Write a management letter to Justin and Sarah Morris.

Dolphin Surf & Leisure Holidays Pty Ltd (Dolphin) is a resort company based on the Great Barrier Reef. Its operations include boating, surfing, diving and other leisure activities, a backpackers’ hostel, a family hotel and a five-star resort. Justin and Sarah Morris own the majority of the shares in the Morris Group which controls Dolphin. Justin is the chairman of the board of directors of both Dolphin and the Morris Group, and Sarah is a director of both companies as well as the CFO of Dolphin.

Justin and Sarah have a fairly laid back management style. They trust their workers to work hard for the company and reward them well. The accounts staff, in particular, are very loyal to the company.

Justin tells you that some accounts staff enjoy their jobs so much they have never taken any annual leave, and hardly any workers ever take sick leave. Justin and Sarah have not bothered much in the past with formal procedures and policies, but they have requested the accounts staff to start documenting the more common procedures. They do not conduct formal performance reviews; they rely on their staff to tell them when there is a problem.

There are three people currently employed as accounts staff, the most senior of which is Peter Pinn.

Peter heads the accounts department and reports directly to Sarah. He is in his fifties and plans to retire in two or three years. Peter prides himself on his ability to delegate most of his work to his two accounts staff, Kristen and Julie. He claims he has to do this because he is very busy developing the policy and procedures manual for the accounting department. The delegated work includes opening mail, processing payments and receipts, banking funds received, performing reconciliations, posting journals and performing the payroll function. Julie is a recent Chartered Accountant graduate. Kristen works parttime — coming into the office on Mondays, Wednesdays and Fridays. Kristen is responsible for posting all journal entries into the accounting system and the payroll function. Julie does the balance of the work, but they often help each other out in busy periods. Kristen authorises Julie’s transactions and Julie returns the favour by authorising Kristen’s transactions. Together, they usually make the accounts balance.