MYRTLE HILLS GOLF AND COUNTRY CLUB
BACKGROUND
Myrtle Hills Golf and Country Club (MHGCC) is a prominent and highly sought-after golf and country club located in the picturesque region of south-eastern Melbourne, Australia. The club offers an array of amenities and services, making it a hub for golf enthusiasts, social members, and those seeking a vibrant social and recreational community. MHGCC boasts a diverse and extensive membership base, comprising approximately 2,000 members across various categories, including full playing, provisional, and social memberships. The club's popularity is evident through its significant waiting list for playing memberships, which highlights the high demand for access to its facilities and services.
MHGCC ‘s operations are supported by a dedicated workforce of approximately 40 employees, consisting of both full-time and casual staff members. This team ensures the seamless functioning of the club's amenities, services, and events. MHCC's success is attributed in part to the leadership of Monte Shanks, the current General Manager.
His stewardship has likely contributed to the club's thriving and well-regarded status within the community. Shanks' vision and management play a pivotal role in driving the club's growth and maintaining its reputation.
CURRENT GOVERNANCE CONCERNS
MHGCC has a has a Code of Conduct applicable to all members. Breaches of the Code may only be raised by the committee. The club also has a whistleblower policy where employees are encouraged to raise concerns directly to the committee. Both of these have been effective as Monte Shanks, the GM, attends all committee meetings and is able to provide context to any staff concerns. Shanks is also able to expedite membership applications by choosing which applications are presented to the committee each quarter.
Some members have expressed concern that Shanks has provided committee members with additional benefits including preferred access to booking times and complementary food and beverages. There has been speculation that Shanks and the committee have also received hidden payments for favouring certain members and membership applications.
CURRENT ACCOUNTING PRACTICES
With a financial year ending 30 September, MHGCC members are billed in advance each July for their annual membership fees of $4,000. Members also have the opportunity to pay their subscriptions monthly with an additional surcharge applied, or ten years in advance at a considerable discount. MHGCC also charges a joining application fee of $10,000 for full membership, 50% payable upon submission of application and the remainder upon joining. Waiting lists for full membership currently exceed 3 years.
MHGCC has recently invested heavily in a new drainage system for the golf course and the installation of a newly renovated fitness room. Both of these projects have absorbed considerable amounts of staff labour and have been conducted concurrently with regular operations. Committee members and members of 20 years standing or longer are provided with a line of credit for their subscriptions, food and beverage consumption, and other club services (including on-site accommodation). All other members and guests are required to settle all services and consumables when ordered or booked. The committee has traditionally performed a revaluation of clubhouse assets each September in order to reflect member’s funds accurately. This practice had extended to annually reviewing the useful life of greenkeeping equipment.
Identify opportunities for earning management in the case study selected.
