« SPORTS D’Ô »

INTERNAL CONTROL’S WORK

Authors:

Teacher :  Anthony DOURTE

 Louis FRANCOIS
 Mr. CLAES

School Year 2019-2020

Table of contents

I. COMPANY PRESENTATION........................................................................................................ 6

II. FIRST ISSUE: VOLUNTEERS PROFESSIONALISM..........................................................................7

 ISSUES EXPLANATION......................................................................................................................7
 SOLUTION TO THE PROBLEM.............................................................................................................7
 APPROPRIATE SOLUTION.................................................................................................................7

III. SECOND ISSUE: WORKERS’ WAGES.......................................................................................... 8

 ISSUES EXPLANATION......................................................................................................................8
 SOLUTION TO THE PROBLEM.............................................................................................................8
 APPROPRIATE SOLUTION.................................................................................................................8

IV. THIRD ISSUE: SIZE OF THE POOL.............................................................................................. 9

 ISSUES EXPLANATION......................................................................................................................9
 SOLUTION TO THE PROBLEM.............................................................................................................9
 APPROPRIATE SOLUTION.................................................................................................................9

V. FOURTH ISSUE: POOR MATERIAL MANAGEMENT.................................................................. 10

 ISSUE EXPLATATION......................................................................................................................10
 SOLUTION TO THE PROBLEM..........................................................................................................10
 APPROPRIATE SOLUTION...............................................................................................................10

VI. FIFTH ISSUE: FINANCIAL LOSSES DURING CAMPS...................................................................11

 ISSUE EXPLATATION......................................................................................................................11
 SOLUTION TO THE PROBLEM..........................................................................................................12
 APPROPRIATE SOLUTION...............................................................................................................12

VII. CONCLUSION........................................................................................................................ 13

VIII. BIBLIOGRAPHY.................................................................................................................... 14

IX. ANNEX.................................................................................................................................. 15

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Introduction

For the course of Internal Control, we have to make a working group. This work consists
into making a relevant report as regards some internal control weaknesses in connection with
a company. Therefore, we will provide some practical advices on how to improve the
situation.

In this group, we are two students, Francois Louis and Dourte Anthony. In order to make a
group, we absolutely need to be a minimum three. However, we didn’t find any additional
person.

For this working group, Louis and I have chosen a non-profit organization called
“Sportsd’O”. This company organises pool lessons for children, birthdays and sports courses.
We will show you which weaknesses we found about this company. In this context, we will
try to find practical solutions. We always try to interpret the weaknesses and solutions with
figures. In order, to prove that the costs are really a problem for the company.

It was complicate to find weaknesses because it’s a little company and the boss is
perfectionist, so he tries to show no weaknesses about it. Nevertheless, when we interviewed
the staff and customers, we found some weaknesses. On the other side, it’s was hard to find a
solution about it because it’s not their pool but a communal pool so we can’t undertake
renovations.

During this work, we will try to explain to you our point of view and make you
understand how it’s complicated to find a solution to a problem. When we go on a way, we
find other problems, so no company is perfect, there is always a weakness.

Sportsd’O makes profits so we firmly believe that they can grow up in few times. They
have a good team and a good communication between them so it’s already a good asset.

We hope you will appreciate our work and will agree with us. I wish you a good reading.

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 I. Company presentation
Sportsd’O, company is a non-profit organization located in Evere. It’s a company that
offers services like pool lessons for children, birthdays and sport courses. Its head office is in
an apartment in Evere. All the activities are in a communal pool called “Triton”.
In Triton, we can find a tennis court, ping pong table, garden, boxing hall and obviously a
pool but there is also a hot tub, a sauna, a steam room and showers.

The boss of Sportsd’O is also the Human Resources Manager of Triton. There are three
bosses in Sportsd’O, Nathalie, Andre and Felipe.

So, their 3 activities are pool lessons for children, birthdays and sport courses.

For the lessons, it’s main activity because it’s the activity with the most children so they
make more profits. It’s also not easy because there are almost nine hundred children and the
most complicated is to manage it.

The second one, birthdays. Sportsd’O offers two options, either just an animation in the
pool or an animation in the pool and after an afternoon tea with a birthday cake with candies.
Most people prefer the second one because children are always happy after this moment.

The last one, sport courses. It’s always during school vacation because during this period,
there are no pool lessons. It’s a funny option because when the parents are working, children
are playing with friends or just doing sport. The option is funny, the morning, all the children
have to go to the pool for a true lesson, and afterwards there is a brunch. At 11 AM, children
start with a sport like tennis, ping pong, basketball, football, self-defence or leisure time. Then
they eat a hot dish with everybody. After the lunch, they still do a sport and then they go to
the pool for chill time until 16 PM.

The company is composed of volunteers, so there are many students. 3 Managers and
other volunteers.

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II. First issue: Volunteers professionalism
 Issues explanation

At “Sports d’O association, workers are engaged under the status of volunteering, but they
get paid for their work.

Volunteers don’t sign any contract which leads to the fact that they actually do not
consider their work as a formal work but more as an additional paid activity and indeed “not
mandatory”.

Regularly, it happens that volunteers give notice of their delay to their superiors only few
minutes before the start hour. That creates a major problem of swimming’s planning schedule.

 Solution to the problem

Unfortunately, there’s not a lot of solutions to this problem.

Only two of them are available:

 Creating a contract of good faith. It involves asking to the volunteers to sign a non-
official contract including few rules to respect. Notably, informing of being late as
soon as possible and be present more often.
 Not offering volunteering contracts anymore but only regular contracts. Thereupon,
workers will not be considered as volunteers but employees.

In this way, they will probably understand that they don’t have as many days off as they
would like to.

 Appropriated solution

To find the right solution, it is essential to evaluate what each solution will cost to the
association.

The first one “contract of good faith” wouldn’t cost a lot but a little bit of ink and
paper. However, the second one may cost much more. Hiring workers under an employee
contract leads the association to pay the compensation expense.

Furthermore, the wage of an employee is higher than the one of a volunteer. This is
why we are considering that the solution of the good faith contract is the better one.

It will be interesting to set up a probation period to see if it’s working out. If it doesn’t,
we could go for the second available solution.

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III. Second issue: Workers’ wages
 Issues explanation

In Sports d’O, as a voluntary worker, your wage is calculated according to your

diploma as well as how long you spent in the non-profit organization.

It will vary between 10€ and 40€/hour. Regarding that the wage limit for voluntary
workers is limited to 1.388€ / year, this will restrict the hours volunteers can work to
2.67h/week for the lowest paid individuals and 0.67h/week for the highest paid.

This is totally insufficient for non-profits. This means that they will have to fraud and
designate a “nominee”. This means an exterior party is paid for the work done by the
volunteers.

 Solution to the problem

In this case we will remove all possibilities that would lead to illegality or fraud.
We have now only two options left:
 First solution, it refers to the previous problem “volunteers and professionalism”. This
solution consists into not taking any volunteer workers but opting for paid full time
workers. This would allow not only to fix the professionalism problem but also to
allow you to pay them full unrestricted wages.
 The second solution would be to take a lot of volunteers in order not to have to fix a
wage limit.

 Appropriated solution

The solution where you take paid workers as well as more volunteers is the ideal one in
order to put in place but costs too much. The non-profit cannot allow itself to pay out that
much.

On the other hand, taking on extra volunteers does not cost extra compared to the current
situation the non-profit has in place. The only inconvenience is to find volunteers and to train
them.

Therefore, we think that taking on volunteers will be the best way for the non-profit to
erase all fraudulent activity from its books.

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IV. Third issue: Size of the pool
 Issues explanation

As it was said in the introduction, there are nine hundred children and the pool is not
oversize so some days it’s complicated to have enough place for everybody. Wednesday,
Saturday, Sunday are the days when there are the most people because there isn’t school at
this time.

For the staff it is also hard because they have to monitor children and there are children
who are not able to swim so they need more attention. If there are too much people, the
teacher has to stay focus to avoid an accident, he has to care about the other person too.

 Solution to the problem

The first one was to extend the pool but it’s impossible because it’s a communal pool and
Sportsd’O can’t ask for this investment. It will be enormously expensive to just gain 3 meters.

So, the second solution was to find another place or find another pool to give lessons but
it’s expensive because Sportsd’O would have to pay a pool hallway and a cloakroom. The
most complicated thing would be that the manager can’t supervise the monitors in another
pool, also maybe there will be no place too.

 Appropriated solution

For us, the best solution is maybe to refuse children’s registration. So, other children can
be peaceful in the pool but if we refuse registration, we will earn less money and they need to
cover some charges.

Or in the future, when Sportsd’O will be ready, they will can hire a manager in another
pool to supervise their monitors, so to grow Sportsd’O.

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V. Fourth issue: Poor material management
 Issue explanation

As mentioned in the headline, Sportsd’O has a problem with the management of material,
they don’t have enough space to stock their material. They just have a little cabinet for
stocking play equipment. So, they cheat a little because they use a triton’s local to stock the
rest of their material. They use this local to stock their food, their water games, …

It’s bad because normally, they can’t use this local. If somebody knows it, it would be
risky for them. They also loose time to go to this local because they have to get out of the
pool, go downstairs and take the material. It’s really a waste of time.

 Solution to the problem

With Louis, we found some solutions. First, their little cabinet costs 50 euros per month.
They could pay 125 euros to have their own local but as said here above, it’s annoying
because it’s a waste of time to go to this local. But they could have all of the place that they
need.

The other solution is to take 2 other cabinets, so they have all the place that they need,
and they don’t have to go to the local and get out of the pool. The disadvantage is that a
cabinet costs 50 euros, so they’ll pay 150 euros per month but at least cabinets are close to
them.

 Appropriated solution

Now it remains a problem, they can’t put the food on this cabinets because inside the pool
it’s too hot and we can’t have food in the pool. But Sportsd’O has a garden shed so they can
preserve their food inside.

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VI. Fifth issue: financial losses during camps
 Issue explanation

During camps, the non-profit makes a loss. They will none the less continue the camps as
these bring in valuable clientele. A lot of children who come to a camp will then purchase a
yearly subscription. These will in turn pay off the losses that were made earlier in the year.

In order to understand why these losses are made, we need to look back at the cost of
the camps and the return on investment.

Costs (for 4 days of camp and an average of 20 children)

Lunch break 400€

Snacks 160€
wage for 3 volunteers 975€
Ping pong table rental 20€
Tennis court rental 112€
Swimming pool 200€
Fitting rooms rental 20€
1887€

Return (for 4 days of camp and an average of 20 children) :

The price for a camp 84€/ person for 4 days.

This total out to 1680€ for 20 people

This equals then to a loss of around 207€ per camp.

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  Solution to the problem

Knowing that the return costs are non-negotiable, there are not many options apart from:

 Cancel the camps. If a camp entails a loss for the non-profit, there is no reason to
continue with it.
 Otherwise, increase the prices of the camps. This would allow in the worst case to
break even and in the best case to make a profit.

 Appropriated solution

Both solutions cause an issue.

The one is more stable. Removing camps from the agenda would equal getting rid of
what might be the biggest ad for the non-profit.

The other is riskier: increasing the price of the camps could:

- In the best case, not have any repercussions on the public perception of the non-
profit.

- In the worst case, it could be a bad advertising for the non-profit. Clients who
currently consider it to be very affordable might change their minds.

For these reasons, we cannot opt for the first or the second option. We will leave
the decision up to the non-profit’s Director, who will have to decide between a more stable
or riskier outcome.

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VII. Conclusion

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VIII. Bibliography
 SOPRTDS’Ô. Retrieved from http://www.sportsdo.be/fr/accueil/
 INBW. Prix de l’eau et évolution. Retrieved from https://www.inbw.be/prix-de-leau-
et-evolution
 SPF FINANCES. Retrieved from https://finances.belgium.be/fr/asbl/benevoles
 LINGUEE Retrieved from https://www.linguee.fr/francais-anglais/traduction

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IX. Annex

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