MORNBFI Vol. 1 - Planters Development Bank

MINIMUM INTERNAL CONTROL STANDARDS FOR QUASI-BANKS(Appendix to Sec. 4185Q (2008 - 4171Q)]APP. Q-508.12.31I. Proper Accounting Records1. QBs should maintain proper andadequate accounting records.2. These records should be keptcurrently posted and should containsufficient detail so that an audit trail isestablished.3. All entries should bear officialapproval and should be initialed by theperson originating and another personchecking them.II. Independent Balancing1. Independent balancing shall meanthat records posted by a person or cash heldby a cashier shall be balanced or countedby another person.2. The minimum independentbalancing procedures which should beadopted are the following:a. Monthly reconcilement of generalledger balances against their respectivesubsidiary and supporting records anddocumentations by someone other than thebookkeeper, the person handling therecords, or the person directly connectedwith processing the transactions.b. Irregular and unannounced countof cashier's cash and checks and other cashitems at least twice a month by the auditor/control officer or by an officer notconnected with the treasurer's/cashier'soffice or its equivalent.c. Monthly reconcilement of cash inbanks accounts (domestic and foreign) anddue from/to head office/branches bysomeone other than the check custodian,the person posting the general ledgerentries or the authorized signatory of thebank account.d. Periodic verification of securitiesand collaterals by someone other than theircustodians. Verification should include boththe physical inventory of securities and therecord checking.e. Periodic verification of the accuracyof the interest credits and payments todeposit substitute liabilities accounts.3. All exceptions in the reconciliation/verification should be followed upimmediately until satisfactorily corrected.III. Division of Duties and Responsibilities1. The duties of all the officers andemployees should be segregated, clearlydefined, understood, documented andmanualized if possible. No individual shallhave complete authority and responsibilityfor handling all phases of any transactionfrom beginning to end.2. The physical handling of atransaction should be separated from itsrecording and supervision as follows:a. A person handling cash should notbe permitted to post the ledger records norshould posting of the general ledger beperformed by an employee who posts theinvestor's/creditor's subsidiary ledgers;b. A loaning officer should never beallowed to disburse proceeds of notes,accept note payment nor process loanledgers;c. The functions of issuing, recordingand signing of checks should be separated;d. The receipt of statements fromdepository banks should be assigned to anemployee other than the one connectedwith the preparation, recording and signingof checks;e. Custodians of securities should notbe allowed to handle security transactions;f. Collateral appraisals should be doneby an employee/officer other than the onesapproving the loans;Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsAppendix Q-5 - Page 1