AUDIT REPORT RESPONSE 01-1911

RDEX FOOD INTERNATIONAL PHILS., INC.

MEMBER OF RD GROUP OF COMPANIES
INTERNAL AUDIT DEPARTMENT
RD Wharf 2, Puting Bato, Calumpang
9500 General Santos City
Land/trunk lines: (083) 552-25-41; 552-7631; 553-2846
Fax No. (083) 554-3178
Local Nos. 311, 170

To : Roger E. Rivera and Glenn B. Biaco

From : Internal Audit Department
Department Audited : Production and Processing
Date :11/23/2019

Part I – Products recovered for Internal Use

FINDINGS
1) Selling of Products intended for Internal Use
(PUD for VAP) at a price not privileged for
Big Buyers.
2) Selling of VAP to Outside Parties (Big
Buyers) was due to a bloating inventory.
3) FIFO Basis on Inventory Pull-Outs is not
observed.
4) There are customers labeled as “Walk-in”
without identifying the person whom it was.
Check October 16, 2019.
5) There is no documented approval.
RECOMMENDATION
 It should be sold at a price intended for Big Buyers
(should be higher than Internal Use). This could be
done by notifying Accounting Department for “Price
Change” for the mean time, upon the sale and will undo
the price back once the sale is finished.
 VAP Department should identify the Maximum
Inventory Requirement as well as the Inventory Lead
Time before it would run out so that Production
Department can diverse and strategize what to recover
if inventory requirement of PUD for VAP is already
reached.
 Maximize the use of Storage Mapping so that
inventories produced first, should be sold first.
 Big Buyers are privileged to purchase at a price lower
than sold at our stores. It should be observed that
products, at “Plant Price”, should only be sold to our
Big Buyers.
 Verbal Approval is possible. But it would be better that
a documented approval should be secured especially
when it comes to sale for future reference.

RESPONSE / COMMENTS
(kindly state if you agree or do not agree with findings and recommendation)

Responded by:
Page 1 of 2
 AUDIT REPORT RESPONSE 01-1911
Part II – Big Buyer Price and Privileges

FINDINGS RECOMMENDATION
1) On October 16, 2019, there is a recorded sale  Completion of Customer Name should be done. A “Blank
without a Buyer’s Name on it. Sale” will be considered suspicious, except on the above
cases specified.

RESPONSE / COMMENTS
(kindly state if you agree or do not agree with findings and recommendation)

Responded by:

Part III – Labor Traceability and Efficiency

RESPONSE / COMMENTS
(kindly state if you agree or do not agree with findings and recommendation)

Responded by:

Page 2 of 2