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MWCC management does not use detailed management reporting to guide decisions regarding GSC’s and MFC’s operations.

Without detailed management reporting, MWCC cannot monitor its operations and make appropriate managerial decisions.

Table of Contents

Overview

MWCC management does not use detailed management reporting to guide decisions regarding the operations of GSC and MFC. Management reporting captures information that is needed to run a business efficiently and effectively. A detailed management report captures the relationships among an operation’s costs, revenue, and activities. GSC and MFC only track and record daily sales; however, GSC’s monthly or annual sales by item, and MFC’s membership activity, would be necessary to analyze business operations in management reports.

Without detailed management reporting, MWCC cannot monitor its operations and make managerial decisions to ensure that these auxiliary services operate efficiently and effectively and that they support MWCC’s mission.6

Authoritative Guidance

RSM International, one of the largest accounting and consulting firm networks in the world, states in its article “Management Reporting: Effective Organizational Data Processes,”

Strong management reporting is a necessity to produce timely, reliable information, in order to make high-quality business decisions about the future of your company. Insight gathered from reporting allows for deeper analysis to understand problems, provide accurate comparisons against competitors and implement controls to hold employees accountable for budgets.

Although MWCC is not required to follow RSM International’s standards, we consider it a best practice to routinely use management reporting to monitor business operations.

Reasons for Noncompliance

Although GSC’s point-of-sale cash-register system provides a detailed breakdown of sales by category each day, this information does not interface with an operating system that tracks the cumulative sales activity on a periodic (monthly or annual) basis. To achieve such reports, GSC personnel must manually enter the information from the cash-register daily sales reports on an Excel spreadsheet. MWCC officials told us that because of MWCC’s limited number of personnel, the manual input is not performed consistently, and therefore periodic sales activity reports by category are not available.

According to MFC personnel, when the facility’s EZ Facility operating system was implemented, management decided to roll out limited functionality because of personnel and financial constraints. Full functionality of the EZ Facility operating system would provide management reporting that would facilitate monitoring of operating performance.

Recommendations

  1. MWCC should allocate financial and personnel resources to develop management reports for both GSC and MFC to monitor the operating performance of these auxiliary services on a monthly and annual basis.
     
  2. Once MWCC has a better understanding of GSC’s and MFC’s operating performance, it should evaluate whether they efficiently and effectively support MWCC’s mission.

Auditee's Reponse

The College agrees with the need to better utilize the fine grain data provided by the point of sale systems for the cafeteria and fitness center. Currently the College makes use of the macro-data provided by the [electronic resource planning] system which provides information on the overall effectiveness of the operations from a fiscal point of view, however, both operations could be made more effective through the analysis of the meta-data provided by these systems.

The key factor that has prevented the College from making better use of this data is the lack of technical expertise. The College is currently in the process of hiring an additional programmer for the [information technology] department. Once on board the new programmer will be able to assist these two departments to develop reports to be used for better decision making.

Auditor's Reply

It appears that MWCC is taking measures to address this finding by dedicating resources to strengthen its managerial reporting. These reports should be instrumental in determining whether GSC and MFC effectively serve the school’s mission.

6. The mission statement on MWCC’s website is as follows: “MWCC is a lifelong learning community dedicated to excellence in education and responsive to the changing needs of the communities we serve. Our focus is the preparation of individuals for lives of fulfillment, leadership, and service in a diverse and global society. We are committed to engaging students in rich and challenging learning opportunities within a small college atmosphere that is known for its personal touch.”

Date published: March 31, 2020
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