Fast forward to March 2023, MSG has expanded to 6 F&B outlets island-wide. MSC's revenue has...
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Fast forward to March 2023, MSG has expanded to 6 F&B outlets island-wide. MSC's revenue has also increased by 50% after it expanded its range of products and production capacity. Other than supplying its products to MS Café outlets, MSC also expanded its customer base to wholesale and distribution business to restaurants and hawkers. With the group's expansion, the group has been facing a tight manpower crunch. With the increase in the foreign workers levy, revision in the tiered work permit or visa regime and tightened foreign workers quota, MSG has to tap on alternative sources of manpower. Both MSC and MS Café employs part-time Singaporean staff. The respective business units has been developing their own pool of "permanent part-time staff to alleviate the resource crunch. The Group Human Resource (HR) of MSG determines the hourly rates to be paid for part-time staff. There has been increasing staff morale issues with some permanent staff complaining that the part-time staff are earning more than them. There has also been complaints about the part-time staff clocking excessive hours and that Supervisors and Team Leads are bringing in their friends and relatives to take-up part-time positions. Both full time and part-time staff are currently using manual punch cards for clocking in and out and their working hours including any overtime pay are verified and approved by the Supervisors or Team Leads. In addition, there has been complaints that the service level at MS Café's has deteriorated as the part-timers were not doing things right. There was also a recent whistle-blowing report by a staff at MSC that they are issues relating to food hygiene and safety. Due to a significant increase in sales orders to fulfill, the production team has decided extended the shelf lives of many of the food sauces and paste so that there is a longer production cycle. In addition, due to a significant proportion of part-time staff being deployed and difficulty in get staff who are experience in food processing, food hygiene and safety procedures are not being followed. Required: (a) The MSG CEO is very concerned with the issues associated with the hiring and management of part-time staff. As the Head of Group HR, you are required to take immediate actions to address the concerns and provide your recommendations to the CEO on the following: (1) Analyse and formulate what are the internal control improvements to adequately and effectively manage the hiring, deployment, performance management and training of part-time staff. (ii) You are also required to formulate the control measures as part of your recommendations in part I above, to mitigate the potential conflict of interest issues. and submit your recommendations to the CEO to improve the internal controls (b) As MSG is exposed to severe penalties and reputational risks including the risk of losing its business licence, the CEO has engaged you as a consultant, to help MSG improve its food hygiene and safety procedures. You should apply the principles in the COSO framework of internal controls and the IIA's Three Lines Model to formulate your recommendations to MSG to establish adequate and effective internal controls for food hygiene and safety procedures. The CEO has also mentioned that even if MSG adopts best practice framework on food safety and hygiene procedures, people may not follow and comply with requirement. As part of your recommendations, you should analyse and formulate the preventive and detective controls that would the CEO's concerns. (16 marks) Fast forward to March 2023, MSG has expanded to 6 F&B outlets island-wide. MSC's revenue has also increased by 50% after it expanded its range of products and production capacity. Other than supplying its products to MS Café outlets, MSC also expanded its customer base to wholesale and distribution business to restaurants and hawkers. With the group's expansion, the group has been facing a tight manpower crunch. With the increase in the foreign workers levy, revision in the tiered work permit or visa regime and tightened foreign workers quota, MSG has to tap on alternative sources of manpower. Both MSC and MS Café employs part-time Singaporean staff. The respective business units has been developing their own pool of "permanent part-time staff to alleviate the resource crunch. The Group Human Resource (HR) of MSG determines the hourly rates to be paid for part-time staff. There has been increasing staff morale issues with some permanent staff complaining that the part-time staff are earning more than them. There has also been complaints about the part-time staff clocking excessive hours and that Supervisors and Team Leads are bringing in their friends and relatives to take-up part-time positions. Both full time and part-time staff are currently using manual punch cards for clocking in and out and their working hours including any overtime pay are verified and approved by the Supervisors or Team Leads. In addition, there has been complaints that the service level at MS Café's has deteriorated as the part-timers were not doing things right. There was also a recent whistle-blowing report by a staff at MSC that they are issues relating to food hygiene and safety. Due to a significant increase in sales orders to fulfill, the production team has decided extended the shelf lives of many of the food sauces and paste so that there is a longer production cycle. In addition, due to a significant proportion of part-time staff being deployed and difficulty in get staff who are experience in food processing, food hygiene and safety procedures are not being followed. Required: (a) The MSG CEO is very concerned with the issues associated with the hiring and management of part-time staff. As the Head of Group HR, you are required to take immediate actions to address the concerns and provide your recommendations to the CEO on the following: (1) Analyse and formulate what are the internal control improvements to adequately and effectively manage the hiring, deployment, performance management and training of part-time staff. (ii) You are also required to formulate the control measures as part of your recommendations in part I above, to mitigate the potential conflict of interest issues. and submit your recommendations to the CEO to improve the internal controls (b) As MSG is exposed to severe penalties and reputational risks including the risk of losing its business licence, the CEO has engaged you as a consultant, to help MSG improve its food hygiene and safety procedures. You should apply the principles in the COSO framework of internal controls and the IIA's Three Lines Model to formulate your recommendations to MSG to establish adequate and effective internal controls for food hygiene and safety procedures. The CEO has also mentioned that even if MSG adopts best practice framework on food safety and hygiene procedures, people may not follow and comply with requirement. As part of your recommendations, you should analyse and formulate the preventive and detective controls that would the CEO's concerns. (16 marks)
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