UNIVERSITY OF MUMBAI

A PROJECT ON
Audit Project Report on Hospital and Clubs
MASTER OF COMMERCE PART II
(Advance Accountancy)
SEMESTER-III
2014-2015
SUBMITTED BY
SEEMA.N.KUMAR
Roll no -18
PROJECT GUIDE
PROF. Muzhar Thakur

SHANKAR NARAYAN COLLEGE OF ART & COMMERCE

BHAYANDAR (EAST), THANE 401105

DECLARATION

DECLARATION

SEEMA.N.KUMAR

student of M.COM-II(Semester-III).SHANKAR NARAYAN COLLEGE OF ART&

COMMERCE hereby declare that we have completed this project on Audit Project Report on Hospital and Clubs in
the academic year2014-2015.
I declared that the project report is my original work and it has not been submitted by me in part or full to any other
university/institution/statutory body for the award of any degree/diploma/certificate.

Name Of Candidate:

Place:

THANE

SEEMA.N.KUMAR

Sign.

401105

Date:

/2014

CERTIFICATE

CERTIFICATE
We certify that the above declaration is true to the best of our knowledge and belief.

Project Guide Coordinator

Principal

Prof. Ajit

Dr.V.N.Yadav

Date:

Date

SHANKAR NARAYAN COLLEGEOF ART & COMMERCE

BHAYANDAR (EAST) NAVGHAR ROAD THANE-401105

CERTIFICATE
CERTIFICATE
This is certify that SEEMA.N.KUMAR

has completed the project titled

Audit Project Report on Hospital

and Clubs under the guidance of Prof.Muzhar Thakur in practical fulfillment of the requirement for the award
of Master of Commerce part-II. In Advance Accountancy studies degree for academic period 2014-2015

PROJECTGUIDE

PRINCIPAL PROF. Muzhar Thakur

Dr. V.N. Yadav

EXTERNAL GUIDE

COORDINATOR
Prof. Ajit Jadhav

Date:
PLACE:

ACKNOWLEDGEMENT

This project was a great learning experience and I take this opportunity to acknowledge all those
who gave me their invaluable guidance and inspiration provided to me during the course of this
project by my guide.
I would like to thanks Prof. Prof.Muzhar Thakur (M.COM S.N College)
I would also thank the M.Com Department of Shankar Narayan College who gave me this
opportunity to work on this project which provided me with a lot of insight and knowledge of my
current curriculum and industry as well as practical knowledge.
I would also like to thank the library staff of Shankar Narayan College for equipping me with
the books, journals and magazines for this project. I would also like to thank my Class
Representatives, friends and fellow students who helped me in the cause of the project.

Index

Sr no.

Topic

Pg. no

Introduction of Audit

Importance of Audit, And Its Advantages & Disadvantages

Importance of Audit, And Its Advantages & Disadvantages

Steps on Audit of Hospital and Club

14

Why Audit is done of Hospital and Clubs

21

Why Audit is done of Hospital and Clubs

23

Audit Questions and Answers:

33

Discussion and Recommendations

37

Audit Conclusion

39

10

Bibliography

40

Introduction of Audit
Definition:
An audit report is a written opinion of an auditor regarding whether an entity's financial statements present fairly
its financial position. This is written in a standard format, as mandated by generally accepted auditing standards
(GAAS). GAAS requires or allows certain variations in the report, depending upon the circumstances of the audit
work that the auditor engaged in. For example, the report may include a qualified opinion, depending upon the
existence of any scope limitations that were imposed upon the auditor's work.

Purpose & Objectives of Auditing Financial Statements

The objective of external audit is for the auditor to express an opinion on the truth and fairness of financial
statements.
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Accountability
The main necessity for conducting the audit of financial statements stems from the fact that the persons
responsible for the preparation of financial statements are often different from the owners of large corporations.
Whereas in small owner managed companies, the owners have first hand knowledge of the affairs of their
business, management and ownership is normally separate in the case of large companies that often have
thousands of shareholders. In large corporations, shareholders appoint directors to run the enterprise on their
behalf. This separation of ownership and control creates the need for external audit.
Financial statements are the main source of accountability of management performance by the shareholders.
However, as the management is responsible for the preparation of financial statements, shareholders have to rely
on external verification by auditors in order to gain reasonable assurance that the accounts are free from material
misstatements and can therefore be relied upon to be presenting true and fair view of the affairs of the company.
Reliability
Apart from the needs of owners, other users of financial statements may need to place reliance on the financial
statements. External audit is a means of providing a reasonable basis for the users to place reliance on financial
statements.
Examples of stakeholders (other than shareholders) that rely on audited financial statements include the
following:
Tax authorities rely on audited financial statements to determine the accuracy of tax returns filed by the
companies.
Financial institutions require audited accounts of prospective borrowers for assessing the credit risk by analyzing
their liquidity and financial position.
Management uses the audit exercise to re-evaluate the company's risk management processes and internal control
system by considering the feedback given by external auditors during the course of the audit in this regard.

Importance of Audit, And Its Advantages & Disadvantages

Auditing is the analysis of the financial accounts/records, by a qualified accountant, and procedures of a firm or
organization. This is essential in order to gain a fair perspective on the company's financial statements. With
auditing, potential investors and creditors can look at the financial statements to decide whether to invest in a
business or not. Auditing is important as it also protects the public from scams and corrupt business procedures.

ADVANTAGES
1. Gain a strong sense of internal control.
6

2. Identify key areas for improvement in your company.

3. Test out the performance of new technology.
4. Evaluate threats, economy, efficacy and quality.
5. Realise fraudulent occurrences in the business.
6. Analyze and understand your firms' financial data.
7. The public are protected from corruption.

DISADVANTAGES
1. It does not take into account the productivity and the skills of the employees of the business.
2. The financial data is never current and does not reveal much about the present financial position of a company.
3. Different accountants use different techniques; therefore it would be hard to compare audits between
companies who have used different accountants.
4. For smaller companies, hiring an accountant/firm to carry out an audit can be costly.
5. A bad audit can discourage investment.
6. Can be time consuming to answer the auditor's questions and the business may not work to maximum capacity.

Introduction of Hospital and Club

Hospital
A hospital is a health care institution providing patient treatment with specialized staff and equipment. The bestknown type of hospital is the general hospital, which has an emergency department. A district hospital typically is
the major health care facility in its region, with large numbers of beds for intensive care and long-term care.
Specialized hospitals include trauma centers, rehabilitation hospitals, children's hospitals, seniors' (geriatric)
hospitals, and hospitals for dealing with specific medical needs such as psychiatric problems (see psychiatric
hospital), certain disease categories. Specialized hospitals can help reduce health care costs compared to general
hospitals. A teaching hospital combines assistance to people with teaching to medical students and nurses. The
medical facility smaller than a hospital is generally called a clinic. Hospitals have a range of departments (e.g.,
surgery, and urgent care) and specialist units such as cardiology. Some hospitals will have outpatient departments
and some will have chronic treatment units. Common support units include a pharmacy, pathology, and radiology.

Hospitals are usually funded by the public sector, by health organizations (for profit or nonprofit), health
insurance companies, or charities, including direct charitable donations. Historically, hospitals were often
founded and funded by religious orders or charitable individuals and leaders.[1] Today, hospitals are largely
staffed by professional physicians, surgeons, and nurses, whereas in the past, this work was usually performed by
7

the founding religious orders or by volunteers. However, there are various Catholic religious orders, such as the
Alexias and the Bon Secours Sisters, which still focus on hospital ministry today, as well as several Christian
denominations, including the Methodists and Lutherans, which run hospitals.[2] In accord with the original
meaning of the word, hospitals were originally "places of hospitality", and this meaning is still preserved in the
names of some institutions such as the Royal Hospital Chelsea, established in 1681 as a retirement and nursing
home for veteran soldiers.
Types
General
The best-known type of hospital is the general hospital, which is set up to deal with many kinds of disease and
injury, and normally has an emergency department to deal with immediate and urgent threats to health. Larger
cities may have several hospitals of varying sizes and facilities. Some hospitals, especially in the United States,
have their own ambulance service.
District
A district hospital typically is the major health care facility in its region, with large numbers of beds for intensive
care and long-term care.
In California, "District hospital" refers specifically to a class of healthcare facility created shortly after World War
II to address a shortage of hospital beds in many local communities.[4][5] Even today, District hospitals are the
sole public hospitals in 19 of
California's counties,[4] and are the sole locally-accessible hospital within 9 additional counties in which one or
more other hospitals are present at substantial distance from a local community.[4] Twenty-eight of California's
rural hospitals and 20 of its critical-access hospitals are District hospitals.[5]
California's District hospitals are formed by local municipalities, have Boards that are individually elected by
their local communities, and exist to serve local needs.[4][5] They are a particularly important provider of
healthcare to uninsured patients and patients with Medi-Cal (which is California's Medicaid program, serving
low-income persons, some senior citizens, persons with disabilities, children in foster care, and pregnant women).
[4][5] In 2012, District hospitals provided $54 million in uncompensated care in California.[5]
Specialized
Specialized hospitals include trauma centers, rehabilitation hospitals, children's hospitals, seniors' (geriatric)
hospitals, and hospitals for dealing with specific medical needs such as psychiatric problems (see psychiatric
hospital), certain disease categories such as cardiac, oncology, or orthopedic problems, and so forth. In Germany
specialized hospitals are called Fachkrankenhaus; an example is Fachkrankenhaus Coswig (thoracic surgery).
A hospital may be a single building or a number of buildings on a campus. Many hospitals with pre-twentiethcentury origins began as one building and evolved into campuses. Some hospitals are affiliated with universities
for medical research and the training of medical personnel such as physicians and nurses, often called teaching
hospitals. Worldwide, most hospitals are run on a nonprofit basis by governments or charities. There are however
a few exceptions, e.g. China, where government funding only constitutes 10% of income of hospitals. (Need
citation here.)
Chinese sources seem conflicted about the for-profit/non-profit ratio of hospitals in China)
Specialized hospitals can help reduce health care costs compared to general hospitals. For example, Narayan
Hrudayalaya's Bangalore cardiac unit, which is specialized in cardiac surgery, allows for significantly greater
number of patients.

It has 3000 beds (more than 20 times the average American hospital) and in pediatric heart surgery alone, it
performs 3000 heart operations annually, making it by far the largest such facility in the world.[6][7] Surgeons
are paid on a fixed salary instead of per operation, thus the costs to the hospital drops when the number of
procedures increases, taking advantage of economies of scale.[6] Additionally, it is argued that costs go down as
all its specialists become efficient by working on one "production line" procedure.[7]
Teaching
A teaching hospital combines assistance to people with teaching to medical students and nurses and often is
linked to a medical school, nursing school or university.
Clinics
The medical facility smaller than a hospital is generally called a clinic, and often is run by a government agency
for health services or a private partnership of physicians (in nations where private practice is allowed). Clinics
generally provide only outpatient services.
Departments
Resuscitation room bed after a trauma intervention, showing the highly technical equipment of modern hospitals
Hospital has departments and Each is usually headed by a Chief Physician. They may have acute services such as
an emergency department or specialist trauma centre, burn unit, surgery, or urgent care. These may then be
backed up by more specialist units such as:

Emergency department
Cardiology
Intensive care unit
Pediatric intensive care unit
Neonatal intensive care unit
Cardiovascular intensive care unit
Neurology
Oncology
Obstetrics and gynecology

Some hospitals will have outpatient departments and some will have chronic treatment units such as behavioral
health services, dentistry, dermatology, psychiatric ward, rehabilitation services, and physical therapy.
Common support units include a dispensary or pharmacy, pathology, and radiology, and on the non-medical side,
there often are medical records departments, release of information departments, Information Management (aka
IM, IT or IS), Clinical Engineering (aka Biomed), Facilities Management, Plant Ops (aka Maintenance), Dining
Services, and Security departments.
Club
A club is an association of two or more people united by a common interest or goal. A service club, for example,
exists for voluntary or charitable activities; there are clubs devoted to hobbies and sports, social activities clubs,
political and religious clubs, and so forth.
Types
Buying club

Buyer's clubs or buying clubs are clubs organized to pool members' collective buying power, enabling them to
make purchases at lower prices than are generally available, or purchase goods that might otherwise be difficult
to obtain. There are many legitimate buying clubs for example, food buying clubs but many is unauthorized
credit card billing scams, in which a customer is induced to enroll in a free trial of a buyer's club membership,
and then unexpectedly billed when the trial ends.
Country club and Sports club
A print of the 1822 meeting of the "Royal British Bowmen" archery club. There are two types of athletic and
sports clubs, those organized for sporting participants (which include athletic clubs and country clubs), and those
primarily for spectator fans of a team. Athletic and country clubs offer one or more recreational sports facilities to
their members. Such clubs may also offer social activities and facilities, and some members may join primarily to
take advantage of the social opportunities.
Country clubs offer a variety of recreational sports facilities to its members and are usually located in suburban or
rural areas.[1] Most country clubs have golf. Swimming pools, tennis courts, polo grounds and exercise facilities
are also common. Country clubs usually provide dining facilities to their members and guests, and frequently host
catered events like weddings. Similar clubs in urban areas are often called athletic clubs.
These clubs often feature indoor sports, such as indoor tennis, squash, basketball, boxing, and exercise facilities.
Members of sports clubs that support a team can be sports amateursgroups who meet to practice a sport, as for
example in most cycling clubsor professionals -- football clubs consist of well-paid team members and
thousands of supporters.
A sports club can thus comprise participants (not necessarily competitors) or spectator fans, or both.Some
organizations exist with a mismatch between name and function. The Jockey Club is not a club for jockeys; but
rather exists to regulate the sport of horseracing; the Marylebone Cricket Club was until recently the regulatory
body of cricket, and so on.
Sports club should not be confused with gyms and health clubs, which also can be for members only.
Fraternities and Sororities
Fraternities and sororities are social clubs of secondary or higher education students. Membership in these
organizations is generally by invitation only.
Hobby club
Hobbies are practiced for interest and enjoyment, rather than financial reward. Examples include science fiction
clubs, ham radio, Model Railroading, collecting, creative and artistic pursuits, making, tinkering, sports and adult
education. Engaging in a hobby can lead to acquiring substantial skill, knowledge, and experience. However,
personal fulfilment is the aim.
Personal club
Personal Clubs are similar to Hobby Clubs. These clubs are run by a few close friends. These friends or family
members do things they like to do together. They might even make a personal website for their club.
Professional body
These organizations are partly social, partly professional in nature and provide professionals with opportunities
for advanced education, presentations on current research, business contacts, public advocacy for the profession
and other advantages. Examples of these groups include medical associations, scientific societies, autograph club
and bar associations. Professional societies frequently have layers of organization, with regional, national and
10

international levels. The local chapters generally meet more often and often include advanced students unable to
attend national meetings.
School club
These are activities performed by students that fall outside the realm of classes. Such clubs may fall outside the
normal curriculum of school or university education or, as in the case of subject matter clubs (e.g. student
chapters of professional societies), may supplement the curriculum through informal meetings and professional
mentoring. Example of such a system is Edu-Clubs, a group of 11 Clubs formed in Excel Group of Schools,
Tamil Nadu.
Service club
Main article: Service club
A service club is a type of voluntary organization where members meet regularly for social outings and to
perform charitable works either by direct hands-on efforts or by raising money for other organizations.
Social activities club
A social activity clubs are a modern combination of several other types of clubs and reflect todays more eclectic
and varied society. These clubs are centered around the activities available to the club members in the city or area
in which the club is located. Because the purpose of these clubs is split between general social interaction and
taking part in the events themselves, clubs tend to have more single members than married ones; some clubs
restrict their membership to one of the other, and some are for gays and lesbians.
Membership can be limited or open to the general public, as can the events. Most clubs have a limited
membership based upon specific criteria, and limit the events to members to increase the security of the
members, thus creating an increased sense of cameradery and belonging. Social activities clubs can be for profit
or not for profit, and some are a mix of the two (a for-profit club with a non-profit charitable arm, for instance).
The Inter-Varsity Club (IVC) is the biggest British non-profit club.
Social clubs and Gentlemen's club
A Club of Gentlemen by Joseph Highmore c. 1730
Some social clubs are organized around competitive games, such as chess and bridge. Other clubs are designed to
encourage membership of certain social classes. In the 1940s, 1950s and 1960s social clubs were the precursor
name of gangs like the infamous Hamburgs of Chicago.
Latino immigrant adult and youth groups organized themselves as social clubs like: Black Eagles, Flaming
Arrows, Paragons and Young Lords. Those made up of the elite are best known as gentlemen's clubs (not to be
confused with strip clubs) and country clubs (though these also have an athletic function, see below).
Membership to gentlemen's clubs require the ability to pay large fees as well as an invitation by existing members
who seek new recruits who meet personal criteria such as lifestyle, moral base, etc. Less elitist, but still in some
cases exclusive, are working men's clubs.
Clubs restricted to either officers or enlisted men exist on military bases.
(The modern Gentlemen's club) sometimes proprietary, i.e. owned by an individual or private syndicate, but more
frequently owned by the members who delegate to a committee the management of its affairs, first reached its
highest development in London, where the district of St. James's has long been known as "Club land".
Current London clubs include Soho's Grouch Club, which opened in 1985 as "the antidote to the traditional club."
In this spirit, the club was named for Grouch Marx because of his famous remark that he would not wish to join
any club that would have him as a member.

11

Steps on Audit of Hospital and Club

Steps on Audit of Hospital
The special steps involved in audit of a Hospital or a dispensary run by a trust are stated below:
1) Trust Deed:Examine the Trust Deed or Regulation in the case of the Hospital and note all the provision affecting accounts.
2) Minutes:Read through the minutes of the meeting of the Managing Committee or Government Body, noting resolutions
affecting accounts to see that these have been duly complied with, specially the decision as regards the operation
of bank accounts and sanctioning of expenditure.
3) Register of Patients:Vouch the Register of patients with copies of bills issued to them. Verify bills for a selected period with the
patients occupancy record to see that the bills have been correctly prepared. Also see that bills have been issued
to all patients from whom an amount was recoverable according to the rules of the hospital.
4) Cash collections:Check cash collections as entered in cashbook with the receipts, counterfoils and other evidence for example,
copies of patient bills, counterfoils of dividend and other interest warrants, copies of rent bills etc.
5) Investment Income:See by reference to the property and Investment Register that all income that should have been received by way
of rent on properties, dividends, and interest on securities settled on the hospital, has been collected.
6) Legacies: Ascertain that legacies and donations received for a specific purpose have been applied in the manner agreed
upon.
12

7) Donations: Trace all collection of subscription and donations received for a specific purpose have been applied in the
manner agreed upon.

8) Expenses:Vouch all purchase and expenses and verify that the capital expenditure was incurred only with the prior sanction
of the Trustees or the Managing Committee and the appointments and increments to staff have been duly
authorized .Compare and that appointments and increments to staff have been duly authorized Compare the totals
of various items of expenditure and income with the amount budgeted for them and report to the trustees or the
Managing Committee significant variations which have taken place.
9) Stocks: Examine the internal check as regards the receipt and issue of stores; medicine, linen, apparatus, clothing,
instruments ,etc .so as to insure that purchases have been properly recorded in the stocks register and that issues
have been properly recorded in the stock register and that issues have been made only against proper
authorization.
10) Grants: Verify that grants, if any, received from government or local authority have been duly accounted for. Also, that
refund in respect of taxes deducted at source has been only against proper authorization.
11) Depreciation: See that depreciation has been written off against all the assets at the appropriate rates.
12) Physical verification: Inspect the bonds, share scrip, title deeds of properties and compare their particulars with those entered in the
Property and Investment Registers. Obtain inventories especially of stocks and stores as at the end of the year and
check a percentage of the items physically; also compare their total values with respective ledger balances.

13

Steps on Audit of Club

The special steps involved in audit of a Club are stated below:
1) Constitution:Examine the constitution, powers of governing body and relevant rules relating to preparation and finalization of
accounts.
2) Entrance Fees:- Vouch the receipt on account of entrance fees with members application counterfoils issued to them, and
minutes of the managing committee.
3) Subscription:Vouch members subscription with the counterfoils of receipts issued to them Trace receipts for a selected period
to the register members: reconcile the amount of total subscription due with the amount collected and
outstanding.
Check totals of various columns of the register of members and tally them across. See the Register of members to
ascertain the members dues which are in arrears and enquire whether necessary steps have been taken for their
recovery. The amount considered irrecoverable, if any should be written off.
4) Cut-off:Ensures that arrears of subscription for the previous year have been correctly brought over and arrears for the
year under audit and subscription received in advance have been correctly adjusted.
5) Supplies & Services:Verify the internal check as regards members being charged with the price of the foodstuffs and drink provided
to them and their guest as well as with the fees chargeable for the special service rendered such as billiards,
tennis, etc. Trace debited for the selected period from subsidiary registers maintained in respect of supplies and
service to members to confirm that the account of every member as been debited with the amounts recoverable
from him.
6) Purchases:Vouch purchase of sports items, Furniture, crockery, etc. and trace their entries in to the respective stock
registers. Vouch purchase of food stuffs, cigars, wines etc. and trace their sale price so as to confirm that the
normal rates of profit have been earned on their sales .The stock of unsold provision and stores ,at the end of the
year should be verified physically and its valuation checked.

7) Stock:Check the stock of furniture, sports material and other assets physically with the respective stock registers or
inventories prepared at the end of the year .
8) Investments:
14

Inspect the share scrips and bonds in respect of investments, check their current Values for disclosure in final
accounts, also ascertain that the arrangements for their custody are satisfactory ,check the accrual of income there
form and provision of income- tax thereon.
9) Gaming Machine Accountability:a) Detection of Theft
i) Checking of machines at least on a monthly basis, with jackpot payments shown in the payout book to the
individual amount for that combination shown on the prize schedule of the machine. For example, record three
aces as 3xA rather than AAA, which can be altered in the shape of a fourth or fifth A.
ii) Check clearances from cash boxes with cash box meters on at least a monthly basis.
b.) Reconcile the clubs financial records to the net income from poker machines on at least a monthly basis to
ensure all poker machine revenue is accounted for in the clubs income records.
c) Check on at least a monthly basis that cancels credit payments balance with the book payouts.
10) Accounting and Expenditure Records:a) General
Records of payments should be appropriately maintained in either a pre-numbered book providing full details of
transactions, i.e. Cheque number, date, payee and amount, or in a computerized or electronic cheque register.
b) Cheques
i).The pre-signing of cheques should be prohibited and all blank cheques kept in a secure place.
ii) All expenses payable by cheque should be detailed on a cheque requisition form, where appropriate, and
supported by source documents signed by an authorised officer. Cheques should only be signed by approved
signatories, who examine and initial any supporting documentation.
c. Petty Cash
i) Petty cash vouchers should have supporting documentation attached and be properly authorized.
ii) Petty cash accounts should be reconciled on at least a monthly basis.
11) Accounting for Revenue and Banking Receipts:a) General
i) Reconciliation of bank statements should be undertaken regularly at least on a monthly basis.
ii) Records of receipts should be accountable and provide full details of the transactions including the area of
operation (i.e. bar, poker machines, etc), the date of banking and the amount banked.
(iii) Check for any delays in banking which can result in funds that are not banked promptly, being used
improperly (the reason for any delay should be noted).
b) From Functions (including those held under section 23 of the Registered Clubs Act)
i. Proper records should be kept of each function. Statutory records must be kept for functions held for non
members or minors under section 23 of the Registered Clubs Act. These records should include the date the
function was approved by the clubs board, the date and nature of the function, the location and time of the
function, and the name and address of the person/s booking the function.
ii) Each function should be costed and the net income or loss from each function should be traceable to the clubs
financial records.
c) From Membership Subscriptions
An annual reconciliation of the number of members of the club, compared with the number of membership
subscriptions received, should be undertaken.

15

12) Wage Records:a) Proper records of wages should be kept, including employment application forms authorized by the club. Staff
time sheets should be maintained in ink, showing the hours worked and be signed by both the employee and the
supervisor, or alternatively, ensure appropriate mechanical or electronic time records are maintained and
authorized.
b) Written authorization and signing of all wage advances should be undertaken (any wage advances should be in
line with existing club policy).
13) Bar Trading:a. Stock Control
i) Proper records should be maintained of stock movement within the club.
ii. If external stock takers are used, their monthly reports should be reviewed by the auditor and reconciled with
the bar trading accounts at least on an annual basis, and be properly categorized. The reports must, as a minimum,
show any variation of actual turnover to expected turnover for each category and explanations for any excessive
deficiencies.
b) Gross Profit Percentage
Ensure that profit on bar trading is operating at an acceptable level, which is normally at least 50%. If it is not,
inquiries should be made to determine what factors are impacting on bar trading profit, and whether any remedial
measures are necessary.
14) Supply of Goods and Services:a) Over Charging
Ensure that prices charged to the club for the supply of goods and services are consistent with quotes obtained
from other suppliers for the same goods and services.
b) Short Deliveries
Proper procedures should be in place to enable deliveries to be checked with invoices and delivery dockets, to
ensure complete deliveries are received. This could include the person who receives the delivery, signing the
invoice or delivery docket and noting any short or incorrect deliveries, or damaged stock.
c) Supply of Goods
Ensure that the goods delivered are the same type and quantity ordered by the club.
d) Tendering Procedures
Tenders should be sought for the supply of goods and services, with a minimum number of quotes obtained.
Documents relating to tenders/quotes should be maintained for a reasonable period of time.
16

15) Loans and Advances

a) Records should be kept of all loans to the club, including the name of the creditor, the amount of the loan, the
amounts repaid, the balance outstanding and the interest rate, if applicable. A review should be undertaken to
ensure that repayments are made in accordance with the loan conditions (if applicable) and that the interest rates
being charged are not greater than commercial rates.
Recommendations should be made accordingly.
b) If cheques are allowed to be cashed, procedures should be implemented to ensure that they are banked
immediately and not held for redemption. Cheques that are repeatedly dishonored should be reviewed to ensure
that the persons cheques are no longer accepted.
c. Cash advances on credit card transactions through EFTPOS / ATM terminals within the club should not be
available.
16) Cash Floats:a) Comprehensive and accurate records of cash floats should be maintained. Where the float does not balance,
any under and overs should be investigated.
Cash floats should be balanced regularly (preferably daily) and the balancing documents retained as an
accounting record.
b) Random cash and float checks should be undertaken at least three times a yea17) Separation of Duties:All cash generating areas of the club, particularly gaming areas, should be reviewed so that duties are divided
amongst staff and, if appropriate, directors to provide adequate internal controls. Staff and directors, should be
rotated in their duties so that the same staff and directors are not continuously working together, particularly on
cash clearances of gaming machines.
18) General:Ensure any cash shortfalls are reported to the clubs management and, where appropriate, to the relevant
authorities.
Check to ensure that the appropriate registers are in place for assets, secretary and directors.

17

Why Audit is done of Hospital and Clubs

There are many reasons one might want or need to do audit. It includes:
1) Required measurements:The Health plan Employer Data and Information Set (HEDIS) is the most widely used set of performance
measures in the managed care industry. Health plans are required to report this large set of measures annually.
Employers and prospective members can then compare plans on their quality of care. Chart audits are often part
of the data collection methods for these measures,
2) Administrative requirements:Federal regulations require medical records documentation to justify charges coded and billed for. Audits are
often used to measure compliance.
3) Research:Medical records contain a wealth of data that may be useful in research, from measuring the prevalence of
symptoms/diseases to comparing the impact of various treatment strategies. Research applications of audits can

18

be clinical (such as reviewing the prevalence of blindness in diabetic and non-diabetic patients) or operational
(such as reviewing the hospital length of stay for surgeries performed on Monday vs. Friday).
4) Standard:Clinical audit offers a way to assess and improve patient care, to uphold professional standards and do the right
thing.
5) Service:Through clinical audit, healthcare staff may identify and measure areas of risk within their service.
6) Quality improvement:Regular audit activity helps to create a culture of quality improvement in the clinical setting. Perhaps the most
desirable reason for chart audits is to measure quality of care in order to improve it. Health professionals,
frustrated with processes that dont work as they should, can use audits to document that something is wrong,
find the defect in the process, and fix it. Practices and health systems that agree upon guidelines and processes of
care can use audits to assess how well they are following them.
You can conduct a chart audit on virtually any aspect of healthcare. The important point is that the data you are
reviewing should be accurate and must be available in the medical record. It is also important to note that a chart
audit will involve reviewing data that may be deemed confidential; therefore, it is important to check the
appropriate institutional guidelines before rev
7) Evidence:Clinical audit is educational for the participants. It involves being up to date with evidence
practice.
8) Job Satisfaction:It offers an opportunity for increased job satisfaction.
9) Professional Practice
It is increasingly seen as an essential component of professional practice.
10) Effectiveness
It can improve the quality and effectiveness of healthcare.

19

based good

Case study: Royal Berkshire Hospital Acute Stroke Unit

Winners of the Gold Award for outstanding achievement regarding audit work on stroke treatment at HQIPs
Clinical Audit Awards 2010
Overview: The Stroke Service of the Royal Berkshire NHS Foundation Trust was opened at Battle Hospital in
2001 as an eight-bed unit. The ward-based service transferred to the Royal Berkshire Hospital in 2005 and is now
a 28-bed ward providing combined acute and rehabilitative care. The Stroke Service has been participating in the
National Sentinel Stroke Audit since 2001, using the reports to improve services and monitor performance against
indicators.

20

1. Organization name Acute Stroke Unit Royal Berkshire Hospital

2. Title-National Sentinel Stroke Audit Changing practice, changing attitude
3. Context
The Stroke Service is run jointly by the hospitals Elderly Care and Neurology departments. The team comprises:
Consultant stroke physician
Consultant neurologist
Ward sister
Stroke service clinical nurse specialist (CNS) and trainee
Four trainee doctors (including neurology and specialist registrar)
11 WTE nurses
12 health care assistants
There are designated therapists for the service from the Occupational Therapy, Dietetics, Psychology,
Physiotherapy and Speech and Language Therapy departments, who have particular interest and experience in
helping stroke patients.
The Stroke Service audit team has responsibility for completing the data collection for the audit and responding
to national reports.

21

This includes writing action plans which are then agreed and reviewed through the Clinical Governance process.
The team includes the stroke physician, consultant neurologist, stroke unit sister, CNS for stroke, operations
manager and divisional clinical audit facilitator. From the initial scores in 2001, the hospital has since regularly
scored in the upper quartile for most indicators and has what it describes as a constant aspiration to continue to
improve our service.
4. Background
The National Sentinel Audit of Stroke Services has been running since 1998 under the guidance of the Royal
College of Physicians. It reviews all aspects of service provision and clinical care. The Stroke Service of the
Royal Berkshire NHS Foundation Trust was opened at Battle Hospital in 2001 as an eight-bed unit.
The ward-based service transferred to the Royal Berkshire Hospital in 2005 and is now a 28-bed ward providing
combined acute and rehabilitative care. It has a hyper-acute stroke service delivering thrombolytic and rapid
access clinic for transience ischemic attack patients.

5. Aims
The aim of the audit is to provoke a steady cycle of measurement and improvement in the provision of stroke
service across the country. This is achieved through assessing the organizational robustness and critically
examining the care individual patients received.
6. Objectives
The aim of the Stroke Service audit team is to use the audit as both an incentive for improvement and a
springboard for growth. The annual process of intensive data collection is used to give the team a birds-eye view
of growing trends and impending challenges. Responding to the reports allows year-on-year evaluation of
performance and stimulates problem-solving as well as business cases.
7. Approach
The audit comprises a comprehensive organizational audit covering staff, services, education and capacity, and
clinical review of 60 patients. The organizational audit is completed by the clinical audit facilitator and stroke

22

CNS and approved by the Executive team. The clinical audit is completed retrospectively by clinicians. Local
reports comparing performance against national average are discussed by the Stroke Service audit team.
Any standards scoring below national averages require an action or reasonable explanation. An action plan is
drafted and presented to local clinical governance meetings for discussion. Agreed action plans are reported to the
Trusts Clinical Governance Board within six months of publication.
8. Standards measured against
Clinical standards are taken from the National Clinical Guidelines for Stroke (2008), NICE CG68 Management
of stroke and TIA (2008) and the National Stroke Strategy (2008). Service standards were taken from the
National Service Framework for Older People (2001).
9. Outcomes
The unit has shown steady improvement through the clinical audits since 2002-3, particularly in the timeliness of
care and interventions.

The total length of stay for stroke patients dropped from 41 days in 2002-3 to 21 days in 2008 saving an
estimated 2700 per patient (estimated 135/patient/day direct & indirect costs for 650 patients per year this
represents up to 1.75m annual savings). Of their stay, the length of time spent on a stroke unit stayed constant,
so the percentage of stay spent on a stroke unit has effectively risen from 35% to 68% in 2008 and was expected
to rise again in the 2010 clinical audit.
23

In 2008, the hospital had no thrombolysis service (42% of trusts audited did) it has since introduced this service
which operates weekdays 08:00-18:00 offering potentially life-saving intervention.
Improved clinical governance support has relieved clinicians of administrative audit work. Clinicians can
concentrate on developing positive actions in response to findings.
A catheter care bundle (launched November 2009) was designed to reduce urinary tract infection rates.
Business cases for increased therapy services and clinical psychology have been approved.
Newly-introduced Early Supported Discharge (recommended by the Stroke Strategy) allows patients to leave
hospital sooner and receive follow up in the community, saving around 176,000 p.a. inpatient nursing costs
(average LoS reduced by 2 days overall for approx 650 patients p.a. at 135/patient day).
Stroke Unit nurses are trained to perform swallow assessments (screening patients for swallowing difficulties),
releasing SALT team for patients who need specialist input.
The Stroke audit team discussions feed back into the Regional Stroke Collaborative, promoting creation of
relevant national and PCT targets, encouraging ongoing engagement and mutual trust between clinicians and
managers.
10. Summary
The hospital feels that changing perception of audit from stick to carrot has improved clinicians relationship
with Sentinel Stroke, allowing the benefits of participating in national audit to be realised across the board.
Reassurance on what we know we do well and reminders of weak spots in practice or organization
The sense of pride in teamwork or wards and when discussing findings
Evidence for business cases, PCT contract reports and Clinical Governance assurance report
Practical reassurance for patients
By involving clinicians and managers, the action plan draws on the combined expertise of the group,
strengthening relationships and creating an achievable and mutually acceptable vision for the service.
Contact details:
Name Vivienne McGlashan. Clinical Audit & Effectiveness Facilitator
Organisation Royal Berkshire NHS Foundation Trust
Email address Vivienne.McGlashan@royalberkshire.nhs.uk
Telephone number 0118 322 8335

24

Case Study
1) During the course of audit of Sridevi Hospital for year ended 31st March 2008 following points have come up
for discussion with Board of Directors .State your views / comment on the same
a) Company has borrowed 20, 00,000 from Bank of security of Machinery on 1-9-2007.Loan is Repayable in
Five Equal annual installment from 31-8-2008 onwards. Directors state that out of above Rs.400000 should be
shown as current liabilities as it is payable within 12 months and remaining secured loan.
b)Company has invested Rs.10,00,000 as Fixed deposits with a bank accured Interest up to 31-3-2008 is
Rs.270000 which is receivable as maturity.
The directors do not want to include interests in accounts and to show Fixed Deposits amount as investments.
c) Rs.360000 paid to a Hospital for Medical Treatment of Mother-in law of a director is debited as Staff Welfare
Expenses
d) Bank Reconcilltion statement on 31-3-2008 includes following items:
(i) 27-2-2008 Interest on Overdraft debited by bank Rs. 132250.
(ii) 28.03.2008 Cash deposited Rs.65000.
The director states that it is not necessary to give effect for these items in books of accounts.
e) The company has made some payment by cross account payee Cheques in favor of parties. The amount is
debited to expense accounts. There are no bills and receipt.
The director state is not necessary to obtain bill/receipt.
f) The Profit & loss includes Advance tax for current year paid during year Rs.66000.
The director state that it is not necessary to make provision for income tax as correct amount cannot be
ascertained till assessment is completed.

Answer
The views and comments as auditor of Sridevi Hospital on various points that have come up with the board of
directors are as follows:
(a) The company has borrowed Rs.2000000 as secured loan. This is repayable in annual Installment .As per
revised schedule VI portion of long term loan due for repayment within
12 months of reporting date (Rs.400000 due within 5 months of year-end) should be reported as other current
liabilities .Balance amount ( Rs.1600000) Should be shown under Long term Borrowing.
(b) The issue involves two points:
(i) Provision for accured interests = Rs.270000.
(ii) Showing F.D with Bank as investment. The view of directors on both the points is not correct.
(i) Accured interests of Rs.270000, receivable on maturity. The Company is required to follow accured method of
account. This accured interests should be accounted and disclosed in Balance Sheet as outstanding income under
heading Current Assets.
(ii) FD with Bank cannot be shown as investments. As per schedule VI, the balance with bank in any type of
account is to be disclosed as Cash and Cash Equivalents under Current Assets. It cannot be shown as investments.
(c) The view of Director is not correct. As per Companies Act, personal expense should not be debited to expense
A/c. The amount of Rs.360000 paid for medical treatment of mother-in-law of a director is personal expense of
director. It cannot be debited to staff welfare expense. Auditor has to enquire about personal expense u/s 227
(1A).
(d) The view of Director is not correct. The reconciliation statement should include only cheque issued but not
presented and cheque deposited not cleared/credited. The items representing revenue should be accounted in
relevant year. The items, like cash deposits, cash withdrawn account. It could even indicate cash losses Cash on
hand should be verified physically and due enquiry should be made and proper steps need to be taken. Thus both
items should be properly accounted and bank balance be revised accordingly.
(e) The directors view in the case is not incorrect. Appropriate sufficient audit evidence is necessary for any
accounting entry. For debit to expense account, proper evidence would be bill/Invoice and evidence of receipt of
goods or service.
The payment by crossed A/c payee cheque is not sufficient evidence. The proper bill is pre-requisite evidence for
accounting.
25

(f) The Director view in this case is also incorrect. The advance tax payment in the nature of advances to be
adjusted for tax liability when assessed. The liability for income tax is to be ascertained in accordance with
provision of law and AS 22 till assessment is completed /finalized.
This is also required in view of need to maintain accounts under accured method of accounting.

2) As an Auditor, How would you deal with /comment/react on the following situation statement?
a) The Audit work worked performed by every assistant needs to be reviewed by person of minimum equal
competence.
b) Audit documentation collected also serves additional purposes.
c) Ensuring appropriateness of physical verification done by the management of inventory at year end due to be
inability to be present at the time of annual physical verification owing to unavoidable circumstances.
d) Ensuring that closing balances of prior accounting year have been brought to current year as opening balances,
when the prior year accounts were audited by different/another auditor of SAK Ltd.without any misstatements .
e) Management request of not seeking confirmations from its (KMM Ltd.)Debtors.
Answer
a) According to SA 220, Quality Control for Audit of Financial Statements, read in conjunction with the
Preface to the Statements on Auditing, issued by the Council of the Institute of Chartered Accountants of India,
the work performed by each assistant needs to be reviewed by the Engagement Quality Control Reviewer to
consider Whether :
(i) The work has been performed in accordance with the audit programme;
(ii)The work performed and the results obtained have been adequately documented.
(iii) All significant audit matters have been resolved or are reflected in audit conclusion.
(iv)The objective of the audit procedures have been achieved and
(v) The conclusion expressed is consistent with the results of the work performed and support the audit opinion.
b) SA 230 (Audit Documentation) deals with this issue.
(i) Basic Objectives:
The objective of the auditors is to prepare documentation that provides

26

(a) a sufficient and appropriation record of the basis for the auditors report and (b) evidence that the audit was
planned and performed in accordance with SAs and applicable legal and regulatory requirements.
(ii) Additional Purposes:
Audit documentation serves a number of additional purposes, including
(i) Assisting the engagement team to plan and perform the audit.(ii) assisting members of the engagement team to
plan responsible for supervision for direct and supervise the audit work, and to discharging their review
responsibleilities in accordance with SA 220,(iii) enabling the engagement team to be accountable for its work ,
(iv) retaining a record of matters of continuing significance to future audits (v) enabling the conduct of quality
control review and inspection in accordance with SQC 1,and (iv) enabling the conduct of external inspection in
accordance with applicable legal,regulartory or other requirements.
(c) As per SA 501, Audit Evidence Additional consideration for specific items sufficient appropriate audit
evidence during his attendance at physical inventory counting SA 501 is additional guidance to that contained in
SA 500, Audit evidence with respect to certain specific financial statements amounts and other disclosures.
If the auditor is unable to be present at the physical inventory count on the date planned due to unforeseen
circumstances, the auditor should take or oberserve some physical counts on alternative audit procedures to
assess whether the changes in inventory between the dates are correctly recorded. The auditor would also verify
the procedure adopted, treatment given for the discrepancies noticed during the physical count.
The auditor would also ensures that appropriate cut off procedures were followed by the management. He should
also get managements written representation on (i) the completeness of information provided regarding the
inventory and (ii) assurance with regard to adherence to laid down procedures for physical inventory count.
By following the above procedure it will be ensured it will be ensured that the physical verification conducted by
the management was in order.
(d) As per SA 510 (Revised), Initial Audit Engagement Opening Balances in conducting an initial audit
engagement, the objective of the auditor with respect to opening balances is to obtain sufficient appropriate audit
evidence about whether:
(i) Opening balances contain misstatements that materially affect the current periods financial statements and
(ii) Appropriate accounting policies reflected in the opening balances have been consistently
Applied in the current periods financial statements or changes thereto are properly accounted for and adequately
presented and disclosed in accordance with the applicable financial reporting framework
Being new assignment audit evidence regarding opening balances can be obtained by pursuing the copies of the
audited financial statements .For current assets and liabilities some audit evidence can ordinarily be obtained as a
part of audit procedure s during the current period. For example, the collection/Payments of opening balances of
receivables and payables will provide audit evidence as to their existence, rights and obligation, completeness
and valuation at the beginning of the period.
In respect of other assets and liabilities such as fixed assets, investments long term debit the auditor will examine
the records relating to opening balances. The auditor may also be able to get confirmation from third parties (e.g.
balances of long term loan obtained from banks)
(e)SA 505 External Confirmations establishes standards on the auditor use of external confirmation as a means
of obtaining audit evidence. If the management refuses to allow the auditor to send a confirmation request the
auditor shall:
(i) Inquire as the management reasons for the refusal and seek audit evidence as to their validity and
reasonableness.
(ii) Evaluate the implications of managements refusal on the auditors assessment of the relevant risks of
material misstatements, including the risk of fraud and on the nature,timing and extent of other audit procedure
and
27

(iii) Perform alternative audit procedures designed to obtain relevant and reliable audit evidence .If the auditor
concludes that managements refusal to allow the auditor to send a confirmation request in unreasonable or the
auditor is unable to obtain relevant and reliable audit evidence from alternative audit procedures, the auditor shall
communicate with those in charge of governance and also determine its implication for the audit and his opinion.

3) As an auditor of a partnership firm under section 44AB of the Income Tax Act, 1961, how would you report on
the following: Expenditure incurred at clubs.
Payment to Club: As per clause 17(d) of Form 3 CD, the amount of payments made to clubs by the assessee
during the year should be indicated.
The payments may be for entrances fees as well as membership subscription and for catering and other service by
the club, both in respect of directors and other employees in case of companies and for propertiors in other cases.
The fact whether such expense are incurred in the course of business or whether they are to be shown separately
under clause 17(b). Hence the tax auditors have to report the payments to clubs under clause 17 (d) of form 3CD.
4) As a tax auditor how would you deal and report the following: An assessee has incurred payments to cubs.
Payment to clubs: As per clause 17(d) of form 3CD the amount of payments made to clubs by the assessee during
the year should be indicated.
The payments may be for entrance fees as well as membership subscription and for catering and other services by
the club, both in respect of directors and other employees in case of companies and for partners or proprietors in
other cases.
The Fact whether such expenses are incurred in the course of business or whether they are of personal nature
should be ascertained. If they are personal in nature, they are of personal nature should be ascertained. If they are
to be shown separately under Clause 17(b). Hence, the tax auditor has to report the payments to clubs under
Clause 17(d) of Form 3 CD.

28

Audit Questions and Answers:

1) What are audit control procedures?
Answered by: ANNSALOME WANGARI
Answer
Audit control procedures are policies and procedures in addition to control environment, (altitude, awareness
and actions of directors and management regarding the internal control system) which the many.
2) What are the reasons for getting audited?
Answered by: pawan
AnswerTo ascertain or present the true and fair view of financial statement with regulatory legal compliance
Answered by: mohamdabdelwhab
AnswerIt is requested by Audit commitee or the Companys; shareholders. The main objective of modern Audit is to help
the MGMT to acheive its various objectives by bringing a systimatic approaches and evaluating the risks.
3)Explain different types of audit, its nature, advantages and disadvantage.?
Answered by: ramesh
AnswerThere is following types of audit Statutory Audit Non-statutory Audit External Audit Internal audit Final Audit
social audit performance Audit Statutory audit: This is the audit governed by statute...
Answered by: prafull.dagwar
AnswerInternal audit external audit are the main types and further they are classified on the basis of nature of work,
tangible, intangible.
4)What is caro 2003? What do you mean by management audit?

29

Answered by: A B GOEL

AnswerCARO means company audit report order 2003.It describes the matter on witch Statutory Auditors has to report
in their Audit Report.
5) What is decommissioning liability? In which senior it will occur in balance sheet?
Answered by: Lokesh M
AnswerDecommission Liability is costs that a company expects to incur in the future when the plant is shut down.
6) What do you mean by vouching?
Answered by: Moiz Mokhtar
AnswerVouching is the process of checking for the existence an example for this is checking from the final record to the
supporting document.
Answered by: RUTUL
"In accounting language all P&L items vouched."
vouching means to check whether recorded transaction have any voucher or not.
Voucher means supportive evidence with the transaction.
7)What is internal audit?
Answered by: Rutul
AnswerInternal audit is the audit system set by the company for audit of the company purpose.
Internal audit (IU) is not mandatory except condition stated by companies act 1956.
IU may be chartered accountant or may not be and having freedom setup by company only.
Answered by: amit
AnswerInternal audit is said to be an independent appraisal activity within an organization for review
of
1) ACCOUNTING
2) FINANCIAL

8)Tax on rent?
30

My company is given machinery on rent basis to other company . Then it is matter of VAT or service tax?
Answered by: i.ram harsha
Answeryou have to pay. if the renting of machinery is ur business then it is chargeable under PGBP(sec.28) of Indian
income tax,1961. And it is in nature of service ...and renting of movable g...
Answered by: Vivek
AnswerBoth are applicable if you are working in state of Karnataka. Hiring the machinery to be given to other party first
of all we add 4% vat after that we will charge service tax on it. If Karnataka is not ur state then to take suggestion
from ur consultant.
9) What is the difference between tangible assets & intangible assets ?
Answered by: naina goel
AnswerTangible Assets are those assets which we can see or touch like fixed asset, machinery,etc.
intangible Assets are those which we can't be seen like goodwill of the company.
Answered by: Muhammad Mansoor
Tangible assets - which are visible, like machine & apply IAS 16Intengible assets - which are invisible like
goodwill, brand name & apply IAS 38.
10) Statutory external audit?
AnswerMerits and demerits of statutory audit
Answered by: Shashank Goyal
AnswerStatutory audit is always an external audit as the statutory auditor is appointed under the provision of section 226
by company shareholders and as per the professional ethics internal auditor cannot...
11) When trial balance matches there could be a error, explain?
Answered by: DIPIKA
AnswerTrail balance may tally when there is an error of omission. ( for eg. if we made payment of rs. 1000/- for office
expenses but both entries are omitted then trial bal will be tally )
31

AnswerAnswered by: Nikhil

Yes, the trial balance matches even when there are errors. For example when there is a compensating error the
trial balance still tallies.
12)What is the requirement of board meeting on the annual basis?
Answered by: Muhammad Mansoor
AnswerMinimum attendance of members must be in meeting at time. In. attendance is according to company's article of
association (AOA) its varying company to company.
13)Can we claim depreciation on second hand purchased asset? If yes, whether it is fixed or floating?
Answered by: Muhammad Mansoor
AnswerYes, any company can charge depreciation as expense in financial statement on second handed asset, but it must
be fixed asset.

Discussion and Recommendations

The following recommendations, if implemented in the operation will contribute to an improvement in the
maintenance performance, improve your plant reliability and availability and reduce maintenance costs.
Work Management
Work Management is the foundation of effective maintenance and several key distinct steps or processes ate used.
These steps commence with work identification, recording and approval of the work, followed by planning and
scheduling of the work, completing the work and recording any history. Shutdown planning and management is
another key area of work management fundamentals.
The strengths in the Work Management in the operation was quite clearly work execution and shutdown planning
and management.
Materials Management

32

Maintenance does have the bad practice of using squirrel stores, which are managed by maintenance.
Replacement of items in the squirrel stores is by direct purchase.
The store is a closed store, on the back shifts and semi-closed on day shift.
The strengths within the materials management area is the purchasing, management and control of the inventory
within the store using computerised supply management systems and having formalised supply processes such as
regular stock-takes, ANSIs (Add New Stock Items), direct purchase and stores requisitions.
Other strengths in the materials management area is that all maintenance materials are booked to maintenance
work orders, having a separate lockable section for attractive items in the store and also having a closed store on
the back shifts.
There is no formal process for identifying obsolete stock, apart from the slow moving stock report, which hasn't
been issued recently.
Key Performance Measurement and Performance Monitoring
There are no control charts or graphs used for monitoring availability, reliability, plant capability or quality
losses.
There were very few measurement of the maintenance business processes and equipment performance and it is an
area with significant opportunity for improvement.
Backlog size is not formally monitored and the backlog definition is not consistent between maintenance
personnel.
Budgeting & Cost Control
The current maintenance budget is effectively a work centre budget. Labour is allocated via the work order
system to separate maintenance cost centres in the processing budget. There is a separate cost centre for
maintenance overheads.
There are strengths and many opportunities for improvement in the Budgeting and Cost Control area. The
strengths were in Cost Management and Work Centre Budgeting.
Improvement opportunities were Budgeting and Long Term Planning, Work Plan Budgeting, Cost Performance
Analysis, Cost Improvement Projects and Cost Improvement Effectiveness

Information Technology
One of the key strengths in the Information Technology area is the use of CMMS, which is fully integrated with
Purchasing and Accounts. CMMS is a very intuitive user friendly maintenance package that is capable of being
used by production and trades personnel and supports the fundamental requirements of the maintenance business
process
Key Improvement Opportunities
Using the framework from Table 1 it is suggested that strategies and line-of-site plans be developed to take the
operation us to the Excellence Level throughout the site. Maintenance Capability
In order to escape the reactive practices and progress into a more proactive maintenance environment it is
necessary to set a direction towards becoming a high performance maintenance organization.
Develop a Maintenance Business Plan (Strategy)
It is recommended that improvement initiatives in the four areas still at the Awareness Level first be undertaken.
These are outlined as follows:

33

Reliability Improvement

Audit Conclusion
Many of the original objectives from the lease of the rail freight network have been achieved, including removing
government from operating the freight rail network, and its associated costs, and paying down debt. The volume
of freight carried on the network has increased and the condition of the standard gauge lines, and the narrow
gauge lines used for mineral freight, has improved.
The condition of the narrow gauge lines used primarily for carrying grain has degraded. The grain lines have
required substantial government funding to remain in service. Two of the uneconomic Tier 3 grain lines have
been placed in care and maintenance, and without further government funding, the remaining eight are likely to
be taken out of service after 2013. Ongoing government funding was anticipated at the time of the lease, but not
quantified, so it is not possible to conclude whether actual levels of support are more or less than originally
estimated.
To date, PTA has managed the lease without a formal risk-based contract management plan, making it difficult
for PTA to demonstrate that it has fully considered the impact of decisions about the lease and network on the
States interests over the life of the lease. PTA is now preparing a plan, which should help better manage risks and
to protect the States interests, while also enabling PTA to maintain the light touch approach envisaged in the
lease.
Hospital Audit Perform alternative audit procedures designed to obtain relevant and reliable audit evidence .If the
auditor concludes that managements refusal to allow the auditor to send a confirmation request in unreasonable
or the auditor is unable to obtain relevant and reliable audit evidence from alternative audit procedures, the
auditor shall communicate with those in charge of governance and also determine its implication for the audit and
his opinion
Club Audit Fact whether such expenses are incurred in the course of business or whether they are of personal
nature should be ascertained. If they are personal in nature, they are of personal nature should be ascertained. If
34

they are to be shown separately under Clause 17(b). Hence, the tax auditor has to report the payments to clubs
under Clause 17(d) of Form 3 CD.
In conclusion, there are many opportunities to improve the maintenance performance at <Insert Site>. The
challenge is to ensure focus on making the most significant improvements first, and in being selective about the
areas for improvement to focus on. Trying to make too many improvements simultaneously frequently means that
little is achieved at all.
Nevertheless, this improvement journey should be guided by a longer-term vision and plan and it is strongly
recommended this plan be developed as the first step and your people be involved in the plans development and
that its progress be regularly communicated to all personnel.
Some high priority opportunities for maintenance to improve their performance have been outlined and all the
recommendations in this report have been prioritised as shown in Appendix C.
If the recommendations of this report are adopted, then your Operations should see significant benefits.
If there are any queries on any aspect of this report, please direct them to the Author via our head office.
Hence Both the Cases the audit is Done with Systematically.

Bibliography
http://www.noca.ie/
The National Office of Clinical Audit (NOCA). Established in 2012, NOCA will
design, develop and implement national clinical audit programmes in order to
improve patient outcomes and promote patient safety in hospitals.
http://www.icgp.ie/audit
Irish College of General Practitioners website. Provides specific guidance and tools
for clinical audit in general practice.

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