Controls at the Bellagio

Controls at the Bellagio Casino Resort

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Key Issues

– Bellagio's management control systems dominated by action and personnel controls, rather than results controls --While the managers may seem justifed in being proud of control system, one needs to keep in mind potential bias

Controls Employed by the Bellagio

-Action -Personnel -Cultural -Results

Action controls

Physical --Strict separations of duties --Constant observation and supervision of gaming area --Stocks of cash and chips are stored in casino cage --Tight security and supervision in count room

Action Controls (cont.)

Administrative -Daily independent cash counts -Stringent controls on recording of receipts and disbursements -Strict procedure to transfer cash /chips to/ from nonimprest funds -Daily reconciliation are performed. -Aggressively pursue collections

Action Controls (cont.)

Preaction reviews –Stringent and frequent auditing procedures Action accountability --Timely analysis of deviations --Strict controls over issuing credit / limits --Documents serially numbered

Action Controls (cont.)

Redundancy --Back-up people or machines available in case of some failure --Recording of activities by CCTV --Minimum of 3 persons in count room

Personnel controls

-Hiring experience dealers -Performing employment screenings independent of registration process -Licensing of casino personnel -Training and retaining well-qualifed employees

Cultural controls

-Controls legally mandated because the gaming industry is highly regulated and highly competitive -Report suspicious activities related to money laundering -Report any cash transaction in excess of $10,000.

Results controls

-Variance reports generated using estimated amount and reconciled with actual data; investigation for deviation on daily and monthly basis -Results measures considered in bonuses paid to management personnel

Problem

-Excellent system of controls over cash no guarantee of good management...