informed andwereabletoestablish thattherelated staffcostshadbeenprovided intheregular budget. Inventory controls 34.Ourexamination revealed inadequate records andphysical controls over inventories. Theresults ofourlimited testcountof14lineitemsshowed shortages in8lineitems. Allshortages, exceptforoneunit,weretracedtoa storage areaknownasthepicking areawheremostitemsareeitherlooseorinopen containers, withineasyreach, andforwhichnoauantity records aremaintained. Thisstorage areaisapproximately one-ninth oftheentireracksystem. Our physical inspection alsorevealed that,exceptfortheproduction area,accessto thewarehouse ispractically unrestricted. 35.Ourreviewofthestocktaking undertaken inMay1984revealed thatthiswas thefirstcountundertaken intwoyears,theinvestigation ofdifferences wasnot completed andtherewasabasicdeficiency inthecountprocedures. 36.Werecommended thatadeauate physical safeguards should immediately be implemented torestrict accesstothewarehouse andananalysis bemadeof inventories keptinthepicking areasothathigh-value itemsthatareparticularly susceptible tolosscanbeidentified. Theresults ofthisanalysis shouldguide officials todetermine whichitemswillreauire physical safeguards orinventory records control orboth. Wealsorecommended acomplete stocktaking, using appropriate inventory-taking procedures, whichmaybestaggered overayearif necessary. 37.TheAdministration informed usthatimmediate stepswouldbetakentocontrol accesstothewarehouse, thatitwouldlookintothepossibility ofre-establishing separate secured areasandindividual logsfor"attractive" inventory itemsand thatcyclecounting wascurrently beingconsidered asanalternative. -10-hemodern eptthat ed postshave sistance weremade extended thatsome ese recurring informed ruction of ts,wewere nprovided ITer wed cedtoa orinopen ntained. Our accessto thiswas swasnot be :>f articularly lJldguide nventory ing earif tocontrol stablishing ~msandAccounts classification 38.Ourcomparison ofaccount balances atyear-end intheUNICEF Packing and Assembly Centre's financial reports withthegeneral ledgerbalances carried at headquarters revealed significant differences. Thesedifferences stemprimarily fromtheincompatibility ofthesystems ofcoding, grouping andclassifying accounts andfinancial transactions atthetwooffices. Thesameobservation was brought totheattention ofofficials duringourinterim auditatwhichtimewe recommended thatthiscondition should becorrected immediately inviewofthethen forthcoming year-end. 39.TheAdministration informed usthatthefailure toeffectthecorrection as promised wasregrettable andthatithadalready engaged theservices ofanoutside electronic data-processing consultant. Thestart-up dateforthisundertaking is 1June1985andimplementation ofthenewsystemisexpected by1September 1985. Electronic data-processing controls 40,Ourreviewofelectronic data-processing controls disclosed datacontrol weaknesses suchasthefailure onsomeoccasions toutilize batchcontrol sheets whentransmitting source documents thatserveasinputdocuments andtheabsence of reviewofsomeeditlistsgenerated fromthedataentryoperations. Thelatter control isparticularly critical inanon-line environment wherekeying-in and checking ofdatainputconstitute oneoperation andareperformed bythesame person. 41.Werecommended thattheseobserved datacontrol weaknesses should becorrected immediately andtheAdministration assured usthatappropriate corrective measures wouldbetaken. 42.Wealsoreviewed thesystemfordatatransmission fromcopenhagen toNewYork through Geneva, wheredataisprocessed through twolevelsofvalidation. Our auditsample takenfromfiveconsecutive validation runsrevealed anaverage error rateof24percent. Ouranalysis disclosed thaterrors weredueprincipally to codingmistakes, batching errors anddelays incoding/echelon masterupdate. Poor reviewprocedures ofrejected dataofthePacking andAssembly Centreresulted in
**Analysis**
The text appears to be a report on an audit of a UNICEF Packing and Assembly Centre, discussing issues related to inventory management, financial reporting, and data processing. The tone is formal and technical, suggesting a focus on administrative and organizational matters rather than humanitarian or developmental activities. The text does not mention specific projects or programs, but rather examines the internal controls and procedures of the centre.

**Category**
Industry, Health (as UNICEF is a humanitarian organization that works in the field of health)