Bayport Financial Services

AUDIT PROGRAME
Head office FINANCE DPT. Prepared by Reviewed Schedule ref
by
Section Outright settlement, Refunds J. Mfumya
and Loan closures/destruction.
Scope April – October 2009

A: Outright settlement

Audit objective:
To ensure the accuracy, validity and completeness of outright settlements made

Risks:
1) Clients being overpaid when outright settlement is made
2) Consultants’ misrepresentation leading to reputation risk
3) Reputation risk due to complaints from clients settled their loans and yet deductions
not stopped

Audit tests Done by W/P Ref

and date
Extract an outright settlement report from Baylend and select a sample
of loans greater or equal to TZS 600,000 settled from April to October
2009 and ensure the following:-

1) If client settles balance as a result of consultants’

misrepresentation, quoted amount is equal to outstanding
capital including admin fee plus two month interest (individual
outright settlement as per Baylend). Otherwise if no complaints,
settlement amount is equal to collectable amount less deductions
pending at employer.

2) Approved loan settlement form bearing settlement amount from

Head office was sent to the respective branch and signed by the
client as an evidence of accepting quoted settlement balance
thereon.

3) Client deposited agreed settlement balance in the company bank

account within the stipulated timeframe and salary slip
submitted to the admin manager.

4) Settlements made beyond stipulated timeframe were refunded to

respective clients by cheque and clients advised to make fresh
application.

5) Head office admin manager closed client account in Baylend

after receiving all relevant documentation from the branch.

6) Head office admin manager contacted the treasury to stop further

deduction from client payroll to avoid refunds and complaints.

7) Analytically compare loans settled during the period under audit

and loans settled during the same period one year before.
B: Refunds

Objective:
To ensure the accuracy, validity and completeness of refunds

Risks:
1) Incorrect amounts being refunded to clients
2) Fraudulent claims for refunds being made by clients or employees.

Audit tests Done by W/P

and date Ref.

Select a sample of refunds made between April and October 2009 and
perform the following audit tests:-

1) Review a customer refund receipt form to ensure that branch

manager filled it with all necessary information.

2) Client’s bank ID card, employee ID card and salary slip(s) for

month(s) over deducted are attached.

3) Ensure that head office administration officer verified the

accuracy of the amount filled in the refund receipt form.

4) Ensure that the head office administration manager verified

refund receipt form and signed refund approval document as an
evidence of approval.

5) Cash requisition form was prepared and verified by the

accountant.

6) The cash requisition form was approved by CFO before cash is

remitted to the head office administration officer.

7) Ensure that the head office administration officer deposited

refunded money into client’s bank account and deposit slip
submitted to finance department for verification.

8) Client’s account in Baylend is updated/posted with refunded

amount

9) The head office administration manager did resubmission to

avoid incorrect deduction being made again.

10) Compare total refunds made during the period under audit from
refunds made the same period but one year before.
C: Loan closures

Objective:
To ensure that accuracy, validity and completeness of loans closed/destroyed.

Risks:
1) Fraud and theft may occur
2) Inforation technology/loss of data

Audit test Done by W/P

and date Ref.
Select a sample of loans destroyed between April and October inclusive
and ensure the following:-

1) A statement was printed from Baylend and attached to the loan

contract to be destroyed.

2) The administration manager initialled the statement as evidence

of approval for the loan destroyed in Baylend

3) The administration manager has explained the reason for

destroying the loan.