Funds and customer welfare(accounting) The Interchange Outer East (IOE) are a not-for-profit business providing disability support in Melbourne's eastern suburbs. One of their key visions is 'to enhance family wellbeing' (IOE website). This indicates the customers are their main priority. Prior to 2011, the IOE was fully government funded, however since the introduction of the NDIS in 2011, funding is now directed through the patient, who is able to choose what business they wish to use. This means increasing customer surplus (Gans, J, 2018) is more important than ever, as they need to compete with other companies. The companies last 4 financial statements (IOE website) show a strong annual increase in total income and end of year cash flows indicating the company has successfully diversified itself from the rest. However, at the end of 2021, the IOE had $11.5 million of cash on hand, an almost 50% increase on 2020 and significantly more than any other year. What do the IOE plan to do with this money. As a not-for-profit business, they are expected to use this money to improve their services. The IOE has just 139 permanent employees out of 903(IOE website) meaning there is serious potential for short staffing issues in the near future, especially with the pandemic causing a 7.2% drop in average annual earnings for Australians (aph 2021), it is more likely than ever that volunteers and casual workers will need to find more employment elsewhere. If this were to happen, customer welfare at the IOE would decrease significantly, leading to massive accounting issues for the IOE. Majority of their current expenses would remain, but they would have significantly decreased income from customers. The $11.5 million of cash on hand indicates the IOE are not doing enough to maximise customer welfare despite it being stated as one of their main values, raising concerns surrounding the integrity of the business. Recommendation- The IOE have much higher levels of cash on hand than ever before and therefore should use this money to fund customer welfare. There are many ways in which they could do this, including hiring more full-time staff to decrease the chance of sudden staff shortages, investing in more medical equipment, better training or better facilities. This would ensure long term sustainability for the IOE in terms of consumer surplus, which due to the IOE being a not-for-profit business, is the most important factor. Publications. (n.d.). Interchange Outer East - Disability Support Service. https://www.ioe.org.au/about-us/publications/ Gans, J., King, S., ttyford, M., & Mankiw, N. G. (2018). Principles of Microeconomics: Australia and New Zealand Edition. Cengage AU. Commonwealth Parliament; addressffiParliament House, C. (n.d.). COVID-19: Labour market impacts on key demographic groups, industries and regions. Www.aph.gov.au. Retrieved May 25, 2022, from https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp2021/COVID-19- Stat_Snapshot# :~: textffiWages%20fell%20more%20substantially%20for