreement expires.
2) Spool the performance artist expense ledger and ensure that payments have
been made as per the contract.
3) Ensure that details as required by the TPAM (Refer expenditure sheet H156).
4) It needs to be ensured that in case of Foreign Artist all the required
permission (Visa / work permit) and licenses has been obtained by the artist
and copy of the same provided to the hotel before the contract is entered into.
5) Ensure that all statutory dues are deducted and remitted as applicable.
6) Ensure that all terms and conditions as per the agreement are adhered to.
Operating and other fees payable to corporate
Page 39
AUDIT PROCESS
1) Obtain the agreements with the corporate for operating and other relevant
fees.
2) Obtain the computation of these fees and ensure that these are in line with
the agreements.
3) These fees are usually calculated as a fixed percentage of revenue after
considering few expenses. Tally the revenue and expenses considered for
calculation with the financials.
Rent expense
1) Obtain the rent agreement copies for the rental expenses.
2) Spool the rent expense ledger and ensure that rent paid is as per the
agreement.
3) Ensure that TDS has been deducted at the correct rate wherever applicable.
Telephone and cellular expense

1) Obtain the telephone bills for a sample period and vouch the same.
2) In case of telephone charges pertaining to employee, obtain the unit’s policy
and ensure adherence to same.
3) In case, the prescribed limit is exceeded, ensure that these are either
recovered from employee’s salary or otherwise collected from them.
Other major expenses should be verified and vouched depending upon the nature of
the expense.
VIII. Software interfacing
NA
Process
1) All POS software are linked to the PMS software (Fidelio/Amadeus) and PMS
is linked to accounting software.
2) Room settlements in POS are immediately posted to PMS. At the time of
night audit, all revenue lows from POS to PMS. Also, all transactions move
from PMS to accounting software at the time of night audit.
1) Spool trial balance from fidelio and revenue register from Orion and compare
the same to ensure that the softwares are propely interfaced.
IX. BRS
 Bank reconciliation statement
 Bank statement
 Bank book
1) Ensure that bank reconciliation statement is prepared on a monthly basis and
signed off by the person reviewing the same.
2) Ensure that BRS is prepared by a person independent of those performing
receipt, cheque issue or any other banking functions.
3) Ensure that cheques not presented for payment for more than 6 months are
transferred to stale cheque a/c and subsequently reversed.
Page 40
AUDIT PROCESS
4) If BRS is prepared outside the accounting software, rework the BRS for a
sample of one or 2 months depending upon the number of banks and volume
of transactions.
5) If BRS is prepared through system, learn the process/control in place and test
check the reconciliation items.
X. Cash Controls:
 Cash vouchers for a sample period.
 Cash book for the above sample.
1) Perform physical verification of cash at all terminals where cash is held.
Compare with balance as per books and analyse any differences.
2) Obtain the cash scroll maintained the the Front Office and verify whether
huge differences have been noticed. Verify whether the FOM has analysed
these differences with reasons. Ensure that no cash disbursements/IOUs
have been made from Front office directly.
3) Physical verification to be performed even for foreign exchange kept at
accounts. (The process is as follows. The Front office deposits all forex cash
received to the accounts at the end of the day. At this time the currency is
parked in ‘Forex Clearing Acccount’. The accounts department hands over
the cash to Thomas cook at the exchange rate prevailing on the date of
handover. So, the cashier has to pass an entry for the exchange gain/ loss.
Thus, at the time of handover, the ‘Forex Clearing Account’ is squared off by
crediting it to the extent of cash handed over to Thomas Cook as well as
accounting for gain/ loss.
4) Select a sample of cash vouchers and vouch for supportings and
authorizations .
5) Ensure that a handover sheet is prepared with the denominations and signed
off by the Front office executive and cashier.
Page 41
AUDIT PROCESS
Area : Credits
I. Credit Committee Meetings
 Minutes of the meetings
1) The unit is to form a credit committee and conduct meetings on a monthly
basis to discuss the collection from debtors, disputes, approve bad debts etc.
These meeting are to be minuted.
2) Obtain the minutes of the meetings for all the months. Ensure its updated and
prepared for all the months and signed by the Credits Manager & FC. Ensure
that it is not just a fake document prepared to satisfy auditors.
II. Credit Card Reconciliation
 Reconciliation Statement
1) The concept of credit card reconciliation is explained below. Credit card swipe
machines will be maintained in outlets and front office (eg: HDFC, ICICI,
AMEX, Citibank). So once we swipe the card, lets say ICICI credit card in
some particular machine say HDFC, HDFC will remit the money and claim it
from ICICI. This money might not be remitted immediately by HDFC. There
might be a lead time of lets say 4 days or something. Thus, meanwhile a track
of how much is pending from each of these parties is to be maintained by way
of a credit card reconciliation statement. The exercise is hence very much
similar to a BRS.
2) First, understand the process being followed at the unit to reconcile credit
card receipts. Verify whether the reconciliation is being done correctly for a
week or so (This can be done by sitting alongside the client when he matches
receipts as a daily exercise). It may also be verified as follows. From Journal
by department code filter all credit card settlements
(Master/Visa/Amex/HDFC/Diners/All other cards) by applying filter in dept
code. (From Fidelio, City ledger settlements can be taken by filtering in
journal by department code for Department number (In Dept column)
pertaining to city ledger. (It is property specific. Will always be greater than or
equal to “900”). Sample can be taken as Say 5 days. For those 5 days, obtain
the credit card charge slips and the summary sheet (Credit card closure
summary statement gets printed at the time of batch closure which will
indicate all the credit card settlements done during the day). Match the
amounts taken from JBD to the charge slip as well as summary statement.
Then take the bank statements to match the receipts with the summary
statement. Generally the banks indicate, against which batch number the
payment is made. So it can be easily matched. Ensure that in ARCL/ORION,
the receipt is booked against the collections pertaining to correct batch
number as indicated by the bank. This ensures that credit card collections are
reconciled on day to day basis.
3) For the credit crad swipes we make, as per the example in point 1, since
HDFC is remitting the money on behalf of ICICI, commission has to be paid to
HDFC. Thus, verify whether the commission on such transactions is
Page 42
AUDIT PROCESS
accounted correctly based on the bank advice. Check whether TDS is being
deducted correctly on such commission.
4) Check whether the pending receipts as on date are not beyond the banking
lead time applicable for the specific bank.
III. Debtors
 Debtors Ageing sent to the corporate by the Credits Manager.
 Debtors Ageing from Orion (Taj – Schedule Summary (6 buckets) Dump
report.
 Debtors Trial Balance from Orion as on the last date of audit period.
 Bank Book from Orion for subsequent period (eg: If audit period ends on 31st
march ’10, obtain the bank book from 1st Apr ’10 till the date when the check
is performed).
1) Ensure there are no long pending debts by verifying the debtors ageing
prepared by the credits manager. If there are, verify whether adequate follow
up is being done to recover such debts. This can be done by cross verifying
with the credit meeting minutes/ e-mails exchanged between the unit and the
party.
2) Compare ageing prepared by the Credits Manager and the ageing from orion.
Ensure that the figures are correct and accurate as the ageing of debts is
forwarded to the corporate on a monthly basis.
3) Obtain the debtors trial balance and trace subsequent receipts from those
parties using the bank book. This check is done to assure ourselves that the
collection process is reasonable.
4) Analyze credit balances in debtors accounts.
5) Using the debtors trial balance verify whether multiple codes have been
created for a single debtor.
IV. Credit extension
 Credit List for Travel Agents, Companies from Credits Manager
 Cash List/Black List from Credits Manager
1) Using the Journal By Dept Report (In case of Fidelio) and The Journal Report
(In case of Amadeus), filter for ‘City Ledger’ Settlements. City ledger
settlements are those parties for whom credit has been extended. Referring
to the Credit list, Cash list and Black Lists verify whether credit has been
extended only to parties approved in the credit list.
V. Back Office Allowances
 Credit Memo Report (Back Office Allowances) for the period of verification.
1) Back Office Allowances are those allowances that are passed at the back-end
(ie) Credits/ Accounts after the guest has checked out. Thus these
Page 43
AUDIT PROCESS
allowances are directly posted in Orion unlike other allowances which are
routed through the guest profile in PMS.
2) For all back office allowances obtain the supporting documents. Verify
whether the entries have been passed correctly based on the supporting.
Ensure that these allowances have been signed by the GM, Credits manager,
Dept Head and FC.
3) The back office allowances can also be taken as aid to select the sample for
checking the billing controls in various operational areas such as Front
office /Banquets etc.
4) For example if there are many back office allowances in banquets for a
particular set of clients during a month, the audit team can check those
banquet bills to see whether there is any process control weakness in the
billing as a result of which they may be allowanced off at the back end. This
ensures that audit is done comprehensively.
VI. Travel Agent Commission
 Travel Agent Commission ledger from Orion.
1) Select a month where travel agent commission paid is the highest as sample.
The general commission percentage is 5%, any commission over and above
this should be specifically approved. Ensure that the commission has been
paid correctly on the bill value. (This exercise will have to be done with the
help of the Credits manager).
2) So for eg, if the ledger says Rs.5,000 booked for Mr X, access Mr X's bill in
Amadeus/Fidelio and check the total value of the bill. Suppose his bill amount
is Rs. 1,00,000, and rate of commission is 5%, then a commission of
Rs.5,000 has been paid correctly so on and so forth.
VII. Debtors Control Account
1) There is a separate module in Orion for Inventory, receivable and payables.
So one has to ensure that figures from each of the module have been
correctly transferred from the sub module to main module which is the
financial module.
2) Thus, obtain a break up of all debtors from the sub-module and see what the
balance as shown in the sub module is the same as that reflected as 'Sundry
Debtors' in the Trial Balance.
VIII. Interunit Reconciliation
 Interunit confirmations for all units from the client.
 Closing balances as per TB for all units from Orion.
1) Interunit confirmations are to be obtained from all other taj units atleast on a
quarterly basis confirming the balances as per their books.
Page 44
AUDIT PROCESS
2) Compare the balances as per the confirmations with the balance as per TB.
Ensure that the balance tallies If not, a reconciliation for the exact difference
should have been prepared.
Page 45
AUDIT PROCESS
Area : Engineering
I. Utility monitoring
 Consumption log book register
 Monthly utility reports.
 Calibration for meters.
 Water & air quality testing reports.
 Energy audit reports
 Energy saving programme
1) Check if consumption reports are circulated daily to GM & FC and are being
sent on a monthly basis to Corporate.
2) Compare the consumption as per utility consumption register with monthly
utility report.
3) Do an analysis of monthly consumption expenses trend and see if there is
any unusual variances. Check if the unit has a system of identifying
variances.
4) Check if sub metering has been done for the major consumption points. The
purpose of sub metering is to find out the consumption department wise.
5) Check if energy audit has been done on a periodic basis. Also check if
recommendations of the energy audit report have been implemented; if not
determine what are the reasons for non implementation,
6) Budgets should be incorporated for all departments. If budget is not adhered
find out reasons for the same.
7) All energy bills such as Electricity/CNG/Diesel etc should be certified by
engineering department. A comparison has to be made with engineering
records to ensure there is no excess payment.
8) Check if there is a energy saving programme laid down by the unit
9) Ensure that cost saving techniques are being explored to ensure that power
consumption does not exceed maximum demand thereby leading to penal
charges
10) Check if air/water/noise levels are being monitored and If any variances are
present enquire as to what steps unit has taken to prevent it in future.
11) Check if any contracts have been entered for electricity/CNG. Comparative
quotes and negotiation for these should be closely looked into as these
involve heavy expenditure. Check on sample basis if billing is in line with
contracted rates.
12) Check if license are available for using LPG Cylinders.
II. Work orders
 Work orders.
 Work order register.
1) First find out who has the authorization to issue work orders. Unit should have
a documented policy for the same. For example. Work orders upto Rs.25,000
Page 46
AUDIT PROCESS
will be approved by FC & Chief Engineer. Work orders over and above will be
approved by the General Manager.
2) See the work orders list and identify if any major work has been undertaken
by the unit for the year. Any expense of capital nature has to be approved by
the board and should be part of the Capex budget.
3) Work orders can be raised via Orion and manual work orders are to be
avoided. It should be ensured that work orders are not confirmatory ( Work
orders prepare after actual completion of work just for documentation purpose
since finance department wont approve bill without a work order)
4) Ensure that for all work orders minimum 3 comparative quotes are taken and
the lowest is selected. If quotes are not available or lowest party is not
selected then logic notes should be available for same, Vendor evaluation is
critical as in engineering preference to one vendor for routine work becomes
a trend.
5) With respect to jobs of repetitive nature such as monthly cleaning of
swimming pools possibility of entering contract has to be looked into.
Contracted rate may be lower than the rates quoted for monthly work order.
6) Check if work order comprehensive and detail all aspects of the work.
7) Work orders should mention expected date of completion. Engineering
department has to monitor these to ensure work is completed within time.
Penal charges may be levied for delay as per work order terms.
8) After work is done a work completion certification has to be issued and this
should be signed by engineering department.
III. Preventive maintenance & AMC

`
 Preventive maintenance schedule
 List of fixed assets & AMC.
 AMCs
1) Check if preventive maintenance schedule has been laid down for all fixed
assets. If self maintenance has been done a justification has to be
documented for same.
2) Ensure adherence of fixed assets schedule and preventive maintenance
records are adequately documented and authorized.
3) If AMCs have been taken minimum 3 comparative quotes are taken and the
lowest is selected. If quotes are not available or lowest party is not selected
then logic notes should be available AMCs are generally taken from
manufacturer to ensure better service. If AMCs have been taken at corporate
level then unit should stick to the same vendor unless approval has been
taken from corporate for deviation
4) Ensure that repairs & maintenance expenses are within budget. Any
expenses after budget has been exceeded to be approved by FC & GM.
5) Check if warranty tracking register is available especially for new
hotels/projects. Check if any expenses have been incurred which could
otherwise have been covered by warranty.
6) Check AMC accounting and ensure payment is as per contract.
7) Check if room status has been changed to Out of Order (OOO) or Out of
Service (OOS) at the time of preventive maintenance to ensure same is not
available in room inventory for the day.
8) Check if rooms are covered once in a quarter for Total Preventive
Maintenance.
Page 47
AUDIT PROCESS
Area : Housekeeping
I. Menu Master comparison for laundry
 Menu card for all outlets.
 Rate master from Housekeeper /IT manager.
 Item sales summary from VPOS/product mix report from Infogenesis.
1) Compare the rate for all items as per menu card with that in the master.
2) Report rate differences quantifying the revenue loss (which should be
computed by multiplying the differences with the quantity sold as per item
sales summary/product mix report).
3) Report cases where there are multiple codes for the same item in the rate
master. Quantify revenue loss due to price differences (same method of
computation as above).
4) Report cases where codes have not been created in the master for items in
menu cards.
II. Linen Inventory
 Linen Inventory sheet
 Linen Physical verification sheets
1) Obtain the linen inventory sheet and verify its arithmetical accuracy. Verify
whether the closing stock figures have been updated correctly based on the
physical verification sheets.
2) Ensure that a physical verification of incirculation stock as well as stock at
stores is performed on a monthly basis. Also ensure that the PV Sheets are
signed by those performing the PV as well as the Executive Housekeeper.
3) A monthly report of discarded linen to be prepared and forwarded to the FC &
GM.
III. Master key usage

 Master key register (In case of ving card/ manual keys)
 Ving Card Log (In case of ving card system)
In case of manual keys:
of the master keys. Ensure that each usage has been authorised by the
Executive Housekeeper. The signature of the person using the key and the
one receiving it after the usage to be obtained. The reasons for using the key
also to be mentioned.
In case of ving cards:
Page 48
AUDIT PROCESS
2) Obtain the master key register maintained at the housekeeping department to

record usages of the master keys. Ensure that each usage has been
authorised by the DM and FOM.
3) Also cross verify with the ving card log whether all usages of master keys
have been entered in the master key register and authorised by the DM and
FOM. The reasons for using the key also to be mentioned.
4) Ensure that the Executive housekeeper is generating the log and verifying it
on a periodic basis.
Also perform a spot check to verify whether the master keys as on hand as per that
register is physical present in the housekeeping department.
IV. Laundry
 Laundry Bills for a sample period.
 Guest Slips for the above sample.
 Laundry contract if any (in case of outsourced laundry).
 Gatepasses prepared (in case of outsourced laundry).
The process is usually as follows. The guest slips are placed in the rooms which the
guest fills up with the no. of pieces sent for laundry. The housekeeping department
then based on the guest slip, prepares the bill and posts it to the guest folio. In case
the laundry function is outsourced, another party is contracted to carry out the
laundry function on our behalf. In that case, the unit prepared returnable gatepasses
for the pieces to be laundered. Once the pieces are returned, it is noted against the
no of pieces given. This way, it is tracked whether all pieces are returned. On a
periodical basis, the contractor raises a bill on our unit.
Laundry Revenue
1) In case the laundry function is outsourced, the following check has to be
performed. Cross verify the no of pieces as per the guest slip with that as per
the gatepasses. Report differences. Also compare the no. of pieces as per
the guest slip with the pieces billed by the unit for to identify discrepancies.
Laundry Expense
2) Obtain the contract entered into (in case of outsourced laundry) and check
whether the rates charged by the contractor are in line with the contracted
rates. Also verify whether the pieces billed by the contractor matches with the
guest slips.
V. Guest Amenities

 Guest Amenities tracking sheet
1) Ensure the arithmetical accuracy of the sheet. Verify whether a periodical
physical verification is conducted if the quantity held is huge.
2) Perform a spot check to identify differences.
Page 49
AUDIT PROCESS
Area : Human Resource
I. Recruitment procedures
 List of additions.
 Manpower requisition.
 Reference checks documents.
 Taj policy
 Budgeted manpower
 Manpower MIS/Head count report
 Salary register
1) Obtain the list of additions during the audit period from the HR manager.
2) Verify if such recruitments are supported by manpower requisition form
approved by the respective department head. In case of executives, these are
to be approved by corporate HR.
3) Ensure that reference check carried out for new employees are documented
in the personnel file.
4) Verify if the appointment letters are signed by the GM/HR manager and
contains all terms and conditions as per Taj HR policy.
5) Ensure that police verification has been done for all new joinees.
6) Identify the method of recruitment of the new employees and verify
compliance with TPAM/Taj HR policy in this regard.
7) Ensure that such recruitments are in line with the budgeted manpower.
8) Ensure that recruitments are properly updated in the MIS.
9) Take the salary register from prism (payroll processing software) and ensure
that salary paid is in line with the appointment letter and also is paid on pro
rata basis from the date of joining.
II. Manpower MIS
Document/Reports required
 Monthly headcount report
 Manpower MIS
1) Obtain the monthly headcount report for all the months during audit period.
2) Ensure that this report is being forwarded to GM and FC.
3) Do a gross tally of head count for all the months and obtain reasons for
differences if any. Gross tally can be done in the following format –
Month Opening head count Recruitments Separation Closing head

(A) (B) (C) Count
(A)+(B)-(C)
Apr 11
May = closing head count of
11 Apr 11
4) Cross verify the head count report and department-wise attendance register.
5) Compare the actual head count with the budgeted head count and ensure
adherence to budget.
6) Verify if manpower MIS contains details as required by TPAM (HR – H7).
Page 50
AUDIT PROCESS
7) Verify if manpower MIS is sent to GM and FC on a monthly basis by 5th of

every month.
8) Ensure that budgeted figures are incorporated in manpower MIS and reasons
for difference between actual and budget are specified in the remarks column.
III. Employee Records
 List of additions and separations
 Personnel files
1) Ensure that HR maintains a checklist for contents to be retained in personnel
file and ensure that this list is exhaustive. (Refer TPAM HR – H12)
2) Verify the personnel files of new joinees on a sample basis and ensure that it
has all the documents as required by TPAM.
3) Ensure that personnel files are maintained by HR department and are kept in
secured place under lock and key and access is restricted only to HR
department.
4) In case of deputed employees, ensure that personnel files are maintained in
original location.
IV. Master Maintenance process
 Audit log
 List of additions
 List of separations
1) Ensure that there is segregation of duties – Access to update master is
restricted to HR department and payroll processing is undertaken by accounts
department.
2) Verify the ‘audit log of changes’ report from prism for a sample period and
ensure that these are prepared on a monthly basis and signed off by the FC
and HR manager as evidence for review.
3) Obtain the list of addition and separations during the period and verify if these
have been correctly updated in the master.
V. Manpower Contracts
 Contract copies
 Vendor evaluation process document
 Quotations and logic notes
 Sample bills
1) Obtain the list of manpower contracts available in the unit.
2) Ensure that these manpower contracts are entered into only upon receipt of
manpower requisition approved by the HR manager, User department & FC.
3) (Ensure compliance with tendering process as per purchases).
4) Ensure that the contracts have been renewed on a timely basis.
5) Obtain the bills raised and ensure compliance with contracted terms.
Page 51
AUDIT PROCESS
VI. Payroll Processing

 Payroll register containing head-wise salary break-up for all employees (Pay
sheet) for the sample month
 Loan/advance forms
 Attendance records and leave cards
 HR policy
 Select a sample of employees. Obtain the payroll sheets for those
employees, compare the salary processed with their appointment letter (in
personnel file) and verify whether it is correct. Ensure that all deductions
(statutory, loan, advances etc) have been made correctly.
 If increments have been given during the year, ensure that the salary
processed is in line with the authorized amount.
 Ensure whether proportionate amount has been paid in case of additions and
deletions.
 Compare the attendance records with leave records and check loss of pay if
any are dealt with appropriately at the time of processing the payroll.
 Check the records maintained for tracking overtime with attendance software
(bio-metric), if any. This record has to be approved by HOD. Ensure whether
payment is as per the policy.
 Check the salary advance requisition and disbursement forms for HOD and
HR manager’s approvals. Check whether employees’ signature is obtained as
an acknowledgment for disbursement.
 Gross tally the PF and ESI remittance and the monthly salary (Consider only
the applicable components. For example to compute salary for PF consider
only )
 Ensure that monthly salary reconciliation report is generated and signed off
by the HR manager and FC along with reasons.
VII. Separation
 Resignation/Relieving letter
 Exit interview forms
 Clearance form
 Full and final settlement sheet
 Obtain the list of separation during the audit period.
 Ensure that resignation letter is given in writing and this is accepted and
signed by the respective HOD and HR manager.
 Ensure that exit interview is conducted for all separated employees and these
are adequately documented.
 Ensure that the names of the resigned employees are removed from the
subsequent month’s payroll and also their official user id’s are deactivated
immediately.
 Ensure that employee submits a ‘Clearance form’ to HR signed off by
respective HOD, HR, Finance and other departments such as housekeeping,
security, laundry, F&B etc. as listed in the clearance form.
 Verify the full and final settlement sheet and verify if these have been
computed correctly. Ensure that all pending advances and loans are adjusted
before making full and final settlement.
Page 52
AUDIT PROCESS
Page 53

Audits Process Notes

Uploaded by

Copyright:

Available Formats

Audits Process Notes

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Audits Process Notes

Uploaded by

Copyright:

Available Formats

AUDIT PROCESS

PROCESS NOTES FOR

S.No Area Page No

2. Food & Beverages…………………………………………….17

11. Human Resources…………………………………………….49

Area: Front Office

II. Local Contracted rates – territory accounts

III. Long Stayer

The above procedure is to be followed for airline crews.

IV. Non contracted rates: BAR, Ad-hoc rates

Document/ Report required:

VI. Global Distribution System (GDS)

VIII. Registration Cards/ C forms

IX. Upgrades (i. RNA and ii. Others)

Document/ Report required: NONE

XI. Complimentaries and House Use

3) Ensure that monthly complimentary report is sent to COO.

XII. Check-in process

XIII. No Shows & Cancellations

XIV. Day-use billing process

XV. Late Checkouts & Early Check-ins

XVI. Foreign Exchange rate updation

XVII. Extra Bed

XVIII. Walk ins

XIX. Master Key Usage

Document/ Report required:

XX. Sharing of user IDs

XXI. Allowance/Negative posting

Allowances are deductions from revenue on account of guest dispute, guest

XXII. Check out process

XXIII. Front office bills on hold

XXIV. Occupancy verification process

XXV. Paid Outs

 Process: Compare the entries made every day in the department

 Process: Compare the entries made every day in the department

 Exception Report for allowances after checkout:

 Base Files: Journal by Department Code and user log.

 Exception report for rate changes:

 Base file: User log

 Exception report for Splits and transfers:

 Base files: User log

 Exception report for transfers made to unrelated parties:

 Base files: User log

 Exception report for Paidouts after checkouts:

 Base Files: Journal by Department Code and user log.

 Exception report for Sharer:

 Exception Report for allowances after Settlements:

 Base Files: Journal by Department Code

 Exception Report for Paidouts after Settlements:

 Base Files: Journal by Department Code

 Exception report for Profile name changes:

 Base file: User log

Area: Food & Beverages

II. Menu engineering

III. User Rights

IV. Delay in Settlement of checks

V. Delay in opening table

Obtain the above reports for any 10 days

VI. Void/ Split/ Reprint Checks