Updated June 26, 2023
As a global nonprofit organization with thousands of retail stores, Goodwill relies on sales of donated goods for a significant portion of its total revenue. Armanino evaluated the internal control environment to maximize Goodwill’s resources for serving target clients and advancing the organization’s mission.
Goodwill is a global social services organization in the United States and Canada that generates opportunities for people who face challenges finding employment. The organization aims to achieve economic stability and build strong families and communities through job training, career services and other community-based programs. To fund its programs, Goodwill sells donated clothes and other household items in more than 2,500 retail stores and online. As a result of having multiple retails stores, applying accurate and reliable controls over transactions and inventory is an area of critical importance. Each Goodwill location consistently evaluates their controls to better manage their retail sales and inventory which ultimately helps to advance their mission.
Goodwill collaborated with Armanino as part of the annual audits to take a closer look at their retail store controls over the inventory and cash receipt cycles and to recommend enhancements to improve these controls.
Armanino completed a detailed risk assessment and focused on several of the higher risk areas, including an inventory of controls around donated items, cash count, inventory systems and employee work habits. The approach was practical and was conducted in conjunction with the audit test work. By analyzing the organization’s situation and focusing on the higher risk areas first, recommendations were tailored to provide the maximum return to the organization.
Based on Armanino’s and the organization’s input, Goodwill successfully implemented control enhancements in a number of key cash receipts and inventory process areas including:
Enhancing these controls has not only allowed each Goodwill location to better manage their retail stores, but it has also assisted Goodwill in better serving their constituents.
Developing an effective system of internal controls at your organization can be a challenging process. Armanino’s Internal Audit consultants offer guidance and services to enhance the control environment in organizations that range from small businesses to national nonprofits and multinational enterprises. Contact an Armanino advisor today to learn more ways our CFO Advisory Services can help you reduce risk and achieve your business objectives.
