Northern Region Support Centre NRSC 2002 Exam CMA

June 2002 CMA Entrance Examination Part 2

Page 94 CMA Canada

The Societies of Management Accountants of Manitoba, New Brunswick, Newfoundland, Northwest Territories, Nova Scotia, Ontario, Prince Edward Island, Saskatchewan and the Yukon, Certified Management Accountants Society of British Columbia,

The Certified Management Accountants of Alberta, Ordre des comptables en management accrdits du Qubec

June 2002

CMA Entrance Examination

Part 2

Backgrounder The background information relating to the Part 2 case (Backgrounder) is provided to candidates in advance of the Part 2 examination date. It contains information about the company in the case and its related industry. Candidates are expected to familiarize themselves with this background information in preparation for the strategic analysis that they will be asked to undertake during Part 2 of the CMA Entrance Examination.

Candidates should note that they will not be allowed to bring any written material into the examination writing centre, including the advance copy of this Backgrounder. A new copy of this Backgrounder, together with additional information about the company, will be provided at the writing centre for Part 2 of the CMA Entrance Examination.

Candidates are reminded that no outside research on the industry related to this case is required and that they will be evaluated on how they respond based on the industry information provided in the Backgrounder and the question paper (Additional Information).


CMA Canada Page 95

Northern Region Support Centre Backgrounder

Overview

Northern Region Support Centre (NRSC) is a registered charitable organization located close to a major Canadian city (the City). NRSCs mandate is the prevention and treatment of all forms of child abuse through education programs and counselling services: sexual abuse, physical abuse, emotional maltreatment and neglect.

NRSC currently offers individual and group counselling to child abuse victims and offenders, as well as to members of their immediate families. The organization has developed strong expertise in the field of child abuse based on its extensive experience over the past 17 years. This has allowed it to help clients recover from the trauma of their abuse and to deal with its impact on both themselves and their families.

NRSCs clients (victims and offenders) range in age from early childhood to senior citizens. Most of its clients come from referrals made by organizations, such as the Childrens Aid Society and other not-for-profit agencies, and from psychologists who practice in the Northern Region. While NRSC was established to serve residents of the Northern Region, the organization sometimes accepts clients from neighbouring communities when there are spaces available (see Exhibit 1).

Funding for NRSC is provided by the Provincial Ministry of Social Services, the Northern Region Municipality, the United Way, and donations from individuals and corporations. The organization operates with a break-even objective. Some of the funds that NRSC receives are restricted for use in specific initiatives within the scope of its mandate. Provincial and municipal funding is provided on the condition that any change in NRSCs mandate must receive government approval.

NRSC has a small staff consisting of an executive director, an administrator, a part-time fundraiser, a clinical director, and two in-house therapists (termed group leaders) who lead the organizations group counselling sessions (see Exhibit 2 for an organizational chart). NRSC engages other psychologists (termed external therapists) within the community on a contract basis to provide counselling for clients who require individual treatment. NRSC is overseen by a volunteer board of directors consisting of nine individuals from within the Northern Region community. An executive committee that reports to the board monitors NRSCs day-to-day operations.


Page 96 CMA Canada

History

NRSC was established in 1985 as the Northern Region Sexual Abuse Program (the Program) to develop and provide treatment and community education programs for and about victims of child sexual abuse. In January 1990, an application for separate incorporation was filed, and the Program was incorporated by Letters Patent under the Canada Corporations Act without share capital. In May 1995, the articles of incorporation were amended, and the Program was renamed the Northern Region Centre for Childhood Sexual Abuse (the Centre).

In December 2000, the Centre received governmental approval to broaden its mandate to make its counselling services available to individuals and families affected by any form of child abuse, including sexual, physical and emotional abuse, and neglect. It took this step in recognition of the reality that all forms of child maltreatment and neglect result in serious consequences for the victims. The Centres management believed that it should offer its knowledge and skills to a broader population that could benefit from its services. In March 2001, Supplementary Letters Patent were issued to change the corporations name to the Northern Region Support Centre (NRSC) in recognition of its broader mandate.

(Note: For ease of reference, the organization will be referred to as NRSC throughout the remainder of the case.)

The Nature and Scope of Child Abuse

Research has shown that child abuse is a traumatic experience that can cause profound and long-lasting damage to the mental, emotional, behavioural, social and physical functioning of the victim. According to a recent report published by the federal government, the prevalence of child maltreatment and neglect in our society is of epidemic proportions and constitutes a major health issue. It destroys individuals, families and communities, and weakens the well-being of our society.

Child abuse crosses all socio-economic boundaries throughout Canada. Most often, victims know the offender, who is frequently in a position of trust with the victims family, i.e. relative, friend, coach or caregiver (see Exhibit 3). This position of trust makes the child uncertain about disclosing the abuse and frequently the abuse goes unreported.

Child abuse is divided into four categories physical abuse, sexual abuse, emotional maltreatment and neglect. Each year, the Childrens Aid Society, which is the principal organization that oversees child welfare in the province, investigates approximately 1,800 cases in the Northern Region for suspected child abuse. It is widely recognized that 1 in 3 female children and 1 in 5 male children suffer from some form of abuse before the age of 16. The degree of abuse varies considerably and most instances go unreported (see Exhibit 4). Without immediate intervention, many abused children cannot break the chain of abuse and become abusers themselves (see Exhibit 5). Children who experience trauma as a result of abuse suffer from a variety of long- and short-term difficulties, including sleep disturbance (night terrors),


CMA Canada Page 97

drug and alcohol abuse, learning disabilities, and extreme emotional states (rage, depression, anxiety).

When children are referred to a professional for help, they typically are in a highly dysfunctional state and in need of immediate and intensive intervention. Parents struggle to understand what has happened to their child and why he/she is displaying such outrageous behaviour. The child cannot fully comprehend what has happened and does not have the capacity to express how he or she feels. Therefore, in many cases, it helps to treat the entire family and not just the victims themselves. This is the approach used by NRSC.

Operations

When a client (victim or offender) is first referred to NRSC, the clinical director assesses the situation by separately meeting with the victim, the offender (where possible), and members of their immediate families. The clinical director strives to meet with prospective clients as soon as possible after a referral. This is critical due to the nature of child abuse and the trauma that it causes.

In some cases, the victim but not the offender is available for treatment (e.g. the victim does not disclose who the offender is, the offender refuses treatment, the offender remains at large, or the offender is imprisoned and is not permitted to be released for therapy outside of the prison). In these cases, only the immediate family of the victim is involved.

Each case referred to NRSC can be classified into one of the following three categories:

1. The victim and the offender are members of the same family (e.g. a young child has been abused by an older sibling or parent). In these cases, the immediate family of the victim and the offender are the same.

2. The victim and the offender are members of an extended family (e.g. a child has been abused by an older cousin, uncle or aunt). In these cases, there are two distinct, but related, immediate family units.

3. The victim and offender are unrelated (e.g. a child is abused by another individual in the community, such as a neighbour, babysitter, coach, etc.). In these cases, there are two distinct, but unrelated, immediate family units.

Following the initial meetings with the clients and members of their immediate families, the clinical director determines whether treatment should be provided on an individual or group basis. Individual treatment may be prescribed when it is a condition of the organization that referred the client to NRSC (e.g. the Childrens Aid Society), in cases where extreme abuse has taken place, or in cases where the clinical director believes that an individual would be disruptive in a group environment. External therapists are used for individual counselling.


Page 98 CMA Canada

When individual therapy is undertaken, sessions typically are held for a period of 6 to 12 weeks. The clinical director meets with the client and the external therapist at the end of the prescribed duration to discuss the next steps. In approximately 25% of these cases, further individual therapy is prescribed. In approximately 20% of these cases, group therapy is recommended as a follow-up to the individual therapy. In the balance of these cases, no further therapy is immediately required.

When group treatment is prescribed, victims are treated with a group of other victims and offenders are treated with a group of other offenders. Group therapy is acknowledged as an important and beneficial form of treatment when dealing with child abuse issues. Groups remove individuals from their isolation and provide them with a safe setting to work on their issues and problems. Each group is specifically designed to address the issues and needs of its members, particularly the overall impact of the traumatic experiences in their lives. Helpful support and constructive understanding are essential elements of all of NRSCs groups.

Groups of victims are organized by age. Victims are categorized either as children aged 7 to 12, or as teenagers aged 13 to 19. Victims under the age of 7 are treated on an individual basis. This is necessary due to the special needs of young children, such as the difficulty they often have in articulating their trauma. In addition, NRSC offers groups for former victims of sexual abuse (termed survivors) who are older than 19 years of age. NRSC began to offer survivor groups in 2000 after learning that certain individuals find it difficult to function in their daily lives long after therapy (individual or group) has been completed. In all cases, the safety and security of victims are strictly maintained.

Offenders are also placed in groups based on age. There are three offenders groups: young offenders (under age 12), teenage offenders (aged 13 to 19) and adult offenders (aged 20 and above).

Groups meet for a period of 10 weeks beginning in January, April, July and September. Each group meets once per week for three hours and is led by a group leader. For each hour of group therapy, the group leader spends an additional two hours for preparation, follow-up, documentation, and individual client meetings. Each group normally consists of five to nine individuals. When 10 or more individuals are registered for a given age category, a second group for that age category is offered.

Prior to commencing group therapy, the group leader arranges a meeting with the victim or offender on an individual basis to discuss expectations and set objectives. One of NRSCs group leaders handles all victims groups, while the other handles all offenders groups. At approximately the mid-point of the group sessions, the group leader again meets with the victim or offender to discuss progress. After the last group meeting, a meeting is held with the victim or offender, members of his/her immediate family, the group leader, and the clinical director. Following that meeting, the group leader and the clinical director determine whether the victim or offender should receive more treatment (group or individual) or whether treatment is completed. Additional group therapy is prescribed in about 25% of the cases and follow-up individual therapy is prescribed in about 5% of the cases.


CMA Canada Page 99

The group leader is responsible for keeping the referring party (e.g. psychologist, Childrens Aid Society, etc.) informed about the status of the victim or offender that was referred. This also ensures that the group leader is provided with information that the referring party may have regarding the situation. In many cases involving offenders, the authorities are directly involved. NRSC has received very positive feedback from a number of Childrens Aid Society workers. This feedback has included praise for its easy accessibility, the high quality of work done by NRSCs staff, and the efforts made by the group leaders to keep the Childrens Aid Society up-to-date on the status of the clients that they referred to NRSC.

A schematic overview of the client treatment process is provided as Exhibit 6.

NRSCs staff also becomes involved in special projects, such as preparing educational manuals on child abuse and conducting research on child abuse treatment techniques. Through the work that it has done, NRSC has become recognized by a select group of professionals within the field as a leader in child abuse detection and group therapy treatment. On occasion, visitors from across Canada, and sometimes even from the U.S. and Europe, visit NRSCs facilities to observe its approach to treating victims and offenders of child abuse. In addition, NRSCs executive director and clinical director are occasionally called upon to be guest speakers at conferences on child abuse located throughout North America.

NRSCs Market and Clients

NRSC is located in the Northern Region, a suburb of the City (see Exhibit 1). NRSC occupies a 1,200-square-metre facility in an industrial strip mall located in District 4 along a major transit route. The Northern Region is comprised of four districts. Districts 3 and 4 are older, and developed from the suburban expansion that took place in the 1960s, 70s and 80s. Over the years, the general population of the Northern Region has been expanding northward. Population statistics for the Northern Region are provided in Exhibit 7.

NRSCs services are available primarily to residents of the Northern Region. In certain cases, the organization accepts clients who live outside the boundaries of the Northern Region when there is space available in one of the groups, i.e. when the admittance of a person from outside of the Northern Region would not result in an additional group having to be offered for a given age range.

The principal agency that oversees all matters involving children in distress within the province is the Childrens Aid Society. The Childrens Aid Society is a provincial government agency that works to ensure the welfare of children in all areas of the province and to ensure that childrens agencies are fulfilling their respective mandates. The Childrens Aid Society has broad powers, including the authority to remove children from their homes and to place them into protective custody. Individual childrens agencies, including NRSC, do not have such powers. Childrens agencies, including NRSC, are required to support the Childrens Aid Society in the fulfillment of its mandate by providing information regarding victims and offenders.


Page 100 CMA Canada

Approximately 60% of NRSCs clients are referred to it by the Childrens Aid Society. Referrals from other agencies in the Northern Region (such as the Centre for Abused Women, discussed below) collectively account for approximately 20% of NRSCs clients, and referrals from agencies located outside of the Northern Region account for about 5% of NRSCs clients. Ten percent of clients are referred to NRSC by other professionals who work in the Northern Region, such as psychologists, physicians, and schoolteachers who become aware of an abused child or offender. Many of these referrals are made because the professional is aware that the victim or offender cannot afford to pay for private therapy. Finally, approximately 5% of NRSCs clients are classified as walk-ins. That is, they are not referred by another agency or professional, but have become aware of NRSC through other means such as speaking with a friend who is a former NRSC client, through NRSC fundraising events, or because they had seen a small brochure that is prepared by NRSC and distributed to select public establishments in the local area (e.g. shopping malls and community centres).

NRSC is the only organization within the Northern Region that offers treatment to victims and offenders of child abuse. Other organizations within the Northern Region that offer treatment for other forms of abuse include the following:

Centre for Abused Women provides counselling and support for victims of spousal and non-spousal abuse, and offers temporary shelter to women and their children who have been physically or mentally abused. The Centre for Abused Women sometimes refers cases to NRSC when its clients children have been sexually abused.

Drug and Alcohol Abuse Program helps individuals addicted to drugs and alcohol in overcoming their addiction. Many drug and alcohol abusers mistreat or neglect children as a consequence of their addiction. The Drug and Alcohol Abuse Program sometimes refers clients to NRSC for child abuse treatment.

Animal Abuse Centre provides shelter for abused and mistreated animals. Research has found a correlation between those who abuse animals and those who abuse children. However, given the differences between the mandates of the Animal Abuse Centre and NRSC, there is little cross-referral between the two agencies.

Personnel

The people involved with NRSC and their respective roles and responsibilities are described below (see the organizational chart in Exhibit 2). A characteristic that is common among NRSCs employees is that they have a passion for the work that they do and thus are willing to accept salaries or wages that are lower than what they could earn elsewhere.

The executive director, Dr. Chris Campbell, manages the day-to-day operations of NRSC. Dr. Campbell holds a Ph.D. in Psychology and has been with NRSC since its inception. He is 55 years old. His duties include liaising with the Ministry of Social Services, the United Way, the Northern Region Municipality, the Childrens Aid Society, and other agencies. Dr. Campbell is the main link between the board of directors and NRSC. He also handles the day-to-day issues


CMA Canada Page 101

that arise at NRSC, including fielding many of the technical inquiries that are made by current and prospective clients (e.g. the reasons for group therapy as opposed to individual therapy). Dr. Campbell oversees all of the programs for which NRSC receives restricted funding. He receives a salary of approximately $60,000 per year.

The clinical director of NRSC is Nicole Gauthier. Nicole holds a Masters Degree in Social Work as well as a Masters Degree in Child Development. She is 44 years old and has been with NRSC for the past 10 years. She oversees all of the clinical functions at NRSC, including initial meetings with prospective clients, coordinating clients into groups, arranging external therapists for clients requiring individual counselling, and reviewing client cases at the end of the group sessions to determine appropriate next steps. Where time permits, Nicole works on special projects such as researching new child abuse detection and treatment techniques. Some of these projects are funded through restricted funds received by NRSC. The other projects, which are not specifically funded, are initiated by Nicole because of her belief in their importance. Nicole receives a salary of approximately $45,000 per year.

There are two group leaders Eric Simms and Monique Picard. Eric Simms works with groups of victims of child abuse. He is 28 years old and holds a Masters Degree in Psychology. Eric joined NRSC this past year following the departure of the previous victims group leader who left to pursue a career in private practice where his earnings potential was greater. Previously, Eric worked at a local hospital helping people who had suffered severe permanent physical injuries to recover emotionally. Dr. Campbell had actively recruited Eric. He believed that it would be beneficial to hire someone with a fairly broad background in treating different types of trauma. Eric receives a salary of about $33,000 per year.

Monique Picard works with groups of offenders. She is 35 years old and has been with NRSC for seven years. Monique holds a Bachelors Degree in Social Work and is close to obtaining a Masters Degree in Social Work, which she has pursued during the evenings. Dr. Campbell has encouraged Monique to pursue a Masters degree because he believes that it would help NRSC to become better recognized for the high qualifications of the professionals it employs and for the quality of care it provides (most agencies of this type employ counsellors with Bachelors degrees or community college certificates). Monique enjoys the research side of her work and over the years has written a few articles on the causes of abusive behaviour, which have appeared in psychiatric journals. Monique receives a salary of about $35,000 per year.

NRSCs administrator is Bonnie White. Bonnie manages all of the office functions, including answering the telephone, greeting visitors, word processing, filing and other secretarial functions. She is 44 years old and has been with the organization for nine years. Bonnie has no formal education beyond high school. She works from 9:00 a.m. to 3:00 p.m. each day and is paid $10.00 per hour for her work. This schedule allows Bonnie to drop off and pick up her young children at school each day.

NRSC employs a part-time fundraiser, Betty Sheer. Betty is 22 years old and joined NRSC after graduating from high school three years ago. Betty works 20 hours per week at NRSC and also has a part-time job at a local fast food outlet. Betty coordinates fundraising events and solicits donations from individuals and corporations in the Northern Region. She also helps to design


Page 102 CMA Canada

and distribute the promotional brochure used by NRSC. Betty is paid at a rate of $8.00 per hour for her work.

NRSC uses external therapists to treat victims and offenders of child abuse on an individual basis. The external therapists typically are psychologists who operate private practices in the Northern Region and whose time is not filled up treating their own clients. NRSC draws upon a pool of about 20 independent psychologists in the Northern Region who are trained in treating victims and offenders of sexual and non-sexual abuse. The pool system is necessary because treatment depends on the availability of external therapists. Once a client has been referred to a particular therapist, there is a reluctance to change because of the drawbacks of having to start a relationship with a new therapist. NRSC pays its external therapists $35 per hour plus a mileage allowance of $0.35 per kilometre. This represents a discount from the therapists normal rates for treating clients, which range from $50 to $90 per hour. All sessions involving NRSC clients are held at NRSCs facilities.

A volunteer board of directors oversees the affairs of NRSC. In accordance with provincial requirements governing not-for-profit agencies, board members may not receive a fee for their service. The bylaws of NRSC state that the board of directors is to be comprised of at least six, and no more than twelve, individuals residing in the Northern Region. There currently are nine board members. Some of the more active members are as follows:

Paul Abrams. Paul is a social worker at a local college and a long-time friend of Dr. Campbell. He is 50 years old and has served on NRSCs board for the past ten years.

Angela Atello. Angela is a 25-year-old student pursuing her Ph.D. in Psychology at City University. Her thesis is on the effects of child abuse. She decided to join NRSCs board last year after learning of the high quality work that the organization was doing in this area.

Vince Brown. Vince is a professional engineer and has been a long-time donor of both time and funds to NRSC. He is 64 years old and recently retired from a long career as a consulting engineer. Vince has been on NRSCs board for four years and has been a very active participant.

Charlie Dewin. Charlie is 50 years old and is a production supervisor at a local manufacturing plant. Charlie has no formal education beyond high school, but has extensive experience in labour relations. He joined NRSCs board recently upon his move to the Northern Region. Previously, Charlie lived in the Eastern Region and had been involved with the Eastern Region Sexual Abuse Centre.

Gus Peters. Gus is 58 years old and is a trained psychologist. Gus has been on NRSCs board for the past 10 years.

Board members are voted in at the annual general meeting by the interested parties who attend the meeting (e.g. donors, former clients, representatives of referring organizations). At that time, the board also selects a president, vice-president and secretary. This past year, Paul Abrams was elected as president, Gus Peters as vice-president, and Charlie Dewin as secretary. The president, vice president, and executive director form the executive committee, which meets regularly to


CMA Canada Page 103

discuss matters regarding the day-to-day operations of NRSC. Board of directors meetings are held ten times per year (once each month except July and December) to review NRSCs operations from a broader perspective.

Financial Information

NRSC prepares its financial statements on a restricted fund accounting basis. The general fund accounts for NRSCs primary service delivery and administrative activities. Restricted funds can only be used for the purpose for which they are intended. Financial statements for the fiscal year ended March 31, 2000, are provided as Exhibits 8, 9, and 10.

NRSCs revenue recognition policy is to recognize contributions related to general operations, including fundraising and donations, as revenue of the general fund when received. Contributions to externally restricted funds are recognized in the specified fund when received.

The majority of the funding for NRSCs general programs is through the Ministry of Social Services for the province. Pursuant to its contract with the Ministry of Social Services, NRSC is required to operate within its stated mandate and facility. The Ministry must approve any material changes to NRSCs services, location, operating methods, etc. Other sources of NRSCs funding include the Northern Region Municipality, the United Way, and donations from individuals and corporations.

The Northern Region Municipality contributes funds to not-for-profit agencies operating within the region. Each year, the Northern Region Municipality sets aside a pool of funds that is allocated to Northern Region not-for-profit agencies based on the number of local clients serviced in the prior year.

The United Way has operating standards that NRSC must abide by to continue receiving United Way funding. These operating standards include restrictions on NRSCs fundraising activities. Specifically, NRSC is prohibited from soliciting donations directly from corporations in the Northern Region that appear on the United Ways restricted list. This list includes most major corporations based in the Northern Region. In addition, all United Way agencies, including NRSC, are prohibited from performing any fundraising activities during the months of October and November because such efforts would conflict with those of the United Ways annual fundraising campaign.

Betty Sheer (NRSCs part-time fundraiser) and various members of NRSCs board of directors solicit donations from individuals and corporations within the community (other than those prohibited by the United Way). Most donations from individuals are small (e.g. $10 to $20). An income tax receipt is manually prepared by the administrator and issued to the donor for donations of $10 or more. In 1997, Ted Ross, a wealthy businessman, made a commitment to donate $15,000 per year for three years starting in 1997. This commitment was renewed for an additional three years in June 2000.


Page 104 CMA Canada

Corporate donations usually are in the range of $100 to $500. In most years, NRSC has been successful in finding two or three corporations willing to donate amounts of $1,000 or $2,000. These more sizeable donations typically come through a contact of a member of NRSCs board. Vince Brown has been particularly successful in obtaining these larger corporate donations.

In the past, NRSC organized fundraising events such as holiday dinners and boat cruises. The intended purpose of these events was to generate extra income and promote awareness of NRSC. However, these types of fundraising events were eventually discontinued because they typically generated little income after expenses had been paid. In some years, the costs of the events exceeded the revenues that were generated.

The major operating expenditures in the general fund are the salaries of NRSC employees. Fees for external therapists who perform individual counselling are accounted for separately. Program promotion costs include the cost of sending NRSC employees to conferences for continuing education. NRSCs bookkeeping is done by a local accountant who also performs the annual audit. An audit is required for all organizations that have registered charity status.

NRSC receives restricted funds for specific projects that last anywhere from a few months to several years. Any excess of restricted fund revenues over expenses is transferred to the general fund after the project for which the restricted funding was received is completed. The current and recently completed projects are as follows:

The Child Therapy Fund Established in 1999 and funded by the Ministry of Social Services, this fund is restricted to the development of individual therapy programs for children under the age of 7. Prior to 1999, NRSC did not deal with victims under the age of 7 years due to the special needs of those cases. NRSC received an initial grant of $20,000 and receives $10,000 per year conditional upon a minimum of 20 children under the age of 7 being offered individual therapy each year. NRSC employs external therapists for all of its individual therapy treatment. The introduction of the Child Therapy Fund caused an increase in the overall number of individual clients served by NRSC.

The Project Champion Fund Established in 1998 and funded by a grant of $15,000 from the Canadian Athletic Association, this program was an initiative aimed at educating parents, coaches, participants and the public about the risk of sexual abuse in minor sports. The program was completed in the fiscal 1999 year, and the excess funds were transferred to the general fund.

The Kid Care Fund Established in 1999, this funded a special joint project of NRSC, the Childrens Aid Society, the Northern Region Hospital, and the Northern Region Police to develop and promote an information resource binder for parents and professionals. The project was completed in 2000, and the excess funds were transferred to the general fund.

The Women Survivors Fund Established in 2000, this fund is run by a group of women who are survivors of abuse and was initiated by the Northern Region Violence Prevention Council. During 2000, the group received a restricted grant from the Northern Region Municipality to develop and implement an educational package. NRSC is a sponsor of the project and administers the restricted fund.


CMA Canada Page 105

The Parent Handbook Fund Established in 2000 from a grant received from the United Way, this fund was restricted to the development of a handbook that would provide parents with information and guidance in exercising their responsibility for safeguarding their children from harm. This project was completed in 2001 and the excess funds were transferred to the general fund.

The Child Abuse Research Fund Established in fiscal 2001, the Ministry of Social Services granted $20,000 to NRSC to perform research into all forms of child abuse and maltreatment, in conjunction with NRSCs recently expanded mandate. This project is expected to continue through fiscal 2003.

The Educator Awareness Fund Established in fiscal 2001, the Northern Region Board of Education granted $12,000 to NRSC to prepare an information binder for educators in the Northern Region about the detection of child abuse. It is expected that this project will be completed in fiscal 2002.


Page 106 CMA Canada

Exhibit 1

Map of Northern Region and Surrounding Area

NorthernRegion

Rural Population

District 3

District 1

Rural Population

District 2

NRSC

District 4

Western Region

City

Eastern Region

Rural Population


CMA Canada Page 107

Exhibit 2

Northern Region Support Centre Organizational Chart

Board of Directors

Paul Abrams Angela Atello Vince Brown

Charlie Dewin Phil Freeman

Margaret FrontenacMarcus Jackson

Gus Peters Allison Wilson

Executive Director Dr. Chris Campbell

Clinical Director Nicole Gauthier

Group Leaders Eric Simms &

Monique Picard

Executive Committee Paul Abrams Gus Peters

Dr. Chris Campbell

Administrator Bonnie White Part-Time Fundraiser

Betty Sheer

External Therapists


Page 108 CMA Canada

Exhibit 3

Alleged Perpetrator in Child Abuse Investigations in Canada (1998)

Alleged Perpetrator Estimate

Biological mother 82,168

Biological father 51,635

Stepfather 11,817

Stepmother 3,825

Foster family or adoptive parents 1,083

Other relatives 9,742

Family friend 1,156

Parents boyfriend or girlfriend 1,765

Childs friend (peer) 900

Babysitter 1,622

Teacher 987

Other professional 442

Other acquaintance 897

Stranger 343


CMA Canada Page 109

Exhibit 4

Age and Gender by Primary Category of Child Abuse Investigations in Canada (1998)

Primary Category of Alleged Abuse Age Range Gender Physical Sexual Neglect Emotional Total

Confirmed Cases

Multiple Categoriesof Abuse

Male 4,189 781 7,917 4,081 16,968 42% 3,419 0-3 years Female 3,333 1,591 6,256 2,801 13,981 36% 3,657

Male 7,055 2,293 7,060 3,039 19,447 38% 4,579 4-7 years Female 4,086 3,265 5,957 3,861 17,169 44% 4,052



Total 41,496 14,332 53,666 25,675 135,169 42% 31,859


Page 110 CMA Canada

Exhibit 5

Detrimental Caregiver Conditions Present in Child Abuse Investigations in Canada (1998)

Detrimental Caregiver Condition Present Estimate

Alcohol or drug abuse 45,591

Criminal activity 14,245

Cognitive impairment 7,948

Mental health problems 32,610

Physical health issues 10,442

Lack of social support 39,201

Childhood history of abuse 42,096

Spousal violence 31,264

Custody dispute 15,484

Other detrimental conditions 5,987


CMA Canada Page 111

Exhibit 6

Northern Region Support Centre Client Treatment Process Chart

Clinical director has initial meetings with victims, offenders and members of their immediate families

Clinical director recommends either group or individual treatment

Group Treatment Individual Treatment

Victims & offenders separated into groups based on age

Clinical director engages external therapist

Initial meeting between victim or offender and group leader

External therapist meets with client for approximately 6 to 12 weeks

Ten-week group therapy session begins

Clinical director meets with client and external therapist to discuss next steps

Group leader holds progress meeting with victim/offender

Ten-week group therapy session completed

Group leader and clinical director meet with victim/offender & family members

Group leader and clinical director decide on next steps for victim/offender


Page 112 CMA Canada

Exhibit 7

Demographic Breakdown of the Northern Region

District 1 District 2 District 3 District 4 Age Range

Male Female Male Female Male Female Male Female

Under 10 3,218 2,990 2,220 2,151 9,162 8,550 8,517 8,108

10 to 19 3,219 3,020 2,731 2,543 9,627 9,135 8,674 8,389

20 to 29 2,966 2,822 2,524 2,361 8,474 8,477 8,438 8,219

30 to 39 3,830 3,845 2,562 2,544 9,699 10,486 9,815 10,277

40 to 49 3,640 3,619 3,002 3,219 10,429 11,323 9,952 10,789

50 to 59 2,719 2,663 2,568 2,467 8,132 8,370 8,390 8,982

60 & over 2,925 3,443 2,497 2,861 9,464 11,250 11,421 14,304

Total 22,517 22,402 18,104 18,146 64,987 67,591 65,207 69,068

Total Age Range

Male Female Total

Under 10 23,117 21,799 44,916

10 to 19 24,251 23,087 47,338

20 to 29 22,402 21,879 44,281

30 to 39 25,906 27,152 53,058

40 to 49 27,023 28,950 55,973

50 to 59 21,809 22,482 44,291

60 & over 26,307 31,858 58,165

Total 170,815 177,207 348,022


CMA Canada Page 113

Exhibit 8

Northern Region Support Centre Statement of Financial Position

As at March 31 2000 1999 General

Fund Restricted

Funds Total

Funds General

Fund Restricted

Funds Total

Funds Assets: Cash

$15,342

$28,311

$43,653

$11,873

$16,234

$28,107

Total assets $15,342 $28,311 $43,653 $11,873 $16,234 $28,107

Liabilities: Accounts payable

$ 3,973

$ 0

$ 3,973

$ 2,906

$ 0

$ 2,906

Total liabilities 3,973 0 3,973 2,906 0 2,906Net assets 11,369 28,311 39,680 8,967 16,234 25,201

Total liabilities and net assets $15,342 $28,311 $43,653 $11,873 $16,234 $28,107


Page 114 CMA Canada

Exhibit 9

Northern Region Support Centre Statement of Operations and Changes in Net Assets

General Fund For the Year Ended March 31

2000 1999 Revenues: Ministry of Social Services $192,832 $189,432 Northern Region Municipality 21,234 19,084 United Way 73,789 71,011 Fundraising (net of costs) (640) 1,010 Donations 27,633 33,402 Interest and other income 582 655 315,430 314,594Expenses: Salaries, wages and benefits 207,419 202,022 External therapist fees 38,610 37,480 Supplies and program costs 6,745 8,241 Audit and accounting 7,415 7,201 Rent 20,776 20,776 Telephone and utilities 7,945 6,898 Insurance 3,949 3,799 Maintenance and repairs 2,747 5,204 Purchased equipment 7,280 8,177 Program promotion 2,768 3,566 Other administration costs 10,407 10,816

316,061 314,180

Excess (deficiency) of revenues over expenses (631) 414Net assets, beginning of year 8,967 7,863Transfers from restricted funds to general fund 3,033 690

Net assets, end of year $ 11,369 $ 8,967


CMA Canada Page 115

Exhibit 10

Northern Region Support Centre Statement of Operations and Changes in Net Assets

Restricted Funds For the Year Ended March 31

2000:

Child Therapy Kid

Care Women

Survivors Parent

Handbook Total

Restricted

Revenues $10,000 $ 0 $10,000 $8,000 $28,000 Expenses 11,082 845 0 963 12,890

Excess (deficiency) (1,082) (845) 10,000 7,037 15,110 Net assets, beginning of year 12,356 3,878 0 0 16,234 Transfers to general fund 0 (3,033) 0 0 (3,033)

Net assets, end of year $11,274 $ 0 $10,000 $7,037 $28,311 1999:

Child Therapy Project

Champion Kid Care Total

Restricted

Revenues $20,000 $ 0 $5,000 $25,000 Expenses 7,644 3,612 1,122 12,378 Excess (deficiency) 12,356 (3,612) 3,878 12,622 Net assets, beginning of year 0 4,302 0 4,302 Transfers to general fund 0 (690) 0 (690)

Net assets, end of year $12,356 $ 0 $3,878 $16,234


Page 116 CMA Canada

The Societies of Management Accountants of Manitoba, New Brunswick, Newfoundland, Northwest Territories, Nova Scotia, Ontario, Prince Edward Island, Saskatchewan and the Yukon, Certified Management Accountants Society of British Columbia,

The Certified Management Accountants of Alberta, Ordre des comptables en management accrdits du Qubec

June 2002

CMA Entrance Examination

Part 2

(Time Allowed: 4 hours) Notes: i) Candidates must not identify themselves in answering the question.

ii) This examination has a total of ten pages and consists of one question. Ensure that you have a complete examination question paper before starting to answer the question.

iii) All answers must be written on official answer sheets. Work done on the question paper or on the Backgrounder will NOT be marked.

iv) Included in the examination envelope is a supplement consisting of formulae and tables. It is a standard supplement that may be useful for answering the question on this paper.

v) Part 2 consists of one case question, which you are to answer in the four hours allotted.

vi) Examination answer sheets must NOT BE REMOVED from the examination writing centre. All used and unused answer sheets and working papers must be sealed in the examination envelope and submitted to the presiding officer before you leave the examination room.


CMA Canada Page 117

Northern Region Support Centre Additional Information

Fiscal 2002 Developments

The fiscal year ending March 31, 2002, proved to be extremely challenging for NRSC. The organization had to request emergency funding from the United Way to avoid running out of money in its general fund. Budgeted and actual operating results for the general fund for fiscal 2002 are provided in Appendix A.

The cause of NRSCs financial dilemma was a significant increase in the demand for individual counselling, which required substantially higher payments to external therapists. This included a sharp increase in the number of children under age 7 requiring individual counselling that was funded by the Child Therapy Fund. When all of the resources of the Child Therapy Fund had been expended, NRSC continued to pay for this treatment through its general fund. This resulted in a deficit in the general fund for the year. Partially offsetting this deficit was a transfer from the Educator Awareness Fund, a project that was completed during the year.

In December 2001, the Ministry of Social Services advised NRSC that, due to government cutbacks, the total amount of funding from the province would be frozen at the fiscal 2002 level for the foreseeable future. However, it might increase the funding for not-for-profit organizations that amalgamate in order to share resources and reduce overhead costs. Authorities at the Ministry of Social Services provided NRSC with some background information on potential amalgamation candidates (see Appendix B).

In February 2002, NRSC was fortunate to receive a substantial $20,000 unrestricted donation from Mr. Bill Rich, whose daughter was helped by NRSC after being sexually abused by a neighbour. Mr. Rich was so impressed with the work done by NRSC that he has inquired about establishing a restricted fund of $25,000 for the purpose of setting up a satellite facility in District 1 of the Northern Region where he resides. NRSC conducted some preliminary research and discovered that suitable premises could be leased in District 1 for $1,000 per month including utilities costs. Other costs of running the satellite office, such as supplies, telephone, etc., were estimated to range from $200 to $300 per month. It was estimated that, with a satellite office in District 1, NRSC could attract a sufficient number of new clients to run one or two additional offenders groups and one or two additional victims groups per year. As well, some groups currently held at NRSCs existing facilities in District 4 could be moved to the District 1 facility for the convenience of clients. It was also estimated that clients requiring individual therapy would increase by 10 to 15 hours per month as a result of the convenience that a District 1 facility would offer.

In March 2002, NRSC was approached by the American Foundation for Child Abuse (AFCA), which wished to create a restricted fund for research into the long-term effects of child abuse. NRSC would be one of several organizations funded for this purpose to act as a team in a five-year research project. The other organizations included a major Canadian university, a major


Page 118 CMA Canada

U.S. university and two U.S. not-for-profit agencies with mandates pertaining to the prevention and detection of child abuse. Nicole Gauthier, the clinical director, would be responsible for sharing case situations about NRSCs clients and would be expected to attend two meetings per year in the U.S. with other members of the team. AFCA estimated the direct costs of this program to be US$2,000 per trip (including airfare, accommodation, meals, etc.). AFCA would fund NRSC at a rate of US$10,000 per year to cover the direct costs and to provide an allowance for the cost of the clinical directors time, estimated to average one day per week.

The Board of Directors Meeting

In June 2002, a few days prior to the annual general meeting, NRSCs board of directors held its monthly meeting. Seven of the current nine board members attended the meeting, which was more than usual.

The executive director began with an overview of the current status of the organization by saying, The demand for individual therapy is still increasing. We may have to turn clients away if we cant get more funding. Charlie Dewin responded, Maybe we should replace the group leaders with therapists who do individual counselling so that we dont risk having another funding shortage. The executive director stated, That would not be a wise decision. I know that a lot of psychologists have been referring clients to us on the condition that we provide them with individual therapy mainly because the client cant afford the psychologists regular fee. But I think that individual therapy is just a fad, and once the benefits of group therapy are better known, group treatment will be preferred. In any event, its not the boards job to dictate the method of clinical treatment, which you know nothing about.

Vince Brown stated, What we need is to raise more money. Why dont we charge user fees to our clients? The executive director stated, User fees would just scare people away. What we need are more donations. Im not at all pleased with the performance of Betty Sheer. She seems very disorganized and doesnt raise very much money. She cant even produce a historical list of donors to NRSC. Terminating Betty would save the organization about $8,000 per year. Allison Wilson, Betty Sheers mother and a board member, replied, Betty would have an easier time raising money if the organization would do some marketing. The only thing we have now is a small brochure that hasnt been updated in almost three years. Vince Brown stated, Theres no money for marketing. I think that board members have to be more active in fundraising efforts. Phil Freeman, another board member, replied, We didnt join the board to go around asking strangers for money. Its already hard enough keeping people on this board, especially professionals that understand things like law and finance. Marcus Jackson, another board member, stated, No one on this board knows whats required of them.

The topic of discussion then turned to the amalgamation proposal from the Ministry of Social Services. The executive director stated, I think that an amalgamation with another agency would compromise NRSCs philosophy and operating standards. Marcus Jackson stated, While I dont doubt there would be some challenges to overcome, an amalgamation might not be a bad idea. In particular, it would allow NRSC to expand the reach of its services and therefore better serve its clients. A heated debate then ensued on the benefits of amalgamation. The meeting ended without any resolution on the amalgamation issue.


CMA Canada Page 119

The Annual General Meeting

A few days after the board of directors meeting, NRSC held its annual general meeting. The executive director, NRSCs auditor and five board members were in attendance. The audience included representatives from the Childrens Aid Society, the Northern Region Board of Education, a few psychologists, Mr. Rich, and several other donors and residents of the community.

Following a presentation by the executive director, the floor was opened to questions. Mr. Rich asked, What was the reason for the levelling off of the number of clients serviced by group therapy during the year? The executive director responded, We noticed a drop in the number of clients being referred by certain organizations such as the Centre for Abused Women. I think they were afraid that we would steal their clients because of our broader mandate. But a lot of that was made up by an increase in the number of referrals coming from psychologists located in the City and the Eastern Region who believe in the benefits of group therapy, which is not offered in those areas. We accept clients from outside the Northern Region when space is available in one of our groups because theres really no cost to NRSC.

Mr. Rich then said, Im having some difficulty dissecting information in NRSCs financial statements, such as the amount of resources expended on administration as opposed to program delivery. Also, the financial statements dont indicate what NRSC has in terms of fixed assets. NRSCs auditor responded, Most not-for-profit organizations prepare their financial statements in this manner, which is in accordance with generally accepted accounting principles.

Another individual donor in the audience asked, Why does the audit report contain a qualification with respect to the completeness of donations? The auditor replied, Like many not-for-profit organizations, NRSC lacks control over its cash donations. Specifically, many clients give cash donations to group leaders or external therapists, who then remit those amounts to the administrator. Many charitable organizations receive a qualified audit report.

Mr. Rich asked for a breakdown of clients by gender, type of abuse and where they reside. The executive director responded, We dont keep formal statistics on these things, but I would estimate that two-thirds of the victims are female, and three-quarters of offenders are male. As far as type of abuse goes, the large majority of our clients still come from the sexual abuse side. As far as the districts go, I would guess that most of our clients live in Districts 3 and 4 because those are the largest and were conveniently located for those folks.

A representative from the Northern Region Board of Education asked, Why was there so much money left over in the Educator Awareness Fund? If it wasnt used for its intended purpose, it should have been returned to us. This constitutes a breach of NRSCs fiduciary duty to its restricted fund donors. The executive director responded, Most of the costs involved in preparing the manual on detecting child abuse involved time that I and other members of NRSCs staff had to spend in preparing it. The cost of our time on this project is included in our salaries, which come out of the general fund. I dont know how many hours we spent on the Educator Awareness Fund, but Im sure that we spent more time than anticipated.


Page 120 CMA Canada

A psychologist in attendance, who operates a private practice specializing in treating victims of sexual abuse and who sometimes refers clients to NRSC for group treatment, stated, Ive heard some of my clients complain about mixing up victims of sexual and non-sexual abuse. Children that have been sexually abused cant relate to those suffering from other forms of abuse. The executive director responded, The type of therapy that we do is applicable to all forms of abuse. We dont have enough clients in non-sexual abuse to warrant separate groups. Anyway, if we didnt offer treatment for non-sexual abuse, the number of group clients would have decreased some more. Regardless of what is said by the clients, its up to us to judge whether we have been effective in treating our clients. This is done informally at the end of group therapy sessions by the clinical director and group leaders.

Subsequent Developments

Shortly after the annual general meeting, the executive director informed the president of NRSCs board that he was going to resign at the end of the 2002 calendar year. He stated that he could no longer tolerate certain members of the board who, in his words, are always meddling in areas they dont understand anything about.

Upon receiving this news, the president called a special meeting of the board to discuss how to proceed. At the meeting, Marcus Jackson stated, Its going to be very difficult finding someone to replace Dr. Campbell given the current financial constraints of NRSC. Now may be the best time to talk with other organizations about amalgamation. Gus Peters replied, I think thats a premature conclusion. While NRSC has been through some financial pressure, I think we could entice a good quality individual with the right remuneration package. Maybe even some perks such as a monthly automobile allowance or a better employee benefits package. These may be more attractive from a tax perspective than receiving a base salary. Vince Brown stated, If we do find a new executive director, we had better make sure that person has the right skill set to run NRSC. Maybe we need someone whos more of a fundraiser than a psychologist. The board decided to hire Marie Garneau, a consultant, to provide advice with regard to NRSCs strategic and operational issues.

Other Findings

Upon further investigation into the affairs of NRSC, the consultant uncovered the following:

According to Statistics Canada, the Northern Region is expected to grow to 420,000 residents by 2007 60,000 residents in District 1, 65,000 residents in District 2, 150,000 residents in District 3, and 145,000 residents in District 4.

In most cases, the clinical director recommends group treatment. Agencies located outside the Northern Region typically refer clients to NRSC because of its reputation in group therapy.

Due to the nature of group therapy, the intensity of work done by the group leaders varies during the year. When group sessions are being held, group leaders typically work 30 to 40 hours per week, depending on the number of groups. This includes time spent leading group therapy sessions, as well as time afterwards to document the progress of each individual


CMA Canada Page 121

within a group and to meet with current and prospective group participants. When they are between groups, group leaders either take their vacations, attend conferences to upgrade their skills and knowledge, or assist the executive director in dealing with restricted funding projects. During these slow periods, the group leaders usually only need to work 20 to 25 hours per week.

NRSC has had the following number of group and individual therapy clients from fiscal 1993-2002:

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Group 213 209 208 216 233 209 220 214 224 220

Individual 74 82 77 81 88 86 109 123 131 243

Dr. Campbell, the executive director, has a solid, long-standing relationship with staff at the Childrens Aid Society.

Because of his background, Dr. Campbell likes to become involved on the clinical side from time to time and spends several hours each week talking to the clinical director and group leaders about the issues they are seeing among NRSCs clients. He typically works 50 to 60 hours per week.

The commitment of the clinical director (Nicole Gauthier) to her work has been the driving force behind many of the innovative child abuse detection and treatment techniques used by NRSC. She typically works 40 to 50 hours per week.

Betty Sheer, the part-time fundraiser, was hired to reduce the demands of this part of the job on Dr. Campbell, who prefers to work on the clinical aspects as opposed to fundraising.

Within the Northern Region are organizations, in addition to NRSC, with mandates involving the welfare of children. The major agencies of this kind include the following:

! Centre for Challenged Children offers programs and support to children with physical and mental disabilities as well as to parents of those children.

! Shattered Homes Program provides support to children whose parents are separated, divorced, or in failing marriages. The Shattered Homes Program is a relatively new agency.

! Child-Help Centre provides counselling support, educational programs and extracurricular activities for children of lower income families.

Each of the Eastern Region, the Western Region and the City has an agency that provides support for children who have been abused, as follows:

! Eastern Region Sexual Abuse Centre provides support in an individual counselling format for children and adults who have been sexually abused.

! City Centre for Childhood Sexual Abuse provides support in an individual counselling format for children who have been sexually abused.


Page 122 CMA Canada

! Western Region Centre for Child Maltreatment handles all forms of child maltreatment and neglect, including sexual and non-sexual abuse. It offers both group and individual counselling.

Decisions by the board of directors are made by a simple majority of board members attending a meeting.

The less active board members are as follows:

! Phil Freeman. Phil is a freelance writer who holds a Bachelors degree in Journalism. He is 44 years old and has been on NRSCs board for three years.

! Marcus Jackson. Marcus is a supervisor at a local construction company. He is 38 years old and has been on NRSCs board for two years. Marcus had been a client of NRSC and was so appreciative of the support he received that he wanted to help others with similar problems.

! Margaret Frontenac. Margaret is married to Gus Peters and does not work outside of the home. She is 52 years old and joined the board six years ago when NRSC was having difficulty finding people to fill the minimum contingent of six board members.

! Allison Wilson. Allison is an entrepreneur who owns and operates a local beauty salon. She is 49 years old and has been on NRSCs board for six years. Allison is the mother of NRSCs part-time fundraiser, Betty Sheer.

Both Gus Peters (a board member) and Ted Ross (a major donor) are long-time friends of Dr. Campbell (the executive director).

NRSCs annual operating budget for its fiscal year ended March 31, 2001, was $320,000.

The Northern Region Municipality does not consider NRSCs clients who reside outside of the Northern Region in determining the funds it allocates to NRSC.

NRSCs lease term runs until the end of 2005. Public transportation within the Northern Region is well-developed, as is transportation between the Northern Region and the City. However, public transportation between the Northern Region and the Western and Eastern Regions is poor.

NRSCs statement of financial position and its statement of operations and changes in net assets for restricted funds for fiscal 2002 can be found in Appendices C and D.

The general fund budget for the fiscal year ended March 31, 2002 (prepared in January 2001) reflects an increase of 2% in revenues and expenses. This is in line with the general guidelines received from the Ministry of Social Services that were sent to all not-for-profit organizations located in the province.

Although NRSC does not charge a fee for its services, clients are asked to make a donation.

The organization does not provide any benefits to its employees apart from statutory benefits (CPP and EI), which amount to approximately 8% of the base salaries or wages.


CMA Canada Page 123

The cost of equipment and other capital purchases is charged against operations in the year of acquisition.

Due to various delays beyond the control of NRSC, the Women Survivors Fund project is on hold until further notice.

Cheques for payment of expenses within budgeted amounts are prepared and signed by the executive director. Expenses that are in excess of budgeted amounts require the approval of the board of directors.

Several external therapists had expressed concern to the clinical director that they may be deemed to be employees of NRSC for income tax purposes. They asked the clinical director what that would mean to them and to NRSC, and what NRSC was doing to ensure that they would be regarded as independent contractors for tax purposes.

A prospective donor inquired about giving NRSC some valuable works of art that the organization could then sell and retain the proceeds. The executive director was not sure how this would be treated for tax purposes from the standpoint of the donor.

Officials at the United Way made it clear to NRSC that it would not grant emergency funding for any organization two years in a row.

Required:

Given its current situation, NRSCs board of directors is unsure as to how to proceed. As Marie Garneau, the outside consultant hired by NRSC, develop an integrated report for NRSCs board of directors, advising them on the strategic direction that NRSC should take, complete with recommendations and an implementation plan, and addressing other issues and concerns requiring attention. In undertaking this task, you will need to take into consideration your background knowledge of the organization as well as the additional information provided above.


Page 124 CMA Canada

Appendix A Northern Region Support Centre

Statement of Operations, Changes in Net Assets and Budget General Fund

For the Year Ended March 31

2002 Budget

2002 Actual

2001 Actual

Revenues: Ministry of Social Services $200,668 $200,668 $196,733 Northern Region Municipality 22,457 23,022 22,017 United Way 76,794 97,440 75,288 Fundraising (net of costs) 0 0 0 Donations 27,019 40,711 26,489 Interest and other income 712 308 698 327,650 362,149 321,225Expenses: Salaries, wages and benefits 218,370 219,660 214,088 External therapist fees 40,190 79,662 39,402 Supplies and program costs 6,257 8,801 6,134 Audit and accounting 7,672 7,767 7,522 Rent 21,192 20,776 20,776 Telephone and utilities 8,803 9,463 8,630 Insurance 4,285 4,293 4,201 Maintenance and repairs 3,921 4,872 3,844 Purchased equipment 5,085 2,816 4,985 Program promotion 3,056 2,930 2,997 Other administration costs 8,819 11,708 8,632 327,650 372,748 321,211Excess (deficiency) of revenues over expenses 0 (10,599) 14Net assets, beginning of year 14,634 14,634 11,369Transfers from restricted funds to general fund 0 8,612 3,251

Net assets, end of year $ 14,634 $ 12,647 $ 14,634


CMA Canada Page 125

Appendix B Amalgamation Candidates

Fiscal 2001

Revenues Net Assets Number of Clients

United Way Agency? Location

Animal Abuse Centre $279,766 $16,606 468 No District 4

Centre for Abused Women $388,744 $59,712 249 Yes District 1

Centre for Challenged Children $368,766 $43,304 207 No District 2

Child Help Centre $308,760 $25,933 350 Yes District 3 City Centre for Childhood Sexual Abuse $638,912 $145,702 896 Yes City

Drug and Alcohol Abuse Program $294,711 $8,776 226 Yes District 4

Eastern Region Sexual Abuse Centre $338,979 $5,522 274 Yes

Eastern Region

Shattered Homes Program $204,911 $21,947 114 Yes District 1 Western Region Centre for Child Maltreatment $458,726 $96,771 597 No

Western Region

Appendix C Northern Region Support Centre Statement of Financial Position

As at March 31 2002 2001 General

Fund Restricted

Funds Total

Funds General

Fund Restricted

Funds Total

Funds Assets: Cash

$15,423 $20,680 $36,103

$16,866

$47,262 $64,128

Total assets $15,423 $20,680 $36,103 $16,866 $47,262 $64,128

Liabilities: Accounts payable

$ 2,776 $ 0 $ 2,776

$ 2,232

$ 0 $ 2,232

Total liabilities 2,776 0 2,776 2,232 0 2,232Net assets 12,647 20,680 33,327 14,634 47,262 61,896

Total liabilities and net assets $15,423 $20,680 $36,103 $16,866 $47,262 $64,128


Page 126 CMA Canada

Appendix D Northern Region Support Centre

Statement of Operations and Changes in Net Assets Restricted Funds

For the Year Ended March 31 2002:

Child Therapy Women

Survivors

Child Abuse

Research

Educator Awareness

Total Restricted

Revenues $10,000 $ 0 $ 0 $ 0 $10,000 Expenses 17,752 0 7,716 2,502 27,970

Excess (deficiency) (7,752) 0 (7,716) (2,502) (17,970) Net assets, beginning of year 7,752 10,000 18,396 11,114 47,262 Transfers to general fund 0 0 0 (8,612) (8,612)

Net assets, end of year $ 0 $10,000 $10,680 $ 0 $20,680 2001:

Child Therapy Women

SurvivorsParent

Handbook

Child Abuse

Research

Educator Awareness

Total Restricted

Revenues $10,000 $ 0 $ 0 $20,000 $12,000 $42,000 Expenses 13,522 0 3,786 1,604 886 19,798

Excess (deficiency) (3,522) 0 (3,786) 18,396 11,114 22,202 Net assets, beginning of year

11,274

10,000

7,037

0

0

28,311

Transfers to general fund

0

0

(3,251)

0

0

(3,251)

Net assets, end of year

$ 7,752

$10,000

$ 0

$18,396

$11,114

$47,262


CMA Canada Page 127

General Comments on Candidate Performance June 2002 CMA Entrance Examination

Part 2 The Part 2 case involves a community-based not-for-profit organization, Northern Region Support Centre (NRSC), that was originally established seventeen years ago to provide treatment and community education programs for and about victims of child abuse. With government approval, two years ago it expanded its mandate to include all forms of child abuse. Recent government cutbacks, however, have resulted in a freeze in government funding, while demand for the organizations services was significantly increasing. NRSC now faces the challenge of finding alternative sources of funding and/or finding ways to increase efficiencies and decrease expenses. Some options include changing its mix of services, changing the market that it serves or amalgamating with other not-for-profit organizations. As a consultant hired by NRSCs board of directors, the candidate is expected to use an appropriate strategic approach to analyze the organizations situation, assess its strategic options in light of its strengths and weaknesses, interpret and use the financial and non-financial information provided in the Backgrounder and Additional Information, and write a formal report to the board of directors, exhibiting appropriate written communication skills. The report should advise the board of directors on the strategic direction that should be taken, complete with recommendations and an implementation plan. Analysis of the relevant operational issues presented in the case should be appropriately integrated into various sections of the report. Overall, performance was acceptable, with most candidates making an effort to use the strategic planning process, appropriately balance the focus of their analyses between the strategic and business issues, and provide a report in a reasonably acceptable format. It appears that candidates who performed well on Part 2 came in with an open mind, as well as a clear understanding and familiarity with the information in the Backgrounder. They were ready to react to the issues presented in the Additional Information and drew on the information from the Backgrounder only to the extent that it was required to support their analyses of the relevant issues. Some candidates, however, tended to focus too much on the information provided in the Backgrounder. The purpose of the Backgrounder is to increase the candidates familiarity with the organization and the environment in which it operates; it does not provide the main issues that a candidate will be required to address in answering the examination. The average candidate attempted to follow a reasonable approach to the case (e.g. situation analysis, analysis of options, recommendations, implementation plan). Weaker candidates overemphasized one or two aspects of the case analysis, or addressed all of them very superficially. It appears that some of the weakest candidates focused their answers too much on the information provided in the Backgrounder and had difficulty assimilating the situation that unfolded in the Additional Information. These candidates would be well advised to avoid


Page 128 CMA Canada

forming preconceived notions of what might appear in the Additional Information because this makes it more difficult to adjust their thinking to adapt to the new information. Other common tendencies of weaker candidates were as follows: 1. Spending too much time on preparing a situation analysis and not enough on applying the

results of this analysis in evaluating the strategic options, presenting a comprehensive implementation plan, or arriving at recommendations for the business issues.

2. Dealing with each strategic and operational issue in isolation (i.e. failing to integrate the

various issues). 3. In addressing the amalgamation option, failing to address the individual potential

candidates for amalgamation. 4. Ignoring or paying little attention to how to resolve the future cash-flow problem and/or

failing to adequately address the implications of their various recommendations on future cash flows.

5. Spending too much time on window dressing such as the executive summary. While all

elements of a report (including table of contents, executive summary, introduction) are required for a good grade for the written communication segment, these elements may be relatively brief.

For each of the five higher-order skills being tested, specific characteristics of a strong response versus a weak response are presented in the marking guide. In addition, two sample responses are presented, with accompanying markers comments on the strengths and weaknesses of each, to demonstrate further what constitutes an acceptable attempt versus a weak attempt. Rather than provide a complete, full-scale model solution that would be impossible to achieve during a four-hour examination, the sample successful attempt, while not perfect, demonstrates what can realistically be achieved by a candidate during the available examination writing time.


CMA Canada Page 129

Marking Guide June 2002 CMA Entrance Examination

Part 2 Overview Part 2 of the June 2002 Entrance Examination was marked according to an approach known as global marking, which is designed to focus on the candidates responses in total according to the skills that are being evaluated, rather that focusing on discrete elements of the responses. This approach was designed to provide a high degree of assurance that candidates receive maximum credit for their demonstration of these skills.

The following describes the global marking approach that was used:

A general marking guide was used which rated the candidates responses according to the following five higher-order skills:

1. Strategic Thinking 2. Analysis 3. Integration 4. Judgment 5. Written Communication

The strategic thinking, analysis, and integration skill areas were further divided into subsections to assist the markers in evaluating the candidates papers, with each of the eight subsections being separately evaluated.

With respect to each of these eight subsections, the markers evaluated the candidates performance in accordance with the marking guide and, with the assistance of a marking worksheet, assigned a ranking value based on a scale of 0 to 10.

To ensure that the candidates responses were ranked fairly, each candidates paper was marked independently by two different markers. In addition, if the difference between the rankings for a particular skill or the total ranking of all skills did not fall within a predetermined range of tolerance, the candidates paper was arbitrated by a third member of the marking team.

After the candidates papers were marked, the following weightings were applied to the assigned rankings for each of the five skill areas:

1. Strategic Thinking 24 2. Analysis 16 3. Integration 20 4. Judgment 24 5. Written Communication 16

Total 100


Page 130 CMA Canada

These weightings took into account the following considerations:

1. All five skills being measured are generally equally important elements of the skill set of a CMA, i.e. each skill was weighted within a range of 16 to 24 to add up to a total of 100 for all five skills.

2. For this case, the extent to which candidates had the opportunity to demonstrate their integration and quantitative analysis skills was less than on other cases, whereas opportunities to demonstrate their strategic thinking skills were somewhat greater than on some cases. Consequently, the weightings given to skill areas were adjusted accordingly.

3. The quality of the candidates strategic analysis was appropriately emphasized in the overall evaluation of the candidates paper and reflected within the various relevant skill areas.

After the candidates papers were ranked and the rankings weighted as described above, candidates responses that were within a designated range around the pass mark were reviewed by a marking supervisor or his/her delegate, and a final judgment was made as to the mark to be assigned to the candidates paper.

As an example of how a candidates final mark for the June 2002 case was arrived at, please consider the following:

A MarkersRanking

B Weight Factor

C Final Mark

(A x B) 1. Strategic Thinking a) Elements of the strategic planning process b) Systematic use of the strategic planning process Total

7/10

6/10 13/20

12

12 24

8.4 7.2 15.6

2. Analysis a) Breadth b) Depth Total

7/10 7/10 14/20

4 12 16

2.8 8.4 11.2

3. Integration a) Fit of alternatives to situation analysis b) Linkages between alternatives, alternatives and issues, issues Total

4/10

6/10 10/20

10

10 20

4.0 6.0 10.0

4. Judgment 6/10 24 14.4 5. Written Communication 7/10 16 11.2

Total 50/80 100 62.4


CMA Canada Page 131

Marking Worksheet June 2002 CMA Entrance Examination Part 2

Northern Region Support Centre

STRATEGIC THINKING S/A/W* Ranking1. Elements of the Strategic Planning Process:

A mission/vision/mandate B situation analysis (e.g., SWOT, financial assessment, ...) C strategic alternatives addressed D make clear recommendations re strategic direction E implementation plan (operational actions/recommendations, timeline, who,

what, when)

/10

2. Systematic use of the Strategic Planning Process (A B C D E ) /10 ANALYSIS

3. Breadth: strategic issues business issues recommendations on business issues

/10

4. Depth: strategic issues business issues quantitative analysis

/10

INTEGRATION 5. Fit of alternatives to situation analysis /10 6. Linkages between issues/alternatives and other issues/alternatives /10

7. JUDGMENT /10 (a) Issues - consider relative emphasis of the following:

strategic vs. business issues major vs. minor business issues

(b) Analysis - consider the following criteria: balance of pros & cons; overcoming cons balance of quantitative vs. qualitative quality of quantitative quality of qualitative information from the case understood and used

(c) Conclusions/recommendations: logical? consistent? convincing? feasible? cash flow issue resolved?

8. WRITTEN COMMUNICATION /10 (a) Format:

layout (table of contents, executive summary, introduction, analysis, conclusions/recommendations, exhibits)

organization (headings, lists, tables) (b) Language and style:

professional tone, tact grammar, spelling, sentence structure, punctuation clear and concise expression, logical and coherent, flow, audit trail

*Note: S = Strong; A = Acceptable; W = Weak


Page 132 CMA Canada

Marking Guide June 2002 CMA Entrance Examination Part 2

Northern Region Support Centre Overview The June 2002 CMA Entrance Examination Part 2 is a case that is evaluated using global marking techniques. While technical competencies knowledge are evaluated extensively in the Part 1 examination, Part 2 focuses on the following skills:

Strategic thinking

Analysis

Integrative capabilities

Judgment

Written communication Strategic thinking focuses on the candidates understanding and use of the strategic planning process. Analysis focuses on the candidates ability to identify and analyze strategic and business issues to an appropriate level of depth and breadth. The quality of the strategic analysis is captured under integrative thinking and judgment. Written communication assesses the ability of the candidate to make effective use of format and language in the report.

The following sections of this document describe the approach that should be taken to evaluate each of these skill areas using global marking. The objective is to ensure that all candidates are evaluated consistently in each area.

STRATEGIC THINKING

This section pertains to the candidates understanding of the strategic planning process, knowledge of a strategic planning method, and ability to apply the methodology in a systematic way to arrive at an integrated strategic plan. It focuses on the integrity and consistency of the logic from one step to another in the strategic planning process. Strategic thinking is evaluated from two different perspectives: (a) Elements of the strategic planning process (BOX 1). This sub-section evaluates the candidates understanding of the elements of the strategic planning process as a tool to solve a business problem (see table below).


CMA Canada Page 133

Elements of the Strategic Planning Process

PROCESS STEPS DESCRIPTIONS USED Purpose

""""

Identification of the mission, vision or mandate. Candidates should assess the appropriateness of the current mandate/mission in light of the current environmental assessment and/or the analysis of the strategic options, and then revisit the mission (either indicating that the current mission should not be changed or providing a new mission). The restated mission should be consistent with the strategic analysis. (Weak = not addressing the mission; strong = providing a new mission that is consistent with the analysis or providing a supported recommendation that the mission not be changed.)

"""" Situation Analysis

""""

Assessment of the external environment, competitive position, financial assessment, internal analysis, SWOT, situational assessment, Porters 5 Forces, PEST. Candidates may use a broad range of strategic planning tools, but for this specific case some of these tools are less useful, e.g. Porters 5 Forces. This specific case would also require consideration of the major sources of funding (Ministry, Municipality, United Way). (Weak = no structured situation analysis; strong = a financial assessment in addition to a structured SWOT analysis and/or analysis of the internal and external environment.)

"""" Strategic Analysis

""""

Clear identification of strategic choices. More than one alternative should be discussed. Note that depth and breadth of analysis will be more fully considered in the next major section entitled Analysis. In this case, the main strategic choice is whether to amalgamate or remain a stand-alone entity. However, services offered and the market served (which would include a couple of restricted fund opportunities) are also considered as strategic choices. As well, the future cash crisis is a major strategic issue that should be analyzed. (Weak = addressed only one strategic option; strong = addressed two or more options).

"""" Recommendations

""""

Clearly stated recommendation of a strategic direction. Does the candidate make clear what the organization should do to ensure its future viability? The quality of the recommendations will be considered in the Judgment section of the marking guide.

"""" Implementation This will be the final step in the process and will address how the

strategic direction will be implemented, including operational actions. It should indicate what should be done, who should do it, and (to a lesser extent in this case) when it should be done. The implementation plan should be consistent with the strategic alternative(s) that is(are) chosen. (Weak = no implementation plan, or simply a list of operational recommendations that is named an implementation plan; strong = a plan that focuses on how to achieve the strategic direction.)


Page 134 CMA Canada

Weak performance would be reflected in some of the following ways:

No consideration of the need to examine the organizations mission/mandate.

Providing a new mission statement that is not supported by the analysis.

No structured situation analysis or one that is extremely superficial and sparse.

No evaluation of NRSCs current financial situation.

Entire strategic analysis revolves around the strategic alternatives and is not part of a larger process.

No separation of strategic alternatives from internal or operational issues.

A recommendation is made as the final stage of the report without addressing how the organization must change to implement the recommended actions (e.g. ignores the functional changes that have to be made to support the strategic recommendation, like who would be the executive director, how would revenues be increased, how would the problems with the board of directors be solved, etc.).

A superior response would be reflected in some or all of the following ways:

Recognition of the current mandate and/or development of a new purpose/vision/mission/ mandate that is supported by analysis.

A comprehensive situation analysiswe are looking for candidates to view the organization from a broad perspective: areas of strength and weakness as well as scanning the external environment for competitive threats and opportunities, and providing an assessment of the current financial situation. Some examples are as follows:

Internal Environment: Strengths: NRSCs clinical staff are highly qualified and dedicated. Weaknesses: No understanding by the board of directors of their role; no allocation of labour and overhead costs to the restricted funds; poor marketing and fundraising efforts.

Documents

Northern Region Support Centre NRSC 2002 Exam CMA