June 2021 ACCA SBL exam was – Instant Poll and comments

I talked about factor conditions as in how they were placed in the community due to the founder and his strong ties with the locals, therefore driving the corporate donations.

And demand for courses due to the economy and unemployment.
And then talked about volunteers and how they were an advantage as the course they led was the most income generating.

I think I repeated the same point several times throughout the paper.
It was not difficlut but the time pressure did make me panic!

What does sharing information on internal controls mean in practice?

What level of detail is shared? Is this different between charities and companies?

2a) Evaluate course portfolio

Computer basics:

Numbers going down.
Course out of date. First course and not updated since (i.e. 20 years old)
IT changes quickly
Course could be dropped
Council puts emphasis on IT skills
Don’t drop but modernize course

Web development course

Numbers going up
Course is full
Skills in demand. Council like IT skills
Increase price (high demand, marketable skills)
Add more capacity

Find a job

Only profitable course
Profitable because run by volunteers (idea for other courses)
Expand

Business skills

Popular
Makes huge loss
Why? Because it’s new? Or other reasons?
Course can’t be dropped because of council requirement
Charity has connections to companies in community (company donors). Ask them to teach course for free to reduce costs

3b identify stakeholders that are interested in internal controls; justify whether they should get information about internal controls

Council: gives a lot of funding. Funding might stop if they don’t see internal controls. Council has a lot of interest and power

Company donors: give donations. Smaller but still significant. If one company stops, other companies might also stop (close community). This would increase interest/power

Individual donations / public: charity scandals in newspaper: increased interest. not much power. but still

(Is interest/power, i.e. Mendelow, the right model?)

Justification: donations would stop (especially council). This is a bit weak. What else could I have said? Maybe charities working in the public interest?

Other stakeholders I did not mention: maybe regulation

4b change management [commercial acumen]

I didn’t do well here, even though change management should have been an easy question. I couldn’t find much in the case study to make it relevant, so I talked quite generally.

Change: biggest problem is people. They might resist change.

Communicate early. Get them involved. Have them own it.

Unfreeze: as above, communicate.
Change: training. switch over
Refreeze: make sure people don’t use old ways. Not clear to me if old newsletter would continue or be discontinued.

I had a hard time linking it to the case.

@Tomodon
I have the same questions as you have.

When I was writing part b of Q 2 I felt that I may not be able to solve the whole paper but I did it

Overall paper was easy but what make it hard was that unlike commercial organization I was not able to improve the quality of my points to explain WHY and IMPACT of point I wrote. So basically have to write as many points as I could which I realize after I had solved Q 1 and Q2.

In change mng question I had also diffculties. I used POPIT because no morr publishing and postage of annual reports so process had to change. Also organisational roles and responsibilites may change. But mainly I wrote about people.

It was a very open question.

It was unexpected to deal with charity but in general not so hard. I have answered to all questions but not sure in quality of answers …..lets see ))) good luck to everyone

It was a tricky one. I commented on art tutor’s cost is high. the art course is going against the charity’s strategic purpose, art class is a hobby and not an employable skill that people are looking for. and doing the course on a weekend when it’s a busy period means NCCP will be diverting existing resources to facilitate the art class is not appropriate. And the course price is too high and expected income should be looked into as the art course is being delivered in an economic area with high unemployment.

That’s how I approached it.

My answer on art course was almost opposite of yours.
Mission was also provide social interactions so I suggested that art course meets it, as there most likely limited interactions during skills courses as participants are busy learning. Plus it can attract more wealthy individuals who are not looking for job like retired people who want to spend time pleasantly. The drawback was initial investment of 12k, I questioned if other cheaper options were considered. Materials cost should’ve been paid one year in advance, again with cash contribution difficulties it’s a commitment. Number of attendees was like 240 per annum, how it was derived if for other courses was in thousands. No forecast for other years ahead.
Also mentioned that the council unlikely to support it because they more focused on IT skills courses.

For the art course we were also being tested on the professional scepticism skill so we had to also question the intention of why such course out of other courses were chosen.

1. He had an interest in art himself so he was bias.

2. There can be seen as a conflict of interest as he contracted his good friend to deliver the course materials and paying him a fee of £12,000 which this arrangement were different from the freelance tutors. The amount charged can be called into question whether it is a fair market rate.

3. There will be a high risk of a loss being made if the demand for the course doesn’t meet at least 240 participants per annum which will profit around £12,400 in order to breakeven to cover the inintial outlay.

4. In order to take advantage of the bulk discount large quantities of materials will be bought in advance, so there is a risk that if the demand is low there will be obsolete inventories.

5. The course is only affordable to the wealthy individuals which is highly unlikely that there will be demand for the course as there is high unemployment rate in Ceeville and so the choice of course is not really appropriate to serve the needs of the community.

6. By charging a high fee for the course it goes against the aim of the NCCP’s objectives.

7. The decision made by the CEO to charge such a high fee goes against the purpose of a charity organisation which is a not-for-profit organisation, but coming from a commerical background, he put too much focus on solely making a profit, despite it might have been for the better good to keep NCCP afloat.

8. On the positive side, drawing from his experience working in the commerical industry, the high course fee could help improve the cash flow position as it is as low as £48,000.

I concluded that the course was not viable, for all the reasons mentioned and most important the high cost charged goes against the very reason why NCCP was established in the first place. Hence why all other courses are priced at such a low rate, needing council subsidies to cover the excess. None of the courses taught are profitable because it’s not out there to make a profit but to help people.

You really did well in Q2a