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Reason 1
Directors, committee members and managers have insufficient
training in accounting and finance. They may not be able to:
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Engage in appropriate budgeting processes that result
in reliable predictions of future income, expenditure
and profit.
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Identify threats to sources of income
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Detect over and unplanned expenditures
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Monitor variances between planned and actual financial
outcomes
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Ensure full compliance with tax, gaming and other laws
and as a result incur financial penalties for their organisations.
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Reason 2
Failure to manage risks and suffer financial losses as a
result of:
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Fraud and embezzlement by employees
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Thefts and fires which should have been covered by insurance
- Litigation for negligence
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Reason 3
Failure to identify and monitor the effect of changes in
the business environment such as:
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Unfavourable long-term demographic changes that reduce
the customer base i.e. the number of people joining as
members
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Activities by competitor organisations that change market
share i.e. offering new programs, improving facilities,
engaging in promotion.
- Changes in legislation or government programs i.e. changes
to important government funding sources.
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