The internal control structure is very simple but effective. Transaction processing at Accounts department is the first level of control where all aspects of validating a transaction from budget provision, adequacy of requisition, supporting documentation, authorization and approval, vendor account history etc. are checked before entering a transaction in the Accounting system.
Second level of control is a system of quarterly audit. An independent auditor team thoroughly audits each and every payment and the supporting documentation. The auditor checks each aspect of control from adequacy of requisition, documentation, and authorization and approval perspective at each stage of transaction to ensure propriety of the payments.
Observations / queries raised by the auditor are given back to Accounts Department. Accounts department follows up with the concerned section to properly address auditor’s queries by providing the requisite additional supporting documentation, authorization or corroborating evidence.
Finance Officer monitors the correction of deviations, if any, to update the Finance Committee and Sponsors through Board of Governors.
Finance Officer randomly checks and queries on the payment before payments are prepared for final sign off from the authorized signatories. Such segregation of duties acts as a strong control over financial transactions. Apart from this, there is also a system of random testing of transactions / expenses as and when a need is realized to review the expense pattern in a particular segment of cost. Such reviews are done internally and informally to initiate necessary action, wherever required.
Once a year External Auditors critically review the books of accounts and analyse the receipts and payments as per the applicable auditing standards and statues to ensure proper and timely compliance of applicable statutory and regulatory requirements. External auditors discuss observations and findings with the Accounts team on a regular basis to seek additional information and explanations to satisfy themselves on the financial statements. The Auditors periodically discuss the audit progress with the Finance Officer to address bottlenecks, if any, for the completion of audit as per the plan. Audit adjustments, as advised by the auditors are passed in the books of accounts to the satisfaction of the auditors. External audit is closed with a final debriefing meeting wherein all necessary explanations and justifications are provided to the auditors. Based on auditor’s and Sponsor’s satisfaction, audited accounts are signed off by auditor and the Sponsors.