ICAN 2024 Public Sector Accounting and Finance | Mixed

The University of Okoko Consultancy Unit (Uniko Consult) provides training courses for staff, public and private individuals. The consultancy unit is currently collating information for its budget for the six months ending December 31, 2021. The following information is available: (i) Provisional bookings for courses July Aug. Sept. Oct. Nov. Dec. Number of courses 0 2 4 3 4 4 Average number of attendees per course 0 16 8 16 8 12 No courses are run during the month of July. Uniko Consult requires intending participants to confirm their attendance in the week prior to the course, giving their credit card number (first and last 4 digits) as a guarantee. On average, 75% of provisional bookings are confirmed and therefore result in fee payment. (ii) Course prices Each course lasts for three days, running from Friday to Sunday and the fee for each course is N120,000 per attendee. All courses have to be paid for in full on the first day of the course. Any returning participant will be given a 25% discount on the fee. One in three of confirmed bookings is from a returning participant. (iii) Personnel costs Experienced team of Professors led by Emeritus Professor Omopinleola deliver Uniko Consult's courses. He is not a member of staff at Uniko Consult, but rather an outsourced facilitator. Emeritus Professor Omopinleola charges Uniko Consult N300,000 for each course and is supported by his assistant, Dr. Chukwuma. Emeritus Professor Omopinleola pays his assistant a wage of N50,000 per course. Uniko Consult has several part-time support staff. Wages costs for July are only N100,000 per month, but every month thereafter amounts to N400,000. However, the Consult is planning to increase wages by 5% from September. All staff are paid at the end of each month. (iv) Property costs The University owns a Researchers' Lodge, which includes an office, a large kitchen and two conference rooms. Uniko Consult rents the Researchers' Lodge at a rental cost of N2,400,000 per annum, with rents being paid quarterly in advance on March 31, June 30, September 30 and December 31. However, the Consultancy Unit has just received a notice from the Bursar of the University, stating that, with effect from December 31, 2021, annual rental payments will increase by 5%. (v) Food costs (Tea break and lunch) All food items purchased by the Researchers' Lodge is organic and delivered weekly by Uniko Farms. On the 5th day of each month, Uniko Consult pays the bill for the previous month's food deliveries. However, in December, Uniko Consult is also required to settle its bill for December's food requirements due to the two-week holiday taken by Uniko Farm in January. In recent months, the cost for food on each training course has been N5,000 per attendee. However, due to lower availability of organic produce, inflation of 2% per month is expected to occur from September onwards. Food costs for June 2021 are expected to be N110,000. (vi) General overheads The running cost of Uniko Consult is N835,000 per annum, paid in ten equal instalments from April to January each year. The consult's fuel cost of N420,000 per annum is paid through equal monthly direct debits. However, it has just come to the fuel supplier's attention that the direct debits from January to April failed, due to systems error. Therefore, the direct debit payment for July will include these outstandings. (vii) Capital expenditure Uniko Consult needs to replace its three air conditioners in one of the conference rooms by August. The price is N180,000 each but Uniko Consult's Managing Director is confident that he can obtain a 10% discount on this price. The supplier is also allowing Uniko Consult to pay for the air conditioners in two instalments – one in August and the other in October. (viii) Bank account The balance on the Consultancy's bank account is expected to be zero on June 30, 2021; it currently has a sufficient overdraft facility to cover any cash deficit arising. (ix) Remittances The Consultancy Unit is expected to remit 50% of its cash balance to the University's account on half-yearly basis.

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