Operational Audit for Private Clubs
Written by Richard C. Day, Chairman & CEO, The Hospitality Resource Group International
Today, in the highly challenging and competitive atmosphere of the private club industry, it is essential that forward thinking clubs initiate and utilize an operational audit. An audit provides a built-in assurance that the all-important step of evaluation will take place before a club makes any additions to a process or a system. It is an organized review of a club’s operating procedures, with the result being a complete audit questionnaire, which can be administered by internal or external auditors. Further, it is an investigative tool by which a club’s management may discover areas of weakness and thereby find ways to improve them
An audit of this type can be of particular assistance to club employees who have little or no formal training in management techniques or food and beverage operations. It raises a consciousness amongst staff that increases attention to detail. It also increases the confidence of club directors and management by assuring them that the club is functioning properly. The operational audit includes a review of existing internal controls to determine whether the club’s resources are being used in an economic and efficient manner. It also includes a review of the club’s financial reporting procedures and a determination of how well it follows its written policies.
For the club that has a vague feeling that everything is not right but cannot identify any particular problem, the operational audit will provide insight into areas of weakness. Even if the club does not feel that there is something wrong, the operational audit may provide greater confidence that everything is operating as it should.
It is critically important for club directors and management to conduct these audits on a regular basis to ensure quality in every facet of their operation. They are a tool to ensure continuing excellence.
It is also important to take the time to tailor the audit questionnaire to your individual club, considering the club’s unique characteristics. Even though it would be unusual if all the questions were relevant to a specific property, inappropriate questions should be deleted so as not to distract from the audit’s usefulness. Left in, individuals involved in the audit could grow used to skipping the questionnaire itself. Specific questions supporting the operational strategy and objectives of the club should be added. These strategies should also consider long range planning issues as well as membership marketing and retention programs.
Personnel at every level of the club should be involved. An additional benefit of involving all personnel in the operational audit process, may be to uncover human resource issues that would otherwise go unnoticed.
In summary, twenty to thirty years ago, many of the issues managers must face today were not even thought of. Managers must be provided with the time and tools to effectively and efficiently perform their responsibilities. An operational audit is one of the wisest investments a club can make in its future.