To: Town Council of Hanso
FROM: Stephanie Black, CMA
DATE: January 31, 2014
SUBJECT: Response to which Police Force is best to implement for the town of Hanso in terms of Expenditures and Management Control System.
As a response to your request on analyzing which Police Force program to implement; the CRP Police Force or the existent Hanso Police Force, here is my report on a list of issues that I feel should be addressed, along with my recommendations to which police program is less costly and best to implement to sustain a safe environment for the Town of Hanso. The first issue that will be discussed will be addressing the high expenditures presented in the Hanso Police Force financial statements and CRP proposal. The second issue that will be discussed will be on Hanso’s goals and targets for the year 1998 and how that may have a negative influence on the management control system for the up-coming three year contract. To prepare this report, I used creditable financial statements, the CRP proposal and information about HPF to provide me with reasonable data/information on why I recommend HPF program should be kept.
The following sections will explain Hanso’s Police Force and Canadian Regional Police Force quantitative and qualitative results. I will also explain the management control system results, followed by my recommendations and why I think those recommendations will result a positive outcome for the Town of Hanso.
Hanso Police force and CRP Police Force quantitative and qualitative results
In evaluating Hanso Police Force expenditures, it illustrated that the expenditures are higher compared to CRP Police Force. Hanso’s Budgeted and Actual Financial Data consisted of two categories; Receipts and Program Expenditures. The Receipts is categorized to Town appropriation, Government grants and Miscellaneous. In 1997, the total measure of receipts was equal to $519,436. Comparing those results with the budgeted data for the year 1997, it is higher by $2,960, which demonstrates that their income was higher than what was expected. The financial data also illustrates that the Hanso Police Force budget is increasing by 5% annually per year compared to other Towns that has only increased their budgets by 3%. In addition, the budgeted salaries are to be increased by 5% and the new lease signed by the council is increased from $1,000 to $1,200. Assuming that the increase in expenses for the upcoming year (1998) is due to: the purchase of three new police cruisers, the increase in rent expenses, an increase of 5% salaries and inflation; it is safe to say that the increase is reasonable.
The CRP proposal financial data demonstrates that there will be a fee of $325,000 plus $10 per citizen (5,509 citizens in 1997). The number of citizens is expected to increase by 1% per year and the total expenditures is stated to be increased by 2% compounded annually for the years 1999, and 2000. According to my calculations, the CRP expenditures for the three year contract proposal are: $380,640, $388,824, and $389,395. Although the CRP’s expenditures are significantly lower than HPF, CRP’s receipts does not account for the gain of government grant ($127,182). Deducting the government grant demonstrates that CRP will be making profit by less than a $1000 per year. However, the profit generated does not include the expenses of the special events overtime payments of $40 per constable per hour. It is also not guaranteed that the CRP constables will be made available for additional coverage; although estimations show that 250 to 350 hours of overtime coverage per year is expected. On the other hand, Hanso Police Force will only be paying $31.5 per constables for additional coverage and they guarantee that officers will be available if needed. In conclusion, Hanso Police Force is at a competitive advantage, although expenditures is higher and it could be less if we are to assume that constables were paid and were
