The present work entitled, Program to evaluate the management of a branch of Banco Popular de Ahorro, in terms of its degree of economy, efficiency and effectiveness, consists of eight procedures, which contain surveys, verifications and verifications, the results of which are based on evidence obtained, will allow the auditor to form a judgment regarding the degree of compliance with the economy, efficiency and effectiveness in the branch subject to the audit. It is recommended to submit this proposal to the consideration of the National Audit Directorate of Banco Popular de Ahorro, for its possible generalization and to continue this investigation, perfecting the proposed program.
Introduction
In recent times, the international environment has been characterized by the existence of a systemic structural crisis, with the simultaneity of the economic, financial, energy, food and environmental crisis; with the greatest impact in underdeveloped countries.
In Cuba, when considering the Guidelines for Economic and Social Policy, within the framework of the VI Congress of the Communist Party of Cuba, it is necessary to make an assessment of the state of the economy, and the problems to be solved taking into account the main events and circumstances of external and internal order present since the last congress of the Communist Party of Cuba.
For all of the above, it is necessary for entities to optimally control and administer all resources, whether material, financial or human, in order to obtain greater economy, efficiency and effectiveness in their operations. This requires the existence of adequate management of its resources and a correct internal control system.
Audit techniques and procedures, especially performance or performance audits, allow evaluating the quality and effectiveness of management and the internal control system implemented in the entity, as well as detecting problems related to these, which facilitates the process of decision making.
In order to carry out this type of audit, it is necessary to have an audit program. In the present work we carry out the proposal of a management audit program to carry out an audit in a branch of Banco Popular de Ahorro.
Program to evaluate the management of a branch of Banco Popular de Ahorro in terms of its degree of economy, efficiency and effectiveness.
Objectives of the audit program:
Evaluate the activity of the branch in terms of the effectiveness of the internal control system implemented, based on the objectives established in Resolution 60/2011 of the Office of the Comptroller General of the Republic, as well as its degree of economy, efficiency and effectiveness, applying tools such as observation, documentary review, interviews, questionnaires, surveys and determining the quality of the information, its timeliness, reliability, consistency and veracity.
Procedures:
We will proceed to evaluate:
I-The quality of service perceived by external customers.
II-The fulfillment of the branch's work objectives.
III-The organization and disposition towards the work of the personnel that works in the branch.
IV-The operation of the ATMs to determine compliance with the principles of internal control and the correct processing of operations.
V-The commercial operations to determine compliance with the principles of internal control and the correct processing of operations.
VI-The branch's ability to carry out its future operations under changing conditions and the structure of the organization that must be flexible enough to adapt to the environment.
VII-Review of the active file regarding custody of the documents that cover primary documents, invoices, accounts, etc.
VIII-Review of records of destruction of documents.
In the execution phase, the auditor will put into practice the audit program drawn up, using as a basis sampling to discover facts and take sufficient, competent, relevant and also reasonable evidence that allows the allocation of responsibility for errors, will examine the degree of effectiveness and efficiency on the part of the branch. The way to analyze if the objectives set are really measurable, key, achievable and verifiable, is achieved if they correspond to the strategies followed, established policies and existing plans for the branch.
Among the techniques to be used are questionnaires, surveys, visual observation, documentary review and the calculation of the reasons and indicators determined by the auditor, the scope of these instruments will be defined by the acting auditor based on their criteria. In addition, you should review other sources of information, such as specific laws and regulations, organization and procedure manuals, organizational charts, audit reports, and management reports.
It will proceed to evaluate compliance with the procedures established for the institution, as well as the degree of economy, efficiency and effectiveness, and consequently identify any relevant deficiencies that require a greater scope of the tests to be carried out.
I- The quality of the service perceived by external clients.
External clients will be surveyed to obtain the necessary elements for the analysis of the quality perceived by them. (See annex No. I)
II- The fulfillment of the branch's work objectives.
To evaluate the fulfillment of the work objectives proposed in the branch, the following reviews will be carried out:
1. Verify compliance with the individual objectives proposed for each worker.
2. Check the fulfillment of the objectives proposed by area and branch level, comparing the correspondence of the results obtained to date with the proposed plan.
3. Verify the occurrence of criminal acts, manifestations of corruption and operations thwarted by workers in different areas.
4. Request the documents related to the payment of the stimulations and verify the correspondence between the payment of the same and the fulfillment of the objectives proposed to each worker.
III- The organization and willingness to work of the staff working in the branch
To evaluate this aspect, the following parameters must be observed:
1. Willingness of workers to carry out their duties.
2. Worker safety when providing a service.
3. Knowledge of banking procedures.
4. Proposals to clients of services that have not been used.
5. Personal presence of workers.
6. Rules of courtesy.
7. Correspondence between the number of boxes that the branch has and the number of clients that visit it.
8. Permanence of workers in their job.
9. Adequate volume and tone of voice between workers and customers and between them.
10. Satisfactory communication between the client and the worker.
Evaluation form:
A point will be awarded to each parameter that gives satisfactory results, the points will be added and the result will be classified as follows:
Good More than 8 points.
Regular From 5 to 8 points.
Bad Less than 5 points.
IV- The operation of the ATMs to determine compliance with the principles of internal control and the correct processing of operations will be evaluated by:
Direct observation must verify that ATMs:
1. They do not have in their possession third party effects, passbooks or cash.
2- They count the cash in detail always in the presence of the client.
3- They withdraw from the counter before attending to a new client all the cash and effects handled in the previous operation.
4- They adequately identify clients in the operations that require it.
5- They keep the doors of the lockers closed as long as they keep cash or effects in their custody and need to be temporarily absent from them, they keep all the cash under lock and key and request the custody of a specialist or leader.
6- That they do not have access to the books and accounting records.
7- They do not process operations to the workers of the own office, whatever their position or function, if they are not duly authorized by the Director.
8- They are reviewed by leaders and workers with a category not inferior to specialists, who perform an eye inspection at the box office after receiving them and who are accompanied until they keep all the cash and stamp of cash in compartments inside the vault and verify that the combinations have been passed.
Documentary Review (Checkout Area)
Box Sheets:
Request a sample of the box sheets to check:
1. That the cash limit has not been exceeded and in cases where excesses have occurred, they are authorized accordingly.
2. That the box checkers have been rotated.
3. That the tests and cash checks are carried out with the established periodicity, ensuring that the specialist who performs the test was not the one who reviewed the box the previous day.
4. That in cases of differences over $ 25.00 there is evidence through certification of the detailed tonnage and of the established revisions.
Credits:
Select a sample of the models of deposits or collection effects (credits) and verify that:
1. They are duly minted and signed by the ATMs.
2. They do not present amendments, deletions and that the dates coincide with those set by the cashier.
3. In the presence of deposits from entities with differences, proceed as established.
4. In the cases of people who are visually impaired or who for any reason cannot sign, their fingerprints are taken, as well as the signature and identification of the witnesses, one of whom may be a leader of the Office.
Debits:
Select a sample of the models of withdrawals or payment effects (debits) and verify that:
1. They are authorized according to the amount by the officials or empowered leaders.
2. The procedures for customer identification have been followed.
3. The formalities for the preparation of the models object of payment have been fulfilled.
4. No cash payments are made from legal entities checks.
5. Cash payments are made only up to the established amount.
6. Operations over $ 50,000.00 up to $ 100,000.00 in MN and USD are documented with (Bills of Exchange) or are carried out by means of a confirmed local letter of credit or with irrevocable Bank guarantee and on demand.
7. No advance payments are made for services that do not have it established: Social security payments, land lease payments, compensation payments.
8. The fees and commissions established in the Rate are charged for each type of service.
9. Overdrafts of personal accounts in any type of currency or legal entities are not allowed.
V- The operation of the commercials to determine compliance with the principles of internal control and the correct processing of operations will be evaluated:
By direct observation, it must be verified that the commercials:
1. They have guaranteed the necessary aspects for the care of account openings with quality, discretion and speed.
2. Note that the clients are attended by specialists who fully dominate the commercial activity, in order to guide them on the different types of accounts offered, their characteristics, duties and rights.
Check that:
Savings Accounts in National Currency and Foreign Currency, Certificates of Fixed Term Deposits and Fixed Term (National Currency and Foreign Currency):
1. Account transfers and other services are completed as established.
2. The established procedure is carried out in cases of loss of notebooks.
3. There are no designated beneficiaries in cases that are so instructed.
4. Payments to beneficiaries, advanced and declarations of heirs, in the cases of deaths of the account holders, are processed as established.
Current accounts
5. The “Know your Customer” model is correctly completed and that it is archived in each existing checking account file.
6. The legal documentation established for the opening of current accounts is required and these are opened only to established legal and natural personnel.
Loans
7. The procedures established for the operation of the credit committee are complied with.
8. The business loan files contain the established documentation.
9. There is evidence on the systematic control and supervision of the loans delivered through physical and documentary verification of the use of the loan and the status of its guarantees.
10. Verify that there is a Plan for supervision visits to entities subject to banking services, with an adequate periodicity.
Personal Credits and General Housing Law
11. Personal Credits and Debts of the General Housing Law are correctly processed. In the case of the first, there is evidence of a rigorous risk analysis.
Electronic banking
12. The domiciliation process for retiree payrolls is carried out correctly.
13. That custody of the Magnetic Cards to be delivered to customers and their personal identification numbers (keys) is established.
VI- The branch's capacity to carry out its future operations under changing conditions and the structure of the organization that must be flexible enough to adapt to the environment.
Calculation and analysis of customer waiting times
From a commercial point of view, the most significant data, provided by queuing theory, for the image of the office, are the following:
- The high number of people in line when the client arrives at the office. It supposes a negative impact that can cause distortions in the development of the operation that comes to realize.
- The waiting time of a client until he is attended. A long time, negatively affects the image of the office, while a time of almost zero permanence (that is, that there were no lines) could imply that high costs are incurred.
1. This analysis must be separated into two aspects:
- Analysis of the waiting time to be attended by cash desk.
- Analysis of service time at the cash desk.
1.1 Analysis of the waiting time to be attended (queue)
- The time that elapses from the customer standing in line to the cash desk window will be measured.
- The number of cash windows serving will be taken into consideration.
1.2 Analysis of attention time
- The time that elapses from when the customer is in front of the cashier window until he withdraws will be measured. In this case, it must be ensured that the workers who are providing the cashier service are the ones who usually carry out this work.
2. Once these measurements have been made, the total waiting time can be determined for each client and type of operation.
3.1 Arrival Rate
Is calculated:
No. of clients who entered the Office during the measurement
Amount of time in minutes the measurement was made
Express: Number of clients that enter the office per minute.
3.2 Average waiting time to be attended
Is calculated:
Waiting time to be attended at the cash desk
No. of clients to be measured
It expresses: The average waiting time in line to be attended.
3.3 Average attention time
Is calculated:
Attention time in the box ______
No. of clients to be measured
Expresses: The average service time per customer in the box.
3.4 Total waiting time
Is calculated:
Average waiting time to be attended at the cash desk
Average time of attention in the box.
It expresses: The total time that each client remains on average in the office.
3.5 Unit Service Rate
Is calculated:
1 minute______________
Average attention time
It expresses: The number of clients that can be served per minute by each ATM.
3.6 Total service rate
Is calculated:
Unit service rate x No. of boxes providing service.
It expresses: The number of clients that it is possible to attend in a minute in the Office by the box.
3.7 Proximity to saturation:
Is calculated:
Arrival rate__
Total service rate
It expresses: The relationship between the clients that enter the Office per minute and those that it can attend to in that time.
This indicator should be analyzed as follows:
If = 1 It means the saturation point, so that if the influx of customers grows, the situation of not being able to attend to the customers that enter in the working day time will be reached.
If> 1 It is the theoretical case in which the office is saturated, at this point it would be advisable to increase the number of teller windows.
If <1 The office is not saturated, since the arrival rate is less than the capacity of the office. The closer you are to unity, the closer you are to saturation.
The following financial ratios must also be calculated:
Productive Assets Structure
It is determined to know the proportion of the branch's assets that generate returns.
Productive Assets
Total active
Ratio of past due loans of more than twelve months
Overdue portfolio over twelve months x 100
Gross Portfolio
It expresses the percent that represents the past due portfolio of the gross portfolio, in the period of more than twelve months
A comparative analysis with the same period of the previous year must be carried out to determine the continuity or progress of the activity.
The evolution of the items that make up the financial statements will be examined through a comparative or percentage analysis.
Financial Efficiency Indicators:
Financial income - Financial expenses =
Gross financial margin index
Financial income
Expresses how much profit is obtained for each peso of financial income, the higher the index, the higher the gross margin for each monetary unit of financial income.
Interest income - interest expense
Financial income
It expresses how much profit is obtained for each peso of interest.
Resource cost. (Unitary)
Gross interest expense
Liability with cost
It measures the cost incurred by the institution for the use of resources obtained from third parties. The smaller it is, the cheaper the mix of resources used to finance active operations will be.
Net interest margin.
Ratio of total expenses to total income.
Total expenditures
Total revenues
It expresses what percentage of the income has been absorbed by the expenses.
Relationship between interest paid and interest earned.
Interest paid
Interest collected
Express how many cents of interest you had to pay for each peso of interest earned
Administrative Efficiency Indicators.
Relationship between administrative and labor expenses and the resources raised.
Administrative and labor expenses
Liabilities with cost
It reflects the ratio of these expenses incurred by each captured unit.
Indicates how much was paid in this concept for each employee
Income ratio per person.
Net income + other income
Average number of employees in the year
Indicates how much each employee contributes as income
Ratio of profits to employee number.
Net profit for the period
Average number of employees
Indicates that each employee is contributing to the profits of his institution.
Cost / Income Ratio.
General expenses
Net income + other income
Indicate how many cents are spent to pay wages and other general expenses for each peso we receive
Relationship between labor expenses and general expenses.
Labor expenses
General expenses
It quantifies the proportion between wages and related items and the total amount of general expenses.
VII- Review of the active file regarding custody of the documents that cover primary documents, invoices or accounts, etc.
An analysis will be carried out on the custody of documents to verify compliance with the division of labor and the determination of responsibility, proceeding as follows:
1. Review of the active file as custody of the documents that cover invoices or accounts.
2. Review of the documents that make up the daily vouchers to examine clarity and consistency in their explanations.
VIII- Review of records of destruction of passive file documents.
1-It will be verified that the destruction of documents will be carried out for each work area within the year following that in which the documents have complied with the terms indicated in the Instruction and Procedures Manual. This destruction will take place in the period from January to September of each year.
2-The documents will be destroyed or delivered to the companies in charge of their
industrial use as Recovery of Raw Materials, if the latter is feasible and also in accordance with the rules established for that purpose.
3. The documentation whose term of conservation is established "Indefinite" will be kept duly protected against humidity, insects, etc.
Once the auditor has completed the work, the official and formal communication of the results of the work is made in a written report, which must include the recording of any important changes in the operations that have been carried out during the course of the examination.. This report should be concise, omitting issues that do not merit executive attention, emphasizing what can improve operations and increase profits.
The evaluation of the management will be carried out giving an opinion in relation to the Economy, Efficiency, Efficacy, quality and impact of the performance in the planning, control and use of resources, as well as in the observance of the provisions that are applicable in correspondence with the audit objectives
recommendations
- Submit this proposal to the consideration of the National Audit Office of the
Banco Popular de Ahorro, for possible generalization.
- Continue this research by perfecting the proposed program.
- Carry out training actions for all the auditors participating in the application of the
proposed management audit program.
Conclusions
As a result of the bibliographic review carried out on the Audit and specifically on the Management Audit and the audit program, it can be concluded:
1. The analysis of the consulted literature demonstrates the importance of Management Audit in the new approach of conducting audits, since it provides the management of each entity or business with the necessary elements for decision-making, since it provides I show the weaknesses of each activity and the trend towards the future.
2. A program has been designed to evaluate the management of a branch of Banco Popular de Ahorro.
3. From its application, a series of positive and negative aspects will be obtained that will allow evaluating the activity of the branch of Banco Popular de Ahorro de Económica Eficiente, y Eficaz.
4. Bibliography
Armada, E, “The application of the new concepts of Internal Control in the Audit”, Magnetic Memories, IV National Audit and Control Workshop, 2003.
Armada, E. Methodology for conducting a performance audit. PhD thesis. Havana. 1997
Decree Law No. 159 of the Audit. ONA Edition. Havana, 1995.
Gene, R. "Changing Audit Objetives and Techniques" The Accounting Review, 1962, p. 697
Law No. 107/09 Of the Comptroller General of the Republic of Cuba.
Regulation of Law 107/09 Of the General Comptroller of the Republic of Cuba.
Resolution No. 60/2011 On the Rules of the Internal Control System.
Sánchez Rodríguez Luisa Maria Management Audit Course.
Sawyer, LB "Modern Internal Audit Practice" Alta Monte Springs, Florida, Institute of Internal Auditors, 1981, November 2005
Instruction and Procedures Manual of Banco Popular de Ahorro
Annex No. I
External clients will be surveyed to obtain the necessary elements for the analysis of the quality perceived by them.
Customer Survey.
Dear Customer:
Its criteria and recommendations are useful elements to improve the quality and efficiency of Banco Popular de Ahorro and therefore optimally satisfy its needs.
Mark with an X)
1. Which of the following services used in the bank do you know and which ones do you use.
Know / Use
Savings accounts
Fixed Term Deposits
Deposit certificates
Current accounts
Direct Payroll
Money transfer
Personal Credits and LGV
Loans
Credit lines
Financial administration
2. You have become aware of said services through:
___ a) Workers at this branch.
___ b) Folds purchased at this branch.
___ c) Other clients of this branch.
___ d) Other routes Which one? ___________
3. The treatment you receive at this branch is:
a) Indifferent _____ b) Courts _____ c) Impolite _____
4. The staff that treats you:
___ a) Does not pay due attention.
___ b) Is constantly interested in listening and caring for him.
___ c) Does not give him enough time to express himself and interrupts him.
5. When requesting a service from a worker at this branch:
___ a) He understands you from the first moment and refers you to the person in charge of carrying out your wishes.
___ b) Does not understand you and seeks advice from someone else.
___ c) Understands you from the first moment and provides the service.
___ d) Does not understand you and refers you to another worker.
6. Upon receiving the requested service, are you satisfied?
___ a) Sometimes ___ b) Almost always ___ c) Almost never ___ d) Always
7. Once a service request has been submitted, with all the correct and complete documentation, the formalization process:
___ a) It takes more than 15 days.
___ b) It takes 15 days.
___ c) It takes less than 15 days.
8. The process of materialization of a service that you request:
___ a) It should be faster.
___ b) Staff should be more prepared.
___ c) It meets your expectations.
___ d) Bureaucratic mechanisms should be eliminated. Which?
9. What do you recommend to us?
Thank you so much!
