Methodology: 

It was agreed with the Owner that a review of the food production management system would be a strong indicator of how well the account is being managed, in general, and would provide us with valuable insight into how efficiently the Owner’s foodservice resources were managed. Since the food production management system is the contractor’s core business an analysis of this essential operating system will tell us a great deal about the contractor’s performance.

Working from check lists prepared for this purpose, we visited the operation and met with the unit manager and chef. Many questions were asked during this session to determine the “how-to” behind the food production management system. A great deal of information was exchanged during the three hour site visit. Following the visit a draft of our findings was presented to the Owner. The Owner provided additional input so that the report could be finalized and forwarded to the Operator. A meeting was held with representatives of the Operator and the Owner to discuss and review the findings. The Operator was then asked to submit a response to the findings and come forward with an action plan to remedy the problems.

Findings: 

Although a computerized food production management system provided by the Contractor was available at this account it was underutilized. The documentation revealed that it had been several months since this system had been relied on as intended. A number of our findings included:

1. Historical items sales information was not used to prepare item forecasts when the menu repeated. 
2. There were no written specifications or purchasing guides provided by the home office for the purpose of the unit management team confirming that all products delivered by the primary distributor satisfied the specification. 
3. Meats were not being weighed upon delivery. 
4. Standardized recipes, although a part of the computerized food production management system, were not being used. 
5. No food production work sheets were used to communicate production requirements with the cooks and to follow up with amounts of foods left over, and to confirm that the amounts used were actually sold. 
6. There was no formal quality assurance program to confirm refrigerator temperatures, a proper station set-up prior to lunch, or to confirm portion control requirements. 
7. Cash registers can be operated and transactions totaled with the cash drawer opened. 

In the meeting held to discuss the Operator’s response to the report findings, the Operator took responsibility for their failure. During the meeting the Operator stated that he was willing to give up their management fee for several months in view of the significant increase in annual subsidy. During the meeting, the Owner explained that in view of these difficulties the Owner was in the process of soliciting proposals for foodservice management.

Subsequent to the meeting, the Owner requested that we audit sales for a representative month to confirm that actual sales are being represented on the operating statement. This “spot” audit also included a review of all the expenses for a representative month to confirm that, in fact, they were “authorized” expenses according to the current management agreement. The spot audit turned up no irregularities.