Controls at the sands hotel and casino
INSTRUCTIONS
This case illustrates one approach to control in a high cash-transactions setting where theft is a constant threat. Although the casino industry is in some ways unique. the controls observed in the case may be applicable to other settings. As you read through this case, try to determine which of the controls used at Sands Hotel might be applicable elsewhere, and under what circumstances.
Write answers to the following questions:
1) Analyze the controls at Sands Hotel and Casino using both the COSO and CoBIT Maturity Model frameworks. Organize your answer by examining the control environment and the application controls.
2) Restaurants are also high cash-transaction business. Discuss the controls at Sands Hotel and Casino that would be appropriate at a restaurant.
Controls at the sands hotel and casino
Answer and Explanation
In the Sands hotel and casino, they have tons of controls presented throughout the building to ensure everything runs smoothly. In the Casino they have 1,077 Slots machines, 59 Blackjack tables, 20 Crap Tables, 10 Roulette wheels, 2 Baccarat tables, 2 Big Six Wheels. These are operated in a two-shift basis. It is open 10am-4am on weekdays and 10am-6am on weekends with almost 930 employees in the casino operations. Casino management has broken up the control into two forms, cash and movement of cash in the casino and the operation of table games.
Casino management for cash control in the casino relates to individual accountability for cash and stocks. Each person is held responsible for a specific sum of money. This means that they are required to turn in the sum of money that are responsible for, or they can be fired on the spot. This is important because it ensures that employees will deliver and are being monitored under COBIT’s maturity model and that they are efficient and under compliance under law in COSO’s risks.
Another example of controls in the casino being present is under transfers of chips. There are very strict procedures that have to be followed under this to ensure everything is accounted for including inventory of chips and signing the opener slip as well as copy to incoming dealers drop box. Also, there needs to be counter checks with credit to be approved by checking their authorization limit through the computer terminal. This relates to COBIT’s maturity with having a consistent plan and being organized in order for the casino to function. With COSO’s risks, these procedures minimize risk with having efficient operations and making sure the financial records match each slip.
Casino management for the control of games relates to the NJCCC issuing multiple forms of control to ensure the casino keeps the cash it is entitled to. This means the casino has careful supervision over the games being played and surveillance over players and dealers. Having the temptation for the dealers with all the chips in front of them that could exchange hands very quickly. In doing this, all employees in the casino had to be licensed through the NJCCC. By doing this, it limits COSO risks by monitoring who is working for the casino and having control in seeing the integrity of who is being employed. In addition to this, having surveillance over the tables keeps the risks low by constantly seeing and monitoring to make sure nothing goes wrong.
With COBIT’s maturity model, the casino implements surveillance staff and is constantly keeping a plan and monitoring to make the control of games runs smoothly. Monitoring the results of the casino is a very important indicator of the controls present. The three key indicators are drop, win and hold percentage. With these methods, the hold percentage shows the casino’s profitability, and they look for patterns that should stick. When the patterns are different, they know something is up. This comes back to the monitoring process in the COSO risks to make sure everything runs smoothly and is being looked at for internal control.
These controls can be used in other cash-based businesses like restaurants. Setting up monitoring to see how employees act and to make sure they do not steal from the company should be important to any cash-based business. Also, having a system to cash out and a plan that is consistent so nothing out of the blue happens is important to maintain control in the restaurant. Having documentation slips like in the casino controls proper surveillance over any cash-based businesses. Lastly, making sure that the employees are background checked and under NJCCC compliance.
