Business Services Industry

Redefining workers' comp: Casino restaurant servers figure out how to work the comp system to their advantage

Internal Auditor, August, 2004 by J. Mike Jacka

J. MIKE JACKA, Farmers Insurance Group

18444 N. 25th Ave.

Phoenix, AZ 85023-1296 USA

Fax: 1-602-863-8588

CONGRATULATIONS TO THE CENTRAL FLORIDA CHAPTER for submitting the April 2004 winning "Roundtable" story. In "Right Controls, Wrong Culture," the annual task of auditing military club systems was delegated to the U.S. Army Audit Agency. Standard audit procedures at the time were to review various reports generated by the clubs, including cash count sheets, physical inventory counts, and reconciliation reports. Because the cash reports never varied, the inventory was never short, and there was never an unexplained variance in any reconciliation, the auditors conducted some additional testing.

Auditors stationed at the clubs found rigged shot glasses and hamburger meat filled with cereal. It quickly became apparent that the staff was conspiring to skim approximately 20 percent of the sales. They were pocketing every fifth sale without ringing it up in the cash register. They also made sure that all cash counts, reconciliation reports, and inventories agreed to the item. The auditors recommended more supervision by the club custodian and encouraged better customer awareness of club operations.

Internal Auditor awards a gift certificate to the affiliate, chapter, or individual submitting the best "Roundtable" story in each issue. Individuals interested in claiming the certificate should contact their affiliate president. Each submission is worth five chapter achievement program (CAP) points and furthers The IIA's motto of "Progress Through Sharing."

EDITED BY J. MIKE JACKA