CASE 2. Returning Unspent Money Jerome is running Children's Joy Foundation, Inc. to help street children. He receives a government grant of one million pesos for a project to teach out-of-school youths who live in the streets of their city. A year passes, Jerome managed to utilize only Php 500,000 from the grant. Despite his best efforts, he couldn’t convince many poor children or their families to join his program. As per the grant rules, Jerome has to return all the unspent money back to the government by the end of March 31st. But his colleague Raniel says: “If we honestly return the remaining Php 500,000 from the grant, the government officials may think that we are amateurs and ineffective in running the foundation, and they may substantially reduce our grant next year or even worse, they may not give us any project in the future. We should ask for the help of our chief accountant to manipulate our account books and reflect that majority of the grant was utilized for education. Many other foundations are doing the same thing. There wouldn’t be a problem since nobody will raise an objection, as long as we offer the 20% of the remaining grant to our accountant. Although it sounds unethical, we will not use the money for our personal needs and we will use it for the street children only. Hence, our act is fully ethical and moral.” QUESTION: What should Jerome do with the money?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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CASE 2. Returning Unspent Money Jerome is running Children's Joy Foundation, Inc. to help street children. He receives a government grant of one million pesos for a project to teach out-of-school youths who live in the streets of their city. A year passes, Jerome managed to utilize only Php 500,000 from the grant. Despite his best efforts, he couldn’t convince many poor children or their families to join his program. As per the grant rules, Jerome has to return all the unspent money back to the government by the end of March 31st. But his colleague Raniel says: “If we honestly return the remaining Php 500,000 from the grant, the government officials may think that we are amateurs and ineffective in running the foundation, and they may substantially reduce our grant next year or even worse, they may not give us any project in the future. We should ask for the help of our chief accountant to manipulate our account books and reflect that majority of the grant was utilized for education. Many other foundations are doing the same thing. There wouldn’t be a problem since nobody will raise an objection, as long as we offer the 20% of the remaining grant to our accountant. Although it sounds unethical, we will not use the money for our personal needs and we will use it for the street children only. Hence, our act is fully ethical and moral.” QUESTION: What should Jerome do with the money?

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