The matters to be considered in respect of a system of internal control for cash sales in a service station are whether the internal control procedures operate as expected. I would expect to find the following controls in place: –
1. Each shift should have an overall supervisor who does not perform routine duties of filling the tanks. He should however, be responsible for receiving the money and checking that the pump meter reading is in accordance with the money received from the pump attendant.
2. The fuel tanks should be dipped and quantity determined at the beginning and at the end of every shift. Thus a hand over register must be maintained and signed by the supervisors as they take over or hand over on change of shifts.
3. Meter readings at the end and the beginning of every shift should be taken and reconciled to the readings from dipping.
4. Quantity reconciliation‘s should be carried out and differences investigated promptly.
5. Security measures should be in place to ensure that theft of stock is minimized and the cash collected is safeguarded.
6. A register should be maintained to monitor sales and stock quantities on daily basis.
7. A bank account should be maintained where all the day‘s collections are banked on a daily basis
8. If possible, the pump attendants should be assigned to specific pumps on a daily basis so that they can be held responsible for any shortages.
9. Use of modern electronic pumps that measure sales accurately.
10. Bank the sales regularly, so that as little cash as possible is kept in the station at any one time.
11. The mechanics undertaking the repairs should maintain a record of all the vehicles that they have repaired and the amount charged. A supervisor should review this and the cash collected reconciled to the record.
12. The station should employ trustworthy people who should be properly trained in the roles that they perform at the station.