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093192 1 (1971-01-20)

handle is hein.gao/gaobacxbc0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE Room 204. 161 PEACHTREE STREcT. N E ATLANTA, GEORGIA 30303 JAN 2 0 1971 Mr. Donald A. Hutchison, Superintendent Federal Prison Industries, Inc. Federal Correctional Institution Tallahassee, Florida 32304 Dear Mr. Hutchison: During our audit of the Federal Prison Industries, Inc. (FPI), financial statements at the Federal Correctional Institution (FCI), Tallahassee, Florida, for fiscal year 1970, which was made pursuant to the Government Corporation Control Act (31 U.S.C. 841), we noted a number of deficiencies which are presented in detail below for your consideration and appropriate action. NEED FOR IMPROVEMENT IN ACCOUNTING FO INVENTORY At the time of our review, variances between the inventory records and the physical inventory existed for 98, or about 50 percent, of the 195 items of raw materials and supplies; and we were informed by the FPt lead foreman that the variances existed because inmates (1) failed to record ibsues from the storeroom, (2) incorrectly recorded some issues, or (3) did not record items returned to the storeroom. We counted 20 items, valued at LU $19,000, and found that the inventory records varied from the -i physical inventory by $1,600, or 8.5 percent of recorded value. FPI expanded the physical inventory to all 195 items, valued at $36,500, and found variances amounting to $2,300, or 6.2 percent of recorded value. FPI personnel followed a procedure of counting the raw materials and supplies inventory before the annual physical inventory was taken, and variances found between the inventory records and the count were corrected by preparing requisitions C- for materials issued to work-in-process without identifying the variances as adjustments resulting from physical inventory. C/) In order to provide better control and reporting of w inventories, we believe that inmate stock record clerks should o 50TH ANNIVERSARY 1921-1971

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