Headed by the internal audit and risk manager, the internal audit and risk department plays a critical role in ensuring the organization's financial integrity, compliance with regulations, and overall risk management. Here's a brief overview of what this department typically entails:
Internal Audit:Conducting independent and objective assessments of the Sacco’s financial processes, controls, and procedures.
Evaluating the effectiveness of internal controls to ensure assets are safeguarded, transactions are accurately recorded, and risks are appropriately managed.
Identifying areas of potential risk, inefficiency, or non-compliance with policies, laws, and regulations.
Providing recommendations for improvements to internal controls, operational processes, and risk management practices.
Performing regular audits of financial statements, loan portfolios, member accounts, and other critical areas to detect errors, fraud, or irregularities.
Risk Management:
Identifying, assessing, and prioritizing risks that could impact the Sacco’s objectives, operations, or financial stability.
Monitoring and reviewing key risk indicators to ensure early detection of emerging risks and timely response mechanisms.
Conducting risk assessments for new products, services, or business initiatives to evaluate their potential impact on the Sacco’s risk profile.
Providing training and awareness programs to staff members on risk identification, assessment, and mitigation strategies.
Reporting on the Sacco’s risk profile, including significant risks, risk appetite, and risk mitigation activities, to the board of directors and senior management.
Overall, the internal audit and risk department serves as a proactive safeguard for the Sacco, helping to ensure financial integrity, regulatory compliance, and effective risk management practices to support the organization's long-term sustainability and success.