Respond to each classmate initial post with 3-4 sentences
Classmate # 1
How does the benefit of a comprehensive annual financial report (CAFR) seem worth the expense from your perspective?
From my point of view, the advantage of a comprehensive annual financial report(s) seems worth the cost due to the thorough ground they cover. The story illustrates the condition of the financial plan and grants permission for funds to be spent. In the long run, if the agency wants to invest in a company CAFR provides insight in whom to do so. In my opinion, the CAFR is useful because it has knowledge about economic data.
How could management information systems provide too much information for a decision maker?
Management Information Systems may provide information as far back as five years that alone could be overwhelming for the person who is receiving the information. For example, in some cases, people ask for the previous history of the company they want to invest in. By using this method one will receive accurate information but it will probably be too much for a decision maker. To avoid confusion, a "synergy" element has been implemented to assist with difficulty and cause each component apart of the MIS to work independently (McKinney: 2004: p.430).
How would you describe the impact of fiscal strain on one of the cities or nonprofit agencies you selected for the final project? How would the tax codes affect the financial pressure?
The fiscal strain that the American Red Cross face is when there is a massive disaster and the agency can not afford to help everyone at once. For example back in 2013 there were mulltiple in Springfied, MA so many that there was a financial strain on the funds and strain on the volunteers during the disaster(Pioneer Valley). According to Mckinney (2004), one of the major causes of fiscal strain is long extended sessions of relying on federal funds and donations (p.500). There is an such thing of a agency running out of funds. Tax codes affect finanical pressure by replacing money that has already been spent so that the agency can assisting the others in a timely manner.
Is it feasible to only employ people of high integrity or implement a system of internal controls that can prevent fraud, waste, and abuse (FWA) no matter who is used?
It is possible to only employ people who have an implementation of internal control because they are the people that will have the most endurance. They are the type of people that cross every T and dot every I. the reports given by a person of this nature will ensure every report is accurate. Integrity is great trait to have, but in the cases of employees for different agencies across the world. A person involved in internal control is what is needed.
Classmate # 2
Not only does a comprehensive annual report ensure compliance and the absence of fraud or error in auditing, it provides insight into the efficiency of organization operations and is a powerful tool for management. Auditing and financial reporting is no longer an issue of simple compliance. Such financial reports can provide the opportunity to assess organization performance (McKinney, 2015). A CAFR provides a powerful tool for management to assess performance in relation to resources used. By providing the universal variable of dollars and cents, these financial reports can allow management to compare different programs and projects. In this way, managers can see which programs are more efficient and produce more results for a given amount of resources. This type of insight is obviously of crucial importance in a public and nonprofit climate where funding is becoming increasingly difficult to come by.
Decision makers are human and clearly have limits to the amount of information they can process. It is easy to see how one could become overwhelmed in this age of information technology. The amount of information out there is not only plentiful, it may be difficult to interpret or apply to the decision-making process. Malhotra (1982) clearly demonstrates that consumers quickly become overloaded with information. Consumers demonstrated poorer decision making and information overload when the amount of choices increased to only 10 alternatives. Etzioni (1967) proposes an alternative to the rational model of decision making. As Etzioni describes it, rational decision making can likely lead to information overload, as the rational decision maker attempts to gather as much information as possible in order to inform a rational decision. Etzioni proposes what he called a "mixed-scanning approach" (p. 387). This approach attempts to get an overall broad picture in addition to a smaller amount of detailed information. This is an attempt to get an overall picture of what is going on but also use specific information to back up the bigger picture.
Both of the municipalities which I will be analyzing in the final project are faring quite well financially. As I have previously stated, both Minneapolis and Saint Paul are operating with balanced budgets. Both cities have approved previous annual expenses, and in some cases, have even expanded funding to certain entities such as fire and police. The Twin Cities area is experiencing growth which is increasing the tax base and increasing revenues. On the other hand, growing populations do need more public services, so the cities are having to use these taxes to accommodate the growth. Just yesterday, Minnesotans voted on a bill to increase the property tax levy in order to fund an increase in education funding. This is a clear example of how tax codes affect fiscal strain. Tax codes may cause fiscal strain by creating low tax rates. On the other hand, tax codes could lead to higher taxes which can increase funding. As far as I understand, much of these more local taxes are voted on by local citizens.
I tend to take an optimistic view of people. I tend to believe that most people are inherently good. There obviously are exceptions to this, but in general I have faith in people. That being said, even good people do stupid things. Again, this is no surprise. Even if you were to only employ people of the highest integrity, people slip up. Humans make mistakes. I feel that this humanistic perspective can sometimes be lost in business and public administration. Instead of people, employees are viewed as nothing more than variables in a work equation. In this analogy, internal control is the organizational response to the human aspects of this "equation." As I see it, this will never completely work because humans, in all of their complexity, do not fit into the equation. They are a completely different entity which is not adequately captured in the equation which they are being forced into. I do not see the complete avoidance of fraud and error to be possible even with people of great integrity in a system of extreme internal control. Things will always slip through the cracks. Another broad insight which could be applied here is that the only constant in the world is change. As such, organizations need to be flexible and adaptable and not simply provide rigid and inflexible internal controls. Organization must manage their "human resources" as humans, and not just variables in the work equation or resources to be utilized towards a goal or objective.