Corporate Branch Control and Operations Training: Audit Review

This report provides a comprehensive overview of a branch control and operations training program, focusing on the objectives, functional approach, and scope of branch control. It details the incident reporting process, including the escalation of operational and control errors. The report presents an analysis of internal audit ratings, categorizing them as Meet Expectation, Satisfactory, Need Improvement, and Unsatisfactory. A significant portion of the document is dedicated to the summary of audit findings, covering areas such as cash management, system access, power of attorney, account data, daily vouchers, cards registers, cash area security, stamps, standing instructions, manager's cheques, stop payments, income/expense ledgers, clearing and cheque book operations, organization charts, service level agreements, remittances, and account opening procedures. Each finding is detailed, highlighting non-compliance issues and providing recommendations for corrective measures. The report concludes with a summary of the importance of branch control and operations training in the banking system, emphasizing the significance of the incident reporting process, audit ratings, and adherence to policies and security protocols.

Branch Control
and Operations
Training
Target Group :
Corporate Branch
Presented By :
Branch Control Team

Contents
 The session will cover:
 Introduction of Branch Control Unit
 Incident Reporting Process (IRP)
 Overview of Standard Audit Ratings
 Repetitive Audit Observations
 Related Policy & Procedures
 Corrective measures
 Question & Answers

Branch Control Department
 Introduction : Branch Control is the supervisory function to monitor and guide branch’s activities.
 Objective: Ensure compliance with bank’s policies and procedures and Central Bank’s guidelines as
well as existing local laws, rules and practices over time in all areas impacting branches operations.
 Functional Approach: Mix of approaches to monitor and control branches.
 Scope : All areas of branch activities are under scope of review

Incident Reporting (IRP)
As per Bank’s Operational Risk Policy, Branches are instructed to report any kind
of operational/control errors & mistakes to operational risk department through
their functional heads for further investigation and validation.
Any detected observation or incident that might expose the bank to an operational
/ financial / legal / reputational risks and that was proved to be due to negligence
or non-abidance by Policies and Procedures, the matter will be escalated, and the
necessary action will be taken towards the violators responsible for this and their
supervisors if they failed to play their monitoring and control role.

Incident Reporting Process Map

Internal Audit Ratings
Meet Expectation -No important issues or
weaknesses in Internal Control
Satisfactory -Less than 40% of total audit issues
are of ‘High’ overall significance.
Need Improvement- 40% or more of total
identified issues are of ‘High’ overall significance.
Unsatisfactory -More than 75% of identified issues
are of ‘High’ overall significance.

Corporate
Branch Audit
Rating 2021 Unsatisfactory
Current
status of sub
observations
Risk Rating
No of
observation
s
Rectificatio
n Rate%
High Moderate Low
Rectified 38 6 - 44 44%
Partially Rectified 12 - - 12 12%
Not Rectified 43 2 - 45 44%
Total 93 8 - 101 100%

Summary of Findings
1.Cash Management 13 Deposits (Call and Fixed)
2. User Access Rights 14.Standing Order
3.Account Data in CBS and Amendments 15. Debit and credit reverse entries on the income/
expense’s ledgers:
4. Account Opening Procedures 16.Cheque Book Operations
5. Power of Attorney 17.Operations under scope of Deputy Branch
Manager
6. Daily Vouchers & Daily Reports and Cancelled
Transactions
18.Minor Accounts
7. Temporary Overdrawn Accounts and Overdrafts 19.Organizational Chart and Job Descriptions
8. Card Registers 20.Service Level Agreements
9. Cash Area, Security Issues and Safe keeping of
documents
21.Transfers
10.Keys, Stamps and combinations registers 22.ccounts Payable\Receivables
11. Standing Instructions 23. Credit Balances in Facilities
12. Operation Under scope of Deputy Manager

Cash management
End of the day cash balancing process
G4S Teller movements inside cash area
Cash box balances and Cash payment entries
Custody of old foreign currencies
Cash counting machine software upgrades

System Access and Authority
Not complying user role-based system matrix
System access functions contradicts with staff designation.
Over authority approving limits to staff
Outsourced staff’s having system accesses

Power of Attorney
 Not feeding the Power of Attorney in the core banking
system
 No Power of attorney registers maintained

Power of Attorney
1. Ensure to feed the correct expiry date in CBS (Five years from the date of issuance) and the same also mention
as remarks in signature screen as well as the expiry date of attorney’s signature.
2. In case of receiving POA issued by court / Minor Affairs for minor account operating by third party, the expiry
date will be five year or the date of reaching the minor eighteen years old which is coming first.
3. If the customer requires the validity of the PAO to be less than five years, then the branch must comply with
the customer instructions and add the expiry date in the POA form duly signed by the customer taking into
consideration to feed the expiry date in the CBS correctly.
4. This new arrangement should be applied for the new received POAs effect from Sunday, the 13th October 2019
onwards.
5. The expiry date of Existing POA will remain as it is without change till you received new instructions.

Accounts Data Update and
Amendments
Customer information change requests not updated in core banking
system
Customer information change request missing or not found in
customer mandate file.
Different customer mobile numbers in core banking and internet
bank (IBEBD)

Daily
Vouchers
/Reports and
Cancelled
Transactions
Not printing mandatory control reports
Control reports not signed by DBM/BM
Few reports not assigned to DBM/BM
No supporting documents attached with cancellation of
entries.
High number of cancelled transaction in branch
Office boys was preparing/binding daily vouchers/control
reports without direct supervision from authorized staff
(DBM/DBM).

Temporary
Overdrawn
Accounts
 Non-compliance of account officials
with the approved matrix of credit
approvals at the time of overdraw or
exceeding and as of the amounts of
cheques.
 There are no samples at the branch
for signatures of the authorized
account managers to verify their
validity and they are identical to the
credit approval matrix

Cards
Registers
Registers not reviewed and initialed by branch
officials.
Cards found not recorded in the registers
Cards found exceeded retention period but
without cancelled
Click and captured card details not submitted to
auditors.

Dormant
accounts
/Unclaimed
Accounts
Dormant accounts found with Overdrawn
balances
Over 10 years dormant accounts not transferred to
unclaimed ledgers
Dormant account balance less than QAR 500 and
monthly charged QAR 10 only instead of QAR
200 as per P&Ps
Branch not charged customers dormant activation
fees QAR 200 for corporate customers and QAR
100 for individuals.
Activation not supported by customer requests.

Cash Area
Security
Issues and
Safe Keeping
Documents
Office boys entering cash area during working hours, despite is not
allowed for them to enter cash area or to perform any work as per
DB policy and QCB instructions
Office boys have access cards for cash area door and stores doors
keys despite they are not the authorized officers to enter these areas
No proper safekeeping and control over the documents
Cabinets for cheque books, returned cheques and cards/PINs &
registers without dual control as it opened in early morning and
EOD by single custody (only key) and we noted the combinations
number deactivated as it fixed by sticky tape.
Daily vouchers for several days laying in Binded machine room
without kept the same inside fireproof cabinets under dual control.

Key
/Combination
/Stamp
Registers
Stamps not properly recorded in registers
Stamps in hand ( staff) differs from stamp
recorded under their name in stamp register
Access cards not recorded in registers
Some Key’s not recorded in key registers

Standing
Instructions
Branch fed charges wrongly for corporate customers which
should be QAR (5) between accounts in Doha bank as per
tariff of charges. And not QAR (10).
Branch did not take an action regarding unprocessed SIs by
deleted/cancelled on CBS despite not processed for last (3)
months and more.
Branch not sent notice letters to customers
There are number of standing instruction not executed from
the system more than 3 months

Managers
Cheque  Reconciliation of manager’s cheques is not
done on daily basis by the branch as per
policies and procedures
 Staff who is doing the reconciliation is the
same who is handling the stock and the
issuance
 Managers cheque delivered to non-
authorized person.

Stop
payments
 No customer written request
 Police Report not obtained
 Stop payment charges not recovered
 No signature verification/No receive
stamp placed

Income/
Expense
Ledger Entries
Long outstanding's in related
income /expense suspense ledgers

Clearing and
Cheque Book
Operations
Accounts having non-sufficient balance
under customer account, but branch rejected
these cheques with the reason Effect not
cleared. These accounts not charged with
actual amount of cheque returned charges
(per rejection QR. 500)
 Cheques are returned to customers due to
branch staff mistakes.

Clearing and
Cheque Book
Operations
Process of registering the rejected cheques in the register is not
accurate and efficient, as we found that the stock number is not the
same as per the register.
Register is not reviewed and signed by any of the branch officials
to ensure reconciliation of the undelivered cheques stock with the
register.
One cheque that is delivered as per the register, but the physical
cheques found with the stock.
Branch not ensuring the delivery to the authorized staff of the
company where this should be mentioned in the diary under the
account data in the core banking system.
Branch not complying with policies and procedures, in addition to
regulatory instructions related to cheque book issuance, as we
found in several instances issuance of cheque books for customers
having unpaid cheques as per CIB reports.

Organization Chart and Job Description
The organization chart provided was not updated, as it was
approved in October 2009.
Branch did not maintain a file for the staff job description.
And the same not provided to ensure that all JDs updated and
approved by HR dept.

Service Level
Agreements
No Service level agreement maintained to
organize and determine the items and the
requirement of review, controls,
responsibilities and the time of processing
operations with other departments such as
checking the reports contents ( amendments
accounts data , interest rate changes and
review , …) , block deposits review , OD
process , and follow-up , outstanding items in
the sundry accounts , reconciliation report.

Remittances /
Funds
Transfers
No segregation of duties in handling remittances , as we
found that the transfer request is signed by the deputy
manager and the signature verification of the customer is also
done by the same, which contradicts with the concept of
segregation of duties that should be applied on the
applications.
Despite signature not approved in the core banking system,
but we noted that the branch executed a transfer
Transfer request was delivered by an unauthorized person
whose name does not appear in the diary of the account in the
core banking system.
 Branch is not ensuring that customers are signing on terms
and conditions of the transfers as per policies and procedures
and to prevent any legal issues with them in the future.

Accounts
payable and
Receivables Accounts payable\receivable in the
core banking system, we noted many
entries that need to be clarified and
settled since these are pending since
long time without any action from
the branch to clear these entries

Account
Opening
 Non submission of Renewed CR’s.
 Not obtaining Article of
Associations/Audited Financials for
company accounts
 Opening accounts with incomplete data .
 Data Mismatch from Core banking &
DBanking .
 No/Delay in Scanning Signatures .
 Incomplete KYC forms

Credit Balances In Facility Accounts
While checking the balances over customers credit facilities ledgers (11 OD & 31
SME) we noted there are credit balance for (238) accounts

Cheque Return Report
 Removing the drawer's name from the returned cheques’ report (Credit Bureau)
1.If the returned cheque is cashed from the account of the drawer.
2. If the bank receives the original cheque from the drawer.
3. If the bank receives evidence of the drawer's settlement of the cheque on certain dates.
4. If the bank is notified of a decision/ order by a judicial
5. If the bank receives proof of reporting the loss or theft of the cheque to the relevant security or judicial
authorities

CONCLUSION
 It has been concluded that branch control and operating
training is major aspect in banking system in order to allow all the
procedure as well as it is necessary to consider.
 Also, in the report there are incident reporting process were explained
as well as provided the overview of standard audit rating on the basis
of satisfied, need improvement and not satisfied.
 Further, repetitive audit observation objective of policy, scope of
policy and security system. Then, corrective measure is related to the
System access and authority, Power of attorney, Stamp register

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ASSESMENT
QUSTION &
ANSWERS

SESSION
ENDS
THANK YOU