Post by ofrancesconi on Aug 31, 2021 21:37:28 GMT
Questions:
What are the major (obvious and not so obvious) risks of this contract?
Risks:
• Being able to recruit that many people annually and finding the people to recruit and train
• How is the external market ie; will there be opportunities to place that many people in jobs? What other external factors can influence this (SWOT analysis). 60% employment retention is ambitious. There could be a number of threats that impact this.
• Financial implications – can we afford to start up? Do we have the facilities? Given it’s performance-based, we need to ensure we’re meeting targets to generate revenue.
• What should be done early to ensure that the contract does not fail?
o What lessons did we learn from previous failures?
o We have Culinary and Facilities Management Programs at the moment within Fedcap. Talk to those people and look at ways to utilize existing knowledge and connections
o Build a financial model to look different scenarios eg; if we don’t meet targets, what does that look like? How long can we be financially sustainable
o What’s our recruitment and retention strategy? Is it reasonable to hire 300 trainees annually?
o What are some of the tripwires that the program director needs to be able to monitor should the company move forward? How will that measurement occur? Keeping focused on the milestones is key. Not just finding trainees, but also having the right people to hire, train and manage trainees. Also having the right systems in place so we can track relevant data. Naturally, the financials are crucial. What are the upfront costs? Do we have enough to start-up? If we don’t meet our milestones, what are the financial implications?
• How can you negotiate this contract to mitigate as much risk as possible?
I would try to negotiate the milestones. If we only train 200 people, what does that look like? If we only have a retention rate of 40%, what does that look like?
Scenario #2: Fraud, Control and Compliance
You have been assigned to manage a new Fedcap Group contract with a City agency that begins in December. Your counterpart at the City insists that you initially meet at a very expensive restaurant for dinner and drinks. A few weeks later, you receive a small, personalized holiday gift tgaryhat is sent to your home.
As the contract begins, you get the sense that the City Agency is not very well organized. Our billing vendor keeps sending invoices that are rejected because they do not have the proper billing codes. Our accounts receivable starts to grow. As the months go by, you have difficulty arranging a meeting to resolve issues. You soon learn that the City Agency contracts with another Not For Profit to provide similar services. A few months later you hear that your counterpart from the City has left his job with no explanation given. As time goes on, our billings decrease dramatically and our contract after one year is not renewed, we eventually have to write down a substantial amount of unpaid receivables.
Questions:
• Was a fraud committed? Are there any compliance issues? Yes, I think this can be considered fraud. Our policy states that ‘a strict standard is expected with respect to gifts, services, discounts, entertainment of any kind from suppliers.’ The gift needed to be reported but we’re not told if this was the case. We also don’t know the type of gift. There were issues with invoices being rejected, which could be a compliance matter.
• What were the risks involved with this contract? Obviously financial risk. Conflict of interest given the City Agency is also reaching out to other NFPs. Possible reputational risk for the City agency, which we may have missed ie; do we know their reputation? Also security and fraud risk – expensive meals, giving gifts and having access to personal information.
• How could you have mitigated them? Do your research! The City Agency sounds dodgy. Reporting the unethical behavior (expensive dinner) at the onset. That was an immediate red flag. Measures could then be put in place to mitigate further issues. Escalate to the very top when the first invoice wasn’t paid.
• What specific controls should we have implemented?
Processes and procedures for ongoing incorrect billing codes. Escalation processes for not being able to get in touch with the relevant people. Having a good understanding of the businesses and people we do business with.
• Are there any lessons learned? Yes! Be clear about what constitutes ‘fraud’ and unethical behavior. Know what to report and to whom. Have the right escalation channels in place. Avoid business with anyone who may have an existing bad reputation. Cease relationships as soon as a number of things go badly.
What are the major (obvious and not so obvious) risks of this contract?
Risks:
• Being able to recruit that many people annually and finding the people to recruit and train
• How is the external market ie; will there be opportunities to place that many people in jobs? What other external factors can influence this (SWOT analysis). 60% employment retention is ambitious. There could be a number of threats that impact this.
• Financial implications – can we afford to start up? Do we have the facilities? Given it’s performance-based, we need to ensure we’re meeting targets to generate revenue.
• What should be done early to ensure that the contract does not fail?
o What lessons did we learn from previous failures?
o We have Culinary and Facilities Management Programs at the moment within Fedcap. Talk to those people and look at ways to utilize existing knowledge and connections
o Build a financial model to look different scenarios eg; if we don’t meet targets, what does that look like? How long can we be financially sustainable
o What’s our recruitment and retention strategy? Is it reasonable to hire 300 trainees annually?
o What are some of the tripwires that the program director needs to be able to monitor should the company move forward? How will that measurement occur? Keeping focused on the milestones is key. Not just finding trainees, but also having the right people to hire, train and manage trainees. Also having the right systems in place so we can track relevant data. Naturally, the financials are crucial. What are the upfront costs? Do we have enough to start-up? If we don’t meet our milestones, what are the financial implications?
• How can you negotiate this contract to mitigate as much risk as possible?
I would try to negotiate the milestones. If we only train 200 people, what does that look like? If we only have a retention rate of 40%, what does that look like?
Scenario #2: Fraud, Control and Compliance
You have been assigned to manage a new Fedcap Group contract with a City agency that begins in December. Your counterpart at the City insists that you initially meet at a very expensive restaurant for dinner and drinks. A few weeks later, you receive a small, personalized holiday gift tgaryhat is sent to your home.
As the contract begins, you get the sense that the City Agency is not very well organized. Our billing vendor keeps sending invoices that are rejected because they do not have the proper billing codes. Our accounts receivable starts to grow. As the months go by, you have difficulty arranging a meeting to resolve issues. You soon learn that the City Agency contracts with another Not For Profit to provide similar services. A few months later you hear that your counterpart from the City has left his job with no explanation given. As time goes on, our billings decrease dramatically and our contract after one year is not renewed, we eventually have to write down a substantial amount of unpaid receivables.
Questions:
• Was a fraud committed? Are there any compliance issues? Yes, I think this can be considered fraud. Our policy states that ‘a strict standard is expected with respect to gifts, services, discounts, entertainment of any kind from suppliers.’ The gift needed to be reported but we’re not told if this was the case. We also don’t know the type of gift. There were issues with invoices being rejected, which could be a compliance matter.
• What were the risks involved with this contract? Obviously financial risk. Conflict of interest given the City Agency is also reaching out to other NFPs. Possible reputational risk for the City agency, which we may have missed ie; do we know their reputation? Also security and fraud risk – expensive meals, giving gifts and having access to personal information.
• How could you have mitigated them? Do your research! The City Agency sounds dodgy. Reporting the unethical behavior (expensive dinner) at the onset. That was an immediate red flag. Measures could then be put in place to mitigate further issues. Escalate to the very top when the first invoice wasn’t paid.
• What specific controls should we have implemented?
Processes and procedures for ongoing incorrect billing codes. Escalation processes for not being able to get in touch with the relevant people. Having a good understanding of the businesses and people we do business with.
• Are there any lessons learned? Yes! Be clear about what constitutes ‘fraud’ and unethical behavior. Know what to report and to whom. Have the right escalation channels in place. Avoid business with anyone who may have an existing bad reputation. Cease relationships as soon as a number of things go badly.