Jim Paul Associate (JPA ) Plant hire ltd is a small family run company that specialises in
Question:
Jim Paul Associate (JPA ) Plant hire ltd is a small family run company that specialises in the hire of plant and equipment to construction sites in the East of England.
The company has a large stock of plant for hire including Heavy Excavators, Dumper Trucks, Heavy Rollers, mobile compressors and a variety of mobile generators of different sizes. The company also runs a small fleet of transport vehicles to transport the hire equipment they pride themselves on being able to deliver to even the hardest to reach sites.
Aaron Lennon has recently joined the company as sales representative, an experienced sales person, Aaron was persuaded to join the company by a friend who has worked at JPA for a number of years. One of the key points that persuaded Aaron to join was the culture at the company which is predominantly male and could be described as less than politically correct "it's a right laugh we can say what we want without anyone complaining". The "laddish" culture is encouraged by the owner who set the company up 40 years ago and still believes in "traditional" values.
This also extends to the approach to Health and Safety and other business regulations which the owner describes as "a right royal pain designed to stop us doing our jobs". Aaron was asked to sign to say he had read the operations rule book but when asked to see it was told "don't worry no body knows where it is let alone if we follow it"
The plant and fleet when stored in the companies main compound do not have a designated parking place and are simply parked where most convenient for the driver at the time, leading to one employee to state that JPA stands for Just Park Anywhere. This means a lot of the time that when a unit is to be sent to site several other units have to moved first.
As the owners do not like to like to throw away any parts that may be useful at some point when a unit is decommissioned JPA will keep as many spare parts as can be stripped down and these are generally placed in a pile in the internal storage area.
Aaron was surprised to find that there is no health and safety training and that none of the company operatives are trained to operate any of the plant hired out or the forklift trucks used in the storage area. Whilst health and safety equipment such as work boots, ear and eye defenders gloves etc are worn when operatives are on construction sites, its use is not enforced on JPA's own premises.
There are regular minor accidents such as cuts, slips, trips and falls as well numerous "near misses" through the day but these are seen as part of the job. One member of staff is currently on sick due to a bad back caused by inappropriate lifting techniques.
The company does not keep an accident book and there is no trained and designated first aider, although one member of staff did "sort of remember seeing a box with a cross on it so there is probably a first aid kit somewhere".
When not on site Aaron is expected to "muck in" and help out with the general day to day operations, he is regularly asked to move plant even though he is not qualified to do so and has only had very basic training in the operation of the units. When he mentioned the lack of training he was told "that's all right none of us are qualified in any of the plant we hire out, but we've all been here that long that we know what we are doing".
JPA's plant and delivery fleet are maintained by a local garage, selected by the owner based on their low price structure but repair and maintenance logs are rarely completed.
Required:
1.What risks do the company currently face?
2.Are there any techniques from the competitve environment that could be used? - after all Aaron Lennon will be looking at the client base.
3.If the company were to list would it succeed?
4.Are there any ethical issues?
5.How strong are the internal controls?
6.What about Fraud, are the main preconditions evident and if so where?