Exercise

We said that organizations are rationale-legal systems. According to Hasenfeld, they are rationale because the internal division of labor, the definition of roles, and the distribution of authority are highly formalized and hierarchical. They are legal because the assignment of to positions, the distribution of authority, and the rights and duties of each position are based on inpersonal rules that are applied universally. These rules and procedures are generally referred to as Standard Operating Procedures. Standard operating procedures are the formal administrative regulations, uniform procedures, and manuals used to create the conditions of regularity and order in an agency. They provide some assurance that fundamental processes will be carried out with dispatch and regularity.
 
In the case below, the standard operating procedures for handling money directed to the discretionary fund were inadequate. The problems confronting Bob are due, in part, to his failure to develop and/or adequately monitor accounting procedures for deposits to the fund. Assume you are in Bob's situation. Develop a set of standard operating procedures regarding deposits and accounting for the Director’s discretionary fund. Then develop a compliance monitoring checklist that could be used to ensure compliance with your new SOPs.

Case
 
City manager Greg Sullivan just shook his head. "Bob, this is crazy. How could you let this happen?"
 
"I have no excuse, Greg," responded Bob Williams, Bridgeton's Social Services Director. "This is a special bank account that was set up years ago. It has discretionary money for the Director to use in emergencies. For all I know, the missing three hundred dollars happened long before I came on board."
 
"What's crazy about all this," Greg noted, "is that the auditors find total conformity with your budgeted accounts of 1.5 million dollars. But they are going to report that in their audit of your $5,000 discretionary fund, they can't find $300.
 
"But when it hits the press, my good reputation in the community will be in doubt," Bob lamented. "No one will even notice that the accounting for my main budget is perfect to the penny."
 
"I hate to ask, Bob," said Greg. "What kind of account do you keep for the discretionary fund?"
 
"I inherited the books," said Bob. "It's just a ledger book purchased at the drug store. I enter all deposits when donations are received and I enter all checks issued. The funds are kept in a separate NOW account in the Bridgetown Bank. I reconcile the ledger whenever I get a chance, but I must admit its usually a few months late."
 
"Do you make the deposits?" Greg asked.
 
"No," Bob answered. "I make sure my secretary actually makes the deposits."
 
"Well," Greg continued, "at least the auditors gave us advanced notice of their report that goes to the city council next week. We'd better prepare a letter to the council. I'll talk to the mayor and get her advice as to who should talk to the media. Darn, we've got more important things to do than dealing with a some reporter eager to make a mountain out of a molehill. But, we have no choice. Unlike our colleagues in private business, we live in a fishbowl. I almost wish it was $300,000 that was missing. That would at least be worthy of public involvement. But $300!"
 
"Bite your tongue, Greg," Bob responded quickly. "If it were $300,000, I'd have no choice but to give you my letter of resignation."
 
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Source: Weiner, M. E. (1990). Human Service Management: Analysis and Application. Wadsworth.
 

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