Auditors who don't know what they don't know
I’ve had my share of dealing with external auditors in my several decades of working in hotels, particularly midway during my hoteliering career, as Front Office Manager. The fact of the matter was that many of the auditors that were sent to the hotel were green; meaning, they had absolutely very little knowledge of the industry, its management and the way it operated. In essence, their understanding of the world of hospitality was woefully inadequate to perform the audit.
One common pattern on how they approached their audits was to assume that staff who had a hand in every transaction were guilty of committing fraud or wrongdoing..The irony of this was that, being unfamiliar with the way hotels operated and not having received any proper training, they could not spot what was wrong – even when it stared at them right in the face.
In the article ‘Why auditors miss the mark’, David Lund narrates this hilarious yet factual interaction with an external auditor tasked with checking inventory and wanting to do a random count of 200 kilos of beef tenderloin worth $4,900, listed in the ‘count sheets’ as stocked in the main kitchen (in particular in the ‘butchery’ section).
Walking in, the auditor found the head butcher Desmond and his team busy ripping apart chickens for a banquet later that day. The staff had counted the inventory the night before, and it was all spot on. Asked where the stock of beef tenderloins was? Desmond playing the part and looking puzzled, said, “Follow me.” He took the auditor into one of the large walk-in coolers, opened a non-descript brown box, pulled out a side of smoked salmon and said “Here is the lot; we have 20 boxes in total”. The auditor looked at the boxes and simply said “Thanks that’ll do”– leaving Desmond grinning from ear-to-ear. The auditor seemingly did not even know the difference between salmon and beef. How green can one be?
I recall some real blunders auditors have made during my active time in the industry. In one instance, the young auditor finding out that the hotel’s check-out time was noon, soon came across the bill copy of Mr. X (a high spending regular guest), who had been permitted to check-out at 5.00 pm that day, without any late departure fee. When she asked the receptionist Neville the reason for the failure to collect the extra revenue, he glibly explained that since Mr. X had checked-in to the hotel on his day of arrival after 5.00 pm, he was allowed to occupy his room with a waiver of any additional charge as he had just completed the twenty-fours on his last day of his stay.
The explanation was received with an “Oh… I can understand that”. Now, those of us who have worked at the front desk know that it doesn’t work like that. The real reason behind extending that concession was due to Mr. X running up a hefty hotel bill (as he usually did) during his weeklong stay, as well as the expected occupancy on the day he checked out hovering around 60%. Neville knew that it was a decision based upon a CLV (Customer Lifetime Value) approach, but the auditor didn’t, and I guess she did not want to appear stupid by asking questions either.
Another time, the auditor in his final report to the hotel’s Financial Controller had stated that despite most of the hotel’s bookings been supported by an internal reservation form, (filled-in by the person accepting the room booking), there were violations to this procedure, as it was observed that it (reservation form), was not opened for ‘walk-ins’? Amazingly, the Financial Controller displaying his ignorance as well copied me this damning indictment asking for my explanation. My short answer; “A guest is called a ‘walk-in’ when he or she arrives at a hotel without a reservation”.
I recall the incident where an external auditor overheard a departing guest, reply ‘No’, when asked by the cashier “Did you take anything from the minibars today, madam?” The cashier then quickly closed her account and presented her the final hotel bill. The auditor without asking for any explanation from the cashier reported the failure to check with the housekeeping department as a serious violation of the laid down procedure with potential to cause financial loss.
Now this was at a time, the mini- bar bill was the one most often contested by guests during checkout. I’ve seen people arguing ad-nauseam with the cashier over whether they actually consumed a coke or a bag of nuts. This happened even with guests who occupied the more expensive suites. A dispute during a check-out is not only unpleasant but can also delay other guests from checking-out in time. Consequently, we introduced the practice of a ‘waiver’ should a guest dispute or deny any minibars consumption. This was included as an addendum in the standard operating procedures (SOP) relating to handling the mini-bar – which the auditor had not picked up before making his comments.
David Lund’s assertion that “They don’t know what they don’t know” is very true when one hears of the numerous stories involving external auditors – be it someone who doesn’t know that a side of smoked salmon and beef tenderloin are not the same despite appearances and that upsells and upgrades arise for different reasons even though they produce the same result.
Shafeek Wahab – Editor, Hospitality Sri Lanka, Consultant, Trainer, Ex-Hotelier
|
|
|
|
