Leo’s Four-Plex Theater
Summary & Issues
Leo Antonelli runs a theater out of a small town in west Texas called “Leo’s Four-Plex Theater’ which he has found to be less profitable than first expected. He hired his nephew, Bill Reilly, to manage the theatre in his absence which has proven unsuccessful. Cash is missing, theater employees are incompetent and ticket counts don’t match the supposed sales numbers. Park Cockerill, professional accountant, was brought in to assess the complications with the business and the main issues pinpointed were of these sorts: 1. Employees and Management: * Young, incompetent employees are the main staff and it being a small town, most know the customers coming in. * Free admissions have been authorized by manager, Bill Reilly, for customers on occasion. * Lack of good management oversight or policies in place to govern employee actions. 2. Movie Ticket Issues * Customers are let in free of charge by employees, including management signing off on free tickets. * Amount of stubs don’t match daily revenue numbers from supposed ticket sales. 3. Missing Cash * Miscounts happen with cash as lack of care is taken, and potential theft, with handling. Not enough MCSs in place to counteract potential thefts or miscounts. * Regular cash discrepancies per cashier and the occasional large cash shortage (e.g. $100). Park noticed that employees either failed to collect cash from the customers or failed to ring up the sale on the cash register.
Analysis & Solutions * Policies and procedures should be put in place to guide, direct and govern employee actions. * Better hiring practices should be in place to avoid incompetent young staff. * If employees are falsifying Bill’s signature to sign off on free admission tickets, free tickets should only be controlled by Bill and if these tickets are administered it is only at his discretion. * A more experienced manager should be brought in, aside from Bill, to oversee employee actions and to make sure ticket stubs match sales, cash is accounted for correctly, employees have guidance and there is no theft. * Cash should be counted by someone other than the individuals who collect it. Have a trusted manager do the cash counts and bank reconciliations. Surprise counts of cash should be conducted after such changes have been made in order to evaluate the success of the changes. * To motivate good behaviour that aligns organizational goals with employee goals is having incentives for such behaviour. For example, introducing Employee of the Month or even a more negative stand point being any cash discrepancies come out of the employee’s pay cheques with only 2 allowed miscounts per cashier.