Memo for Sunshine Center

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Memo for Sunshine Center Name: Zhan Danni Question 1 Using the COSO framework, evaluate the financial control systems at Sunshine Center. Answer 1: According to the COSO framework, the Sunshine Center has a weak financial control systems. 1) Control Environment The Sunshine Center’s committee didn’t set a tone at the top. They let Rev Andrew had much control and influenced the making of decisions. The discipline and structure of the committee have never been made. The financial reporting problems are neglected by Rev. 2) Control Activities In the control activities part, the sunshine center had plenty of questions. 1. Center failed to deal with the segregation of duties. Barb collected the fees, supervised the activities, purchased supplies and recorded the journal entry. 2. The cash receipts and record. Using the cash can easily cause the corruption. Also, the records of cash didn’t be made. 3) Risk Assessment The committee and the church administrative board failed to identify the risks in the operations of the sunshine center. For example, in the hiring part, committee failed to hire the personnel who had experience in the managerial and teaching aspect. Even Brab had some child care experience, she didn’t accept any standard training. What’s more, the Rev Andrew deeply influenced the committee so the financial problems was covered. 4) Information and communication There are no budgets and financial statements in the Sunshine center. The financial activities cannot be transparent and be well controlled. Also, there are gaps in the communication tunnel. Information cannot be transferred correctly and directly to the committee and the administrative board. 5) Monitoring The Sunshine center lacks an appropriate supervisor to go through the financial status. There are no signs that ongoing Activities and separate

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