MFI Internal Audit and Controls: Trainer's Manual
This toolkit primarily looks at risk, risk management, and internal controls from an operational perspective in an MFI. It provides practical ways for MFIs to approach and implement effective internal control systems and internal audit functions within their institutions. The toolkit is built on an integrated internal control framework that advocates a strong role of the Board and senior management in the internal control process, including the Internal Audit function. The document argues that a strong control environment should be promoted from the top for effective implementation and adherence to control policies and procedures within the MFI. The toolkit also provided key recommendations for preventive controls:
- Effective human resource policies and systems that motivate staff, control policies and procedures designed to promote efficiency, effective service, and the prevention of loss of assets, capital or reputation of the MFI;
- Reliable information systems both accounting and client tracking systems (for loans and savings) that provide timely, reliable and accurate information for financial reporting of the MFI.
The document also emphasizes the internal auditors role in the entire process. This role includes testing controls, systems and procedures for compliance and effectiveness, identifying any new risks, and communicating the results and findings to senior management and the MFI board of directors.
