Annual Report 2012 - National Savings Bank

198THE RESULTS OF A CHALLENGING YEARDIRECTORS’ STATEMENT ON INTERNAL CONTROLSobserved. The Auditor Generalcarries out the external audit ofthe Bank. The Superintendent ofthe Government Audit is generallyinvited to BAC meetings. The BAC reviews the internal auditfunction with particular emphasison the scope of audits and qualityof the same. The activities attendedto by the BAC during the year2012 are set out in the Board AuditCommittee Report appearing onpage 95 of this Annual Report.The Internal Audit Division ofthe Bank carries out audits ofbranches, divisions and other unitsas per the Annual Audit Plan. Thefrequency of audit is determined bythe level of risk assessed. The AuditPlan is approved by the BAC forimplementation. The Internal AuditDivision carries out audit checks toensure compliance with policies andprocedures and the effectivenessof the internal control systems andreports its ndings in respect of anynon-compliance. Audits are carriedout to provide an independent andobjective report on operational andmanagement activities. The ndingsof the audits are submitted to theBAC for review at their periodicmeetings. The activities of theBAC, along with minutes of theCommittee meetings are submittedfor information of the Board on aperiodic basis. The Board Integrated RiskManagement Committee (BIRMC)has been established by the Boardto assist the Board to oversee theoverall management of principalareas of risk of the Bank. TheExecutive Risk ManagementCommittee (ERMC) which includesrepresentation from all key businessand operating units of the Bankassists with the implementation ofpolicies advocated at the BIRMC.The Board has also establishedan independent Compliance Unitwhich ensures Bank’s activitiesare conducted in accordance withapplicable laws, regulations andregulatory directives and any issuesof non-compliance are reported toBIRMC periodically. The report onthe Risk Assessment is submittedby the BIRMC to the Boardperiodically. Management level Committeeshave also been functioning withappropriate empowerment toensure effective management andsupervision of Bank’s core areas inthe day-to-day business operations.The assessment covered only theprocess applied by the Bank and didnot include the processes carried outby its Subsidiary.The ndings of the GovernmentAudit are reported to the managementperiodically and the managementensures that they are rectied andresponded promptly. The commentsmade by the Auditor General inconnection with the audit on internalcontrol system appeas on page 200.NATIONAL SAVINGS BANK . ANNUAL REPORT 2012