You found the deficiency in the raw material. How did you discover it? Was it discovered in the stock audit? But then what kind of stock audit it was? Was it monthly or quarterly or half-yearly? Was it by some third party? Did the auditors obtain the statement from the stores in-charge?
You had questioned the General Manager (GM) but then later he stopped coming for the duties. However, a follow-up was required on two counts. One was to order the enquiry on the shortage of the materials in the stores and another is to issue a notice to the GM on his unauthorised absence. Did you do that?
About Shrinkage of Stores: - What is the total stock value at your stores and what kind of material was found deficient? Sometimes, there is a natural reduction in the quantity like in case of fuel and lubricants. Have you defined the percentage of that?
Shortage of inventory also occurs because of the excess issue of the material to the operations or production department. On discovery of the excess receipt, dutifully it should be returned to the stores. But then many stores personnel rue that this does not happen. Therefore, on the discovery of the shortage of the material, did you reconcile the material issue with the production department?
Sometimes certain material gets worn out and becomes unusable like corrosion of the nuts and bolts. This obsolete material can be disposed of but before doing that a committee is formed for the condemnation. Have you done that? Is it that the obsolete raw material was disposed of but the records at the book inventory were not amended?
Therefore, the question arises is have you done shrinkage analysis of the material? Inventory accuracy is always a challenge in most of the stores. There is always a difference between a book inventory and shelf inventory. What is inventory accuracy percentage in your company?
There are so many questions associated with your post. Please give complete information. Lastly, as such the matter in the court. Therefore, you need to defend it anyway. Nevertheless, if you had conducted an enquiry on the shorage of the raw material and also on the absence of the GM, your case would have become very strong. It appears that the lack of administrative procedure has put you the sticky wicket.
8th June 2019 From India, Bangalore