Day 3
Facilitator: Mr. Shabbir Ahmed Chowdhury
Remarking 26th March is the Independence Day of
Bangladesh, the Course Coordinator started the 3rd day session with
thanks to the participants. He checked with all participants if they are okay
physically and mentally. Then he explained little changes in the program schedule.
Check in
by Participants
Course coordinator requested participants to check in to today’s
session by saying a few words on yesterday’s learning. In this regard,
following points came from participants:
- It was a good day and I
learnt so many new ideas on MF.
- Learnt delinquency
management.
- Yesterday was good,
hope today will go fine.
- Thanks to Bangladeshi
in their independent day.
- The day was very good.
- Good exercise on
delinquency.
- I learnt many
information, I also like to learn more today.
- Thanks to Bangladeshi
in their independent day.
- Yesterday was
interesting to me.
- Looking forward for new
learning.
- We had good sessions
yesterday.
- I learnt about
assessment and feedback techniques of training sessions.
- Thanks to Bangladeshi
on their independent day.
- My health improving
today, hope to have active participation.
- The contents were
relevant to me.
- Participation improved
compare to 1st day.
- Time was short.
- Facilitators are very
experienced on the topic discussed.
Session 2:
Internal Control
Facilitator: Mr. Mohamad Nazirwan
Facilitator started the session by asking participants why internal
control is important. In response, participants mentioned the following points:
- Control fraud
- Ensure transparency
- To streamline the
organization
- For achievement of
target
- Ensure progress
- Attain efficiency
- Ensure sustainability
- For better performance
If
internal control is not established what would happen?
Facilitator
asked participants what happens if internal control system is not developed. He
asked participants to give some examples from their own experience.
Participants expressed their experiences on the consequences due to absence of
good internal control system. They mentioned that in absence of internal
control system risks increased in a organization.
Facilitator
mentioned that MF is a business and therefore NGO-MFI should be aware of
minimize risk in their MF programme. He mentioned that NGO-MFI could mitigate,
and anticipate risk being the internal control system is established.
Discussion also
held explaining how much NGO-MFI can effort loss and how much they can accept
risks. Next on participants were asked to identify 3 kinds of risks from their
own experiences.
Types of Risks
Participants in small groups identified several
risks associated with MF programme of NGOs. The group views were:
- Natural risk
- Security risk, can not
enter to the rural area
- Internal stability,
corruption
- Cash transportation
- Admin risk
- Lack of management
- Risk of fraud by the
participants and the staff
- Absence of MIS
It was explained
that Business exposure – Control = Business risk (accepted risk)
Risk and its very nature
Risk and its
nature were discussed. Facilitator mentioned the following point to explain the
nature of risk.
- Every activity is exposed to risk
- Risk must be mitigated
- Internal control is must to mitigate
risk
Facilitator was then explained the categories of risks, which are of
two categories:
- Internal risks
- External risks
Showing PP Slide, he also explained 5 different types of risks under
internal and external categories.
- Institutional risk
- Credit risk
- External risk
- Financial risk
What is internal Control?
Facilitator showing PP slide explained the internal control giving
relevant examples. He mentioned that-
Internal Control (Ex-ante and Ex-post):
- To verify the efficiency
and effectiveness of the operations
- To assure the
reliability and completeness of financial and management information
- To comply with
applicable laws and regulation
Category of
Control
Facilitator
also explained the different ways of control system by showing PP slides.
- Preventive – to prevent
problems
- Detective – to detect
problems
- Corrective – to correct
detected problems
- Repressive – to impose
sanctions on guilty parties
Requirements for internal
control system establishment
- Capable and trusted employees
- Separation of authority
- Continuous control
- Clear job description
- Automatic control mechanism
- Accurate and immediate accounting
report
- Proper equipment for physical
security
Built-in
Internal Control System
- Segregation of duties
- Limits
- Signature requirement
- Physical control
- Crosscheck
- Dual control
- Computerized control
Audit
Reporting
Audit finding
sheet:
Condition-what
the problems is?
Criteria – What
is should be?
Cause
Impact –
Potential loss
Recommendation -
special investigation, repressive or preventive
Report to
management:
Satisfactory -
Satisfactory with qualification - Unsatisfactory
Institutionalising
§
Scale of operation:
Small, Medium and Large
scale MFIs
Fully regulated, partly or unregulated
Simple, complicated
Responsible and capacity building
Best
Practices at BRI-Unit System
At this stage,
the facilitator explained the internal control system of BRI and shared his own
experiences being associated with this organization for long time.
Supervisory Framework:
- Business development and risk management
- Head office, Regional office, Branch
- On-site and off-site
Internal Control Framework:
- Regulatory fulfilment and compliance
- Built-in the system and procedures and products
- Mobile internal control and regional audit
- Internal office
- Remove vague notion and forces the
organization and its staff to be quite specific about the products or
services they intended to offer;
- Compel the organization and its staff to
analyse the market and competition;
- Force to determine the money will be
required to start and other details of operation;
- Business plan is essential for fund
management of the program/business;
- Set specific target and milestones for
the business/program and thereby makes the employees target driven;
- Make the organization and its staff
systematic in operating the program/business;
- Ensure accountability and transparency;
- Make the organization and its staff
careful about cost and achievement;
- Make the staff dynamic and performance
oriented;
- One can see the last point of the route
sitting at its starting point;
- Ensure optimum use of material,
financial and human resources;
- Reduce the risk of failure;
- Ensure better integration and
coordination among key variables and personnel that influences success and
failure of the business or project;
- Help in monitoring the program/business
compare to the original plan;
- Help in decision making in case of any
deviation occurred in implementation stage;
Defining customer satisfaction
Proving Impact
Improving
Review
of the Day 3
and Participants’ Feedback
Facilitator: Mr. Shabbir Ahmed Chowdhury
In the last session of the day,
participants were asked to checkout making comments on today’s performance and
giving one most important learning they learned from
today’s sessions. Before conclusion of the session, participants’ comments were
sough on today’s performance. In response participants and the facilitators
mentioned the following points: