BSB61015 Advanced Diploma of Leadership

Background
You are an external consultant hired to conduct research into and propose an appropriate compliance management system for a large not-for-profit charity called Charity-Care. Charity-Care is based in Brisbane and is a public company that is limited by guarantee under the Corporations Act 2001. It is registered as a charity under the Queensland Collections Act 1966. The organisation has grown quickly to its current size from its single-centre opening just two years ago. Charity-Care is registered for GST and has an ABN: 21 745 368 027.
Charity-Care has about 50 employees, who are assisted in various charity tasks by community volunteers. Charity-Care operates two major frontline community services:
● Community-Care – Two 100-square-metre first-floor drop-in office centres operating in Spring Hill on Brisbane’s Northside and Wooloongabba on Brisbane’s Southside. Community-Care provides counselling services, short-term ‘rent loans’ and $20 supermarket gift food vouchers for people in need. Each centre has a manager, receptionist, office clerk and four counselling staff, and is fitted out with a reception/waiting room, two counselling offices and a staff general office area that includes a kitchenette. Private information is collected on people seeking the counselling services and this information is recorded in a central database that can be accessed from all centre computers. Volunteer staff operate the call centre and conduct visits seeking donations from local businesses and households.
● Computer-Care – A retail business on the CBD fringe that specialises in selling re-conditioned second-hand ex-government computers to needy families for children’s educational purposes. The small, 70-square-metre shop is supported by a 1,000-square-metre warehouse and repair centre in Fairfield, a Brisbane suburb. 50% of the computers are picked up from the shop and 50% are delivered from the warehouse. Computers for repair are dropped off and picked up from the warehouse. Repair costs are paid by the customers to the service centre staff. There is a manager of the Computer-Care initiative who manages both the shop with its 15 employees as well as the warehouse (eight employees) and service centre (four employees).
The head office for Charity-Care is based in Fortitude Valley. This is where the CEO and the business manager have offices. There is a boardroom, reception/waiting area and an open office area where the accounts payable, accounts receivable, payroll clerk and bookkeeper each have a workstation.
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
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V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
Key personnel
● Charity-Care CEO – Joan Murphy
● Charity-Care business manager – Jo Tully
● Computer-Care warehouse manager – Jack O’Toole
● Computer-Care retail manager – Mary Taylor
● Woolloongabba Community-Care centre manager – Judith Moore
● Woolloongabba Community-Care centre receptionist – Peggy White
● Spring Hill Community-Care centre manager – Helen Ng
● Spring Hill Community-Care centre receptionist – Julie Jones
● Charity-Care bookkeeper – Jenny Aviel
● Charity-Care payroll clerk – Tom Brown
● Charity-Care accounts receivable clerk – Maggie Saldais
● Charity-Care accounts payable clerk – John Tomlin
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 3 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
Organisation structure
Funding
Community-Care
Community-Care receives regular funds from a philanthropist entrepreneur who gives a portion of the annual profits from his electrical retail business to the charity. Including this last year, this has amounted to about $800,000 per annum. The call centre raises about $300,000 per annum from local businesses and households.
Computer-Care
Computer-Care turns over $1,700,000 per annum: $1,400,000 from the retail business and $300,000 in repair charges. The profit margins are small but the overall net profit is $150,000 per annum. The shop is supported significantly by
Board of
Board of DirectorsDirectors
Joan Murphy
Joan Murphy CEOCEO
Computer
Computer–CareCare
Jack O’Toole
Jack O’Toole Warehouse Warehouse ManagerManager
Repair
Repair StaffStaff
Warehouse
Warehouse StaffStaff
Delivery
Delivery StaffStaff
Volunteers
Volunteers
Mary Taylor
Mary Taylor Retail ManagerRetail Manager
Sales
Sales StaffStaff
Community
Community–CareCare
Judith Moore
Judith Moore Woolloongabba Woolloongabba Centre ManagerCentre Manager
Peggy White
Peggy White ReceptionistReceptionist
Counsellors
Counsellors
Office
Office StaffStaff
Volunteers
Volunteers
Helen Ng
Helen Ng Spring Hill Spring Hill Centre ManagerCentre Manager
Julie Jones
Julie Jones ReceptionistReceptionist
Counsellors
Counsellors
Office
Office StaffStaff
Volunteers
Volunteers
Head Office
Head Office
Jo Tully
Jo Tully Business Business ManagerManager
Maggie Saldais
Maggie Saldais Accounts Accounts ReceivableReceivable
John Tomlin
John Tomlin Accounts Accounts PayablePayable
Tom Brown
Tom Brown PayrollPayroll
Jenny Aviel
Jenny Aviel BookkeeperBookkeeper
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 4 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
the landlord, who is providing the fringe CBD shop rent-free for the first five years.
Scenario and policy framework
The CEO has explained to you that the organisation has grown quickly and the management and compliance systems have not had a chance to catch up. Issues were found with the last audit and there has been some disquiet from the association’s stakeholders about the way the association has been managed – particularly in regards to the cash handling processes and the keeping of transaction records. The business manager is totally focused on providing the best possible outcomes for the clients. He is very passionate about making sure they are looked after, but does not really worry too much about issues of control or compliance. The culture of the business is focused on having a good time while helping the community.
The CEO also says that many policies are documented; however, there still remain some training and motivational issues in relation to implementing them appropriately. Some of the policies include:
● risk management policy
● sexual harassment policy
● credit card policy
● expense reimbursement policy
● financial handling policy
● expenses policy
● equal employment opportunity policy
● work health and safety policy.
In asking you to help plan and establish the compliance management system for Charity-Care, the CEO has handed you the current documents relating to the policies and procedures. The CEO has also explained that the association has many compliance requirements under Acts, tax law, and tender agreements. The CEO has also asked you to look into the option of implementing a computerised financial management and payroll system.
Audit report
You review the previous year’s audit report to management and note that some of the issues the CEO explained still have to be considered and dealt with where
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 5 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
needed. The CEO said that the last external audit cost a fortune because there were so many issues with internal controls.
Issues uncovered during the audit include:
● Over 40% of the computer spare parts for Charity-Care are purchased from ‘Compute IT’ – a business that is owned by the warehouse manager’s family.
● The banking of the repair payments from customers does not agree with the total of the receipts issued.
● A cheque was paid to ‘Cheap Computers “R” Us’ for $2,300 but there was no evidence that the goods had been received.
● There are accuracy errors with stocktakes in the computer retail store.
● There are laptops missing from the warehouse, indicating possible fraud.
● There are a lack of prescribed levels on lending limits.
● There has been inappropriate use of the organisation’s assets.
● There are assets on the asset register that are not in their listed location. This is particularly true in regard to printers.
● Some significant transactions are being recorded in the wrong accounting period according to accrual accounting standards.
● There are some notifications from the ATO regarding late lodgement of tax and monthly BAS returns.
A visit to the warehouse uncovered the following:
● The warehouse manager said, ‘Not all customers want us to give them a receipt. They just pay the money and go. That’s why our banking doesn’t always agree with our cash receipts duplicates.’
● When you asked about the suppliers that the warehouse manager purchases spare parts from, he said, ‘Compute IT are great with delivery times and I know the owners really well so I get everything at a good price.’
● The warehouse manager explained further that, ‘Computers move through here so fast it is hard to keep up. So we don’t always record movement in and out of the laptop store room. We just count it at stocktake time.’
● When asked about the cash handling, the warehouse manager said, ‘We are a long way from head office here. So, sometimes I use the proceeds from the repairs to purchase equipment for the warehouse or to repair machinery that needs fixing.’
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 6 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
● One of the warehouse staff said that while most of the goods come into the warehouse via the goods-inward system, sometimes the deal is too good and they go to the supplier, purchase the goods directly and put them into stock. Since the goods come into the warehouse from the charity’s van, they are not checked by the goods-inward clerk, ‘A bit like the time we got five laptops from Cheap Computers “R” Us for a killer price.’
● At your visit to the warehouse you notice that the laptops are all kept in one place in a room, but there is no lock on the door and it is located near the exit to the building. The manager has already explained how ‘…volunteers come and help with the stock management when they get a large delivery. They clean up the computers and make them ready for sale. It’s great. They just come and go as they are able to.’
● One of the repair staff said, ‘The warehouse manager lets me take the delivery truck for the weekend sometimes. Especially if I have some things to move from home. He does not have an issue with it. I think it’s great!’
A visit to the retail store uncovered the following:
● Speaking with the manager of the computer retail store, you discover that stocktakes are done late Friday afternoon rather than Saturday afternoon when the store is shut and, to speed things up, the count is done by individuals and not by teams of two as required in the policy and procedures.
● The retail manager did not think there was any need to have a contingency plan for a fire or any other disaster. She explained that nothing had happened to date and she could not see anything bad happening in the future.
● The retail store manager said in response to the job descriptions for the staff, ‘All Charity-Care employees are pretty switched on. None of the managers need to tell them what to do because they all know. Anyway, we are all so hands-on that the employees can ask us personally if there is a problem. They don’t need job descriptions.’
● The retail store manager said that, ‘Some days it is so busy that we miss the bank. On those days we hide the cash takings in the draw under the cash register.’
● One of the salespeople said, in response to a question you asked about businesspeople coming in to the shop to buy computers, ‘Yeah, we usually charge those people a bit more than when families buy computers. We don’t give them the same good deal we give families because businesspeople can afford it.’
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 7 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
A visit to the counselling centres uncovered the following:
● When inquiring about the way data on people seeking counselling services was kept, you noted that there was no password login on the computer or on the client database. The receptionist at Spring Hill was able to show you the name, address, phone number, and counsellor notes on all the clients that had visited in the past week.
● The Spring Hill receptionist also explained that sometimes the counsellors were too busy to see people and that she would have a chat to the client in the waiting room. She said, ‘I have learned a lot from hearing the counsellors chat in the tearoom and I have a pretty good idea of how to handle people with social and family needs.’
● You asked the receptionist at Spring Hill about the how the banking of the donations is done and she explained that she gets the same people who collect the money to prepare the bank deposits and take it to the bank. ‘I just don’t have the time … and besides I can’t leave here,’ she said.
● When talking with one of the counsellors, you note that they say, ‘We don’t really have a limit to lend to in relation to rent loans for clients. We all just use our best judgement.’
● In asking about the records relating to the rent loan scheme, the counsellor showed you the form they complete. ‘I just look up the number on the last loan I gave and add a number to it to get the new number. I enter this number at the top of the form here.’
● The managers reported that there was no real forward planning budget. ‘We just ring in and get approval for any expenditure we want to do,’ was the Woolloongabba centre manager’s response.
● In commenting on the number of printers in the Spring Hill centre, the manager said, ‘We do twice the amount of paperwork here as the Woolloongabba centre so I got them to send over two of their printers.’ You also note that there is no asset identification code on the printers.
● None of the employees reported that they were ever tested by managers in regard to their knowledge about the privacy issues of client data, and said that they had not received any information regarding client complaints about their work.
At the head office, the following was observed:
● The CEO said that the business manager is the one who should to sign off on all employment positions; however, you note that the warehouse manager had told you, ‘I just employ the people I need to help with the
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 8 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
computer repairs. It’s very technical and the business manager wouldn’t know a good repairman from a bad one.’
● The business manager explained that sometimes the monthly financial reports are not received from the satellite operations until well past the 20th of the following month, when they should be out on the 10th.
● You ask the CEO about job descriptions and she says that she has prepared all the job descriptions for the managers but has left it to the business manager to prepare the job descriptions for the operational staff.
● When you asked the bookkeeper about her recent training and professional development, she said that she had been too busy for the past couple of years to do any. ‘The last professional development I did was a few years ago in regard to changes in the Fringe Benefits Tax law,’ she said.
● The bookkeeper also explained that she keeps the details of what is owed under the rent loan system, but the centres also keep a separate set of records about monies paid out and monies received. ‘Reconciling these two sets of records is a nightmare,’ she said, ‘It’s so much work reconciling accounts that the centres are very protective whenever I ask to do one. They think I don’t trust them, but it’s just my job. The managers tend to back up the centre staff and not us at head office trying to run the checks.’
● The bookkeeper explained that while they are supposed to be keeping the accounts on an accrual basis, ‘…sometimes it just gets too busy to do the end-of-month adjustments so we don’t always do it.’
● The bookkeeper explained that no one comes to check on her work. ‘Everyone is so focused on providing help for the clients, no one really knows or cares about the recording of the financial information. Sometimes I wish we had a better computerised accounting system that integrated all aspects automatically. The lack of support for the importance of control systems is pretty demoralising. Sometimes I feel like saying, “If they don’t care why should I?”’
● The bookkeeper explained that she seemed to get most of the client complaint calls. She would take down all the details and pass them on to the previous business manager. She was not sure how these complaints were dealt with, but she thought that the number of complaints was increasing.
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 9 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
● The payroll clerk explained that he had not been given any training on the computerised payroll system so he did most of the work manually and only entered the totals into the system. He also said that he got no paperwork regarding pay rate changes, just a verbal chat with the previous business manager: ‘I just took down notes as she spoke.’ He further explained, ‘I keep all the staff records in the filing cabinets that are used by the accounts clerks as well. Sometimes they forget to lock them and I find them open in the morning when I come to work.’
● The payroll clerk explained that sometimes the timesheets come to him for payment but they are not signed. He tries to get them signed but sometimes there is no time, so he just processes them without a signature.
● The accounts clerks said, ‘Everyone just sticks with what they know best. No one rotates or changes roles. It’s too much to learn anyway.’
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 10 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
Charity-Care Policies and Procedures
Work health and safety policy
Charity-Care cares about the safety of its people and recognises that injuries result in needless suffering to individuals and their families.
Charity-Care is committed to providing a safe and healthy work environment for its employees, contractors and visitors.
All Charity-Care employees, whatever their role, carry the primary responsibility to ensure that the work they undertake or supervise is carried out safely and without injury. Charity-Care’s first priority must always be the wellbeing of its employees. No task is so important that a person’s safety is put at risk. All accidents are preventable, and Charity-Care is therefore committed to the goal of ‘no injuries’.
In the event of a workplace hazard or injury, an incident/hazard report form must be completed and submitted to the workplace health and safety office. The form must detail:
● incident date
● name of person who submitted report
● time of incident/hazard
● location of incident/hazard
● incident/hazard type
● description of incident/hazard
● persons involved
● witnesses
● injuries sustained
● description of injuries
● actions taken to minimise hazard or reduce risk post-incident.
Equal employment opportunity policy
In keeping with the federal government legislation to promote equal employment opportunity, Charity-Care is committed to the promotion of equal opportunity for all persons including women, people of Aboriginal and Torres Strait Island descent, people of all racial and ethnic groups and people with disabilities.
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 11 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
Equal employment opportunity means that merit and equity will form the basis of all employment, training, and promotion decisions that affect employees at the workplace.
Charity-Care accepts that as an employer it has a responsibility to eliminate and ensure the continued absence from within its structure any source of direct or indirect discrimination on the basis of any factors not related to work performance, including race, colour, national or ethnic origin, nationality, sex, marital status, pregnancy, age, status as a parent or carer, political conviction, social origin or impairment.
In practice, Charity-Care’s EEO policy means:
● For job applicants:
○ fair recruitment procedures
○ opportunities for non-traditional jobs for women and men
○ merit-based access to jobs for members of designated groups, including people of Aboriginal and Torres Strait Island descent, people of all racial and ethnic groups and people with disabilities.
● For employees:
○ no unjustified barriers to advancement for any members of staff
○ elimination of unjustified discrimination in selection and promotion processes
○ appropriate training and development opportunities for all staff, including women and members of designated groups
○ opening up of business decision-making processes to staff.
Charity-Care is committed to the principles of the legislation and seeks your support in implementing the equal opportunity program.
Expenses policy
The purpose of this policy is to ensure you are properly reimbursed for out-of-pocket expenses related to direct expenses for work-related activities, and that Charity-Care is able to claim on taxable expenses.
Meals and entertainment
As a general rule, meals and entertainment necessary for the conduct of business should not be lavish, extravagant or unreasonably costly.
BSB61015 Advanced Diploma of Leadership and Management
Assessment Resource – Charity Care Case Study – BSBCOM603 Plan and establish compliance management systems |
Page 12 of 28
V 3.1: May 2020, Approved: QAC, Next Review: December 2020
International College of Tasmania Pty Ltd trading as: TasCollege
RTO Code: 45352 | CRICOS Code: 03683K
The business meal/drink
A meal is classed as a business meal and is reimbursable when the purpose of the meal is a business discussion in line with business goals.
One employee may not entertain another except when a client is present or:
● when one employee is away from home
● when the discussion cannot, for reasons of privacy or other pertinent business purposes, be conducted on business premises.
In order to qualify for business use, the entertainment must:
● be fully documented and explained in the expense report
● be for a business purpose and not just general goodwill.
Reimbursement of small expenses/temporary cash advance
In some situations, it may be necessary to use cash and claim the reimbursement of these expenses via a cheque requisition or petty cash.
● Always obtain a tax invoice; without one, Charity-Care may not be able to reimburse you.
● Parking expenses incurred while working will be reimbursed against receipts.
● Until previous cash advances have been accounted for, further cash advances are not allowed. You must reconcile all cash advances and attach appropriate receipts with an expense statement.
● You will be required to sign for the advance before it is issued.
● An expense reimbursement form must be completed and submitted with receipts to claim reimbursement. The form must detail:
○ employee name
○ date of purchase
○ department
○ expense type
○ description
○ client ID number
○ purchase amount.