1. Has the company imposed overly restrictive controls? Explain why or why not.

2. Do you think the company has a good conception of control tolerances? Why or why not?

3. What should Jean do?

Jean:

Hey. I could sure use some help. We regional supervisors are caught in the middle. What do you do about all this red tape were having to put up with? The Jean: accounting department is all bothered about the way people are padding their expenses and about the cost of luncheons and long-distance calls. You know--their answer is nothing but more red tape.

John:

Well. I don't know. I'm feeling the heat too. Upper management wants us to maintain our contacts with our brokers and try to get the money out in loans. So we John: push the district supervisors to see our best contacts or at least call them frequently. Yet lately. lye been having a heck of a time getting my people reimbursed for their expenses. Now the accounting department is kicking because we spend a few bucks taking someone to lunch or making a few long-distance calls.

Jean:

I really don't know what to do. I'll admit that some of my people tend to charge the company for expenses that are for their personal entertainment But how can I tell whether they're buttering up a broker or just living it up on the company? The Jean: accounting department must have some receipts and records to support expenses. Yet I think that getting a receipt from a parking lot attendant is carrying this control stuff too far. As a matter of fact. the other day. I caught a taxi at the airport and failed to get a receipt--I'lI bet I have a hard time getting that money from the company even if I sign a notarized affidavit.

John:

Well, the way I handle those things is to charge the company more for tips than I actually give--and you know they don't require receipts for tips. I just don't know how to decide whether those reimbursement receipts that I sign for my people are legitimate. If I call people up and ask about some items on a reimbursement request, they act as though I'm making a charge of grand larceny. So far. I've decided to sign whatever requests they turn in and leave the accounting department to scream if it wants to. The trouble is that I don't have any guidelines as to what is reasonable.

Jean:

Yeah, but I don't want to ask questions about that because it would just result in more controls! It isn't up to me to be a policeman for the company. The accounting department sits back looking at all those figures--it should watch expenses. I ran into someone from the department the other day on what she called an internal audit trip, and she told me that they aren't in a position to say whether a $40 lunch at a restaurant is necessary to sell a loan. She said that the charge was made by one of my people and that I should check it out! Am I a regional production person or am I an accountant? . . . . . .