FSH 1409.15 AUDITING CONCESSIONS
10/77 R-1 SUPPLEMENT 3
CHAPTER 30 - AUDIT PROGRAMS
31.6 - Internal Control Standards. Annual internal control reviews are an interim part of the 3 year requirement for audits of fees that are calculated annually.
District or business management personnel must make review during the permittee's operating season.
Internal control reviews are used to observe onsite the procedures for recording sales and use of assets. The controls used on a daily basis are a direct reflection of the accuracy of sales and other data reported to the Forest Service to calculate fees and manage the permit.
Forests or Districts making the review should make sure that management of the area is aware that reviews will be made. The content of the review should not be discussed with the management and the trip should not be scheduled in advance. Controls should be viewed as normal operations take place rather than an abnormal preannounced situation.
Reviews should be made at least once each year. If deficiencies are found, followup reviews should be made in the same season.
Following is the Region's Internal Control Review Guide for Ski Areas.
Internal Control Review Guide
This review includes two parts: (1)Review of permit and previous audits and fee calculations and (2)Observation of current internal control practices of permittee.
This review applies only to those activities included in the permit. Written notes should be prepared for observations take on each date.
Steps 1, 2, and 5 trace sales from the sources sales record to cash taken in and bank deposit slips.
Steps 3, 4, and 6 are an observation of sales practices and question/ answer portion on handiling of cash and bank deposit slips.
1. Lift Ticket Sales
Daily Tickets a. Record the types and values of tickets sold. b. Observe issue of tickets, record beginning numbers of tickets for date of visit, note date or color code for day.

c. Obtain sales record for previous day of operation. Note number sequence from previous day. Ending number from previous day should match sequence for current day unless color code is changed. If colors are changes, trace back to previous date with same color. d. Check computation for sales for previous day; tickets should be in order; tickets exchanges or given as gratuities should be notes. A record for gratuities should be with daily sales records. Tickets sold times rate per ticked (less discounts, if any) should equal total value of tickets sold for the day. total sales for the day should be reconciled to Cash
Received and compared with a bank deposit slip. e. Observe lift loading procedure; color or date codes should be correct for current day; record ticket numbers observed, if possible. f. Company should have an inventory record of all tickets acquired for sale during the year. Note if record exists and get a copy if possible.
Other Ticket Sales
Note procedure used to record lift tickets sold as part of package plans. Make a list of such plans and note how the permittee accounts for such sales.
2. Season Pass Sales a. Obtain season pass number control record. Record beginning pass number and sequence through current date. b. Examine season passes on hand. Note type of pass and identification of skier and how passes are used for current day. c. Observe use of season pass in lift loading area. Record numbers observed if possible; compare with numbers issued and note identification of skier. d. Examine season pass sales record. Note passes issued at no cost and compare with gratuity policy. Note preseason discount policy. Randomly check values paid with sales policy.
3. Cafeteria Sales (includes Bars and Snack Bars) a. Note general types of items sold. Examples are: sandwiches, soup, chili, soft drinks, beer, wine, candy bars, etc. b. Observe if all sales are rung up on a cash register with a tape. Cash register tapes should be retained daily. Ask permittee if record is prepared to compare sales per tape with cash taken in. Discounts on food using coupon books or meal tickets should be noted.

c. If a meal sales invoice system is used, sales per tickets should be compared with cash register tapes and cash taken in daily.
4. Ski Rental Equipment a. Sales will be recorded on a invoice system. Get a copy of the type of invoice used.
Sales may also be rung up on a cash register with a tape. b. Daily sales per invoices should be compared with cash taken in and cash deposited in a bank. Ask permittee about process. c. Observe the rental of equipment noting procedure used and payment. Invoices should be prenumbered and number sequence kept intact. d. If rentals are involved with a package skier program, note method of recording package sales. e. Note if equipment or clothing or other merchandise is sold in the rental area. Such sales should be rung up on a cash register with a tape. If the permit includes only rental sales, merchandise sales should be identified separately so the two categories do not get mixed together.
5. Ski School a. Normally tickets are issued for ski lessons similar to lift tickets. Make a list of the programs offered and prices. b. If possible, observe procedure for issuing tickets and use of ticket by skier. Note if lift ticket is part of the package. c. If ski school tickets are recorded on the same daily control record with lift tickets; the same procedures apply for number control, sales by day, and bank deposits.
6. Other Sales
Locker Sales
Count number of lockers available. Note number that appear to be rented out. Record rates for locker use and how sales are recorded.
Vending Machines
Note the types of products sold through vending machines that are located in the permit are. Inquire if machines ar owned by the permittee. If they are owned by outsiders, note the percent for the permittee.

Day Care
Note the method of recording sales. If a daily or hourly record is kept, review record on hand for current day. Take count of children present at time of review and record the rate per hour or day. If other services are offered, note the type and charge.
Merchandise
If the permit provides for the sale of merchandise such as clothing, ski boots, skis, goggles, poles, etc. A separate accounting will be made for these items. All sales should be rung up on a cash register with tape. Larger value merchandise should be recorded on prenumbered invoices.
7. Assets
Review those assets included as Gross Fixed Assets in the permit.
Observe if major assets and activities are in operation at the time of the review. New assets and changes in activities should be noted for followup on G. F. A. for the next update.
If the reviewer notes deficiencies in any of these areas (1 - 7), they should be reported to the
Forest Supervisor or Fiscal Management.