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June 2002 CMA Entrance Examination Part 2

The Societies of Management Accountants of Manitoba, New Brunswick, Newfoundland, Northwest Territories, Nova Scotia, Ontario, Prince Edward Island, Saskatchewan and the Yukon, Certified Management Accountants Society of British Columbia, The Certified Management Accountants of Alberta, Ordre des comptables en management accrdits du Qubec

June 2002 CMA Entrance Examination Part 2 Backgrounder


The background information relating to the Part 2 case (Backgrounder) is provided to candidates in advance of the Part 2 examination date. It contains information about the company in the case and its related industry. Candidates are expected to familiarize themselves with this background information in preparation for the strategic analysis that they will be asked to undertake during Part 2 of the CMA Entrance Examination. Candidates should note that they will not be allowed to bring any written material into the examination writing centre, including the advance copy of this Backgrounder. A new copy of this Backgrounder, together with additional information about the company, will be provided at the writing centre for Part 2 of the CMA Entrance Examination. Candidates are reminded that no outside research on the industry related to this case is required and that they will be evaluated on how they respond based on the industry information provided in the Backgrounder and the question paper (Additional Information).

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Northern Region Support Centre Backgrounder


Overview
Northern Region Support Centre (NRSC) is a registered charitable organization located close to a major Canadian city (the City). NRSCs mandate is the prevention and treatment of all forms of child abuse through education programs and counselling services: sexual abuse, physical abuse, emotional maltreatment and neglect. NRSC currently offers individual and group counselling to child abuse victims and offenders, as well as to members of their immediate families. The organization has developed strong expertise in the field of child abuse based on its extensive experience over the past 17 years. This has allowed it to help clients recover from the trauma of their abuse and to deal with its impact on both themselves and their families. NRSCs clients (victims and offenders) range in age from early childhood to senior citizens. Most of its clients come from referrals made by organizations, such as the Childrens Aid Society and other not-for-profit agencies, and from psychologists who practice in the Northern Region. While NRSC was established to serve residents of the Northern Region, the organization sometimes accepts clients from neighbouring communities when there are spaces available (see Exhibit 1). Funding for NRSC is provided by the Provincial Ministry of Social Services, the Northern Region Municipality, the United Way, and donations from individuals and corporations. The organization operates with a break-even objective. Some of the funds that NRSC receives are restricted for use in specific initiatives within the scope of its mandate. Provincial and municipal funding is provided on the condition that any change in NRSCs mandate must receive government approval. NRSC has a small staff consisting of an executive director, an administrator, a part-time fundraiser, a clinical director, and two in-house therapists (termed group leaders) who lead the organizations group counselling sessions (see Exhibit 2 for an organizational chart). NRSC engages other psychologists (termed external therapists) within the community on a contract basis to provide counselling for clients who require individual treatment. NRSC is overseen by a volunteer board of directors consisting of nine individuals from within the Northern Region community. An executive committee that reports to the board monitors NRSCs day-to-day operations.

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History
NRSC was established in 1985 as the Northern Region Sexual Abuse Program (the Program) to develop and provide treatment and community education programs for and about victims of child sexual abuse. In January 1990, an application for separate incorporation was filed, and the Program was incorporated by Letters Patent under the Canada Corporations Act without share capital. In May 1995, the articles of incorporation were amended, and the Program was renamed the Northern Region Centre for Childhood Sexual Abuse (the Centre). In December 2000, the Centre received governmental approval to broaden its mandate to make its counselling services available to individuals and families affected by any form of child abuse, including sexual, physical and emotional abuse, and neglect. It took this step in recognition of the reality that all forms of child maltreatment and neglect result in serious consequences for the victims. The Centres management believed that it should offer its knowledge and skills to a broader population that could benefit from its services. In March 2001, Supplementary Letters Patent were issued to change the corporations name to the Northern Region Support Centre (NRSC) in recognition of its broader mandate. (Note: For ease of reference, the organization will be referred to as NRSC throughout the remainder of the case.)

The Nature and Scope of Child Abuse


Research has shown that child abuse is a traumatic experience that can cause profound and longlasting damage to the mental, emotional, behavioural, social and physical functioning of the victim. According to a recent report published by the federal government, the prevalence of child maltreatment and neglect in our society is of epidemic proportions and constitutes a major health issue. It destroys individuals, families and communities, and weakens the well-being of our society. Child abuse crosses all socio-economic boundaries throughout Canada. Most often, victims know the offender, who is frequently in a position of trust with the victims family, i.e. relative, friend, coach or caregiver (see Exhibit 3). This position of trust makes the child uncertain about disclosing the abuse and frequently the abuse goes unreported. Child abuse is divided into four categories physical abuse, sexual abuse, emotional maltreatment and neglect. Each year, the Childrens Aid Society, which is the principal organization that oversees child welfare in the province, investigates approximately 1,800 cases in the Northern Region for suspected child abuse. It is widely recognized that 1 in 3 female children and 1 in 5 male children suffer from some form of abuse before the age of 16. The degree of abuse varies considerably and most instances go unreported (see Exhibit 4). Without immediate intervention, many abused children cannot break the chain of abuse and become abusers themselves (see Exhibit 5). Children who experience trauma as a result of abuse suffer from a variety of long- and short-term difficulties, including sleep disturbance (night terrors),

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drug and alcohol abuse, learning disabilities, and extreme emotional states (rage, depression, anxiety). When children are referred to a professional for help, they typically are in a highly dysfunctional state and in need of immediate and intensive intervention. Parents struggle to understand what has happened to their child and why he/she is displaying such outrageous behaviour. The child cannot fully comprehend what has happened and does not have the capacity to express how he or she feels. Therefore, in many cases, it helps to treat the entire family and not just the victims themselves. This is the approach used by NRSC.

Operations
When a client (victim or offender) is first referred to NRSC, the clinical director assesses the situation by separately meeting with the victim, the offender (where possible), and members of their immediate families. The clinical director strives to meet with prospective clients as soon as possible after a referral. This is critical due to the nature of child abuse and the trauma that it causes. In some cases, the victim but not the offender is available for treatment (e.g. the victim does not disclose who the offender is, the offender refuses treatment, the offender remains at large, or the offender is imprisoned and is not permitted to be released for therapy outside of the prison). In these cases, only the immediate family of the victim is involved. Each case referred to NRSC can be classified into one of the following three categories: 1. The victim and the offender are members of the same family (e.g. a young child has been abused by an older sibling or parent). In these cases, the immediate family of the victim and the offender are the same. The victim and the offender are members of an extended family (e.g. a child has been abused by an older cousin, uncle or aunt). In these cases, there are two distinct, but related, immediate family units. The victim and offender are unrelated (e.g. a child is abused by another individual in the community, such as a neighbour, babysitter, coach, etc.). In these cases, there are two distinct, but unrelated, immediate family units.

2.

3.

Following the initial meetings with the clients and members of their immediate families, the clinical director determines whether treatment should be provided on an individual or group basis. Individual treatment may be prescribed when it is a condition of the organization that referred the client to NRSC (e.g. the Childrens Aid Society), in cases where extreme abuse has taken place, or in cases where the clinical director believes that an individual would be disruptive in a group environment. External therapists are used for individual counselling.

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When individual therapy is undertaken, sessions typically are held for a period of 6 to 12 weeks. The clinical director meets with the client and the external therapist at the end of the prescribed duration to discuss the next steps. In approximately 25% of these cases, further individual therapy is prescribed. In approximately 20% of these cases, group therapy is recommended as a follow-up to the individual therapy. In the balance of these cases, no further therapy is immediately required. When group treatment is prescribed, victims are treated with a group of other victims and offenders are treated with a group of other offenders. Group therapy is acknowledged as an important and beneficial form of treatment when dealing with child abuse issues. Groups remove individuals from their isolation and provide them with a safe setting to work on their issues and problems. Each group is specifically designed to address the issues and needs of its members, particularly the overall impact of the traumatic experiences in their lives. Helpful support and constructive understanding are essential elements of all of NRSCs groups. Groups of victims are organized by age. Victims are categorized either as children aged 7 to 12, or as teenagers aged 13 to 19. Victims under the age of 7 are treated on an individual basis. This is necessary due to the special needs of young children, such as the difficulty they often have in articulating their trauma. In addition, NRSC offers groups for former victims of sexual abuse (termed survivors) who are older than 19 years of age. NRSC began to offer survivor groups in 2000 after learning that certain individuals find it difficult to function in their daily lives long after therapy (individual or group) has been completed. In all cases, the safety and security of victims are strictly maintained. Offenders are also placed in groups based on age. There are three offenders groups: young offenders (under age 12), teenage offenders (aged 13 to 19) and adult offenders (aged 20 and above). Groups meet for a period of 10 weeks beginning in January, April, July and September. Each group meets once per week for three hours and is led by a group leader. For each hour of group therapy, the group leader spends an additional two hours for preparation, follow-up, documentation, and individual client meetings. Each group normally consists of five to nine individuals. When 10 or more individuals are registered for a given age category, a second group for that age category is offered. Prior to commencing group therapy, the group leader arranges a meeting with the victim or offender on an individual basis to discuss expectations and set objectives. One of NRSCs group leaders handles all victims groups, while the other handles all offenders groups. At approximately the mid-point of the group sessions, the group leader again meets with the victim or offender to discuss progress. After the last group meeting, a meeting is held with the victim or offender, members of his/her immediate family, the group leader, and the clinical director. Following that meeting, the group leader and the clinical director determine whether the victim or offender should receive more treatment (group or individual) or whether treatment is completed. Additional group therapy is prescribed in about 25% of the cases and follow-up individual therapy is prescribed in about 5% of the cases.

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The group leader is responsible for keeping the referring party (e.g. psychologist, Childrens Aid Society, etc.) informed about the status of the victim or offender that was referred. This also ensures that the group leader is provided with information that the referring party may have regarding the situation. In many cases involving offenders, the authorities are directly involved. NRSC has received very positive feedback from a number of Childrens Aid Society workers. This feedback has included praise for its easy accessibility, the high quality of work done by NRSCs staff, and the efforts made by the group leaders to keep the Childrens Aid Society up-to-date on the status of the clients that they referred to NRSC. A schematic overview of the client treatment process is provided as Exhibit 6. NRSCs staff also becomes involved in special projects, such as preparing educational manuals on child abuse and conducting research on child abuse treatment techniques. Through the work that it has done, NRSC has become recognized by a select group of professionals within the field as a leader in child abuse detection and group therapy treatment. On occasion, visitors from across Canada, and sometimes even from the U.S. and Europe, visit NRSCs facilities to observe its approach to treating victims and offenders of child abuse. In addition, NRSCs executive director and clinical director are occasionally called upon to be guest speakers at conferences on child abuse located throughout North America.

NRSCs Market and Clients


NRSC is located in the Northern Region, a suburb of the City (see Exhibit 1). NRSC occupies a 1,200-square-metre facility in an industrial strip mall located in District 4 along a major transit route. The Northern Region is comprised of four districts. Districts 3 and 4 are older, and developed from the suburban expansion that took place in the 1960s, 70s and 80s. Over the years, the general population of the Northern Region has been expanding northward. Population statistics for the Northern Region are provided in Exhibit 7. NRSCs services are available primarily to residents of the Northern Region. In certain cases, the organization accepts clients who live outside the boundaries of the Northern Region when there is space available in one of the groups, i.e. when the admittance of a person from outside of the Northern Region would not result in an additional group having to be offered for a given age range. The principal agency that oversees all matters involving children in distress within the province is the Childrens Aid Society. The Childrens Aid Society is a provincial government agency that works to ensure the welfare of children in all areas of the province and to ensure that childrens agencies are fulfilling their respective mandates. The Childrens Aid Society has broad powers, including the authority to remove children from their homes and to place them into protective custody. Individual childrens agencies, including NRSC, do not have such powers. Childrens agencies, including NRSC, are required to support the Childrens Aid Society in the fulfillment of its mandate by providing information regarding victims and offenders.

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Approximately 60% of NRSCs clients are referred to it by the Childrens Aid Society. Referrals from other agencies in the Northern Region (such as the Centre for Abused Women, discussed below) collectively account for approximately 20% of NRSCs clients, and referrals from agencies located outside of the Northern Region account for about 5% of NRSCs clients. Ten percent of clients are referred to NRSC by other professionals who work in the Northern Region, such as psychologists, physicians, and schoolteachers who become aware of an abused child or offender. Many of these referrals are made because the professional is aware that the victim or offender cannot afford to pay for private therapy. Finally, approximately 5% of NRSCs clients are classified as walk-ins. That is, they are not referred by another agency or professional, but have become aware of NRSC through other means such as speaking with a friend who is a former NRSC client, through NRSC fundraising events, or because they had seen a small brochure that is prepared by NRSC and distributed to select public establishments in the local area (e.g. shopping malls and community centres). NRSC is the only organization within the Northern Region that offers treatment to victims and offenders of child abuse. Other organizations within the Northern Region that offer treatment for other forms of abuse include the following: Centre for Abused Women provides counselling and support for victims of spousal and non-spousal abuse, and offers temporary shelter to women and their children who have been physically or mentally abused. The Centre for Abused Women sometimes refers cases to NRSC when its clients children have been sexually abused. Drug and Alcohol Abuse Program helps individuals addicted to drugs and alcohol in overcoming their addiction. Many drug and alcohol abusers mistreat or neglect children as a consequence of their addiction. The Drug and Alcohol Abuse Program sometimes refers clients to NRSC for child abuse treatment. Animal Abuse Centre provides shelter for abused and mistreated animals. Research has found a correlation between those who abuse animals and those who abuse children. However, given the differences between the mandates of the Animal Abuse Centre and NRSC, there is little cross-referral between the two agencies.

Personnel
The people involved with NRSC and their respective roles and responsibilities are described below (see the organizational chart in Exhibit 2). A characteristic that is common among NRSCs employees is that they have a passion for the work that they do and thus are willing to accept salaries or wages that are lower than what they could earn elsewhere. The executive director, Dr. Chris Campbell, manages the day-to-day operations of NRSC. Dr. Campbell holds a Ph.D. in Psychology and has been with NRSC since its inception. He is 55 years old. His duties include liaising with the Ministry of Social Services, the United Way, the Northern Region Municipality, the Childrens Aid Society, and other agencies. Dr. Campbell is the main link between the board of directors and NRSC. He also handles the day-to-day issues

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that arise at NRSC, including fielding many of the technical inquiries that are made by current and prospective clients (e.g. the reasons for group therapy as opposed to individual therapy). Dr. Campbell oversees all of the programs for which NRSC receives restricted funding. He receives a salary of approximately $60,000 per year. The clinical director of NRSC is Nicole Gauthier. Nicole holds a Masters Degree in Social Work as well as a Masters Degree in Child Development. She is 44 years old and has been with NRSC for the past 10 years. She oversees all of the clinical functions at NRSC, including initial meetings with prospective clients, coordinating clients into groups, arranging external therapists for clients requiring individual counselling, and reviewing client cases at the end of the group sessions to determine appropriate next steps. Where time permits, Nicole works on special projects such as researching new child abuse detection and treatment techniques. Some of these projects are funded through restricted funds received by NRSC. The other projects, which are not specifically funded, are initiated by Nicole because of her belief in their importance. Nicole receives a salary of approximately $45,000 per year. There are two group leaders Eric Simms and Monique Picard. Eric Simms works with groups of victims of child abuse. He is 28 years old and holds a Masters Degree in Psychology. Eric joined NRSC this past year following the departure of the previous victims group leader who left to pursue a career in private practice where his earnings potential was greater. Previously, Eric worked at a local hospital helping people who had suffered severe permanent physical injuries to recover emotionally. Dr. Campbell had actively recruited Eric. He believed that it would be beneficial to hire someone with a fairly broad background in treating different types of trauma. Eric receives a salary of about $33,000 per year. Monique Picard works with groups of offenders. She is 35 years old and has been with NRSC for seven years. Monique holds a Bachelors Degree in Social Work and is close to obtaining a Masters Degree in Social Work, which she has pursued during the evenings. Dr. Campbell has encouraged Monique to pursue a Masters degree because he believes that it would help NRSC to become better recognized for the high qualifications of the professionals it employs and for the quality of care it provides (most agencies of this type employ counsellors with Bachelors degrees or community college certificates). Monique enjoys the research side of her work and over the years has written a few articles on the causes of abusive behaviour, which have appeared in psychiatric journals. Monique receives a salary of about $35,000 per year. NRSCs administrator is Bonnie White. Bonnie manages all of the office functions, including answering the telephone, greeting visitors, word processing, filing and other secretarial functions. She is 44 years old and has been with the organization for nine years. Bonnie has no formal education beyond high school. She works from 9:00 a.m. to 3:00 p.m. each day and is paid $10.00 per hour for her work. This schedule allows Bonnie to drop off and pick up her young children at school each day. NRSC employs a part-time fundraiser, Betty Sheer. Betty is 22 years old and joined NRSC after graduating from high school three years ago. Betty works 20 hours per week at NRSC and also has a part-time job at a local fast food outlet. Betty coordinates fundraising events and solicits donations from individuals and corporations in the Northern Region. She also helps to design

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and distribute the promotional brochure used by NRSC. Betty is paid at a rate of $8.00 per hour for her work. NRSC uses external therapists to treat victims and offenders of child abuse on an individual basis. The external therapists typically are psychologists who operate private practices in the Northern Region and whose time is not filled up treating their own clients. NRSC draws upon a pool of about 20 independent psychologists in the Northern Region who are trained in treating victims and offenders of sexual and non-sexual abuse. The pool system is necessary because treatment depends on the availability of external therapists. Once a client has been referred to a particular therapist, there is a reluctance to change because of the drawbacks of having to start a relationship with a new therapist. NRSC pays its external therapists $35 per hour plus a mileage allowance of $0.35 per kilometre. This represents a discount from the therapists normal rates for treating clients, which range from $50 to $90 per hour. All sessions involving NRSC clients are held at NRSCs facilities. A volunteer board of directors oversees the affairs of NRSC. In accordance with provincial requirements governing not-for-profit agencies, board members may not receive a fee for their service. The bylaws of NRSC state that the board of directors is to be comprised of at least six, and no more than twelve, individuals residing in the Northern Region. There currently are nine board members. Some of the more active members are as follows: Paul Abrams. Paul is a social worker at a local college and a long-time friend of Dr. Campbell. He is 50 years old and has served on NRSCs board for the past ten years. Angela Atello. Angela is a 25-year-old student pursuing her Ph.D. in Psychology at City University. Her thesis is on the effects of child abuse. She decided to join NRSCs board last year after learning of the high quality work that the organization was doing in this area. Vince Brown. Vince is a professional engineer and has been a long-time donor of both time and funds to NRSC. He is 64 years old and recently retired from a long career as a consulting engineer. Vince has been on NRSCs board for four years and has been a very active participant. Charlie Dewin. Charlie is 50 years old and is a production supervisor at a local manufacturing plant. Charlie has no formal education beyond high school, but has extensive experience in labour relations. He joined NRSCs board recently upon his move to the Northern Region. Previously, Charlie lived in the Eastern Region and had been involved with the Eastern Region Sexual Abuse Centre. Gus Peters. Gus is 58 years old and is a trained psychologist. Gus has been on NRSCs board for the past 10 years.

Board members are voted in at the annual general meeting by the interested parties who attend the meeting (e.g. donors, former clients, representatives of referring organizations). At that time, the board also selects a president, vice-president and secretary. This past year, Paul Abrams was elected as president, Gus Peters as vice-president, and Charlie Dewin as secretary. The president, vice president, and executive director form the executive committee, which meets regularly to

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discuss matters regarding the day-to-day operations of NRSC. Board of directors meetings are held ten times per year (once each month except July and December) to review NRSCs operations from a broader perspective.

Financial Information
NRSC prepares its financial statements on a restricted fund accounting basis. The general fund accounts for NRSCs primary service delivery and administrative activities. Restricted funds can only be used for the purpose for which they are intended. Financial statements for the fiscal year ended March 31, 2000, are provided as Exhibits 8, 9, and 10. NRSCs revenue recognition policy is to recognize contributions related to general operations, including fundraising and donations, as revenue of the general fund when received. Contributions to externally restricted funds are recognized in the specified fund when received. The majority of the funding for NRSCs general programs is through the Ministry of Social Services for the province. Pursuant to its contract with the Ministry of Social Services, NRSC is required to operate within its stated mandate and facility. The Ministry must approve any material changes to NRSCs services, location, operating methods, etc. Other sources of NRSCs funding include the Northern Region Municipality, the United Way, and donations from individuals and corporations. The Northern Region Municipality contributes funds to not-for-profit agencies operating within the region. Each year, the Northern Region Municipality sets aside a pool of funds that is allocated to Northern Region not-for-profit agencies based on the number of local clients serviced in the prior year. The United Way has operating standards that NRSC must abide by to continue receiving United Way funding. These operating standards include restrictions on NRSCs fundraising activities. Specifically, NRSC is prohibited from soliciting donations directly from corporations in the Northern Region that appear on the United Ways restricted list. This list includes most major corporations based in the Northern Region. In addition, all United Way agencies, including NRSC, are prohibited from performing any fundraising activities during the months of October and November because such efforts would conflict with those of the United Ways annual fundraising campaign. Betty Sheer (NRSCs part-time fundraiser) and various members of NRSCs board of directors solicit donations from individuals and corporations within the community (other than those prohibited by the United Way). Most donations from individuals are small (e.g. $10 to $20). An income tax receipt is manually prepared by the administrator and issued to the donor for donations of $10 or more. In 1997, Ted Ross, a wealthy businessman, made a commitment to donate $15,000 per year for three years starting in 1997. This commitment was renewed for an additional three years in June 2000.

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Corporate donations usually are in the range of $100 to $500. In most years, NRSC has been successful in finding two or three corporations willing to donate amounts of $1,000 or $2,000. These more sizeable donations typically come through a contact of a member of NRSCs board. Vince Brown has been particularly successful in obtaining these larger corporate donations. In the past, NRSC organized fundraising events such as holiday dinners and boat cruises. The intended purpose of these events was to generate extra income and promote awareness of NRSC. However, these types of fundraising events were eventually discontinued because they typically generated little income after expenses had been paid. In some years, the costs of the events exceeded the revenues that were generated. The major operating expenditures in the general fund are the salaries of NRSC employees. Fees for external therapists who perform individual counselling are accounted for separately. Program promotion costs include the cost of sending NRSC employees to conferences for continuing education. NRSCs bookkeeping is done by a local accountant who also performs the annual audit. An audit is required for all organizations that have registered charity status. NRSC receives restricted funds for specific projects that last anywhere from a few months to several years. Any excess of restricted fund revenues over expenses is transferred to the general fund after the project for which the restricted funding was received is completed. The current and recently completed projects are as follows: The Child Therapy Fund Established in 1999 and funded by the Ministry of Social Services, this fund is restricted to the development of individual therapy programs for children under the age of 7. Prior to 1999, NRSC did not deal with victims under the age of 7 years due to the special needs of those cases. NRSC received an initial grant of $20,000 and receives $10,000 per year conditional upon a minimum of 20 children under the age of 7 being offered individual therapy each year. NRSC employs external therapists for all of its individual therapy treatment. The introduction of the Child Therapy Fund caused an increase in the overall number of individual clients served by NRSC. The Project Champion Fund Established in 1998 and funded by a grant of $15,000 from the Canadian Athletic Association, this program was an initiative aimed at educating parents, coaches, participants and the public about the risk of sexual abuse in minor sports. The program was completed in the fiscal 1999 year, and the excess funds were transferred to the general fund. The Kid Care Fund Established in 1999, this funded a special joint project of NRSC, the Childrens Aid Society, the Northern Region Hospital, and the Northern Region Police to develop and promote an information resource binder for parents and professionals. The project was completed in 2000, and the excess funds were transferred to the general fund. The Women Survivors Fund Established in 2000, this fund is run by a group of women who are survivors of abuse and was initiated by the Northern Region Violence Prevention Council. During 2000, the group received a restricted grant from the Northern Region Municipality to develop and implement an educational package. NRSC is a sponsor of the project and administers the restricted fund.

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The Parent Handbook Fund Established in 2000 from a grant received from the United Way, this fund was restricted to the development of a handbook that would provide parents with information and guidance in exercising their responsibility for safeguarding their children from harm. This project was completed in 2001 and the excess funds were transferred to the general fund. The Child Abuse Research Fund Established in fiscal 2001, the Ministry of Social Services granted $20,000 to NRSC to perform research into all forms of child abuse and maltreatment, in conjunction with NRSCs recently expanded mandate. This project is expected to continue through fiscal 2003. The Educator Awareness Fund Established in fiscal 2001, the Northern Region Board of Education granted $12,000 to NRSC to prepare an information binder for educators in the Northern Region about the detection of child abuse. It is expected that this project will be completed in fiscal 2002.

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Exhibit 1 Map of Northern Region and Surrounding Area

Rural Population District 1

Rural Population

District 2 Northern Region NRSC District 4

Rural Population

District 3

City Western Region Eastern Region

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Exhibit 2 Northern Region Support Centre Organizational Chart

Board of Directors Paul Abrams Angela Atello Vince Brown Charlie Dewin Phil Freeman Margaret Frontenac Marcus Jackson Gus Peters Allison Wilson Executive Committee Paul Abrams Gus Peters Dr. Chris Campbell

Executive Director Dr. Chris Campbell

Administrator Bonnie White

Clinical Director Nicole Gauthier

Part-Time Fundraiser Betty Sheer

External Therapists Group Leaders Eric Simms & Monique Picard

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Exhibit 3 Alleged Perpetrator in Child Abuse Investigations in Canada (1998)

Alleged Perpetrator Biological mother Biological father Stepfather Stepmother Foster family or adoptive parents Other relatives Family friend Parents boyfriend or girlfriend Childs friend (peer) Babysitter Teacher Other professional Other acquaintance Stranger

Estimate 82,168 51,635 11,817 3,825 1,083 9,742 1,156 1,765 900 1,622 987 442 897 343

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Exhibit 4 Age and Gender by Primary Category of Child Abuse Investigations in Canada (1998)

Age Range

Primary Category of Alleged Abuse Gender Physical Sexual Neglect Emotional Total

Confirmed Cases

Multiple Categories of Abuse

0-3 years

Male Female Male Female Male Female Male Female

4,189 3,333 7,055 4,086 6,419 4,000 6,163 6,251 41,496

781 1,591 2,293 3,265 781 1,903 664 3,054 14,332

7,917 6,256 7,060 5,957 6,379 6,393 6,309 7,395 53,666

4,081 2,801 3,039 3,861 3,592 3,560 2,000 2,741 25,675

16,968 13,981 19,447 17,169 17,171 15,856 15,136 19,441 135,169

42% 36% 38% 44% 40% 43% 49% 42% 42%

3,419 3,657 4,579 4,052 4,184 3,420 3,327 5,221 31,859

4-7 years

8-11 years

12-15 years Total

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Exhibit 5 Detrimental Caregiver Conditions Present in Child Abuse Investigations in Canada (1998)

Detrimental Caregiver Condition Present Alcohol or drug abuse Criminal activity Cognitive impairment Mental health problems Physical health issues Lack of social support Childhood history of abuse Spousal violence Custody dispute Other detrimental conditions

Estimate 45,591 14,245 7,948 32,610 10,442 39,201 42,096 31,264 15,484 5,987

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Exhibit 6 Northern Region Support Centre Client Treatment Process Chart

Clinical director has initial meetings with victims, offenders and members of their immediate families Clinical director recommends either group or individual treatment Group Treatment Individual Treatment Victims & offenders separated into groups based on age Clinical director engages external therapist Initial meeting between victim or offender and group leader External therapist meets with client for approximately 6 to 12 weeks Ten-week group therapy session begins Clinical director meets with client and external therapist to discuss next steps Group leader holds progress meeting with victim/offender Ten-week group therapy session completed Group leader and clinical director meet with victim/offender & family members Group leader and clinical director decide on next steps for victim/offender

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Exhibit 7 Demographic Breakdown of the Northern Region

Age Range Under 10 10 to 19 20 to 29 30 to 39 40 to 49 50 to 59 60 & over Total

District 1 Male 3,218 3,219 2,966 3,830 3,640 2,719 2,925 22,517 Female 2,990 3,020 2,822 3,845 3,619 2,663 3,443 22,402

District 2 Male 2,220 2,731 2,524 2,562 3,002 2,568 2,497 18,104 Female 2,151 2,543 2,361 2,544 3,219 2,467 2,861 18,146

District 3 Male 9,162 9,627 8,474 9,699 10,429 8,132 9,464 64,987 Female 8,550 9,135 8,477 10,486 11,323 8,370 11,250 67,591

District 4 Male 8,517 8,674 8,438 9,815 9,952 8,390 11,421 65,207 Female 8,108 8,389 8,219 10,277 10,789 8,982 14,304 69,068

Age Range Under 10 10 to 19 20 to 29 30 to 39 40 to 49 50 to 59 60 & over Total

Total Male 23,117 24,251 22,402 25,906 27,023 21,809 26,307 170,815 Female 21,799 23,087 21,879 27,152 28,950 22,482 31,858 177,207 Total 44,916 47,338 44,281 53,058 55,973 44,291 58,165 348,022

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Exhibit 8 Northern Region Support Centre Statement of Financial Position As at March 31
2000 Restricted Funds $28,311 $28,311 1999 Restricted Funds $16,234 $16,234

General Fund Assets: Cash Total assets $15,342 $15,342

Total Funds $43,653 $43,653

General Fund $11,873 $11,873

Total Funds $28,107 $28,107

Liabilities: Accounts payable Total liabilities Net assets Total liabilities and net assets

$ 3,973 3,973 11,369 $15,342

0 0 28,311

$ 3,973 3,973 39,680 $43,653

$ 2,906 2,906 8,967 $11,873

0 0 16,234

$ 2,906 2,906 25,201 $28,107

$28,311

$16,234

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Exhibit 9 Northern Region Support Centre Statement of Operations and Changes in Net Assets General Fund For the Year Ended March 31
2000 Revenues: Ministry of Social Services Northern Region Municipality United Way Fundraising (net of costs) Donations Interest and other income Expenses: Salaries, wages and benefits External therapist fees Supplies and program costs Audit and accounting Rent Telephone and utilities Insurance Maintenance and repairs Purchased equipment Program promotion Other administration costs $192,832 21,234 73,789 (640) 27,633 582 315,430 207,419 38,610 6,745 7,415 20,776 7,945 3,949 2,747 7,280 2,768 10,407 316,061 Excess (deficiency) of revenues over expenses Net assets, beginning of year Transfers from restricted funds to general fund Net assets, end of year (631) 8,967 3,033 $ 11,369 $ 1999 $189,432 19,084 71,011 1,010 33,402 655 314,594 202,022 37,480 8,241 7,201 20,776 6,898 3,799 5,204 8,177 3,566 10,816 314,180 414 7,863 690 8,967

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Exhibit 10 Northern Region Support Centre Statement of Operations and Changes in Net Assets Restricted Funds For the Year Ended March 31
2000: Child Therapy Revenues Expenses Excess (deficiency) Net assets, beginning of year Transfers to general fund Net assets, end of year $10,000 11,082 (1,082) 12,356 0 $11,274 Kid Care $ 0 845 Women Survivors $10,000 0 10,000 0 0 $10,000 Parent Handbook $8,000 963 7,037 0 0 $7,037 Total Restricted $28,000 12,890 15,110 16,234 (3,033) $28,311

(845) 3,878 (3,033) $ 0

1999: Child Therapy Revenues Expenses Excess (deficiency) Net assets, beginning of year Transfers to general fund Net assets, end of year $20,000 7,644 12,356 0 0 $12,356 Project Champion $ 0 3,612 (3,612) 4,302 (690) $ 0 Kid Care $5,000 1,122 3,878 0 0 $3,878 Total Restricted $25,000 12,378 12,622 4,302 (690) $16,234

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The Societies of Management Accountants of Manitoba, New Brunswick, Newfoundland, Northwest Territories, Nova Scotia, Ontario, Prince Edward Island, Saskatchewan and the Yukon, Certified Management Accountants Society of British Columbia, The Certified Management Accountants of Alberta, Ordre des comptables en management accrdits du Qubec

June 2002 CMA Entrance Examination Part 2


(Time Allowed: 4 hours)

Notes:
i) ii) iii) iv) v) vi) Candidates must not identify themselves in answering the question. This examination has a total of ten pages and consists of one question. Ensure that you have a complete examination question paper before starting to answer the question. All answers must be written on official answer sheets. Work done on the question paper or on the Backgrounder will NOT be marked. Included in the examination envelope is a supplement consisting of formulae and tables. It is a standard supplement that may be useful for answering the question on this paper. Part 2 consists of one case question, which you are to answer in the four hours allotted. Examination answer sheets must NOT BE REMOVED from the examination writing centre. All used and unused answer sheets and working papers must be sealed in the examination envelope and submitted to the presiding officer before you leave the examination room.

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Northern Region Support Centre Additional Information


Fiscal 2002 Developments
The fiscal year ending March 31, 2002, proved to be extremely challenging for NRSC. The organization had to request emergency funding from the United Way to avoid running out of money in its general fund. Budgeted and actual operating results for the general fund for fiscal 2002 are provided in Appendix A. The cause of NRSCs financial dilemma was a significant increase in the demand for individual counselling, which required substantially higher payments to external therapists. This included a sharp increase in the number of children under age 7 requiring individual counselling that was funded by the Child Therapy Fund. When all of the resources of the Child Therapy Fund had been expended, NRSC continued to pay for this treatment through its general fund. This resulted in a deficit in the general fund for the year. Partially offsetting this deficit was a transfer from the Educator Awareness Fund, a project that was completed during the year. In December 2001, the Ministry of Social Services advised NRSC that, due to government cutbacks, the total amount of funding from the province would be frozen at the fiscal 2002 level for the foreseeable future. However, it might increase the funding for not-for-profit organizations that amalgamate in order to share resources and reduce overhead costs. Authorities at the Ministry of Social Services provided NRSC with some background information on potential amalgamation candidates (see Appendix B). In February 2002, NRSC was fortunate to receive a substantial $20,000 unrestricted donation from Mr. Bill Rich, whose daughter was helped by NRSC after being sexually abused by a neighbour. Mr. Rich was so impressed with the work done by NRSC that he has inquired about establishing a restricted fund of $25,000 for the purpose of setting up a satellite facility in District 1 of the Northern Region where he resides. NRSC conducted some preliminary research and discovered that suitable premises could be leased in District 1 for $1,000 per month including utilities costs. Other costs of running the satellite office, such as supplies, telephone, etc., were estimated to range from $200 to $300 per month. It was estimated that, with a satellite office in District 1, NRSC could attract a sufficient number of new clients to run one or two additional offenders groups and one or two additional victims groups per year. As well, some groups currently held at NRSCs existing facilities in District 4 could be moved to the District 1 facility for the convenience of clients. It was also estimated that clients requiring individual therapy would increase by 10 to 15 hours per month as a result of the convenience that a District 1 facility would offer. In March 2002, NRSC was approached by the American Foundation for Child Abuse (AFCA), which wished to create a restricted fund for research into the long-term effects of child abuse. NRSC would be one of several organizations funded for this purpose to act as a team in a fiveyear research project. The other organizations included a major Canadian university, a major

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U.S. university and two U.S. not-for-profit agencies with mandates pertaining to the prevention and detection of child abuse. Nicole Gauthier, the clinical director, would be responsible for sharing case situations about NRSCs clients and would be expected to attend two meetings per year in the U.S. with other members of the team. AFCA estimated the direct costs of this program to be US$2,000 per trip (including airfare, accommodation, meals, etc.). AFCA would fund NRSC at a rate of US$10,000 per year to cover the direct costs and to provide an allowance for the cost of the clinical directors time, estimated to average one day per week.

The Board of Directors Meeting


In June 2002, a few days prior to the annual general meeting, NRSCs board of directors held its monthly meeting. Seven of the current nine board members attended the meeting, which was more than usual. The executive director began with an overview of the current status of the organization by saying, The demand for individual therapy is still increasing. We may have to turn clients away if we cant get more funding. Charlie Dewin responded, Maybe we should replace the group leaders with therapists who do individual counselling so that we dont risk having another funding shortage. The executive director stated, That would not be a wise decision. I know that a lot of psychologists have been referring clients to us on the condition that we provide them with individual therapy mainly because the client cant afford the psychologists regular fee. But I think that individual therapy is just a fad, and once the benefits of group therapy are better known, group treatment will be preferred. In any event, its not the boards job to dictate the method of clinical treatment, which you know nothing about. Vince Brown stated, What we need is to raise more money. Why dont we charge user fees to our clients? The executive director stated, User fees would just scare people away. What we need are more donations. Im not at all pleased with the performance of Betty Sheer. She seems very disorganized and doesnt raise very much money. She cant even produce a historical list of donors to NRSC. Terminating Betty would save the organization about $8,000 per year. Allison Wilson, Betty Sheers mother and a board member, replied, Betty would have an easier time raising money if the organization would do some marketing. The only thing we have now is a small brochure that hasnt been updated in almost three years. Vince Brown stated, Theres no money for marketing. I think that board members have to be more active in fundraising efforts. Phil Freeman, another board member, replied, We didnt join the board to go around asking strangers for money. Its already hard enough keeping people on this board, especially professionals that understand things like law and finance. Marcus Jackson, another board member, stated, No one on this board knows whats required of them. The topic of discussion then turned to the amalgamation proposal from the Ministry of Social Services. The executive director stated, I think that an amalgamation with another agency would compromise NRSCs philosophy and operating standards. Marcus Jackson stated, While I dont doubt there would be some challenges to overcome, an amalgamation might not be a bad idea. In particular, it would allow NRSC to expand the reach of its services and therefore better serve its clients. A heated debate then ensued on the benefits of amalgamation. The meeting ended without any resolution on the amalgamation issue. Page 118 CMA Canada

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The Annual General Meeting
A few days after the board of directors meeting, NRSC held its annual general meeting. The executive director, NRSCs auditor and five board members were in attendance. The audience included representatives from the Childrens Aid Society, the Northern Region Board of Education, a few psychologists, Mr. Rich, and several other donors and residents of the community. Following a presentation by the executive director, the floor was opened to questions. Mr. Rich asked, What was the reason for the levelling off of the number of clients serviced by group therapy during the year? The executive director responded, We noticed a drop in the number of clients being referred by certain organizations such as the Centre for Abused Women. I think they were afraid that we would steal their clients because of our broader mandate. But a lot of that was made up by an increase in the number of referrals coming from psychologists located in the City and the Eastern Region who believe in the benefits of group therapy, which is not offered in those areas. We accept clients from outside the Northern Region when space is available in one of our groups because theres really no cost to NRSC. Mr. Rich then said, Im having some difficulty dissecting information in NRSCs financial statements, such as the amount of resources expended on administration as opposed to program delivery. Also, the financial statements dont indicate what NRSC has in terms of fixed assets. NRSCs auditor responded, Most not-for-profit organizations prepare their financial statements in this manner, which is in accordance with generally accepted accounting principles. Another individual donor in the audience asked, Why does the audit report contain a qualification with respect to the completeness of donations? The auditor replied, Like many not-for-profit organizations, NRSC lacks control over its cash donations. Specifically, many clients give cash donations to group leaders or external therapists, who then remit those amounts to the administrator. Many charitable organizations receive a qualified audit report. Mr. Rich asked for a breakdown of clients by gender, type of abuse and where they reside. The executive director responded, We dont keep formal statistics on these things, but I would estimate that two-thirds of the victims are female, and three-quarters of offenders are male. As far as type of abuse goes, the large majority of our clients still come from the sexual abuse side. As far as the districts go, I would guess that most of our clients live in Districts 3 and 4 because those are the largest and were conveniently located for those folks. A representative from the Northern Region Board of Education asked, Why was there so much money left over in the Educator Awareness Fund? If it wasnt used for its intended purpose, it should have been returned to us. This constitutes a breach of NRSCs fiduciary duty to its restricted fund donors. The executive director responded, Most of the costs involved in preparing the manual on detecting child abuse involved time that I and other members of NRSCs staff had to spend in preparing it. The cost of our time on this project is included in our salaries, which come out of the general fund. I dont know how many hours we spent on the Educator Awareness Fund, but Im sure that we spent more time than anticipated.

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A psychologist in attendance, who operates a private practice specializing in treating victims of sexual abuse and who sometimes refers clients to NRSC for group treatment, stated, Ive heard some of my clients complain about mixing up victims of sexual and non-sexual abuse. Children that have been sexually abused cant relate to those suffering from other forms of abuse. The executive director responded, The type of therapy that we do is applicable to all forms of abuse. We dont have enough clients in non-sexual abuse to warrant separate groups. Anyway, if we didnt offer treatment for non-sexual abuse, the number of group clients would have decreased some more. Regardless of what is said by the clients, its up to us to judge whether we have been effective in treating our clients. This is done informally at the end of group therapy sessions by the clinical director and group leaders.

Subsequent Developments
Shortly after the annual general meeting, the executive director informed the president of NRSCs board that he was going to resign at the end of the 2002 calendar year. He stated that he could no longer tolerate certain members of the board who, in his words, are always meddling in areas they dont understand anything about. Upon receiving this news, the president called a special meeting of the board to discuss how to proceed. At the meeting, Marcus Jackson stated, Its going to be very difficult finding someone to replace Dr. Campbell given the current financial constraints of NRSC. Now may be the best time to talk with other organizations about amalgamation. Gus Peters replied, I think thats a premature conclusion. While NRSC has been through some financial pressure, I think we could entice a good quality individual with the right remuneration package. Maybe even some perks such as a monthly automobile allowance or a better employee benefits package. These may be more attractive from a tax perspective than receiving a base salary. Vince Brown stated, If we do find a new executive director, we had better make sure that person has the right skill set to run NRSC. Maybe we need someone whos more of a fundraiser than a psychologist. The board decided to hire Marie Garneau, a consultant, to provide advice with regard to NRSCs strategic and operational issues.

Other Findings
Upon further investigation into the affairs of NRSC, the consultant uncovered the following: According to Statistics Canada, the Northern Region is expected to grow to 420,000 residents by 2007 60,000 residents in District 1, 65,000 residents in District 2, 150,000 residents in District 3, and 145,000 residents in District 4. In most cases, the clinical director recommends group treatment. Agencies located outside the Northern Region typically refer clients to NRSC because of its reputation in group therapy. Due to the nature of group therapy, the intensity of work done by the group leaders varies during the year. When group sessions are being held, group leaders typically work 30 to 40 hours per week, depending on the number of groups. This includes time spent leading group therapy sessions, as well as time afterwards to document the progress of each individual

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within a group and to meet with current and prospective group participants. When they are between groups, group leaders either take their vacations, attend conferences to upgrade their skills and knowledge, or assist the executive director in dealing with restricted funding projects. During these slow periods, the group leaders usually only need to work 20 to 25 hours per week. NRSC has had the following number of group and individual therapy clients from fiscal 1993-2002: 1993 Group Individual 213 74 1994 209 82 1995 208 77 1996 216 81 1997 233 88 1998 209 86 1999 220 109 2000 214 123 2001 224 131 2002 220 243

Dr. Campbell, the executive director, has a solid, long-standing relationship with staff at the Childrens Aid Society. Because of his background, Dr. Campbell likes to become involved on the clinical side from time to time and spends several hours each week talking to the clinical director and group leaders about the issues they are seeing among NRSCs clients. He typically works 50 to 60 hours per week. The commitment of the clinical director (Nicole Gauthier) to her work has been the driving force behind many of the innovative child abuse detection and treatment techniques used by NRSC. She typically works 40 to 50 hours per week. Betty Sheer, the part-time fundraiser, was hired to reduce the demands of this part of the job on Dr. Campbell, who prefers to work on the clinical aspects as opposed to fundraising. Within the Northern Region are organizations, in addition to NRSC, with mandates involving the welfare of children. The major agencies of this kind include the following: ! ! Centre for Challenged Children offers programs and support to children with physical and mental disabilities as well as to parents of those children. Shattered Homes Program provides support to children whose parents are separated, divorced, or in failing marriages. The Shattered Homes Program is a relatively new agency. Child-Help Centre provides counselling support, educational programs and extracurricular activities for children of lower income families.

Each of the Eastern Region, the Western Region and the City has an agency that provides support for children who have been abused, as follows: ! ! Eastern Region Sexual Abuse Centre provides support in an individual counselling format for children and adults who have been sexually abused. City Centre for Childhood Sexual Abuse provides support in an individual counselling format for children who have been sexually abused.

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! Western Region Centre for Child Maltreatment handles all forms of child maltreatment and neglect, including sexual and non-sexual abuse. It offers both group and individual counselling.

Decisions by the board of directors are made by a simple majority of board members attending a meeting. The less active board members are as follows: ! ! Phil Freeman. Phil is a freelance writer who holds a Bachelors degree in Journalism. He is 44 years old and has been on NRSCs board for three years. Marcus Jackson. Marcus is a supervisor at a local construction company. He is 38 years old and has been on NRSCs board for two years. Marcus had been a client of NRSC and was so appreciative of the support he received that he wanted to help others with similar problems. Margaret Frontenac. Margaret is married to Gus Peters and does not work outside of the home. She is 52 years old and joined the board six years ago when NRSC was having difficulty finding people to fill the minimum contingent of six board members. Allison Wilson. Allison is an entrepreneur who owns and operates a local beauty salon. She is 49 years old and has been on NRSCs board for six years. Allison is the mother of NRSCs part-time fundraiser, Betty Sheer.

Both Gus Peters (a board member) and Ted Ross (a major donor) are long-time friends of Dr. Campbell (the executive director). NRSCs annual operating budget for its fiscal year ended March 31, 2001, was $320,000. The Northern Region Municipality does not consider NRSCs clients who reside outside of the Northern Region in determining the funds it allocates to NRSC. NRSCs lease term runs until the end of 2005. Public transportation within the Northern Region is well-developed, as is transportation between the Northern Region and the City. However, public transportation between the Northern Region and the Western and Eastern Regions is poor. NRSCs statement of financial position and its statement of operations and changes in net assets for restricted funds for fiscal 2002 can be found in Appendices C and D. The general fund budget for the fiscal year ended March 31, 2002 (prepared in January 2001) reflects an increase of 2% in revenues and expenses. This is in line with the general guidelines received from the Ministry of Social Services that were sent to all not-for-profit organizations located in the province. Although NRSC does not charge a fee for its services, clients are asked to make a donation. The organization does not provide any benefits to its employees apart from statutory benefits (CPP and EI), which amount to approximately 8% of the base salaries or wages.

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The cost of equipment and other capital purchases is charged against operations in the year of acquisition. Due to various delays beyond the control of NRSC, the Women Survivors Fund project is on hold until further notice. Cheques for payment of expenses within budgeted amounts are prepared and signed by the executive director. Expenses that are in excess of budgeted amounts require the approval of the board of directors. Several external therapists had expressed concern to the clinical director that they may be deemed to be employees of NRSC for income tax purposes. They asked the clinical director what that would mean to them and to NRSC, and what NRSC was doing to ensure that they would be regarded as independent contractors for tax purposes. A prospective donor inquired about giving NRSC some valuable works of art that the organization could then sell and retain the proceeds. The executive director was not sure how this would be treated for tax purposes from the standpoint of the donor. Officials at the United Way made it clear to NRSC that it would not grant emergency funding for any organization two years in a row.

Required:
Given its current situation, NRSCs board of directors is unsure as to how to proceed. As Marie Garneau, the outside consultant hired by NRSC, develop an integrated report for NRSCs board of directors, advising them on the strategic direction that NRSC should take, complete with recommendations and an implementation plan, and addressing other issues and concerns requiring attention. In undertaking this task, you will need to take into consideration your background knowledge of the organization as well as the additional information provided above.

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Appendix A
Northern Region Support Centre Statement of Operations, Changes in Net Assets and Budget General Fund For the Year Ended March 31 2002 Budget Revenues: Ministry of Social Services Northern Region Municipality United Way Fundraising (net of costs) Donations Interest and other income Expenses: Salaries, wages and benefits External therapist fees Supplies and program costs Audit and accounting Rent Telephone and utilities Insurance Maintenance and repairs Purchased equipment Program promotion Other administration costs Excess (deficiency) of revenues over expenses Net assets, beginning of year Transfers from restricted funds to general fund Net assets, end of year $200,668 22,457 76,794 0 27,019 712 327,650 218,370 40,190 6,257 7,672 21,192 8,803 4,285 3,921 5,085 3,056 8,819 327,650 0 14,634 0 $ 14,634 2002 Actual $200,668 23,022 97,440 0 40,711 308 362,149 219,660 79,662 8,801 7,767 20,776 9,463 4,293 4,872 2,816 2,930 11,708 372,748 (10,599) 14,634 8,612 $ 12,647 2001 Actual $196,733 22,017 75,288 0 26,489 698 321,225 214,088 39,402 6,134 7,522 20,776 8,630 4,201 3,844 4,985 2,997 8,632 321,211 14 11,369 3,251 $ 14,634

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Appendix B
Amalgamation Candidates Fiscal 2001 Number of Revenues Net Assets Clients $279,766 $16,606 468 $388,744 $308,760 $638,912 $294,711 $338,979 $204,911 $458,726 $59,712 $43,304 $25,933 $145,702 $8,776 $5,522 $21,947 $96,771 249 207 350 896 226 274 114 597 United Way Location Agency? No Yes No Yes Yes Yes Yes Yes No District 4 District 1 District 2 District 3 City District 4 Eastern Region District 1 Western Region

Animal Abuse Centre Centre for Abused Women

Centre for Challenged Children $368,766 Child Help Centre City Centre for Childhood Sexual Abuse Drug and Alcohol Abuse Program Eastern Region Sexual Abuse Centre Shattered Homes Program Western Region Centre for Child Maltreatment

Appendix C
Northern Region Support Centre Statement of Financial Position As at March 31 General Fund Assets: Cash Total assets Liabilities: Accounts payable Total liabilities Net assets Total liabilities and net assets $15,423 $15,423 2002 Restricted Funds $20,680 $20,680 Total Funds $36,103 $36,103 General Fund $16,866 $16,866 2001 Restricted Funds $47,262 $47,262 Total Funds $64,128 $64,128

$ 2,776 2,776 12,647 $15,423

0 0 20,680

$ 2,776 2,776 33,327 $36,103

$ 2,232 2,232 14,634 $16,866

0 0 47,262

$ 2,232 2,232 61,896 $64,128

$20,680

$47,262

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Appendix D
Northern Region Support Centre Statement of Operations and Changes in Net Assets Restricted Funds For the Year Ended March 31 2002: Child Therapy Revenues Expenses Excess (deficiency) Net assets, beginning of year Transfers to general fund Net assets, end of year 2001: Child Therapy Revenues Expenses Excess (deficiency) Net assets, beginning of year Transfers to general fund Net assets, end of year $10,000 13,522 (3,522) 11,274 0 $ 7,752 Women Parent Survivors Handbook $ 0 0 0 10,000 0 $10,000 $ 0 3,786 (3,786) 7,037 (3,251) $ 0 Child Abuse Research $20,000 1,604 18,396 0 0 $18,396 Educator Total Awareness Restricted $12,000 886 11,114 0 0 $11,114 $42,000 19,798 22,202 28,311 (3,251) $47,262 $ $10,000 17,752 (7,752) 7,752 0 0 Women Survivors $ 0 0 0 10,000 0 $10,000 Child Abuse Research $ 0 7,716 Educator Total Awareness Restricted $ 0 2,502 $10,000 27,970 (17,970) 47,262 (8,612) $20,680

(7,716) 18,396 0 $10,680

(2,502) 11,114 (8,612) $ 0

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General Comments on Candidate Performance June 2002 CMA Entrance Examination Part 2
The Part 2 case involves a community-based not-for-profit organization, Northern Region Support Centre (NRSC), that was originally established seventeen years ago to provide treatment and community education programs for and about victims of child abuse. With government approval, two years ago it expanded its mandate to include all forms of child abuse. Recent government cutbacks, however, have resulted in a freeze in government funding, while demand for the organizations services was significantly increasing. NRSC now faces the challenge of finding alternative sources of funding and/or finding ways to increase efficiencies and decrease expenses. Some options include changing its mix of services, changing the market that it serves or amalgamating with other not-for-profit organizations. As a consultant hired by NRSCs board of directors, the candidate is expected to use an appropriate strategic approach to analyze the organizations situation, assess its strategic options in light of its strengths and weaknesses, interpret and use the financial and non-financial information provided in the Backgrounder and Additional Information, and write a formal report to the board of directors, exhibiting appropriate written communication skills. The report should advise the board of directors on the strategic direction that should be taken, complete with recommendations and an implementation plan. Analysis of the relevant operational issues presented in the case should be appropriately integrated into various sections of the report. Overall, performance was acceptable, with most candidates making an effort to use the strategic planning process, appropriately balance the focus of their analyses between the strategic and business issues, and provide a report in a reasonably acceptable format. It appears that candidates who performed well on Part 2 came in with an open mind, as well as a clear understanding and familiarity with the information in the Backgrounder. They were ready to react to the issues presented in the Additional Information and drew on the information from the Backgrounder only to the extent that it was required to support their analyses of the relevant issues. Some candidates, however, tended to focus too much on the information provided in the Backgrounder. The purpose of the Backgrounder is to increase the candidates familiarity with the organization and the environment in which it operates; it does not provide the main issues that a candidate will be required to address in answering the examination. The average candidate attempted to follow a reasonable approach to the case (e.g. situation analysis, analysis of options, recommendations, implementation plan). Weaker candidates overemphasized one or two aspects of the case analysis, or addressed all of them very superficially. It appears that some of the weakest candidates focused their answers too much on the information provided in the Backgrounder and had difficulty assimilating the situation that unfolded in the Additional Information. These candidates would be well advised to avoid CMA Canada Page 127

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forming preconceived notions of what might appear in the Additional Information because this makes it more difficult to adjust their thinking to adapt to the new information. Other common tendencies of weaker candidates were as follows: 1. Spending too much time on preparing a situation analysis and not enough on applying the results of this analysis in evaluating the strategic options, presenting a comprehensive implementation plan, or arriving at recommendations for the business issues. Dealing with each strategic and operational issue in isolation (i.e. failing to integrate the various issues). In addressing the amalgamation option, failing to address the individual potential candidates for amalgamation. Ignoring or paying little attention to how to resolve the future cash-flow problem and/or failing to adequately address the implications of their various recommendations on future cash flows. Spending too much time on window dressing such as the executive summary. While all elements of a report (including table of contents, executive summary, introduction) are required for a good grade for the written communication segment, these elements may be relatively brief.

2.

3.

4.

5.

For each of the five higher-order skills being tested, specific characteristics of a strong response versus a weak response are presented in the marking guide. In addition, two sample responses are presented, with accompanying markers comments on the strengths and weaknesses of each, to demonstrate further what constitutes an acceptable attempt versus a weak attempt. Rather than provide a complete, full-scale model solution that would be impossible to achieve during a four-hour examination, the sample successful attempt, while not perfect, demonstrates what can realistically be achieved by a candidate during the available examination writing time.

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Marking Guide June 2002 CMA Entrance Examination Part 2


Overview
Part 2 of the June 2002 Entrance Examination was marked according to an approach known as global marking, which is designed to focus on the candidates responses in total according to the skills that are being evaluated, rather that focusing on discrete elements of the responses. This approach was designed to provide a high degree of assurance that candidates receive maximum credit for their demonstration of these skills. The following describes the global marking approach that was used: A general marking guide was used which rated the candidates responses according to the following five higher-order skills: 1. Strategic Thinking 2. Analysis 3. Integration 4. Judgment 5. Written Communication The strategic thinking, analysis, and integration skill areas were further divided into subsections to assist the markers in evaluating the candidates papers, with each of the eight subsections being separately evaluated. With respect to each of these eight subsections, the markers evaluated the candidates performance in accordance with the marking guide and, with the assistance of a marking worksheet, assigned a ranking value based on a scale of 0 to 10. To ensure that the candidates responses were ranked fairly, each candidates paper was marked independently by two different markers. In addition, if the difference between the rankings for a particular skill or the total ranking of all skills did not fall within a predetermined range of tolerance, the candidates paper was arbitrated by a third member of the marking team. After the candidates papers were marked, the following weightings were applied to the assigned rankings for each of the five skill areas: 1. 2. 3. 4. 5. Strategic Thinking Analysis Integration Judgment Written Communication 24 16 20 24 16 100

Total

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These weightings took into account the following considerations: 1. All five skills being measured are generally equally important elements of the skill set of a CMA, i.e. each skill was weighted within a range of 16 to 24 to add up to a total of 100 for all five skills. 2. For this case, the extent to which candidates had the opportunity to demonstrate their integration and quantitative analysis skills was less than on other cases, whereas opportunities to demonstrate their strategic thinking skills were somewhat greater than on some cases. Consequently, the weightings given to skill areas were adjusted accordingly. 3. The quality of the candidates strategic analysis was appropriately emphasized in the overall evaluation of the candidates paper and reflected within the various relevant skill areas. After the candidates papers were ranked and the rankings weighted as described above, candidates responses that were within a designated range around the pass mark were reviewed by a marking supervisor or his/her delegate, and a final judgment was made as to the mark to be assigned to the candidates paper.

As an example of how a candidates final mark for the June 2002 case was arrived at, please consider the following: A Markers Ranking 1. Strategic Thinking a) Elements of the strategic planning process b) Systematic use of the strategic planning process Total 2. Analysis a) Breadth b) Depth Total 3. Integration a) Fit of alternatives to situation analysis b) Linkages between alternatives, alternatives and issues, issues Total 4. Judgment 5. Written Communication 7/10 6/10 13/20 7/10 7/10 14/20 4/10 6/10 10/20 6/10 7/10 50/80 B Weight Factor 12 12 24 4 12 16 10 10 20 24 16 100 C Final Mark (A x B) 8.4 7.2 15.6 2.8 8.4 11.2 4.0 6.0 10.0 14.4 11.2 62.4

Total

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Marking Worksheet June 2002 CMA Entrance Examination Part 2 Northern Region Support Centre

STRATEGIC THINKING
1. Elements of the Strategic Planning Process:
A B C D E mission/vision/mandate situation analysis (e.g., SWOT, financial assessment, ...) strategic alternatives addressed make clear recommendations re strategic direction implementation plan (operational actions/recommendations, timeline, who, what, when)

S/A/W*

Ranking

/10

2. Systematic use of the Strategic Planning Process (A B C D E )

/10 /10

ANALYSIS
3. Breadth:
strategic issues business issues recommendations on business issues strategic issues business issues quantitative analysis

4.

Depth:

/10

INTEGRATION
5. Fit of alternatives to situation analysis 6. Linkages between issues/alternatives and other issues/alternatives

7. JUDGMENT
(a) Issues - consider relative emphasis of the following:
strategic vs. business issues major vs. minor business issues

/10 /10 /10

(b) Analysis - consider the following criteria:


balance of pros & cons; overcoming cons balance of quantitative vs. qualitative quality of quantitative quality of qualitative information from the case understood and used

(c) Conclusions/recommendations:

logical? consistent? convincing? feasible? cash flow issue resolved?

8. WRITTEN COMMUNICATION
(a) Format:
layout (table of contents, executive summary, introduction, analysis, conclusions/recommendations, exhibits) organization (headings, lists, tables) professional tone, tact grammar, spelling, sentence structure, punctuation clear and concise expression, logical and coherent, flow, audit trail

/10

(b) Language and style:

*Note: S = Strong; A = Acceptable; W = Weak

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Marking Guide June 2002 CMA Entrance Examination Part 2 Northern Region Support Centre Overview
The June 2002 CMA Entrance Examination Part 2 is a case that is evaluated using global marking techniques. While technical competencies knowledge are evaluated extensively in the Part 1 examination, Part 2 focuses on the following skills: Strategic thinking Analysis Integrative capabilities Judgment Written communication

Strategic thinking focuses on the candidates understanding and use of the strategic planning process. Analysis focuses on the candidates ability to identify and analyze strategic and business issues to an appropriate level of depth and breadth. The quality of the strategic analysis is captured under integrative thinking and judgment. Written communication assesses the ability of the candidate to make effective use of format and language in the report. The following sections of this document describe the approach that should be taken to evaluate each of these skill areas using global marking. The objective is to ensure that all candidates are evaluated consistently in each area.

STRATEGIC THINKING
This section pertains to the candidates understanding of the strategic planning process, knowledge of a strategic planning method, and ability to apply the methodology in a systematic way to arrive at an integrated strategic plan. It focuses on the integrity and consistency of the logic from one step to another in the strategic planning process. Strategic thinking is evaluated from two different perspectives: (a) Elements of the strategic planning process (BOX 1). This sub-section evaluates the candidates understanding of the elements of the strategic planning process as a tool to solve a business problem (see table below).

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Elements of the Strategic Planning Process PROCESS STEPS Purpose " DESCRIPTIONS USED Identification of the mission, vision or mandate. Candidates should assess the appropriateness of the current mandate/mission in light of the current environmental assessment and/or the analysis of the strategic options, and then revisit the mission (either indicating that the current mission should not be changed or providing a new mission). The restated mission should be consistent with the strategic analysis. (Weak = not addressing the mission; strong = providing a new mission that is consistent with the analysis or providing a supported recommendation that the mission not be changed.) " Assessment of the external environment, competitive position, financial assessment, internal analysis, SWOT, situational assessment, Porters 5 Forces, PEST. Candidates may use a broad range of strategic planning tools, but for this specific case some of these tools are less useful, e.g. Porters 5 Forces. This specific case would also require consideration of the major sources of funding (Ministry, Municipality, United Way). (Weak = no structured situation analysis; strong = a financial assessment in addition to a structured SWOT analysis and/or analysis of the internal and external environment.) " Clear identification of strategic choices. More than one alternative should be discussed. Note that depth and breadth of analysis will be more fully considered in the next major section entitled Analysis. In this case, the main strategic choice is whether to amalgamate or remain a stand-alone entity. However, services offered and the market served (which would include a couple of restricted fund opportunities) are also considered as strategic choices. As well, the future cash crisis is a major strategic issue that should be analyzed. (Weak = addressed only one strategic option; strong = addressed two or more options). " Clearly stated recommendation of a strategic direction. Does the candidate make clear what the organization should do to ensure its future viability? The quality of the recommendations will be considered in the Judgment section of the marking guide. " This will be the final step in the process and will address how the strategic direction will be implemented, including operational actions. It should indicate what should be done, who should do it, and (to a lesser extent in this case) when it should be done. The implementation plan should be consistent with the strategic alternative(s) that is(are) chosen. (Weak = no implementation plan, or simply a list of operational recommendations that is named an implementation plan; strong = a plan that focuses on how to achieve the strategic direction.)

Situation Analysis "

Strategic Analysis "

Recommendations "

Implementation

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Weak performance would be reflected in some of the following ways: No consideration of the need to examine the organizations mission/mandate. Providing a new mission statement that is not supported by the analysis. No structured situation analysis or one that is extremely superficial and sparse. No evaluation of NRSCs current financial situation. Entire strategic analysis revolves around the strategic alternatives and is not part of a larger process. No separation of strategic alternatives from internal or operational issues. A recommendation is made as the final stage of the report without addressing how the organization must change to implement the recommended actions (e.g. ignores the functional changes that have to be made to support the strategic recommendation, like who would be the executive director, how would revenues be increased, how would the problems with the board of directors be solved, etc.). Recognition of the current mandate and/or development of a new purpose/vision/mission/ mandate that is supported by analysis. A comprehensive situation analysiswe are looking for candidates to view the organization from a broad perspective: areas of strength and weakness as well as scanning the external environment for competitive threats and opportunities, and providing an assessment of the current financial situation. Some examples are as follows: Internal Environment: Strengths: NRSCs clinical staff are highly qualified and dedicated. Weaknesses: No understanding by the board of directors of their role; no allocation of labour and overhead costs to the restricted funds; poor marketing and fundraising efforts. External Environment: Opportunities: Expected continued growth in the Northern Region; good public transportation between City and Northern Region. Threats: Flat demand for group therapy; external therapists insistence on individual therapy for clients who cant afford their individual therapy; potential loss of important donors. Funding: Potential to increase provincial funding by amalgamating with another not-forprofit organization; Ministrys funding freeze; the United Ways fundraising restrictions. Financial Assessment: - Analysis of the 2002 results versus the budget. - Analysis of the costs of group therapy versus individual therapy. - Analysis of the 2002 restricted funds.

A superior response would be reflected in some or all of the following ways:

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An evaluation of several strategic directions followed by a clearly stated recommendation (e.g. Amalgamate with the City Centre for Childhood Sexual Abuse and focus on the prevention and treatment of child sexual abuse.) An actionable implementation plan that would serve as a useful guide to management for the successful implementation of the strategic plan. It should address the most critical actions and operational issues that would affect the success of the plan (e.g. if remaining a standalone entity is recommended, consideration should be given to how to deal with Dr. Campbells announcement of his desire to resign at the end of the year, how to increase revenues/decrease costs to alleviate the cash crisis).

A very strong paper would have all, or most, of the above. (b) Systematic use of the strategic planning process (BOX 2). This sub-section evaluates the candidates ability to use the process to arrive at a coherent strategic plan. Whereas we looked at the pieces of the puzzle (or the ingredients in the recipe) above, here we look at how well the puzzle is put together (or whether the cake was successfully baked). Each of the five elements in BOX 1 should connect to the other steps. For example, the candidate should keep the organizations mission in mind in the analysis of the current situation. The reason for the situation analysis is to learn from it and use it to find the strategic direction that is a good fit with NRSCs internal and external environment. As well, the candidate should consider how to resolve the operational issues to make the recommended strategy work. A superior response would contain a comprehensive situation analysis that includes a statement of the mission/vision/mandate. The current situation is discussed and the need to address the impending cash flow problem is recognized. Strategic alternatives are evaluated using the information learned from the situation analysis (i.e. mission, strengths, weaknesses, opportunities, threats and financial assessment are addressed in the analysis of the alternatives). Candidates should make recommendations that derive from the analysis and will then address the operational and business issues that must be resolved to effectively implement the plan. A weak response may identify the mission and may include a situation analysis, but the contents are not referred to again in the report such that it seems like a stand-alone exercise.

ANALYSIS
This section evaluates the candidates ability to make use of the information available in the case. The primary focus is on the extent of the analysis that the candidate has done. This includes the ability to identify the many issues in the case that need to be addressed (breadth) and to analyze the issues in detail (depth). (a) Breadth Clear recognition of the strategic alternatives/opportunities and issues in the case that are problems (BOX 3). Breadth refers more to recognition than analysis. Identifying an issue within the situation analysis as a weakness, for example, or providing a listing of problems that must be addressed by the company demonstrates recognition of the problems. In some cases, an issue Page 135

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may be addressed indirectly by suggesting a solution or discussing how a strategic alternative might help solve a particular weakness. Both strategic and business issues/alternatives should be recognized, with a greater weighting on the strategic issues and alternatives. More than one amalgamation candidate should be considered in the strategic analysis. Clear recommendations and/or conclusions on the business issues are also required. (The presence of a clear recommendation regarding the strategic direction is covered under BOX 1 and the quality of both strategic and business recommendations is evaluated under Judgment BOX 7.)

A superior response will recognize all of the major strategic items identified in the case, address more than one amalgamation candidate, recognize most of the major business issues, recognize a reasonable number of other business issues, and make recommendations on most of the business issues addressed. (b) Depth Analysis of the issues identified (BOX 4). Depth recognizes the ability of the candidate to use information provided in the case to analyze the issues identified. Each issue merits different levels of analysis. In some cases, one or two sentences will adequately address the issue (e.g. replace Betty Sheer for the fundraising role), while other issues will merit more extensive analysis (e.g. analysis of the major strategic alternatives and business issues, such as resolving the problems with the board of directors or considering the effects of the resignation of the executive director and how to deal with them). Depth can be found throughout the paper, sometimes in several places for any one issue. In some cases, the situation analysis may be used to describe the nature of the issue. In other cases, there may be additional discussion in the recommendations or implementation plan. As well, some of the business issues could be discussed within the analysis of the strategic issues. More weighting should be placed on the strategic issues than on the business issues. There should be quantitative analysis on some issues (e.g. cash flow projection for 2003, comparison of financial and statistical data on the amalgamation candidates, cost/benefit analysis of the proposed restricted fund for opening a satellite office in District 1, cost per client receiving individual therapy versus group therapy, capacity utilization analysis of the staffs time).

A superior response would provide qualitative analysis of the amalgamation versus stand-alone alternative, the types of services (e.g. group vs. individual therapy) and the markets served (out of region, satellite office), and would identify the future cash flow crisis. Within the amalgamation analysis, there should be some consideration/comparison of the information provided on the various amalgamation candidates. There should be some discussion of how income can be increased and/or costs decreased, and some of the business issues should be discussed in depth. Quantitative analysis should be provided where applicable, e.g. AFCA research fund, satellite office.

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A weak response will not have adequately analyzed issues in the case.

INTEGRATION
Integration is the ability to identify connections between related elements of the case and to consider/determine how one element impacts another. Integration is evaluated from two different perspectives: (a) Fit of alternatives to situation analysis (BOX 5). Integration should be demonstrated by links between the situation analysis (i.e. mission/mandate, strengths, opportunities, threats and/or funding) and the strategic alternatives or business issues. The candidate should clearly identify the specific strength, threat, opportunity or funding point. The link should make sense and be accurate. The link should be made by the candidate in the context of attempting to solve a problem. Some examples are as follows: If NRSC amalgamates with the Centre for Challenged Children, the Ministry will provide additional funding. Because there is good public transit from the City to the Northern Region, clients from the City could be easily served from the Northern Region facility. The Western Region Centre handles both sexual and non-sexual abuse, which is consistent with NRSCs current mandate.

(b) Linkages between issues/alternatives, and other issues/alternatives (BOX 6). Integration should also be demonstrated by links between strategic issues, between business issues (weaknesses), and between business and strategic issues. Some examples are as follows: If NRSC amalgamates, the other organizations executive director could take the place of Dr. Campbell. Betty Sheer should be fired and replaced by the more active members of the board of directors who are willing to do some fundraising.

For both BOX 5 and BOX 6: While there are no specific marks for any particular linkage that is made by the candidate, less weight should be placed on numerous links to only one issue or alternative versus many links between different issues/strengths/opportunities/threats and the strategic alternatives. For example, a response should not focus on only the many potential links to the executive directors resignation, or the many potential links to the Provinces increased funding if NRSC amalgamates. The evaluation should reflect both the quantity and quality of the links that are identified.

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Links must be explicitly stated and not simply implied. For example, stating that, amalgamation will solve our cash flow problem is insufficient. The cash flow problem must be identified and then the candidate must tie the amalgamation option to the cash flow problem, e.g. Amalgamation with the City Centre for Childhood Sexual Abuse would help solve the impending cash crisis by eliminating the need to replace the executive director, thereby saving his salary of $60,000. For both BOX 5 and BOX 6, a weak response will have few linkages and a strong response will have many distinct linkages.

JUDGMENT (BOX 7)
This section evaluates the candidates judgment as it relates to the following: 1) 2) 3) 4) 5) What is important and relevant in the case. The consideration of both the pros and cons as well as quantitative analysis of the various issues/opportunities. The quality of both the quantitative and qualitative analysis. Recommendations regarding which solutions best help to resolve the problems. How these recommendations can be implemented to maximize the pros and overcome the cons.

Conclusions and recommendations should be feasible, logical and consistent with the analysis. Examples of where judgment is being evaluated include the following: (a) Issues: Demonstration of appropriate emphasis on what is important in the case, in terms of strategic and business issues, and in terms of major and minor business issues. A very strong paper would place appropriate emphasis on strategic and business matters, and would give some indication that the candidate had prioritized the issues. Extensive analysis of matters that do not deal with NRSCs impending cash flow problem and NRSCs strategic alternatives would not reflect strong judgment abilities by the candidate. Analysis of each issue equally with no indication of what is most important is another indication of weak judgment. Given the time constraints of the examination, a better candidate will be selective about the issues chosen for in-depth analysis. For instance, a candidate should not spend much time on discussing the effects of the executive directors resignation if he/she has recommended that NRSC amalgamate with one of the other relevant organizations. In this case, the major strategic alternatives/issues are the options for amalgamation, changing the services NRSC offers, changing the market it serves, and finding ways to increase revenues and/or decrease costs. Lack of consideration of major weaknesses and important business issues would not reflect strong judgment. The most important business issues are the executive directors pending resignation, the problems with the board of directors, and the lack of proper fund accounting

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(allocation of all relevant costs to the restricted funds). Overemphasis on minor business issues (e.g. tax issues) would not reflect strong judgment. (b) Analysis: Using the information provided in the case to analyze, both quantitatively and qualitatively, the various alternatives and issues in the case. Analysis should not be one-sided. Both the pros and cons of an alternative should be considered. Some consideration of how the cons of the chosen alternative would be overcome would be evidence of strong judgment. All issues require qualitative analysis, and certain issues require some quantitative analysis where others do not. Both over and under-emphasis on quantitative analysis should be considered in the evaluation of judgment. There is limited opportunity to provide detailed quantitative analysis in this case. The most likely quantitative methodologies to be demonstrated in the case are as follows: breakeven analysis (e.g. opening a satellite facility in District 1), analyzing possible sources of financing or cost savings, service pricing/costing, cost allocation, and ratio analysis (e.g. revenue to net assets). The quality of both the quantitative and qualitative analysis is a criterion in evaluating judgment. The quantitative analysis should not contain serious errors or unreasonable assumptions. The qualitative analysis should not be superficial and should be tied to NRSCs situation. Another aspect of judgment is that the candidate correctly read and understood the case information, and used the information effectively in the analysis of the various issues. Providing general discussion that could be applied to any case (i.e. discussion and recommendations that are not specifically tied in to the case facts) would be evidence of inadequate judgment. Candidates must demonstrate relevance in their analysisit must make sense.

(c) Conclusions/recommendations: Relevant to the issues discussed, appear logical, consistent with the analysis, convincing to the reader, feasible in the situation. Conclusions and recommendations can be rewarded anywhere the candidate makes them (i.e. listed in a conclusions or recommendations section, in the executive summary, embedded within a situation or SWOT analysis, in the strategic analysis, in individual issues analyses, or reflected in implementation plans). Note that candidates can integrate their analyses and recommendations well, but can then be inconsistent in their judgment by drawing conclusions that are not consistent with their analyses. This is evidence of weak judgment. Candidates can provide conclusions and recommendations that are consistent with their analyses and are well supported, but that are not useful in solving the major issues facing NRSC. This is evidence of weak judgment.

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There are no specific marks for each of the factors to be considered in evaluating judgment abilities; however, each factor should be assessed within the scale of weak-acceptable-strong. Then the overall weighting should be based on an overall assessment of the judgment capabilities demonstrated by the candidate. The final questions that should be considered in this overall assessment are the following: Would this report be useful to NRSCs board of directors? Would it solve the cash flow issue in a realistic manner for an organization of this size?

WRITTEN COMMUNICATION (BOX 8)


In evaluating written communication, the following two components should be considered: format, and language and style. (a) Format Layout

Candidates should follow the layout demonstrated by CMA Canada in its published preparation materials, so this aspect is evaluated to a very high standard. The responses should be formatted as formal reports, containing the following physical elements: table of contents, executive summary, introduction, body, conclusions/recommendations, and appendices and exhibits at the end. Note that the executive summary should be a report in short (a summary of issues and recommendations), whereas the introduction should lay out the scope and purpose of the report (e.g. In this report, I will do a situation analysis, analyze various strategic alternatives and issues, ). If the candidates executive summary does not present a summary of issues and recommendations, but is really an introduction, do not give the candidate credit for providing an executive summary. At times, a candidates covering letter (not required) may contain all the elements of either an introduction or an executive summary and should be credited for one or the other. Organization

In this section, we are evaluating the candidates ability to use the organization of his/her report to help communicate. For instance, clearly labelled headings and subheadings to help the reader understand the flow of the argument; clearly separating each point with paragraph breaks or bullet points to help the reader identify the points supporting an argument; clearly referencing exhibits within the body of the report to help the reader understand where the candidate gets his/her numbers; using tables and lists where appropriate to help the reader understand how the points relate to each other. (b) Language and Style Beyond the structure used to present the report, there is also the matter of how the candidate uses words to communicate. A superior paper should contain the various attributes indicated below, but it is reasonable to take into account that the answers were produced under the constraints of

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examination conditions. Thus, it is not generally a one strike and youre out approach. Rather, we are more concerned with evaluating a candidates general ability to maintain a reasonable level of communication skills throughout the response. To be awarded a superior score in this section, we would expect a candidates answer to have the following attributes: Professional Tone and Tact

The candidate is expected to communicate using a business tone, as opposed to a colloquial style. In addition, the candidate is expected to avoid tactless comments such as insulting or negatively characterizing members of the board of directors or any of NRSCs employees they hold in high esteem. Certainly, constructive criticism offered in a tactful way is quite acceptable. Tact is really an issue of taste and all aspects of a candidates response should demonstrate good taste. Grammar, Spelling, Sentence Structure, Punctuation

Committing only a few spelling/grammar mistakes is certainly forgivable in evaluating communication skills. However, when the general use of the English language is so weak as to become distracting, the assessment can quickly move from adequate to inferior. Clear and Concise Expression, Logical and Coherent Flow

Here you will be required to apply your global judgment upon completing a reading of the report. With regard to expression, did you understand what the candidate was trying to say? With regard to flow, were you able to follow the argument? Did the ordering of the discussion make sense to you? Did one section naturally flow to the next? Was it free of excessive repetition? Was closure brought to the analyses of the issues and to the report, generally? Audit Trail

In a quantitative analysis or within a qualitative discussion, clearly labelling what a number represents in terms of what it is and how it was calculated helps the reader follow the analysis. References to exhibits or other sources of information in making an argument also help the clarity and flow of a report.

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Sample Response Successful Attempt June 2002 CMA Entrance Examination Part 2
June 20, 2002 To: The Board of Directors of NRSC From: Marie Garneau Re: Strategic Direction of NRSC Please find enclosed the requested report regarding the strategic direction and other issues facing NRSC. Marie Garneau

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TABLE OF CONTENTS Executive Summary Situation Analysis Strengths and Weaknesses Opportunities and Threats Porters Five Forces Strategic Mission Strategic Alternatives Recommendation Implementation Plan Functional Issues Conclusion Appendices

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EXECUTIVE SUMMARY NRSC has developed a good reputation for its group therapy program. Over the last year, there has been a considerable increase in the demand for individual therapy, which requires NRSC to re-evaluate its strategy and deal with decreasing assets. It is faced with a funding freeze from the government and no new funding from the United Way. I recommend that NRSC amalgamate with another agency with the same mandate and pursue the team research project to deal with its situation. The proposed recommendation will allow NRSC to grow with its community and allow it to continue to serve its clients with a high level of service.

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SITUATIONAL ANALYSIS

SWOT
Strengths good reputation for group therapy Dr. Campbells strong relationship with staff and Childrens Aid Society Dr. Campbells focus on clinical aspect dedication of staff, especially Nicole Gauthier good location easy access for residents of Northern Region expertise in field of child abuse over 19 years of experience

Weaknesses low cash reserves cannot handle increase in demand due to lack of funds may have to turn clients away Bettys performance at raising funds is poor lack of a marketing program brochure only lack of role definition for board members difficulty in retaining board members lack of control over cash donations financial statements prepared according to GAAP not easily understood lack of information (statistics) on clients seasonality of group therapy group leaders work 30-40 hours while holding sessions and 20-25 hours between sessions lack of qualified marketer/fundraiser lack of evaluation of professional judgment lack of proper record keeping and budgetary controls poor internal control no segregation of duties for the preparation and signing of cheques

Opportunities satellite facility in District 1 run 1-2 more offenders groups and victims groups per year team research project with the AFCA charge user fees increased referrals from other regions increased growth in Northern Region group therapy not offered by other regions (Eastern Region and City Centre) amalgamation with another agency

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Threats funds frozen at 2002 levels due to government cutbacks substantial increase in demand for individual counselling especially for children under the age of 7 decreased number of referrals by the Centre for Abused Women other agencies with mandates involving the welfare of children compete for funding, especially in the same region potential resignation of Dr. Campbell no succession plan, and may lose funding from Ted Ross and board member Gus Peters and Margaret Frontenac, as they are Dr. Campbells friends funding from the Northern Region Municipality does not consider clients who do not live in the Northern Region poor public transportation between Northern Region and Western Region and Eastern Region

Conclusion In face of the significant funding freezes and increased demand, NRSC must develop a new strategy that leverages its strength in its reputation for its group therapy and overcomes its many weaknesses.

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PORTERS FIVE FORCES Rivalry Competition from other not-for-profit organizations (NPOs) for funding is high. Threat of Substitutes People have other alternatives for treatment such as the Centre for Challenged Children, Child Help Centre, etc. in the Northern Region. People may also seek help outside the Northern Region. This threat is high, but is tempered by NRSCs good reputation for its group therapy program. Power of Suppliers This refers to the financial supporters. The power of suppliers is high, as they are in control of funds to be distributed, and NRSC does not have a lot of bargaining power, e.g. the United Ways refusal of NRSCs request for additional funding. Power of Buyers This refers to the clients. The power of buyers is low as individuals do not have a lot of bargaining power over the running of the programs.

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STRATEGIC MISSION In order to choose a strategic alternative for NRSC, its strategic mission must be considered. Its current mission can be stated as follows: We are committed to the prevention and treatment of all forms of child abuse through education programs and counselling services: sexual abuse, physical abuse, emotional maltreatment and neglect. A better mission statement would better qualify and clarify its purpose: We are committed to the prevention and treatment of all forms of child abuse: sexual abuse, physical abuse, emotional maltreatment and neglect. We do so by: 1. providing treatment to abused children and their families, and survivors and offenders of child abuse; 2. providing educational programs to our community; and 3. researching and developing new methods for detection, prevention and treatment of child abuse.

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STRATEGIC ALTERNATIVES Alternative 1 Setup Satellite Facility in District 1 Pros Cons $25,000 donation will cover costs for 19-20 months ($25,000 $1,300) and will require continued financial support from Bill Rich does not help relieve demand for individual therapy demand would increase by 1015 hours a month restricted donation cannot be used for other purposes, i.e. this amount must eventually all be used for the satellite funding already approved better access for residents in Districts 1 and 2 2-4 additional group sessions per year can be offered (1-2 each for survivors and victims) can handle some sessions held at the current centre, i.e. increased capacity initial cash could be used to alleviate cash flow problems (donations may be restricted, but physical assets are not) considerable growth is expected in the next 5 years increased funding from Northern Region Municipality

Conclusion This will help NRSC keep to its mandate, but will require additional resources in future years, and doesnt alleviate its cash problems resulting from the increased demand for individual therapy. Alternative 2 Participate in Team Research Project Pros net funding of US$8,000 ($10,000 - $2,000 direct costs) is provided (Canadian equivalent is approximately $12,000 using a 1.50 exchange rate), not restricted, can fund individual counselling in line with mandate research is Nicoles expertise and interest; good to keep her morale and loyalty to NRSC could be long-term source of funding if the project is over course of several years (assumption)

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Cons time spent on the research is time that could be used meeting with clients research is secondary to the clinical directors duties. If the project is accepted, research could become her focus primary mandate is to provide treatment, not research

Conclusion This alternative will provide a much needed inflow of cash, while ensuring Nicoles professional needs are met, and will provide NRSC with new information resulting from the research on how to run their group therapy sessions. Alternative 3 Amalgamation with Another Agency Pros Cons amounts of increased government funding uncertain potential conflict/clashing between staff of amalgamating groups incompatibility of mandates with certain agencies, i.e. Animal Abuse Centre, other agencies whose mandates are not the treatment and prevention of child abuse increased government funding lower operating costs resulting from economies of scale achieved expand the reach of its services sharing of resources and expertise see Appendix 1 NRSC receives the lowest funding per client of all candidates. Amalgamation will increase funding available. some regions (i.e. Eastern Region and City Centre) do not currently have group counselling complementary services provided. easy access (public transportation) for city center residents.

Conclusion Amalgamating with an agency with the same mandate as NRSC would allow NRSC to keep its strategic mission and not require additional documentation and filing with the government to obtain approval to change its mandate. Increased funds will be achieved through additional government funding, economies of scale and reduced administration costs.

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RECOMMENDATION I recommend that NRSC adopt the revised strategic mission. This is important in selecting an alternative. Given the strategic options available, I strongly recommend amalgamation with another appropriate agency and participation in the team research project. In line with NRSCs recommended strategic mission, NRSC should amalgamate with either the Eastern Region or City Centre abuse centres who dont have group counselling. This will alleviate cash flow problems by sharing resources and reducing administration costs, as well as obtaining additional government funding. City Center would be ideal as the public transportation systems between the two regions are good and facilitate access. Also, participation in the research project will allow NRSC to continually improve its methods of treatment, thereby following the strategic mission. Setting up a satellite should only be accepted if committed funding for the next several years can be obtained. This would be a longer term strategy.

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IMPLEMENTATION PLAN NRSC should immediately discuss with the Eastern Region and City Centre for the possibility of an amalgamation. A quick amalgamation (within 1-3 months) would allow NRSC quick access to additional funds and obtain additional government funds. Negotiations should be done by the executive committee. Within the next six months to one year, NRSC should pursue the team research project. If a commitment can be obtained from Bill Rich for continued funding for a satellite facility, this should be implemented in the next year or two. It should depend on the demand within District 1 and 2.

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FUNCTIONAL ISSUES AND STRATEGIES Issue 1 Accounting, Accountability and Budgets The most immediate issues facing NRSC is the increased cost of providing individual counselling due to the increase in demand for such services. A proper accounting system should be set up so that all costs can be tracked. Budgetary controls should be set up in the system so that expenditures cannot exceed budgets without raising flags. This will allow for additional funds to be allocated or found when it is required, not after the fact. A policy of tracking staff hours spent on specific projects needs to be in place so that a portion of staff salaries are allocated to the appropriate project. This would reduce the discrepancy between recorded direct costs and actual costs of projects, such as in the case of Educator Awareness projects, where restricted funds were considerably more than recorded costs ($11,114 in funds, $2,502 in expenses). An accounting system will also provide better internal control, e.g. it would segregate the duties of preparing and signing the cheques, which is currently done by Dr. Campbell. The preparation of the cheques could be done as follows: invoices approved by the clinical director, processed by the administrator and cheques signed by Dr. Campbell. Another important issue is the control of cash donations. Policies need to be implemented where secure donation boxes are set up in areas where clients meet and are encouraged to make payments to the administrator, who should generate receipts for all donations. Issue 2 Marketing and Fundraising Because funding from governments and the United Way are not within the control or influence of the NRSC, the best source of funding would be corporate and individual donations. Currently, very few corporations and individuals donate to the NRSC (see Appendix 2). Considerable marketing efforts should be made to influence the public regarding NRSCs work. Not only would this create awareness of NRSC, but also generate much needed funds. NRSC should develop a yearly event that both generates awareness and funds. People can then identify NRSC and its needs. It could organize a campaign to sell tulips, for example, or canvass for funds using volunteers. In order to do so, NRSC needs a person that has fundraising and marketing experience. It is advisable that NRSC solicits a donation of the expertise and time of a fundraiser. This person (hired, if funds are available) can then, in turn, provide training to Betty Sheer, who lacks the

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training and expertise in fundraising. As Betty Sheer was hired to do the fundraising, if she cannot achieve the results desired, she should be replaced. It is important that NRSC has a comprehensive marketing program that will help generate funds and educate the public about child abuse. Marketing should also inform the public, therapists and clients regarding the benefits of group therapy. This will help alleviate the increasing demand for individual therapy and decreasing demand for group therapy. Issue 3 Management and Board Directors The threat of Dr. Campbells potential resignation is the most immediate non-financial issue, as he has been the backbone of the NRSC since its inception. He has strong relationships with his staff and with the Childrens Aid Society. Also, his expertise in clinical studies have helped shape NRSCs programs. This may be dealt with by clarifying the roles of the board so that he knows and the board knows what is expected of the board and Dr. Campbell as executive director. The board is generally formed to allow for the accountability and stewardship of management (i.e. the executive committee, and Dr. Campbell, specifically). He is to report to the board on the effectiveness of the strategies used. It is the job of the board to meddle in the effective and efficient running of NRSC. Measurable goals and objectives need to be set up so that performance can be measured objectively. Performance measures may include funding received per client, expenses per client, documentation of the satisfaction/improvement of clients, and hours of therapy required per client. With regards to providing perks as opposed to cash salary for a new executive director, for tax purposes, most benefits are included in taxable income, such that the tax effect is the same.

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CONCLUSION In dealing with the threat of funding freezes and increased demand, I advise NRSC to revise its strategy and adopt the following recommendations: Amalgamate with the City Center for Childhood Sexual Abuse or the Eastern Region Sexual Abuse Centre. Pursue the research project.

This will allow NRSC to do the work it has done for the community for the last two decades.

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APPENDIX 1 Analysis of Funding per Client for Amalgamation Candidates

Revenue/Client* ($) Animal Abuse Centre Centre for Abused Women Centre for Challenged Children Child Help Centre City Centre Drug and Alcohol Abuse Program Eastern Region Shattered Homes Program Western Region NRSC *Revenue/Client = Total Revenues Number of Clients 598 1,561 1,781 882 713 1,746 1,237 1,797 768 483

Amalgamated Revenue per Client** ($) 646 997 1,030 775 707 894 896 912 736

**Amalgamated revenue per client = Revenue from candidate + revenue from NRSC (2001)
Clients from candidate agency + clients of NRSC

e.g., re Animal Abuse Centre = ($270,766 + $321,225) (468 + 463) = $646

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APPENDIX 2 Analysis of Revenue from Donations for 2002 Actual Donations Donation from Bill Rich Donation from Ted Ross Balance from other sources Assumptions: 3 corporate donations of $1,000 Other corporate donations (100-500) Individual donations Balance $40,711 (20,000) (15,000) 5,711

(3,000) (500) (2,211) 0

Assume average donation from individuals at $15 (between $10 and $20). Therefore, around $2,211 $15 = 148 people donated to NRSC.

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Markers Comments Successful Attempt June 2002 CMA Entrance Examination Part 2
General Comments
This response was a successful attempt, but it was certainly not perfect. This was a very attainable effort for most adequately prepared candidates attempting to write the Part 2 Entrance Examination. It should be noted that, although sufficient professional skills were exhibited in the response, there were many areas that could have been done better. Those preparing to write the Part 2 Entrance Examination should not use this candidates solution as a template without studying the comments that follow. Remember that each case examination comes with its own unique problems that require a different set of skills and tools to solve. As a case in point, most prior Part 2 cases were in profit environments where Porters Five Forces could be used effectively to uncover relevant aspects of the external environment found within the Backgrounder and Additional Information. In general, Porters Five Forces would provide very few elements that would help a not-for-profit organization, yet many candidates, including this candidate, used the tool, probably because published solutions in the past have used it. It proved to be a waste of valuable time for most candidates, uncovering very few elements that would be helpful in evaluating the opportunities facing NRSC. In this successful response, only one additional threat was identified that had not already been uncovered in the good SWOT analysis performed by the candidate (i.e. additional United Way funding would not be available for a second year) and may have cost the candidate valuable time that could have been better spent providing a more useful implementation plan. Candidates preparing to write the Part 2 Entrance Examination should be careful to apply judgment before using tools that they have learned in their strategy, management and accounting courses.

Strategic Thinking 1st Decile


The report demonstrated a fairly good understanding of the strategic approach to solving a business problem. The candidate wisely looked at the current mission statement, but was premature in restating the mission statement before evaluating NRSCs future direction by way of the strategic alternatives. There was actually nothing wrong with the current mission/mandate, but it was arguably too aggressive, and better candidates addressed the possibility of scaling back the organizations mandate in a variety of ways (services, type of therapy, geographic reach, types of clients, etc.). In this response, the candidate recommended amalgamating with another agency, in which case the new mission should be one that the combined organization would define together.

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The situation analysis was specific, made good use of case facts and identified a good crosssection of strengths, weaknesses, opportunities and threats. Very few were missed. One important threat that was not mentioned was the fundraising restrictions that were placed on NRSC by the United Way. Some of the amalgamation candidates were United Way agencies while others were not, which was an important criterion in deciding which agency to amalgamate with since it would be detrimental to NRSC to lose funding from the United Way. This restriction could also have been considered in discussing the fundraising business issue. Another weakness of the situation analysis is that it did not include a financial assessment of NRSC. Several strategic alternatives were identified and two possible amalgamation agencies were evaluated. The candidate could have discussed the breadth of the mandate as another strategic issue, as mentioned above, but otherwise, the strategic discussion was well done. The recommendations to amalgamate, to accept the AFCA research fund, and to reject the funding for the satellite office were very clear. The implementation plan was adequate regarding the actions that needed to be taken to ensure the successful achievement of the strategic recommendation, but the recommendation to amalgamate did not seem to be taken into consideration in the discussion of the business issues. This recommendation should have had a bearing on who the executive director would be, whether NRSC should even need to keep Dr. Campbell, what marketing efforts would be required and what changes to the accounting system would be required. Overall, this report demonstrated a systematic use of the strategic planning process. It contained a comprehensive situation analysis and recognized the current cash flow problem. The strategic alternatives were evaluated using the information learned from the situation analysis and the recommendations were derived from the analysis of the various options and issues.

Analysis 1st Decile


The breadth and depth of analysis of the strategic and business issues were superior, although coverage of the human resource issues was very limited. The depth of the qualitative analysis was sufficient and there was adequate quantitative analysis to convince the reader that the candidate had thought the issues through from both a quantitative and qualitative perspective. Recommendations were made for most of the business issues discussed. However, after providing a lengthy and often good discussion pertaining to Dr. Campbells resignation, it was not clear what ultimate recommendation was being made on this issue.

Integration 1st Decile


The response showed abundant evidence that the candidate was seeking a strategic direction that would be a good fit with NRSCs internal and external environment. Most of the pros and cons linked back to the extensive situation analysis that was performed earlier in the report (e.g. certain amalgamation candidates had good transportation, others poor; some had a related mandate, others did not; some alternatives solved the cash concern and others did not). CMA Canada Page 159

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There was also some demonstration of the business changes that would have to occur given the new strategic direction, but this could have been improved (e.g. if Nicole is to be involved in the research project, it will be important to find a replacement for the times she would be unable to fulfill her clinical duties, as she is already overworked; the quantitative impact of this fact should also be taken into account, and any additional strain this places on the organization should have to been addressed).

Judgment 1st Decile


The candidate appropriately placed more emphasis on the strategic issues, but did not ignore the business issues. There was good identification of the pros as well as the cons for each of the alternatives evaluated. However, the answer did not deal with the cons of the recommended alternative in the implementation plan. For instance, the candidate mentioned that one of the dangers of amalgamation is the potential for conflict between the staff of the two amalgamating groups. This was not dealt with in the balance of the report. The extent of the quantitative analysis, though limited, was sufficient for this particular case, and demonstrated the candidates understanding of the importance of balancing quantitative analysis with qualitative analysis. Candidates reviewing this document should take note, however, that some cases require significantly more quantitative analysis than was required in this particular case. Again, professional judgment must be used in determining an appropriate balance between quantitative and qualitative analysis for the case situation. The quality of the qualitative analysis was adequate, but there were a number of errors made in the quantitative analysis. For example, in the analysis of the satellite facility, the increased individual therapy costs were not considered, and in the analysis of the AFCA research project, the cost of only one meeting per year was used, instead of two meetings per year, and the opportunity cost of Nicole Gauthiers time was not considered. As well, in Appendix 1, the calculation of NRSCs revenue per client was incorrect (i.e. it should have been $321,225/355 = $905/client in 2001) and, in the calculation of the amalgamated revenue per client, the candidate used NRSCs 2002 number of clients together with the 2001 revenues, which was definitely inappropriate. These errors led the candidate to make incorrect assumptions and conclusions. The recommendations made in the report were logical and seemed to flow naturally from the analysis. After making allowances for the errors in the quantitative analysis, the recommendations were convincing, usually consistent with the analysis, and feasible.

Written Communication 2nd Decile


Most of the elements of a well-formatted report were present. The response only lacked an introduction, which should have outlined the purpose and scope of the report. The executive summary provided a good synopsis of the major problems facing NRSC, complete with a

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recommendation regarding the strategic direction. The candidate understood that the executive summary does not have to be long to be effective. Although there were some weaknesses demonstrated in the use of grammar, sentence structure and punctuation, they were not so serious as to impede the readers understanding of the candidates intended message. For the most part, the report flowed well and was logical and coherent. The use of point form was effective in most places, and the tone was generally professional. References were made to the appendices where appropriate and, except for an incorrect figure in Appendix 1, the candidate provided a sufficient audit trail that allowed the reader to determine how the numbers were calculated. Overall, this candidates response demonstrated most of the characteristics of a professional report.

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Sample Response Unsuccessful Attempt June 2002 CMA Entrance Examination Part 2
Date: June 20, 2002 To: Board of Directors of NRSC

From: Marie Garneau Re: Analysis and Strategic Direction

Attached, please find my analysis of NRSCs current situation, the opportunities and threats it is facing and my recommendations for the best strategic direction. Please feel free to contact me at 949-4100. Marie Garneau

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EXECUTIVE SUMMARY The following reports provide a strategic analysis of the following: 1. SWOT 2. External Environmental Scanning 3. Porter 5 Forces 4. Strategic Alternatives 5. Selection of Alternatives 6. Implementation Plan

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The following is a SWOT analysis that will help determine some core competencies and determine the best strategic direction for NRSC. Strengths 1. Strong expertise in dealing with child abuse. 2. Seen as a successful leader in their field by other professionals. 3. Dedicated employees with talents. 4. Management and staff have a strong relationship. 5. Good relationship of top management with agencies and board. Opportunities 1. Set up satellite facility in District 1. 2. AFCA Team with others to prevent and detect child abuse project. 3. Amalgamation with other agencies. 4. Population of Northern Region is growing expansion of office. Conclusion NRSC s core competency is in their professionalism and passion for their work. With the growing population, it is a good time to use their strengths to reach out to other regions. Internal organizational functions need to be placed in order by hiring a qualified manager. Weaknesses 1. Poor expertise in financial control. 2. Weak board of directors who dont have much understanding of the business. 3. Poor record keeping. 4. No succession plans in their organization structure.

Threats 1. Government funding cutbacks. 2. Demand for individual therapy is increasing. 3. Drop in referrals by Centre for Abused Women. 4. Client complaints of

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This is the external environmental scanning of factors that may affect NRSC. Political - Government budget cutbacks have affected funding to NRSC. - Changes in political party may also deflect funding to other parts of the organization that leaders perceive to be of immediate importance such as military. Economics - NRSC is indirectly affected by the economic conditions of the province and country. Inflation and interest rates affect government and personal decisions which can filter down to cutbacks in funding and donations. Social - Statistics Canada has shown population growth rate is expected to increase for the next 5 years. This indicates that more clients will be referred and more staff needed. Technological - Email and Internet is becoming crucial to do research and information sharing. - An accounting system is also important in helping keep track of records and information retrieval such as for statistics.

Summary: NRSC is very affected by its external environment.

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Porters 5 Forces analysis determines how others in the same industry can affect NRSC. Power of Supplier The suppliers of NRSC are United Way, Northern Region Municipality, Ministry of Social Services and private donors. They provide the funds and ability for NRSC to function. They have strong power and a say in what NRSC does. Power of Customers The customers are the Childrens Aid Society, external psychologists, walk-in clients and anyone thats sent to NRSC. If management of therapies is not effective, customers will complain and NRSC will be directly affected. Thus their power is high. Threat of New Entrant NRSC is the only one in its region to provide their services. Barrier to entry is high as it requires funding, expertise and experience. Threat of Rivalry There is not much rivalry in their region since they are the only centre providing governmentfunded therapies. Threat of Substitute There can always be an innovative way of treatment. Presently, there has to be time and research proven to have a high degree of success rate in treatment before it will be implemented. NRSC is itself researching better methods of treatment and prevention of child abuse.

Summary: Suppliers and customers have the strongest power over NRSC.

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STRATEGIC ALTERNATIVES 1. Satellite Facility in District 1 Pros: 1) Extend service to new area. 2) Population growth in District 1 is expected to be 30%. 3) Relief of some workload at current office. Cons: 1) Possible competition for current office. 2) Requires monitoring of operations there. 2. Joint Project (with other organizations to research child abuse detection and prevention) Pros: 1) Good opportunity to work with other organizations and U.S. foundations. 2) Good perk for Nicole Gauthier whose interest is in this area of work. 3) AFCA covers costs that will not drain the general account. Cons: 1) Need to share clients confidential situations. 2) With increasing workload, Nicole needs to be relieved of some duties. 3. Amalgamation with Other Agencies Pros: 1) Ministry of Social Services may increase funding for amalgamated not-for-profit organizations. 2) Overhead costs can be reduced. 3) More professional talents available. Cons: 1) Loss of control of management. 2) Possible conflict of interest. 4. Expansion of Centre Pros: 1) Anticipated population growth will increase referrals and increase funding. 2) Opportunity to hire more therapists. 3) Opportunity for better service and separate group sessions. Cons: 1) More organizational structure is required. 2) Bigger centre requires more expenses and better control.

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SELECTION OF ALTERNATIVES AND RECOMMENDATION The primary objective is to increase funding and decrease expenses. The best way to do this is to amalgamate with other agencies with similar mandates and resources. This decreases duplication of efforts and creates synergy that can benefit everyone. Eastern Region Sexual Abuse Centre, City Centre for Childhood Sexual Abuse and Western Region Centre for Child Maltreatment offer similar services. Some also provide individual counselling that can reduce external therapists fees. Since NRSC is suffering the effects of funding cutbacks, the other centres are probably feeling effects too and may be open to streamlining the services. Research is always an important part of improvement and future development. Since theres a good opportunity to associate with respected organizations and to provide a talented staff to develop professionally, the Joint Research Project offered by the American Foundation for Child Abuse should be taken. The expansion of NRSC is not recommended as there is too much organizational restructuring to be done in the functional areas. With amalgamation, it is not a good time to expand. The satellite facility in District 1 needs to wait until the amalgamation is completed. It is a good opportunity but there is some risk involved when the Centre is going through major changes.

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IMPLEMENTATION The following is a plan to redirect the Centre to a more focused strategy while addressing some managerial issues. Mission/Mandate To counsel individuals and families affected by all forms of child abuse: neglect, sexual, physical and emotional abuse. Board of Directors: It is apparent the Board is a weak one. Volunteers for the Board should be screened for background, experience and interest to be able to provide NRSC with strong recommendations. Dr. Campbells position involves liaising with donors and supporters. The new directors main job should be fundraising. A person with social work background and the ability to raise funds should be hired. With sufficient funding, a competitive salary can be offered. Maybe his/her salary can be a percentage based on funds raised. Dr. Campbell has tremendous experience and a good relationship with the staff. Since Nicole Gauthier will be busy with research and an increasing workload, Dr. Campbell can be retained to provide day-to-day clinical operational help. Cant focus on doing her job properly because of her fast-food job. Offer her Bonnie Whites part-time job so the combined part-time positions can let Betty help with fundraising and office duties. A qualified accountant is necessary to keep proper account of funds and to provide statistical information when required. This is important as funding agencies need to know the proper care and responsibility taken by NRSC.

Executive Director:

Clinical Director:

Betty Sheer:

Accountant:

Amalgamation with Other Agencies A meeting of all the executive directors of the other agencies is necessary as soon as possible to discuss the acceptability of such a proposal. This should be done before Dr. Campbell leaves his position. If the other agencies agree to amalgamate, a summary of services, expenses and funding should be gathered to be analyzed to see what can be eliminated and how one service can complement another. Core services should be determined. Manpower and expertise should be recognized and location of services to be determined. A computerized system connecting the agencies is necessary to share information, better communicate and cut down on duplication of paper work.

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The key to successful amalgamation is goal congruence, i.e. everyone has to buy in to accomplish the same goal of quality service, survival of their centres through resource sharing, expense reduction and improved service. Success is going to bring increased funding.

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Markers Comments Unsuccessful Attempt June 2002 CMA Entrance Examination Part 2
General Comments
Although some professional skills were exhibited in this response, it was an unsuccessful attempt. With additional preparation in examination case writing techniques and with further study of the strategic approach to solving business problems, this candidate could be successful on a second attempt, particularly if the following shortcomings are resolved and the positive attributes are further improved.

Strategic Thinking 8th Decile


The candidate attempted to follow a strategic approach to solve this case, but it was not well developed. It was clear that the candidate understood that solving a business problem should start with a situation analysis of NRSC, including scanning the internal and external environments to identify the internal strengths and weaknesses of NRSC as well as the external opportunities and threats facing this not-for-profit organization. Unfortunately, the candidate did not recognize that a situation analysis is not complete without an evaluation of the organizations current financial situation, which was not provided in the report. The candidate used too many tools to conduct the situation analysis, namely SWOT, PEST and Porters Five Forces. This led to considerable repetition and uncovering factors that would be of little value in solving the organizations problems (e.g. indicating that the government might deflect money into the military was not very useful). This also proved to use up a great deal of examination time that the candidate might have better spent by providing a more in-depth discussion of the business problems or providing an assessment of the organizations current financial situation. It should also be noted that the use of the Porters Five Forces model for a not-for-profit organization is often not very effective. In spite of the length of the environmental analysis, the overall quality of the analysis was not strong. There were still some important factors that were not identified by the candidate, some of which would be critical in finding a new strategic direction for NRSC. Some of the important factors missed by the candidate were as follows: group therapy is what NRSC is best known for, yet group therapy clients are stagnating while individual therapy has grown significantly; NRSC does not have any in-house therapists for individual therapy and their group therapists are underutilized; the increased demand for individual therapy is causing NRSCs financial difficulties, as external therapists are more costly than internally delivered group therapy; NRSCs location is a strength; there is good transportation between the north and central regions, and weak transportation between the western and eastern regions. These important factors could have been used to evaluate the amalgamation options.

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There was no reference made to NRSCs current mission or mandate, i.e. it focuses on both prevention and treatment of all forms of child abuse, involving both education and counseling of victims as well as offenders, and offering both group and individual therapy. The restatement of the current mandate is usually a good place to start and the balance of the report should evaluate the continuing relevance or appropriateness of the mandate (i.e. a better response might question such a broad mandate given NRSCs current financial difficulties and in light of the organizations internal strengths and weaknesses and the external environment). A brief mission/mandate statement was provided by the candidate later in the report, but it did not seem to take the recommendations into consideration. The candidate evaluated three strategic alternatives, but the amalgamation option was handled in a very general manner and did not make use of the extensive situation analysis performed in the prior stage. The recommendation to amalgamate was clear, although a specific agency with which to amalgamate was not recommended. An implementation plan was provided, but it could have provided a more detailed action plan for management.

Analysis 7th Decile


The breadth of strategic issues addressed was adequate, with the following issues being identified: the amalgamation (listing three possible organizations), the satellite facility, and the AFCA research fund. A better paper would also consider restricting the mandate somewhat (e.g. focusing only on sexual abuse versus all types of abuse, offering only group therapy and eliminating individual therapy, just servicing victims and not offenders). The cash flow crisis could also have been handled better by including more detailed discussion pertaining to how to increase revenues (e.g. possible user fees, specific fundraising ideas) or reduce costs (e.g. not servicing people outside of the region). The breadth of business issues addressed was very weak. Some issues that required discussion included marketing, therapist staffing, program effectiveness, management information, fund/project accounting, accounting issues (capital assets, auditor, cash donations, expense approvals) and tax issues raised in the case. The depth of discussion on some of the strategic issues was adequate, but was quite weak on the amalgamation alternatives. A better response would not have focused the entire discussion on the idea of amalgamation in a general sense; in addition, it would have evaluated some potential amalgamation partners with more specific reasons for and against the partnership. Such an analysis would have made extensive use of a better situation analysis than what was provided in this response. The depth of discussion on business issues was very brief and weak.

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Although there was sufficient financial information provided in the case to evaluate the research fund and satellite facility quantitatively, there was no quantitative analysis of any of the issues in this response. A management accountant would be expected to provide at least some quantitative analysis. Although quantitative analysis was not a major requirement of this particular case, failing to perform any was a significant weakness in this response.

Integration 8th Decile


Although the candidate indicated that the SWOT analysis would help determine the best strategic direction for NRSC, there was limited evidence in the rest of the report that the candidate was seeking a strategic direction that would be a good fit with NRSCs internal and external environment. There was some general recognition that NRSC should amalgamate with other agencies that have similar mandates and resources, and that synergies could be created. There was also general recognition that some of these agencies could provide individual counselling, resulting in reduced costs. However, a better report would have considered more of the amalgamation options and would have evaluated each in terms of the following: how well its mandate matches NRSCs mandate (rather than a vague comment that their mandates are similar), its location/accessibility to clients, and its complimentary core competencies. Rather than making vague statements that amalgamation would help create synergies, such synergies should have been explained. For instance, a better report would have explained that if NRSC amalgamates, it could eliminate its need to find another executive director when Dr. Campbell leaves. As well, the amalgamated organizations could share marketing resources (such as Websites), staff, individual therapists, group therapists and possibly even space, thus reducing overhead costs. Because the discussion of the business issues was so weak, there was little opportunity for the candidate to show how changes in the business would help support the strategy, and how changes in one area of the organization could help improve problems experienced in other areas (e.g. better project/fund accounting would lead to more credibility with donors, which could lead to increased donations, or at least prevent the loss of current donations).

Judgment 3rd Decile


The candidate appropriately placed more relative emphasis on the strategic issues than the business issues; however, the excessive emphasis on the situation analysis led to insufficient time being devoted to both the major and minor issues. The importance of identifying both pros and cons associated with the various options was understood, but the candidate should also have made sure that the implementation plan addressed the cons that had been identified for the recommended alternative. For instance, one of the compelling cons identified by the candidate with regard to amalgamation was the potential loss of control by NRSC management. Yet, nowhere in the balance of the report was that problem addressed.

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One of the criteria evaluated in judgment is the balance of qualitative versus quantitative analysis. As there was no quantitative analysis at all, the candidate scored weak in this area. Many of the facts from the backgrounder and additional information were not uncovered in the situation analysis or used in evaluating the alternatives. As well, the quantitative information provided in the case was not used to support or refute the alternatives. Consequently, the candidate scored weak in the assessment of information from case understood and used. Finally, the markers look at the recommendations overall. Were they logical? Were they consistent with the analysis? Were they convincing to the reader? Were they feasible? And in this particular case, did the recommendations solve the immediate cash concerns? The conclusion was that it was not clear that amalgamation would solve the problems, as the analysis was superficial. The recommendations regarding the other alternatives were not convincing because they were insufficiently supported with relevant qualitative and quantitative analysis. With regard to the business issues, recommending that NRSC hire Dr. Campbell to do the work Nicole would not have time for, as well as hiring an accountant, would not solve the financial problems experienced by NRSC (in fact, this would likely make them worse) and did not demonstrate good judgment. These recommendations also appeared to ignore the amalgamation recommendation.

Written Communication 9th Decile


Many of the elements of a well-formatted professional report were missing or not well done. The page titled Executive Summary read more like an introduction, but it looked more like a table of contents. Otherwise, there was no table of contents, true executive summary or introduction. An introduction should contain the purpose and scope of the report and an executive summary should contain an overview of the strategic and major operational problems facing the organization as well as a succinct summary of the recommendations. These were clearly missing from the report. Although the flow and tone of the body of the report was reasonable, there was no conclusion or exhibits (where the reader would expect to find the quantitative support, which would then be summarized in the body of the report). Grammar, spelling, sentence structure and punctuation were generally appropriate throughout the response. The candidates expression was also generally clear and concise.

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June 2002 CMA Entrance Examination Supplement

CMA Entrance Examination Supplement


Formulae
1. CAPITAL STRUCTURE a) After-Tax Marginal Cost of Debt:
kb = k(1 T) or (1 T)I F

where k T I F b)

= interest rate = corporate tax rate = annual interest payment on debt = face value of debt

Cost of Preferred Shares:


kp = Dp NPp

where Dp = stated annual dividend payment on shares NPp = net proceeds on preferred share issue c) Cost of Common Equity: i) Cost of Common Shares (Capitalization of Dividends with Constant Growth Rate):
ke = D 1 +g NP e

where D1 = dividend expected for period 1 NPe = net proceeds on common share issue g ii) = annual long-term dividend growth rate
D 1 +g P e

Cost of Retained Earnings:


kre = re =

where Pe = market price of a share re = expected return on common equity

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iii) Capital Asset Pricing Model:
Rj = Rf + j Rm Rf

where Rj = expected rate of return on security j Rf = risk-free rate Rm = expected return for the market portfolio j = beta coefficient for security j (measure of systematic risk) d) Weighted Average Cost of Capital:
! B$ ! P$ ! E$ k = # & kb + # & kp + # & ke " V% " V% " V%

where B P E V 2.

= amount of debt outstanding = amount of preferred shares outstanding = amount of common equity outstanding = B + P + E = total value of firm

PRESENT VALUE OF TAX SHIELD FOR AMORTIZABLE ASSETS a) Present Value of Total Tax Shield from CCA for a New Asset
Present Value = CdT ! 2+ k $ CdT ! 1+ 05 . k$ # &= # & d + k " 2(1+ k)% d+ k " 1+ k %

b)

Present Value of Total Tax Shield from CCA for an Asset that is Not Newly Acquired
! dT $ Present Value = UCC# & " d+k %

c)

Present Value of Total Tax Shield Lost From Salvage


Present Value =

(1+k)

Sn

& n# " d+k %

! dT $

or

(1+k)

Sn

& n1 # " d+k %

! dT $

, depending on cashflow , depending on cashassum flowptions

assumptions

Notation for above formulae: C = net initial investment UCC = undepreciated capital cost of asset Sn = salvage value of asset realized at end of year n T = corporate tax rate k = discount rate or time value of money d = maximum rate of capital cost allowance n = total life of investment

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June 2002 CMA Entrance Examination Supplement Table 1 Present Value of One Dollar Due at the End of n Years
P= 1

(1+ i) n
6% 0.943 .890 .840 .792 .747 .705 .665 .627 .592 .558 .527 .497 .469 .442 .417 .394 .371 .350 .331 .312 .294 .278 .262 .247 .233 7% 0.935 .873 .816 .763 .713 .666 .623 .582 .544 .508 .475 .444 .415 .388 .362 .339 .317 .296 .277 .258 .242 .226 .211 .197 .184 8% 0.926 .857 .794 .735 .681 .630 .583 .540 .500 .463 .429 .397 .368 .340 .315 .292 .270 .250 .232 .215 .199 .184 .170 .158 .146 9% 0.917 .842 .772 .708 .650 .596 .547 .502 .460 .422 .388 .356 .326 .299 .275 .252 .231 .212 .194 .178 .164 .150 .138 .126 .116 10% 0.909 .826 .751 .683 .621 .564 .513 .467 .424 .386 .350 .319 .290 .263 .239 .218 .198 .180 .164 .149 .135 .123 .112 .102 .092

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1% 0.990 .980 .971 .961 .951 .942 .933 .923 .914 .905 .896 .887 .879 .870 .861 .853 .844 .836 .828 .820 .811 .803 .795 .788 .780

2% 0.980 .961 .942 .924 .906 .888 .871 .853 .837 .820 .804 .788 .773 .758 .743 .728 .714 .700 .686 .673 .660 .647 .634 .622 .610

3% 0.971 .943 .915 .888 .863 .837 .813 .789 .766 .744 .722 .701 .681 .661 .642 .623 .605 .587 .570 .554 .538 .522 .507 .492 .478

4% 0.962 .925 .889 .855 .822 .790 .760 .731 .703 .676 .650 .625 .601 .577 .555 .534 .513 .494 .475 .456 .439 .422 .406 .390 .375

5% 0.952 .907 .864 .823 .784 .746 .711 .677 .645 .614 .585 .557 .530 .505 .481 .458 .436 .416 .396 .377 .359 .342 .326 .310 .295

CMA Canada

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June 2002 CMA Entrance Examination Supplement Table 1 (contd) Present Value of One Dollar Due at the End of n Years
P= 1

(1+ i) n
16% 0.862 .743 .641 .552 .476 .410 .354 .305 .263 .227 .195 .168 .145 .125 .108 .093 .080 .069 .060 .051 .044 .038 .033 .028 .024 17% 0.855 .731 .624 .534 .456 .390 .333 .285 .243 .208 .178 .152 .130 .111 .095 .081 .069 .059 .051 .043 .037 .032 .027 .023 .020 18% 0.847 .718 .609 .516 .437 .370 .314 .266 .225 .191 .162 .137 .116 .099 .084 .071 .060 .051 .043 .037 .031 .026 .022 .019 .016 19% 0.840 .706 .593 .499 .419 .352 .296 .249 .209 .176 .148 .124 .104 .088 .074 .062 .052 .044 .037 .031 .026 .022 .018 .015 .013 20% 0.833 .694 .579 .482 .402 .335 .279 .233 .194 .162 .135 .112 .093 .078 .065 .054 .045 .038 .031 .026 .022 .018 .015 .013 .010

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

11% 0.901 .812 .731 .659 .593 .535 .482 .434 .391 .352 .317 .286 .258 .232 .209 .188 .170 .153 .138 .124 .112 .101 .091 .082 .074

12% 0.893 .797 .712 .636 .567 .507 .452 .404 .361 .322 .287 .257 .229 .205 .183 .163 .146 .130 .116 .104 .093 .083 .074 .066 .059

13% 0.885 .783 .693 .613 .543 .480 .425 .376 .333 .295 .261 .231 .204 .181 .160 .142 .125 .111 .098 .087 .077 .068 .060 .053 .047

14% 0.877 .769 .675 .592 .519 .456 .400 .351 .308 .270 .237 .208 .182 .160 .140 .123 .108 .095 .083 .073 .064 .056 .049 .043 .038

15% 0.870 .756 .658 .572 .497 .432 .376 .327 .284 .247 .215 .187 .163 .141 .123 .107 .093 .081 .070 .061 .053 .046 .040 .035 .030

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CMA Canada

June 2002 CMA Entrance Examination Supplement Table 1 (contd) Present Value of One Dollar Due at the End of n Years
P= 1

(1+ i) n
26% 0.794 .630 .500 .397 .315 .250 .198 .157 .125 .099 .079 .062 .050 .039 .031 .025 .020 .016 .012 .010 .008 .006 .005 .004 .003 27% 0.787 .620 .488 .384 .303 .238 .188 .148 .116 .092 .072 .057 .045 .035 .028 .022 .017 .014 .011 .008 .007 .005 .004 .003 .003 28% 0.781 .610 .477 .373 .291 .227 .178 .139 .108 .085 .066 .052 .040 .032 .025 .019 .015 .012 .009 .007 .006 .004 .003 .003 .002 29% 0.775 .601 .466 .361 .280 .217 .168 .130 .101 .078 .061 .047 .037 .028 .022 .017 .013 .010 .008 .006 .005 .004 .003 .002 .002 30% 0.769 .592 .455 .350 .269 .207 .159 .123 .094 .073 .056 .043 .033 .025 .020 .015 .012 .009 .007 .005 .004 .003 .002 .002 .001

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

21% 0.826 .683 .564 .467 .386 .319 .263 .218 .180 .149 .123 .102 .084 .069 .057 .047 .039 .032 .027 .022 .018 .015 .012 .010 .009

22% 0.820 .672 .551 .451 .370 .303 .249 .204 .167 .137 .112 .092 .075 .062 .051 .042 .034 .028 .023 .019 .015 .013 .010 .008 .007

23% 0.813 .661 .537 .437 .355 .289 .235 .191 .155 .126 .103 .083 .068 .055 .045 .036 .030 .024 .020 .016 .013 .011 .009 .007 .006

24% 0.806 .650 .524 .423 .341 .275 .222 .179 .144 .116 .094 .076 .061 .049 .040 .032 .026 .021 .017 .014 .011 .009 .007 .006 .005

25% 0.800 .640 .512 .410 .328 .262 .210 .168 .134 .107 .086 .069 .055 .044 .035 .028 .023 .018 .014 .012 .009 .007 .006 .005 .004

CMA Canada

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June 2002 CMA Entrance Examination Supplement Table 1 (contd) Present Value of One Dollar Due at the End of n Years
P= 1

(1+ i) n
36% 0.735 .541 .398 .292 .215 .158 .116 .085 .063 .046 .034 .025 .018 .014 .010 .007 .005 .004 .003 .002 .002 .001 .001 .001 .001 37% 0.730 .533 .389 .284 .207 .151 .110 .081 .059 .043 .031 .023 .017 .012 .009 .006 .005 .003 .003 .002 .001 .001 .001 .001 .001 38% 0.725 .525 .381 .276 .200 .145 .105 .076 .055 .040 .029 .021 .015 .011 .008 .006 .004 .003 .002 .002 .001 .001 .001 .001 .001 39% 0.719 .518 .372 .268 .193 .139 .100 .072 .052 .037 .027 .019 .014 .010 .007 .005 .004 .003 .002 .001 .001 .001 .001 .001 .001 40% 0.714 .510 .364 .260 .186 .133 .095 .068 .048 .035 .025 .018 .013 .009 .006 .005 .003 .002 .002 .001 .001 .001 .001 .001 .001

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

31% 0.763 .583 .445 .340 .259 .198 .151 .115 .088 .067 .051 .039 .030 .023 .017 .013 .010 .008 .006 .005 .003 .003 .002 .002 .001

32% 0.758 .574 .435 .329 .250 .189 .143 .108 .082 .062 .047 .036 .027 .021 .016 .012 .009 .007 .005 .004 .003 .002 .002 .001 .001

33% 0.752 .565 .425 .320 .240 .181 .136 .102 .077 .058 .043 .033 .025 .018 .014 .010 .008 .006 .004 .003 .003 .002 .001 .001 .001

34% 0.746 .557 .416 .310 .231 .173 .129 .096 .072 .054 .040 .030 .022 .017 .012 .009 .007 .005 .004 .003 .002 .002 .001 .001 .001

35% 0.741 .549 .406 .301 .223 .165 .122 .091 .067 .050 .037 .027 .020 .015 .011 .008 .006 .005 .003 .002 .002 .001 .001 .001 .001

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CMA Canada

June 2002 CMA Entrance Examination Supplement Table 2 Present Value of One Dollar Per Year n Years at i%
! 1 $ & 1 # # 1+ i n & ) % "( P n= i

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1% 0.990 1.970 2.941 3.902 4.854 5.796 6.728 7.652 8.566 9.471 10.368 11.255 12.134 13.004 13.865 14.718 15.562 16.398 17.226 18.046 18.857 19.661 20.456 21.244 22.023

2% 0.980 1.942 2.884 3.808 4.713 5.601 6.472 7.325 8.162 8.983 9.787 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 17.011 17.658 18.292 18.914 19.523

3% 0.971 1.914 2.829 3.717 4.580 5.417 6.230 7.020 7.786 8.530 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.753 14.324 14.877 15.415 15.937 16.444 16.936 17.413

4% 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 8.111 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 14.029 14.451 14.857 15.247 15.622

5% 0.952 1.859 2.723 3.547 4.330 5.076 5.786 6.463 7.108 7.722 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 12.821 13.163 13.489 13.799 14.094

6% 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 7.887 8.384 8.853 9.295 9.712 10.106 10.477 10.828 11.158 11.470 11.764 12.042 12.303 12.550 12.783

7% 0.935 1.808 2.624 3.387 4.100 4.767 5.389 5.971 6.515 7.024 7.499 7.943 8.358 8.745 9.108 9.447 9.763 10.059 10.336 10.594 10.836 11.061 11.272 11.469 11.654

8% 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.224 8.560 8.851 9.122 9.372 9.604 9.818 10.017 10.201 10.371 10.529 10.675

9% 0.917 1.759 2.531 3.240 3.890 4.486 5.033 5.535 5.995 6.418 6.805 7.161 7.487 7.786 8.061 8.313 8.544 8.756 8.950 9.129 9.292 9.442 9.580 9.707 9.823

10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 8.649 8.772 8.883 8.985 9.077

CMA Canada

Page 181

June 2002 CMA Entrance Examination Supplement Table 2 (contd) Present Value of One Dollar Per Year n Years at i%
! 1 $ & 1 # # 1+ i n & ) % "( P n= i

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

11% 0.901 1.713 2.444 3.102 3.696 4.231 4.712 5.146 5.537 5.889 6.207 6.492 6.750 6.982 7.191 7.379 7.549 7.702 7.839 7.963 8.075 8.176 8.266 8.348 8.422

12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 7.562 7.645 7.718 7.784 7.843

13% 0.885 1.668 2.361 2.975 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.303 6.462 6.604 6.729 6.840 6.938 7.025 7.102 7.170 7.230 7.283 7.330

14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.687 6.743 6.792 6.835 6.873

15% 0.870 1.626 2.283 2.855 3.352 3.785 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.725 5.847 5.954 6.047 6.128 6.198 6.259 6.313 6.359 6.399 6.434 6.464

16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.576 5.669 5.749 5.818 5.878 5.929 5.973 6.011 6.044 6.073 6.097

17% 0.855 1.585 2.210 2.743 3.199 3.589 3.922 4.207 4.451 4.659 4.836 4.988 5.118 5.229 5.324 5.405 5.475 5.534 5.585 5.628 5.665 5.696 5.723 5.747 5.766

18% 0.848 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 4.656 4.793 4.910 5.008 5.092 5.162 5.222 5.273 5.316 5.353 5.384 5.410 5.432 5.451 5.467

19% 0.840 1.547 2.140 2.639 3.058 3.410 3.706 3.954 4.163 4.339 4.487 4.611 4.715 4.802 4.876 4.938 4.990 5.033 5.070 5.101 5.127 5.149 5.167 5.182 5.195

20% 0.833 1.528 2.107 2.589 2.991 3.326 3.605 3.837 4.031 4.193 4.327 4.439 4.533 4.611 4.676 4.730 4.775 4.812 4.844 4.870 4.891 4.909 4.925 4.937 4.948

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CMA Canada

June 2002 CMA Entrance Examination Supplement Table 2 (contd) Present Value of One Dollar Per Year n Years at i%
! 1 $ & 1 # # 1+ i n & ) % "( P n= i

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

21% 0.826 1.510 2.074 2.540 2.926 3.245 3.508 3.726 3.905 4.054 4.177 4.279 4.362 4.432 4.489 4.536 4.576 4.608 4.635 4.657 4.675 4.690 4.703 4.713 4.721

22% 0.820 1.492 2.042 2.494 2.864 3.167 3.416 3.619 3.786 3.923 4.035 4.127 4.203 4.265 4.315 4.357 4.391 4.419 4.442 4.460 4.476 4.488 4.499 4.507 4.514

23% 0.813 1.474 2.011 2.448 2.804 3.092 3.327 3.518 3.673 3.799 3.902 3.985 4.053 4.108 4.153 4.189 4.219 4.243 4.263 4.279 4.292 4.302 4.311 4.318 4.323

24% 0.807 1.457 1.981 2.404 2.745 3.021 3.242 3.421 3.566 3.682 3.776 3.851 3.912 3.962 4.001 4.033 4.059 4.080 4.097 4.110 4.121 4.130 4.137 4.143 4.147

25% 0.800 1.440 1.952 2.362 2.689 2.951 3.161 3.329 3.463 3.571 3.656 3.725 3.780 3.824 3.859 3.887 3.910 3.928 3.942 3.954 3.963 3.971 3.976 3.981 3.985

26% 0.794 1.424 1.923 2.320 2.635 2.885 3.083 3.241 3.366 3.465 3.543 3.606 3.656 3.695 3.726 3.751 3.771 3.786 3.799 3.808 3.816 3.822 3.827 3.831 3.834

27% 0.787 1.407 1.896 2.280 2.583 2.821 3.009 3.156 3.273 3.364 3.437 3.493 3.538 3.573 3.601 3.623 3.640 3.654 3.664 3.673 3.679 3.684 3.689 3.692 3.694

28% 0.781 1.392 1.868 2.241 2.532 2.759 2.937 3.076 3.184 3.269 3.335 3.387 3.427 3.459 3.483 3.503 3.518 3.529 3.539 3.546 3.551 3.556 3.559 3.562 3.564

29% 0.775 1.376 1.842 2.203 2.483 2.700 2.868 2.999 3.100 3.178 3.239 3.286 3.322 3.351 3.373 3.390 3.403 3.413 3.421 3.427 3.432 3.436 3.438 3.441 3.442

30% 0.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3.249 3.268 3.283 3.295 3.304 3.311 3.316 3.320 3.323 3.325 3.327 3.329

CMA Canada

Page 183

June 2002 CMA Entrance Examination Supplement Table 2 (contd) Present Value of One Dollar Per Year n Years at i%
! 1 $ & 1 # # 1+ i n & ) % "( P n= i

n 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

31% 0.763 1.346 1.791 2.131 2.390 2.588 2.739 2.854 2.942 3.009 3.060 3.100 3.129 3.152 3.170 3.183 3.193 3.201 3.207 3.211 3.215 3.217 3.219 3.221 3.222

32% 0.758 1.332 1.766 2.096 2.345 2.534 2.678 2.786 2.868 2.930 2.978 3.013 3.040 3.061 3.076 3.088 3.097 3.104 3.109 3.113 3.116 3.118 3.120 3.121 3.122

33% 0.752 1.317 1.742 2.062 2.302 2.483 2.619 2.721 2.798 2.855 2.899 2.931 2.956 2.974 2.988 2.999 3.007 3.012 3.017 3.020 3.023 3.025 3.026 3.027 3.028

34% 0.746 1.303 1.719 2.029 2.260 2.433 2.562 2.658 2.730 2.784 2.824 2.853 2.876 2.892 2.905 2.914 2.921 2.926 2.930 2.933 2.935 2.937 2.938 2.939 2.939

35% 0.741 1.289 1.696 1.997 2.220 2.385 2.508 2.598 2.665 2.715 2.752 2.779 2.799 2.814 2.826 2.834 2.840 2.844 2.848 2.850 2.852 2.853 2.854 2.855 2.856

36% 0.735 1.276 1.674 1.966 2.181 2.339 2.455 2.540 2.603 2.650 2.683 2.708 2.727 2.740 2.750 2.758 2.763 2.767 2.770 2.772 2.773 2.775 2.775 2.776 2.777

37% 0.730 1.263 1.652 1.936 2.143 2.294 2.404 2.485 2.544 2.587 2.618 2.641 2.658 2.670 2.679 2.685 2.690 2.693 2.696 2.698 2.699 2.700 2.701 2.701 2.702

38% 0.725 1.250 1.630 1.906 2.106 2.251 2.356 2.432 2.487 2.527 2.556 2.576 2.592 2.603 2.611 2.616 2.621 2.624 2.626 2.627 2.629 2.629 2.630 2.630 2.631

39% 0.719 1.237 1.609 1.877 2.070 2.209 2.308 2.380 2.432 2.469 2.496 2.515 2.529 2.539 2.546 2.551 2.555 2.557 2.559 2.561 2.562 2.562 2.563 2.563 2.563

40% 0.714 1.225 1.589 1.849 2.035 2.168 2.263 2.331 2.379 2.414 2.438 2.456 2.469 2.478 2.484 2.489 2.492 2.494 2.496 2.497 2.498 2.499 2.499 2.499 2.499

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CMA Canada