Fourth Control Environment

التاريخ

2007-02-07

4)	Control Environment
	a)	Internal controls
		i)	The Bank’s structure of internal controls is reviewed at least once a year by internal and external auditors.
		ii)	The Board provides a statement in each Annual Report on the adequacy of the Bank’s internal controls over its financial reporting. This statement contains:
			1.	a statement of executive management’s responsibility for establishing and maintaining adequate internal control over financial reporting for the Bank;
			2.	a statement identifying the framework used by executive management to evaluate the effectiveness of internal control;
			3.	executive management’s assessment of the effectiveness of internal control as of the date of the financial statements included in the Annual Report;
			4.	disclosure of any material weaknesses in the internal controls (a material weakness is a significant deficiency or combination of significant deficiencies that result in the possibility that a material misstatement will not be prevented or detected); and
			5.	a statement that the Bank’s external auditor has issued an attestation report on executive management’s assessment of the effectiveness of internal controls.
		iii)	The Bank has set up arrangements whereby staff can confidentially raise concerns about possible irregularities, and that allow for such concerns to be independently investigated and followed up. Such arrangements are overseen and monitored by the Audit Committee.

	b) Internal audit
		i)	The Bank’s policy is that the Internal Audit function of the Bank should be adequately resourced, trained, remunerated, and be provided full access to Bank records and staff members, and given sufficient standing and authority within the Bank to adequately carry out its task. The functions, powers and responsibilities of Internal Audit are documented within the Internal Audit Charter which is approved by the Board and published within the Bank.
		ii)	The Internal Audit function reports primarily to the Chairman of the Audit Committee.
		iii)	To promote independence, internal audit staff do not also have operational responsibilities. Internal audit is responsible for proposing the structure and scope of the audit schedule, and any potential conflicts of interest are to be reported to the Audit Committee.
		iv)	The Internal Audit reports may be discussed with the departments and operational units being reviewed, but the Internal Audit function is allowed to operate and make a full and honest report without outside influence or interference.
		v)	The primary responsibility of the Internal Audit function, conducting risk focussed audits, is at least the review of:
			1.	the Bank’s financial reporting (ensuring that significant financial, managerial, and operating information are accurate, reliable , and timely).
			2.	compliance with internal policies, international standards, procedures, and applicable laws and regulations;

	c)	External audit
		i)	The Bank requires the regular rotation of the external audit between auditing firms. Should this no longer be practical, then the Bank will at a minimum require the regular rotation of the principal partner in charge of the external audit.
		ii)	The external auditors’ report is submitted to the Audit Committee as well as the Annual General Assembly. The external auditors meet the Audit Committee, without executive management present, at least once per year.

	d)	Risk Management
		i)	The risk management department within the Bank reports to the Risk Management Committee of the Board, and on a day-to-day operational basis it reports to the General Manager.
		ii)	The responsibilities of the Bank’s risk management department include:
			1.	the analysis of all risks including credit risk, market risk, liquidity risk and operational risk;
			2.	the development of methodologies for the measurement and control of each risk;
			3.	recommending limits to Risk management committee, and the approval, reporting and recording of exceptions to policy;
			4.	the provision of information on risk metrics and on the Bank’s risk profile to Senior management and to the Board (the Board reviews the risk statistics of the Bank, both qualitative and quantitative, at each regular Board meeting); and
			5.	the provision of risk information for use in the Bank’s public statements and reporting.
		iii)	The functions of the risk management department are assisted by a network of properly constituted, authorised, and documented committees such as credit committees, assets and liabilities/ treasury committees, and operational risk committees.
		iv)	The structure, operation, and ongoing development of the Bank’s risk management department and functions are discussed and explained in the Bank’s public documents, primarily in the Annual Report.

	e)	Compliance
		i)	The Bank’s policy is that it has an independent compliance function which is adequately resourced, trained and remunerated, in accordance with the Central Bank’s instructions in this regard.
		ii)	The compliance function establishes effective mechanisms to ensure that the Bank complies with all applicable laws and regulations, and any non-statutory guidelines and codes. The functions, powers and responsibilities of the compliance function are documented and published within the Bank.
		iii)	The compliance function is responsible for developing the compliance policy of the Bank and ensuring its implementation throughout the Bank. The Board is responsible for approving the compliance policy and overseeing its implementation.
		iv)	The compliance function reports on operational compliance within the Bank to the Chairman or a committee of the Board, copying the General Manager on each report, in accordance with the Central Bank’s instructions in this regard.

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