SHERATON, Hyderabad(SAMHI Hotels

Ahmedabad Pvt. Ltd.)

(A unit of Samhi Hotels Pvt. Ltd.)

Internal Audit Report Under

Construction Property
(For the period July 2014-June 2015)

S.S. Kothari Mehta & Co.

Member of HLB International

Scope of work:
Contract Management

Procurement Management

Private & Confidential

Detailed Report

Private & Confidential

Contract
Management

Mediu
m

Review of Contractual Documents

Observation(s)

Implications

Recommendations

Further, out of the aforesaid instance in case of BNP

interiors, it was observed that the guarantee of lesser
amount has been taken because consultant had wrongly
communicated to the company the amount of PBG
required to be obtained from the contractor. However, the
correct value of PBG has been obtain after pointing out by
us.

Non submission of PBG

by contractor may lead
to less secured amount
in case of any loss due
to poor performance of
contractor.
Further,
extra cost to company
in respect of bank
charges

Company should ask

the
contractor
to
submit the PBG.

2. Further, we have found 2 instances where contractor

has not submitted the PBG. However, the company has
withheld
theContr
proportionate
amount
from
the bills.
Details
Contracto
Agre
Withhel
Balan
Work
of
the
same
is
as
follows;
r
act
ed
d
ce
Certified
Value

PBG

Amount

Amou
nt

till last RA

2.24

5.24

22.46

(in Lacs)
ENKAY
Technologi
es

41.34

7.48

Management Comments

Further, even though company has withheld the amount

but the same is less than the guarantee amount, which
was required to be submitted by the contractor.

Root Cause

O S

Enkay technologies has placed the order vide PO

No. ROH-SMI-BOI-PUR-GEN078 where vendor was
agreed to submit the BG during negotiation stages
but not submitted after award of the work.

Now contract executed

Responsibility: XXXX, Department

Implementation Date: XXXX
D Design Deficiency; O Operating Ineffectiveness; S System Deficiency
Private & Confidential

Procurement Management

Mediu
m

Review of Procurement Process

Observation(s)

Implications

Introduction:
As per the process explained by the concerned person,
the material supplied by the vendor at Construction Site
will be inspected by the security guard and will attach a
security stamp on the bill of the vendor. The concerned
person from the project team will examine the product
supplied and raise the Goods Receive Note(GRN) against
such receipt and the GRN will be signed by the store in
charge.

Weak internal control

Observation:
We have reviewed 37 vouchers of the purchases and we
have found the cases where;
Gate Entry stamp is missing

GRNEntry
is notStamp
attached orGRN
attached
signed
Gate
not but not
GRN
not by store
Incharge
missing
signed
attached
Details is as follows;
13
5
8
35%

17%

22%

Recommendations

Management Comments
Since this a renovation project a lot of OSE
supplies was received directly by Hotel
Operations in coordination with SAMHI Ops team

Further, we have asked for the stock register and

material
reconciliation and same
Root
Cause
D has Onot
S
been
shared with us till 11th Sep2015. So we can not
comment on the same
XXXX
Responsibility: XXXX, Department
Implementation Date: XXXX

D Design Deficiency; O Operating Ineffectiveness; S System Deficiency

Private & Confidential