The evolution of the business world and the growing interest in an efficient and effective administration, changed the focus of control in Cuba, currently subject to variations in internal control as of the approval of Resolution 60 of 2011 of the Office of the Comptroller General of the Republic, which brought as a consequence in all the organizations in the country the realization of a study and evaluation of each one of the components that make it up using tools designed for this purpose.
During the course of the current investigation, an evaluation of the internal control was carried out at the Meliá Cayo Coco hotel, using the self-control guide, yielding 5 deficiencies detected in the activities component. Recommendations are made based on these deficiencies.
Keywords: internal control, audit, effectiveness
Abstract
The businesses's worldly evolution and the increasing interest for an efficient and actual administration, he changed the focus of the control in Cuba, subject at the present time to variations on the subject of internal control starting from the resolution's approval 60 of the 2011 of the República's Comptroller General that brought as a result in all the organizations domestic a study's realization and evaluation out of every one of the components that integrate it starting from tools designed for that purpose.
During the present-day investigation's passing, Meliá Cay Coco utilizing for it the self-checking guide accomplished an evaluation of the internal control in the hotel himself, affording 5 deficiencies detected in the component activities. They accomplish recommendations in terms of these deficiencies.
Key words: inter control, auditing, efficacy.
Introduction
As companies have developed, and financial operations and their ramifications are more important, the work of controlling economic operations has become more necessary, due to the existence of irregularities that allow the illicit enrichment of some members of society. For this reason, the control and inspection of state assets is an essential factor in the economic process.
Currently, Cuba is carrying out profound transformations in the economic sphere with the sole purpose of attenuating the attacks of the so-called special period and laying the foundations for the productive development of the country, safeguarding the social conquests of recent decades. The nation is more quickly open to international markets and foreign investment, where serious reforms are taking place in the resizing of the economy, in the structure and improvement of financial and tax mechanisms.
In this sense, CASTRO, R.'s words express extraordinary value, stating that: “The economic battle constitutes today, more than ever, the main task and the center of the ideological work of the cadres, because sustainability and preservation of our social system. "
Internal control has been a concern of the entities, to a greater or lesser degree, with different approaches and terminologies, which has allowed different conceptions about it, its principles and elements to be known and implemented over time. in Cuban entities.
Since the end of the last century, the need for control has been highlighted with greater force within the Cuban entity, so in 1995 Decree Law No. 159 of the audit was issued, which declares as a fundamental task of the State the strengthening of the economic and administrative control of the entities.
Eight years later, on September 23, 2003, the Ministry of Finance and Prices dictates Resolution 297, which expands the meaning of internal control in the entity, removing the barriers that until then limited it to the accounting area only and opening the way of control to all the departments or activities of the entity.
Playing its primary role in the functions and objectives for which it was adapted in the economic sphere of the country, it was necessary to continue improving internal control, for which reason Resolution No. 60, created in the Office of the Comptroller General of the Republic of Cuba, was created. effective as of March 1, 2011. This resolution discloses the new rules of the "internal control system", which is tempered by the provisions that regulate this activity and the requirements of the administrative economic development of the country.
This new resolution is in accordance with what was established in the IV Congress of the PCC, when taking up what was stated in the conclusions by the President of the Councils of States and Minister CASTRO, R.: ¨… today more than ever the internal control systems have They must be adequate so that the administrations are more efficient, marking the path of rectification and necessary updating of the social economic model.
This is reflected in the general guideline No. 12 of the Economic Management Model, stating that: “The elevation of the responsibility and power of companies makes it essential to strengthen their internal control system, to achieve the expected results in terms of compliance with their plans and goals with efficiency, order, discipline and absolute compliance with legality ”.
Control today becomes the most important economic and political task that our cadres and other workers have to face, and especially professionals in the economy, accounting and auditing, who must fight against all manifestations of corruption, crime, actions illicit acts and other conducts that impede the use of the scarce resources available to the country.
In order to be in accordance with the current requirements that the country's senior management requires, the Meliá Cayo Coco Hotel draws up various strategies to complete the aforementioned, since it presents an internal control system that includes the organization plan, as well as the duly classified methods and coordinated, in addition to the measures adopted to protect its resources, but it does not have suitable mechanisms that provide feedback on the level of effectiveness of the system implemented, taking into account the regulations established by the Comptroller General of the Republic of Cuba.
Starting from these presented limitations and the need to solve it, the following scientific problem is needed: How to evaluate the internal control system at the Hotel Meliá Cayo Coco?
In order to resolve the aforementioned, the general objective is as follows: Evaluate from the General Self-Control Guide the basic aspects by components and standards that correspond to implement for a better competitiveness of the Hotel Meliá Cayo Coco.
In the present investigation, the questionnaire method will be used as a technique for the Evaluation of the Internal Control System, adapted to the entity's own conditions for each of the operational areas.
Evolution of internal control.
In ancient times, ways of controlling and verifying the security of goods were developed, the most efficient being found in large commercial emporiums.
Different authors consider that the first formal procedure of internal control was established by the pharaohs in ancient Egypt, whose cause was fundamentally given by the number of robberies carried out by the helpers who handled the wheat, gold and different wealth of the pharaoh.
To resolve this situation, they chose two people or scribes so that they independently recorded all the operations that were carried out with their wealth.
If both scribes did not coincide, they were sentenced to death. This fact was more than enough for the scribes to control other people avoiding the occurrence of robberies, which apparently created some of the functions of internal control: control of the entity's resources.
On the other hand, Candau recalls that in Athens, in 300 BC, a group of experts was commissioned to verify the accounts of public treasures and others the accounts of people who manipulated public funds.
Other authors express that among the multiple Zeno papyri, found in Egypt in 1951, which are kept in the Library of the University of Cairo and in the Universities of Colombia, Harvard and Cornell, in the USA, there are data that allow To know that, in the year 254 BC, the accounts were inspected and verified.
It is also considered that when the famous book by the mathematician Fray Luca Pacciolo entitled “Sum of Arithmetic, Geometry, Proportioni, et Proportionalita” was published in 1494, where the accounting principles, procedures, and systems were structured and developed, as well as Venetian merchants and others they had developed efficient internal control systems.
One of the accounting classics, Robert H. Montgomery published the book Auditing Theory and Practice in 1912, which shows the notion that the fundamental activity of an auditor is the prevention and detection of fraud as well as errors.
However, later texts and accounting theory took another path, greatly pressured by necessity. The creation of large financial economic conglomerates produced a large number of financial transactions that could not all be reviewed; Cumulative accounting became common and as a result, issuing reports with an opinion became the first priority for the profession.
The verification of each transaction from the cradle to the grave, (a procedure that discovers and prevents many frauds), was discontinued and the detection or prevention of fraud was relegated to a secondary role.
Financial fraud increases from the first decades of the 20th century to the present day. In the bulletin of the US Federal Reserve: Verification of financial statements published in 1929, (revised version of the article published by the same entity in 1917), it is stated that in some cases the auditor might find it necessary to verify a substantial part of All recorded transactions, but in other cases, where the internal check and control system is reliable, the tests may suffice. This document also established that in the audit, through sampling, not always embezzlement or undervaluations of assets are discovered.
Evolution of internal control in Cuba
In the Economic Resolution of the V Congress of the Communist Party, 1997, it was stated: “an indispensable condition in all this process of transformation of the business system will be the implantation of strong financial restrictions that make the control of the efficient use of resources internal to the mechanism management and do not rely solely on external checks. "
Demonstrating that, as in the rest of the world, in Cuba it has been necessary to include within economic policy, lines of action and research related to control and to the role that management cadres must play in all instances on the custody of goods and resources that the State puts in your hands.
In Cuba, taking the antecedents that were developing in the world, the Ministry of Finance and Prices issued Resolution 297 in 2003, which formulated all the necessary requirements to implement the internal control system in socialist companies, but the The need to continue perfecting said control led to the issuance of a new standard adjusted to the provisions that regulate this activity and to the requirements of the country's economic-administrative development, and that is when Resolution 60 issued by the General Comptroller of the Republic of Cuba.
Conceptualization of internal control
There are several definitions of internal control that have been addressed in different literatures, but to talk about internal control before you have to know what control is.
In the International Auditing Standards (1957), internal control is defined as the set of policies and procedures adopted by management to achieve the entity's objectives; and thus guarantee the safeguarding of assets, the prevention and detection of fraud and error, and the timely preparation of reliable financial information.
GÓMEZ Morfin (1968) considers that “Internal control includes the organization plan and all the methods and procedures that are coordinated in a business to safeguard its assets, verify the reasonableness and reliability of its financial information, promote operational efficiency and provoke adherence to the policies prescribed by the administration ”.
For his part WILLNGHAM J. (1983) professor of accounting at the University of Houston states that: “Internal control includes the organization plan and the coordination of all the methods and measures adopted by a company to protect its assets, verify the accuracy and reliability of its accounting data, to promote operational efficiency and stimulate adherence to the administrative policies prescribed by the company's management. ”
The COSO report (1997) gives a more inclusive definition of internal control with the aim of facilitating a model based on which companies and other entities can evaluate their control systems and decide how to improve them. In it, the following is proposed:… ”Internal control is a process carried out by the Board of Directors, the management and the other members of an entity, in order to provide a reasonable degree of confidence in achieving objectives in the following areas or categories: Effectiveness and efficiency of operations, Reliability of financial information and Compliance with applicable laws and regulations… ”
In 2003, in Cuba, the Ministry of Finance and Prices established Resolution 297 of the internal control system, defining it as: ¨ The process integrated into operations carried out by the management and the rest of the staff of an entity to provide security reasonable to the achievement of the following objectives: Reliability of information, efficiency and effectiveness of operations, compliance with laws, regulations and established policies and control of resources available to the entity.¨
The changes that have been developing in the Cuban economic and social model, and after the need to improve the established control mechanism, the Comptroller General of the Republic of Cuba repeals Resolution 297 and issues 60 of the rules of the control system. internal, defining it in its article three as: “The process integrated to the operations with a focus of continuous improvement, extended to all the activities inherent to the management, carried out by the management and the rest of the personnel; it is implemented through an integrated system of rules and procedures, which help to anticipate and limit internal and external risks, provide reasonable security in achieving institutional objectives and adequate accountability. ”
The control system within the framework of Resolution 60 of the Comptroller General of the Republic of Cuba
Resolution 60 is effective as of March 1, 2011, leaving Resolutions No. 297 of September 23, 2003, issued by the Minister of Finance and Prices and No. 13 of 18 December, without legal effect. January 2006, issued by the Minister of Audit and Control, its main objective is to establish basic rules and principles of mandatory observance for the Comptroller General of the Republic and those subject to the actions of audit, supervision and control of this body. It constitutes a standard model of the internal control system and is flexible to be applied to the particular characteristics of any organization.
The General Self-Control Guide contains 109 basic aspects (348 less than the previous one) is developed by components and standards, including fundamental issues of the current accounting subsystems established by the MFP, as well as a relation with the legal provisions and regulations that are attached to the document. impact with greater incidence on the legal non-observances detected in the control actions.
The basic principles for which it is governed are:
- LegalityObjectivityAdministrative integrity.Division of functions.Fixation of responsibilitiesCharge and discharge.
Said Resolution has the characteristic of being comprehensive, flexible and reasonable. In addition, the internal control system that is embodied in it is made up of five interrelated components, within the framework of the basic principles and general characteristics, which are: Control environment, risk management and prevention, control activities, information and communication and supervision and monitoring, which are structured in standards.
The evaluation of internal control.
The control is evaluated throughout the process, preliminarily during the exploration or familiarization stage to define the scope of the tests to be designed and then during the execution itself based on its results.
Considering that among the fundamental objectives of the evaluation of internal control is to verify the degree of efficiency of the system, deficiencies or irregularities of the structural elements that are examined in a specific unit of the organization and indicating the correction guidelines that correspond to each case..
The knowledge and evaluation of Internal Control must allow the auditor to establish a specific relationship between the quality of the entity's internal control and the scope, timing and nature of the audit tests. On the other hand, the auditor must communicate the weaknesses or deviations to the control. internal of the auditee.
On the evaluation of internal control in the entities, different authors have ruled, below we list some of them:
For DE MIRANDA and TORRAS (2006), the internal control system, established in the entity, must be studied and evaluated at the beginning, with the aim of verifying its compliance, validity and sufficiency as well as to determine the nature, extent and opportunity of the tests to which the audit procedures must be specified. The results will provide the auditor with the basis for making recommendations, for correcting deviations, or for making improvements to insufficient controls.
According to MEIGS (1976), there are different techniques to be used by the auditor to collect the information necessary for the study and evaluation of the internal control system and to verify compliance with the general principles of internal control in the segment of the company subject to the audit., among the most used are:
- The written narrative of internal control. The internal control questionnaires. The internal control flow charts.
The auditors will carry out compliance tests to determine if the internal controls described in their working papers (P / T) are actually used and function effectively, that is, through these, they can determine the validity of the questionnaire responses., descriptions or other method used to evaluate the internal control system and the degree of compliance with the procedures and company regulations established in its manuals, specify the areas of strength and weakness in the system, will evaluate the system to determine the degree of who can rely on it, based on that assessment, modifications are made to the audit program and audit procedures are expanded. Only after an evaluation of internal control are auditors able to draw up a complete audit program.
CASHIN, NEUWERT and LEVY (1985) state that: “In order to review and evaluate the controls on which a high degree of reliability is to be deposited, the auditor must first obtain a clear picture of how the system is supposed to operate. The evidence should then be collected in the form of test results intended to show whether the system works as expected. Finally, the real system must be evaluated to make sure it meets the standards of good internal control. ”
COOK and WINKLE (1994) believe that: “In the preliminary stage of review, the auditor must achieve an understanding of the client's control environment. Based on knowledge of the control environment and the flow of operations, the auditor must decide whether to trust the internal control system… ”
Characterization of the Meliá Cayo Coco Hotel.
The construction of the Arena Real hotel (constructive name of the work of the Hotel Meliá Cayo Coco) was the first project with a prior study of the environmental impact on the destination, which allowed from its conception to achieve an integration of the work with the environment without major effects for the same, where for Business Management Environmental Management is always taken into account as an essential element for the development of the product.
Beginning the construction of the hotel in 1996 and with a delay of one year from the date of delivery, it opens its doors to customers on August 1, 1999, starting with All Inclusive mode and providing a service intended primarily for families where Source markets were Canada, Germany, and the United Kingdom.
The Meliá Cayo Coco hotel is created through an Administration and Marketing Contract, dated July 15, 1999.
In 2003, the facility redefined its commercial objectives and launched market strategies aimed at tourism dedicated exclusively to adults, mainly couples. From that moment a new segment begins in the facility: the celebration of weddings and renewal of Marriage Vows, achieving from 2004 to 2010 maintaining the supremacy in the celebration of weddings in the destination, at which time due to the opening of other more offers attractive in the same pole and in other territories of the country decreases considerably.
Connected by a 17 km jetty over the water from the Big Island, 65 km. from the town of Morón and 13 km. from the Jardines del Rey International Airport, the Meliá Cayo Coco Hotel is located on the Las Coloradas beach.
Where 30% of the bungalows are built on stilts in a natural saltwater lagoon.
It is a facility that has 250 rooms, including 12 Suite, 8 Junior Suite, 62 Superior doubles and the rest are standard. Only for adults and over 18 years. It offers Special Offers such as: Honeymoons, birthday celebrations, special attentions for repeat clients and wedding celebrations.
It has a wide diversity of flora and fauna, which led to the installation receiving in 2005 the Environmental Distinction that the CITMA gives to companies that achieve a development of their products without affecting the environment and a minimal anthropic impact, thus as different recognitions for the preservation of the environment.
Distributed in 12 areas or departments and with a total of 294 contracted workers, the Meliá Cayo Coco hotel has a qualified workforce that allows it to provide a service of excellence and professionalism where the level of labor fluctuation is one of the lowest in the territory, which has allowed to consolidate the sense of belonging and commitment of the workers with the objective of the installation. All of them come from the Tourism Employing Agency in the territory, most are graduates of basic specialties at the School of Hospitality and Tourism of the province. The predominant level of education is the Upper Medium, followed by the university and the Medium technician.
The hotel has a consolidated and united management with more than 8 years of experience, in the direction of the facility, which has managed to place the hotel in a top position.
The business purpose of the Hotel is to: "Provide, promote and market accommodation and gastronomic services in freely convertible currency, under the mechanisms of collections and payments established in our country."
It has all the professionalism of Meliá applied to the varied gastronomic offer and services, offering different options of food and drinks 24 hours a day. The Lobby Bar "Los Flamencos" operates 24 hours a day, offering services of national and international drinks, coffee, various cocktails and pastries. The "Del Sol" Buffet Restaurant offers breakfast, lunch and dinner services.
A very special gastronomic offer is constituted by the A Las Carte Restaurant "Las Caletas", categorized as 5 forks.
If you prefer Italian food, you can visit the "La Terraza" Restaurant. In addition, the Ranchón Parrillada "Arena Real" on the beach, offers you lunch service, and at night it offers dinner service, operating as an a la carte restaurant with a typically Cuban menu, offering the rich lobster from the Cuban platform.
On the shore of the beach, you can taste refreshing cocktails and Cuban beers in the “Coco Sol” bar, a construction with a rustic line similar to that of our Cuban Ranchón. The 24-hour Snack Bar is also at your disposal, where you can enjoy a cozy and informal atmosphere, next to the pool.
The Billiard Bar "Carambola" is the ideal place to play billiards and end the night with good Cuban cocktails.
Among the general options provided are: towel changing services, laundry, outdoor pool with Jacuzzi and showers in the area, sauna, massage, 24-hour medical assistance, wedding service, motorcycle rental, cars, shops, bureau of tourism.
Proposal for a Questionnaire to be applied to evaluate internal control at the Meliá Cayo Coco hotel.
There are different methods to evaluate the effectiveness of the internal control system in an entity. Taking into account the characteristics of the entity under study, it was decided to apply the questionnaire as an evaluating instrument. Which is structured based on the five components with their corresponding standards as established in Resolution 60/2011.
The application of this questionnaire aims to directly affect errors and deficiencies that are detected, covering all the areas that the entity has. It is constituted in such a way that positive responses indicate the existence of an adequate control measure, while negative responses indicate a failure or weakness in the established system.
This control tool serves the Hotel Meliá Cayo Coco to know, measure and rectify its Internal Control system and detect any non-compliance or violation that prevents compliance with the proposed objectives.
Results obtained from the application of the Questionnaire.
Taking into account the objectives of the investigation, an evaluation of the implemented internal control system was carried out in August 2015, with the aim of detecting existing weaknesses and strengths.
In the evaluation, each of the standards of the 5 components of Internal Control was individualized and in order to have more reliable information, a detailed review of the operations carried out from January to July 2015 was carried out.
The existence of the Single Audit File and the Internal Control Manual was verified, verifying the reports showing the results of the control actions received in the last five years and the plans of measures derived from these.
The main results obtained by each of the components are defined below:
CONTROL ENVIRONMENT
Standard: Planning, annual, monthly and individual work plans:
The work objectives of all the departments of the facility are defined and elaborated; there is correspondence between the annual plan of activities and the entity's work objectives, activities and resources; responding to the implementation of the activities included in the main activities plan of the Representation of the Greater Caribbean in Ciego de Ávila.
For the preparation of the annual activity plan, the mission of the facility, the work objectives, the defined functions of each area and job, the activities to be carried out in each process or sub-process and the most relevant risks were taken into account (Plan of Prevention of Risks) containing at the same time the tasks of consultation and discussion of the Economic Plan and the annual Budget with the workers.
It complies with what is elaborated in the monthly work plan based on what is approved in the annual plan of activities of each management level, specifying the activities that have undergone changes and the new ones, as a result of the management process, taking into account Also, in compliance with it, the control and monitoring actions to be carried out by the entity itself to solve the deficiencies or limitations that are detected should be included, which should affect the updating of the Risk Prevention plans.
Examples of annual plans:
- Vacation Plan: Retained in Human Resources and in Joint Ventures. Preparation and Improvement Plan for cadres and leaders: Retained in Human Resources Training and Development Plan: Retained in Human Resources Income and Expense Plan: Retained in the Economic Department. Investment Plan: Retained in Investments and Technical Services. Energy Carriers Plan: Retained in Technical Services and Management. Risk Prevention Plan: Retained in the management and in the Economic Department.
Each cadre, official and specialist draws up their individual work plan, keeping in mind the monthly work plan of the level of management to which they are subordinated, the assurance of the objectives and tasks that respond to their responsibility and the assigned missions, in addition they are supervised by the immediate superior manager who reviews, approves and analyzes the fulfillment of the approved plan and informs the corresponding levels of their fulfillment.
Standard: Integrity and ethical values:
The Code of Ethics of the Pictures of the Cuban State is signed by the cadres. Accountability and evaluations of compliance with ethical precepts are evaluated. Workers have identify the entity's ethical values. The facility has a specific Code of Ethics for the activity in which it is carried out.
The workers know about the Disciplinary Regulation and its application, it is valid to emphasize that there is a register of disciplinary measures which is filed in Human Resources and in the Hotel's Legal Department, it is updated and has a consecutive record of disciplinary measures. Despite the fact that the Disciplinary Regulation is approved, it does not have a validity since it was repealed with the new Labor Code, in force since June, but the relevant organizations have not ruled on updating it.
There is compliance with the Collective Labor Agreement drawn up jointly between the management of the Hotel Meliá Cayo Coco, the Department of Mixed Companies and the union organization, having been discussed and approved by the workers, which must remain in force for a maximum period of three Years. It is necessary to note that this is repealed with the implementation of the new Labor Code, since June, but for its update it is necessary that Joint Ventures together with the Greater Caribbean pronounce themselves on this.
There is evidence of the general preparation of the cadres and reserves, their links with other workers, to achieve a culture of administrative responsibility.
Standard: Proven Suitability:
The committee of experts is created and the minutes of the meetings are preserved, as well as the recommendations issued in each case and any other information or supporting documentation on the matter in question. The hotel has the competence profiles of each position established according to Cuban standards and each worker knows their tasks or functions established in the position qualifier and in the specific job contents, and their compliance is reflected in performance evaluations.
The facility has prepared and updated the staff roster, the worker registry and the annual training plan in accordance with current MTSS legislation, also considering the integration of the diagnosis or determination of preparation needs and the individual plan. training.
Standard: Organizational structure and assignment of authority and responsibility:
The entity has the provision that approves the constitution of the entity and its corporate purpose or state commission, which consists of the notarial deed # 132 of 1997 of the notary Bernardo Misubai Piñeiro of the special notary office of MINJUS, constitution of the Mixed Company Hundred Amigos SA in which the corporate purpose is defined: construction of the hotel called Arena Real for its later exploitation, today Meliá Cayo Coco. It is also registered in the Mercantile Registry, in the Property Registry and in the Registry of the Public Limited Company.
The administration and marketing contract and the provision of 20 of 1996 of Gran Caribe also reflects the legal and commercial framework of the Meliá Cayo Coco hotel, everything is filed in the hotel's Legal File.
They have the registration certificates in the corresponding public registers according to the activity carried out by the entity (Registers of the National Office of Statistics and Information and the National Office of Tax Administration, among others).
There is documentation that approves the position template, the same is Resolution No. 1 of 2014, as well as the organization chart of the entity, which correspond to the organization structure of the entity and its needs.
Processes, activities and their managers identified, based on the entity's functions, to fulfill the established objectives.
It is prepared and approved by Gran Caribe Headquarters, the manual of procedures and internal operation, where the procedures to be followed in each of the fundamental processes are listed and where the functions and relationships between the areas and work positions are established with the processes and activities that are developed for the fulfillment of the entity's work objectives, as well as the authority and responsibility of the different work positions, being approved by the Head Office.
The Government's information system is applied, in accordance with the provisions of current legislation, the mandatory standards issued by the National Standardization Office apply to the processes that require it, they also have legal advice and follow-up on opinions on aspects legal aspects of the management carried out by the entity.
In the cases that proceed, the agile and timely processing of legal claims for the recognition of debts between the parties to the contract is controlled and required. There being unenforced collection obligations, payment obligations recognized by the debtor entity, the court has been urged and in the corresponding process of not documenting the obligations, measures have been taken before favorable and unfavorable court rulings.
The different types of contracts derived from labor, monetary and mercantile relationships, agreed with natural and legal persons, are prepared and controlled, according to what is established in the current regulations. They have quality in the process of negotiation, preparation, signing, execution, claim and control of contracts.
The computer security plans and the security and physical protection plans are prepared and updated in accordance with current legislation.
The cadres, officials and designated workers have the appointment resolutions and the workers with the employment contracts, they have defined in writing their duties, rights and material responsibility for the resources they guard.
There is evidence of the process of delivery and reception of the position and the plan of measures prepared to solve the deficiencies and limitations present in the organization is rigorously evaluated.
They have the provisions that approve the constitution of the governing, collegiate and advisory bodies such as: Purchase Committee, Quality Committee, Board of Directors, Control Committee and Committee of Experts. The minutes of their respective meetings are kept.
The structure and organization of the economic and accounting area correspond to the mission and the volume of operations to guarantee the review processes on the preparation, execution and fulfillment of the assigned Annual Budget, the veracity of the administrative information, the fulfillment of the duties Formal Tax System and economic-financial analysis and its situation of technical and organizational changes. The financial and economic situation of the hotel is analyzed monthly by the Boards of Directors, evidenced in the Minutes of the same, which are drawn up in consecutive order defining the points to be dealt with according to the themes of the year, appearing the agreements with compliance dates and those responsible, giving follow-up to them at every meeting.
The management systems applied by the entity are integrated and harmonized with the internal control system.
Standard: Policies and practices in human resources management:
They have the procedures, policies and practices in human resource management for the recruitment, selection and approval of personnel.
The minutes of formation of the basic labor justice bodies are kept, this lies in Mixed Companies, and those corresponding to the assemblies with the workers for the analysis of efficiency.
A worker health and safety program is drawn up and followed, as well as the procedure for welcoming new workers.
MANAGEMENT AND RISK PREVENTION
Standard: Identification of risk and detection of change:
The group is formed to identify and analyze the risks that may affect the fulfillment of the objectives and goals of the organization, whether external or internal, classified by processes, activities and operations of each area, with the participation of the workers.
The risks identified in each process, activity and operation that affect compliance with the entity's objectives and goals are periodically analyzed.
Standard: Determination of control objectives:
In meetings chaired by the highest authority, the union leader, representatives of political organizations and workers, a diagnosis is made using the report issued by the working group and the control objectives are determined.
The minutes of the meetings by areas with the workers for the determination of the control objectives are kept and were preceded by a work of information and preparation of the workers.
Standard: Risk prevention:
There is evidence of the preparation, approval, evaluation and systematic updating of the entity's Risk Prevention Plan, by the collegiate management body and the workers, leaving documentary evidence through the minutes of the meeting, based on the most relevant risks contained in the respective Risk Prevention plans of the areas and considering self-control as one of the measures, guaranteeing due transparency and sufficient control in the processes of access to training and / or training actions and over the results provided in accordance to existing regulations.
The most relevant risks related to computer security, security and physical protection, the protection of Official Information in the entity and ethical behavior are considered. Furthermore, the identified risks and the prepared Prevention Plan identify the existence and effectiveness of the counterparties.
The financial risks in the hotel are managed for decision-making, considering the following: losses due to the impact of the change in the exchange rate policy, losses due to changes in prices, losses due to changes in the interest rate and others.
CONTROL ACTIVITIES
Standard: Coordination between areas, separation of tasks and responsibilities and levels of authorization:
The division of functions and the counterpart in the essential tasks and responsibilities are guaranteed, related to the treatment, authorization, registration and review of transactions and events, increasing the supervision and control actions, in cases where the division of tasks is not possible. and responsibilities.
The familiarity relationships survey has been carried out and in this they are identifying the relationships that affect the counterpart. In addition, the action plan to solve family relationships when the counterpart is affected is drawn up and followed.
The responsibilities by areas and the levels of authorization defined in the Organic Regulations and in the Operation Manual, as appropriate, as well as the authorized firms for the different transactions and operations of the entity were verified.
Rule: Documentation, timely and adequate registration of transactions and events:
The transactions, operations and facts have a demonstrative, reliable documentary support that guarantees its traceability.
The cost system implemented corresponds to the type of activity carried out by the entity and includes: areas of responsibility and defined cost centers, methods of calculating the cost used, analysis of cost deviations and their application in decision-making and cost and price tokens.
The results obtained in calculating the financial ratios (liquidity, activity, indebtedness and profitability) with the entity's real situation are used as management tools.
There is good financial management of inventory. In addition, the inventory structure and its respective cycles correspond to the needs of the entity. It has a stock of idle and slowly rotating inventories.
Knowledge of the collection and payment instruments used is demonstrated by making an analysis of the age of the accounts receivable and payable, guaranteeing that their balances are reconciled and documented.
The accounting procedures comply with the internal control standards of the accounting subsystems in force by the Ministry of Finance and Prices.
The effectiveness of internal control is verified according to the specifications defined in the following accounting subsystems without detecting irregularities in:
- Cash on hand Cash on Bank Inventories Fixed Assets Payroll Investments Fuel and other energy carriers Shortages, losses and surpluses Costs
The irregularities are located in:
- Accounts Receivable: the various sub-major accounts receivable are not kept up-to-date and have aged balances. Accounts Payable: the sub-major accounts payable to suppliers, the various accounts payable and those of Anticipated Collections and present aged balances.
Standard: Restricted access to resources, assets and records:
The security procedures carried out to protect and conserve the resources and records that constitute evidence of administrative acts are complied with, the levels of access to the areas and dependencies are complied with, and the persons authorized to access the resources, assets, records and vouchers render account of its custody and use.
Standard: Staff turnover in key areas:
There is no rotation plan for the personnel in charge of the tasks with the highest probability of irregularities. There is no documentary evidence of the systematic rotation of personnel in these tasks.
When there are few workers and it is difficult to comply with this rule, the frequency of supervision and control actions increases.
Standard: Control of information and communication technologies:
Written policies, standards and procedures for planning, executing, evaluating and controlling the use of information technologies are fulfilled to achieve the entity's objectives.
Compliance with the Computer Security Plan is verified for all the procedures it contains.
The financial accounting system used by the entity (E-Hotel) has an updated certificate issued by the authorized entity (DATYS).
Likewise, surprise inspections are carried out to detect unauthorized withdrawals or loans of computer assets and to verify the proper control and use of computer and telephone services.
Standard: Performance and performance indicators:
Qualitative and quantitative indicators are established to measure staff performance. In addition, written procedures for how to apply performance and performance indicators exist and are followed.
INFORMATION AND COMMUNICATION
Standard: Information system, flow and communication channels:
An information management system has been implemented that guarantees the preparation of the entity's information flow diagram, defining the: sender, receiver, communication channels, frequency, format, storage and support of documents and databases. relevant data.It also guarantees the procedure to be carried out with the official classified information of the entity, identifying its content, retention periods and other specific aspects and access to the information is determined.
The entity has and complies with the institutional communication program that defines the informative content, its origin, destination and periodicity, and basically enables its management.
The information management system achieves that both downward, upward and horizontal communication meets its objectives.
Standard: Content, quality, responsibility:
Those responsible for information and communication are defined and the established policies are applied to guarantee the quality of the relevant information, its organization and conservation, allowing it to be audited at any time.
There is an adequate information discipline that guarantees compliance with what is established for the information system and the exchange between its members.
Standard: Accountability:
Good practices are applied for the treatment of documentary evidence provided for in Cuban archival legislation and the rules of the document management system that allow, in a transparent and responsible manner, the accountability of the cadres and officials, who in turn report on comprehensively about the integrity of its management and decision-making, according to the approved schedule, being evidenced in the minutes.
SUPERVISION AND MONITORING
Standard: Evaluation and determination of the effectiveness of the internal control system:
The internal control system implemented corresponds to the principles and characteristics that are endorsed in Resolution No. 60/11 of the Office of the Comptroller General of the Republic.
The General Self-Control Guide is adequate to the conditions and characteristics of the entity.
The results of the internal and external control actions with the workers are analyzed and the corresponding plan of measures is prepared. Likewise, self-evaluations of the internal control system are carried out periodically and documentary evidence of its analysis is left with the workers.
Permanent control over the activities that they carry out themselves is carried out by the workers. The application of the Internal Control System in the subordinate units is controlled. The record of control actions is established in accordance with current legislation.
There are internal auditors in the entity and they have prepared an internal audit plan that is followed.
It is possible to measure the impact on the control and fulfillment of the tasks, confirming greater quality, motivation and better work results, as a result of the change in the mentality of managers regarding the development of their functions from the implementation and updating of the model of economic management approved in the Guidelines of the Economic and Social Policy of the Party and the Revolution.
Standard: Prevention and Control Committee:
The Prevention and Control Committee, chaired by the Assistant Director General, is constituted by means of a legal document.
The composition, permanence and periodicity of the meetings of the Prevention and Control Committee are defined by the highest authority, through documentary evidence, as well as the schedule of meetings and the topics discussed, agreements adopted and their follow-up in the work sessions. The minutes and agreements are kept as evidence of the analyzes carried out.
Cases of indiscipline, illegalities and alleged criminal acts and corruption are analyzed with the required rigor. Relevant disciplinary measures apply.
The facts or conduct that may constitute crimes are disclosed to the corresponding authorities, regardless of the disciplinary measure that is decided to impose on the offender.
In order to offer a rating to the existing internal control in the entity, a scale was applied where each checked aspect is evaluated as follows: the positive responses are divided by the number of questions for each component and the quotient is multiplied by one hundred and According to the results, the following qualification criteria are granted:
- Satisfactory if you get between 91-100%, Acceptable from 81-90%, Poor between 71-80%, Bad less than 70%.
The results by component are as follows:
- Control Environment is rated as satisfactory with 100.00%. Risk Assessment is rated as satisfactory with 100.00%. Control Activities is rated as acceptable with 84.84%. Information and Communication is rated as satisfactory with 100.00%. Supervision and Monitoring is rated as satisfactory with 100.00%.
In general, the internal control system implemented in the entity is evaluated as acceptable with 96.97%.
Conclusions
- To achieve strict control of all its assets, to prevent fraud and mistakes, to promote a more efficient operation by increasing the efficiency of administrative management, companies implement the internal control system. The application of this Self-Control Guide Adequate to the characteristics, structure, mission and work objectives of the Hotel Meliá Cayo Coco, it effectively contributed to achieve better results in the efficiency and effectiveness of administrative management. 5 localized deficiencies were detected in the Control Activity component, which They are related to accounts payable and receivable and their aging balances, the existence of idle inventories and the non-existence of a plan and evidence of systematic rotation of personnel with greater responsibilities.
Bibliography
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CASTRO Ruz, R.: "Closure of the IX Congress of the Union of Young Communists", Granma Newspaper, April 6, 2010. p. 13.
Internal Check and control ”, in Cuba in the 40s and 50s, is considered internal check as“ internal verification ”or internal accounting control and internal control as“ internal control ”or internal administrative control.
Communist Party. Economic Resolution of the V Congress of the Communist Party of Cuba. 1997. Granma Newspaper, Havana, November 7, Tabloid, p.4.
Collective of Authors. ” Mexican Institute of Public Accountants, "Examination of Internal Control" Bulletin 5 of the Audit Procedures Commission, Mexico. 1957. p 3.
GÓMEZ Morfin, J. The Internal Control of the Company and the Internal Audit. Mexico: Institute of Internal Auditors of Mexico. Internal Control in business. Mexico: Economic Culture Fund. 1968. p. Four. Five.
WILLNGHAM J. SIAS publication, number 1 of the Institute of Internal Auditors. 1983. p. 12.
COSO Report, 1997. Available at: International.Business.Consultants.network. Coso Report. www.netconsul.com,. p. 25.
Ministry of Finance and Prices. Resolution No. 297 of the internal control system. November 14, 2003. p.4.
General Comptroller of the Republic. Resolution 60 "Rules of the internal control system" Chapter 1, General Provisions Article 3. 2011. p 1.
DE MIRANDA González, Antonio and TORRAS, Oscar. "Business Audit" Volume I. 2006. p 200-215.
MEINGS, WB Principles of Auditing. Volume I. Sixth edition, (sl), (sn) 1976. p-316, 320.
CASHIN, JA; NEUWERT, PD and LEVY JF Encyclopedia of Audit. Barcelona: Editorial Group Oceano, 1985. p. 350.
COOK, JW and WINKLE GM. Audit. Mexico: Latin American Printer and Publisher. 3rd Edition, 1994. p. twenty.
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