Question

Halo University is a private faith-based university with less than 10,000 undergraduate and graduate students. The largest sources of revenue are tuition and donations. In the past ten years, the football team has been wildly successful in a Division I conference. Led by Coach Joe Smith, the team played in bowl games all ten years and finished seven seasons in the top 25 in the AP Poll. University fans are wild with enthusiasm. Game are sold out and university colors are seen everywhere. Most importantly, enrollment and donations have increased by 5% each year for the past 10 years. Although Coach Smith receives a $4.5 million a year salary, university administrators agree he is worth every penny. They are not worried about the current $15 million buyout agreement; they want him to stay as long as possible! Joe Smith grew up in the city where Halo is located. He played high school football before becoming a student and player at Halo. After college, Joe played professional football for three years. An injury sidelined him from the game, so Joe decided to coach. Joe served as an assistant coach for another university for four years until his alma mater offered him the Head Coach position. He has been loved by the university community. Everyone knew that he would do an excellent job.

On July 5, the president of the university received a phone call from the state police department. Coach Smith’s home was robbed in the middle of the night. Coach Smith was fine but sent to the hospital for observation. The president immediately went to talk to Coach. Coach Smith assured the president that he was fine and was thankful that no one else was at home at the time of the home invasion. Coach’s wife and three children were on vacation that week. The next day, the president and the coach held a press conference to assure everyone that the Coach suffered only minor scrapes and bruises and that no one else was home at the time of the robbery.

On July 10, television reporters announced that Coach Smith was in fact not home alone at the time of the invasion. A woman named Kaitlyn Anderson was there with him. She hid in the closet during the robbery. She left the home prior to Coach Smith calling the police in an attempt to stay out of the press. Although she did not incur any physical injuries, she was experiencing severe emotional distress from the robbery. The reporters also revealed that the coach and Kaitlyn were having an affair for over two years. A former graduate assistant in the Halo athletic office, Kaitlyn recently completed her Master of Accountancy degree, passed the CPA , and is interviewing for a jobs at public accounting firms. The university formed an Ad Hoc Disciplinary Committee to address the issue. Members of the committee included the university president, the vice president of accounting and finance (who is a CPA), the human resource director, marketing and communications director, athletic director, and legal counsel.

1. What are the relevant facts of the case? Be sure to identify the problem.

          Halo is a small university (with 10,000 undergraduate and graduate student)

2. Governmental entities and not-for-profit organizations have their own Codes of Professional Conduct and/or Codes of Ethical Conduct, many of which can be viewed online. Select an actual faith-based private university and examine its Code of Conduct. Assume that Halo University has a code of conduct similar to the one you selected.

a. What parts of the code should the Ad Hoc Committee consider when making its decision about the ethical issue? (Identify the university your chose for your code of conduct in your answer and provide a link to the code.)

b. Does the Vice President of Accounting and Finance have additional professional obligations due to his CPA designation and position at the university? If so, what are the additional obligations? (Do CPAs have their own code of conduct?) c. What personal obligations, if any, should the committee members consider?

3. Who are the affected parties (stakeholders)? Be sure your answer includes any relevant stakeholders who are not specifically mentioned in the case.

4. What are the potential options and courses of action the ad hoc committee might pursue? List the potential ethical and/or practical ramifications for each option. In your answer, consider the points of view of the stakeholders you identified.

5. What do you think should be done in this situation?

Accounting Questions

1. What set of generally accepted accounting principles does Halo University likely follow? What are the potential financial effects of this situation and of the possible courses of action?

2. Budgeting and control are essential to not-for-profit organizations.

a. What are the key purposes of operating budgets?

b. How do operating budgets of non-governmental not-for-profit entities differ from budgets of for-profit entities? from governmental entities?

c. In this case, how might the present situation and different courses of action affect the present and future operating budgets?

Professional Development Questions

1. Kaitlyn has passed the CPA and will apply to be a CPA when she completes one year of work. What effects, if any, do you think the enormous media coverage of this situation will have on

a. Kaitlyn’s job prospects?

b. Kaitlyn’s likelihood of becoming a CPA? (Could she be denied a license because of her actions related to this case?)

2. Is media, including social media, a concern for all individuals who are interviewing? Explain. What actions should students take concerning their social media prior to a professional job search?

Answer 1

Answer to accounting questions

1) An organization is a Non-Profit Organisation (NPO) generally has to prepare the following.

The Statement of Activities

The Statement of Cash Flows

Fund Accounting

Financial Statement Presentation

The Statement of Financial Position

set of generally accepted accounting principles does Halo University likely follow are

Principle of Consistency

Principle of Sincerity

Principle of Permanence of Methods

Principle of Non-Compensation

Principle of Prudence

Principle of Continuity

Principle of Utmost Good Faith

The fact that the coach is in the hospital with injuries will largely affect the financial position of the organization as income has increased 5% every year for the last 10years. Also, the 15 million paid to retain him as the coach may also not be fruitful as the performance may be affected by the coach because of the accident. The course of action should be made judgemental o retain the money back from the coach and pay after he returns back while employing a new coach for the time being.

2) An operating budget shows the organization's projected revenue and associated expenses for an upcoming period – usually the next year – and is often presented in an income statement format. Usually, management goes through the process of compiling the budget before the start of each year and then makes ongoing updates each month. An operating budget might consist of a high-level summary schedule, supported by detail to back up each line item in the budget. Key purposes can be

• Are we meeting or beating our targets?
• Did we have any expenses that we didn't include in the budget?
• Have we projected costs fairly well, or do we have cost overruns that need immediate attention?

NPO	GOVERNMENT AGENCY
SOURCES OF FUNDS IS NOT FIXED	SOURCES OF FUND IS FIXED
USED CHARITY PURPOSES ONLY	PURPOSES INCLUDE MANY
PREPARED BASING ON PAST YEARS PERFORMANCE	PREPARED BASING ON FUTURE ESTIMATE
HEAVY CALCULATIONS MAY NOT BE REQUIRED	INVOLVES MANY CALCULATIONS

As the source of income is the tuition fee and donation, the source of the donation might be heavily affected if the players fail to meet the expectations of the audience due to the lack of the head coach. The only way to safeguard the future is to set up a new coach or bring back the old one. The management should also find other sources of income like "playing for a cause" donation collection campaigns and promoting other talents of the students to enter other sources of income while keeping football and tuition fees a major source. Planning other sources of income like an investment, Fundraising campaigns, Crowdfunding, football Membership can be started.