Methodist Ladies College Case StudyMethodist Ladies College, Perth (MLC) case study is based on environmental management accounting practices and intends to demonstrate how these practices can lead to favourable environmental and financial outcomes. MLC teaches kindergarten to year 12 students and is a daycare boarding school. The case study addresses several objectives and it has done so by way of organizing the tasks into three systematic phases. Three phases of the case study and their associated objectivesPhase I was to check environmental impacts vis-à-vis MLC's operations and how these impacts are treated within the management accounting system currently in practice at MLC.
The first step in this direction was to shortlist key environmental impacts and these included waste management; paper, water, and energy usage. While identifying these key environmental impacts, low levels of responsibility were accounting for overhead costs lost because of the existing accounting system. The system was lacking in terms of analysis or classification. Clearly, the existing system could neither identify revenue opportunities nor could it identify costs incurred on overheads; which led both of them to be not recorded anywhere.
Phase II took up the tasks of identifying both revenue opportunities and cost incurred. It further ascertained as to what changes would be required to be made in the existing system in order to reflect these two parameters, with an intention to improve profits and reach environmental outcomes that were better than the previous ones. This was done for the environmental management accounting (EMA) to meet its desired objective of identifying these two parameters, and make them accountable in a way that the stakeholders can be fed with correct information.
The focus of MLC's EMA were primarily transactions related to income, expenditure, and capital works and the system changes that were proposed to meet these objective included creation of activity sub-centers and responsibility centers, incorporation of record keeping methods, and drivers for apportioning costs to responsibility centers, amendment in the income and expenditure report formats to suit the changing needs, and inclusion of life cycle costing (LCC) to streamline decision making process. Following these changes in the system, Phase III was initiated for trial to check how the changes made impacted the whole system and what were the perceivable difference in the results achieved, which indicated how EMA was an effective contributor towards proper management, better accountability towards stakeholders, and a deterrent towards sub-optimal decisions that were previously taken.
This is because the changes led to the availability of correct information and identification of opportunities that was not the case previously. MLC’s Blackbaud school accounting and reporting systemBlackbaud is known for its services and software that it provides particularly to non-profits. The company claims it nurtures school data so that schools can nurture students.
The idea is to give school staff and support convenient access and retrieval facility on student data whenever they need it (Blackbaud. com, n.d. ).MLC uses this system for registration of students, their admissions and general records, and accounting related to non-profit organisations. Thus at MLC, it is primarily meant for reporting and accounting. But it has limited output with regard to management accounting reports since balance sheets, general ledger, income statements, chart of accounts and trial balance that it provides as an output have to be processed further manually to provide cash flow forecasts and income and expenditure spreadsheets.