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Saturday, January 07, 2006

Who Is Fred Hardy?

My first Visit to Syncrude was in May 1981. It was my job to visit the site and make sure there were proper internal controls. Syncrude was a huge project involved in mining oil sand and converting the ore into crude oil. We offered food service and housekeeping for over 3,000 workers.

The month end inventory was scheduled for the next day. I went on a tour of the food service operation, met the site managers, ate dinner and went to sleep.

Early the next day, I arose and walked to the office. Our office manager gave me the count sheets. We divided up the 30 sheets between 4 count teams.

It was necessary to invalidate the initial count due to an unauthorized delivery. I don't like deliveries during month end inventory counts. This made me quite unpopular.

We finally completed the counts and took the sheets back to the office. Everyone began using their calculators at a furious pace. I asked everyone to total each page. We finished up in 30 minutes. Using the previous inventory and the purchase information, I calculated the food cost. The number was way high.

I took a quick look at each page and noticed the dairy figure was much higher than normal. In a quick review of dairy purchases, I noticed a delivery the previous day of an entire truckload of eggs. The inventory sheet had a zero count for eggs. After asking why the eggs were not on the sheet, I was told there was no delivery the previous day. As I held the invoice in my hand, I noted the signature: F. Hardy, Manager.

I asked "Who is F. Hardy?" The regional manager said it was Fred Hardy. When I asked to speak with Fred, they said he was vacationing for two weeks. He would be back in 8 days. "So how did his signature get on this invoice?"

After a long pause, the assistant site manager produced a rubber stamp from the desk with an inverted F. Hardy on the back. I threw it in the garbage.

To complete the story, the eggs WERE delivered the day before. The problem was they went to our competitor's site down the road (another large oil sands project). The invoice was for $5,000.

I'm really big on receiving controls. HUGE!!!

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