AGM 2013

W E L O O K A T T H I N G S D I F F E R E N T L Y

W E L O O K A T T H I N G S D I F F E R E N T L Y

Monitoring Presentation January 2015

David Hewson

W E L O O K A T T H I N G S D I F F E R E N T L Y

Monitoring Presentation January 2015

David Hewson

W E L O O K A T T H I N G S D I F F E R E N T L Y

2

Regulation and challenges ROI

• Tougher regulatory regime in recent years• Final Report of the Commission on Credit

Unions published March 2012• Credit Union and Co-operation with

Overseas Regulators Act 2012 published Jan 2013

• More powers for Central Bank to intervene and take control of credit unions

• 18 credit unions transferred in 2014

W E L O O K A T T H I N G S D I F F E R E N T L Y

3

Regulation and challenges ROI

• Extra requirements for credit unions under:–Strategic planning–Risk management–Compliance–Fitness and probity– Internal Audit–Anti Money Laundering

W E L O O K A T T H I N G S D I F F E R E N T L Y

4

Regulation and challenges NI

• FSA took over regulation in March 2012• FSA now replaced by PRA and FCA with

regulatory restructuring in UK (April 2014)• Extra requirements for credit unions under

loan provisions, liquidity, investments, strategic planning, risk management

• Capital requirements are lower under PRA (can be as low as 3%)

W E L O O K A T T H I N G S D I F F E R E N T L Y

5

Monitoring Framework

• Risk based approach, prioritise resources• Based on quarterly returns and PEARLS

ratios derived from same• Focus resources on problem areas• Coupled this with aim to visit each CU

every two years (subject to resources)• Review processes annually (i.e update

reports to take account of changed priorities)

W E L O O K A T T H I N G S D I F F E R E N T L YW E L O O K A T T H I N G S D I F F E R E N T L Y

Monitoring Department Organisation Chart

• Many are ACCA, CIMA or ACA qualified• Some are forensic accountants• Some have compliance and QFA qualifications

Head of Monitoring

Business Managers

(1)

Field Officers

(10)

Senior Analyst

(1)

Admin

(2)

• Risk based audit reviews (ROI & NI)• Loan book reviews (ROI & NI)• ECCU Insurance Reviews (ROI & NI)• Investment & Fixed Asset reviews (ROI)• Internal controls & Viability reviews (ROI & NI)• Compliance reviews & Governance reviews (ROI & NI)• Systems and report reviews (ROI & NI)• Conflict Resolution (ROI & NI)• Due diligence reviews as part of Transfer of Engagements

process (ROI & NI)

W E L O O K A T T H I N G S D I F F E R E N T L YW E L O O K A T T H I N G S D I F F E R E N T L Y

Reviews completed by Field Officers

W E L O O K A T T H I N G S D I F F E R E N T L Y

8

Monitoring assistance in other areas

• Monitoring Department issue PEARLS reports, performance statistics and best practice (Senior analyst)

• Monitoring Dept provide training on strategic planning, risk management and compliance (field officers)

• Monitoring staff also seconded to provide an internal audit service in due course

• Update and issue draft policies to credit unions (Senior analyst and field officers)

W E L O O K A T T H I N G S D I F F E R E N T L Y

9

ILCU staffing and functions

• Monitoring Dept 10-12 staff• Finance Dept 5 staff• Communications Dept 8 staff• Legal Dept 2 staff• Compliance Dept 2 staff• HR Dept 2 staff• ICT Dept 3 staff• Learning and Devel 10 staff• Foundation Dept 4 staff

Total approx 46 (for 463 credit unions)

W E L O O K A T T H I N G S D I F F E R E N T L Y

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Minimum requirements for Belize

• Simple excel quarterly return to include at a minimum: Income and Expenditure, Balance Sheet, Arrears and Capital

• Email and remote access for staff• 2 staff required, 1 staff member in the field full

time, 1 staff member partly office based for analysis and report work, partly in the field

• Work schedule to be based on analysis of quarterly returns

• Credit unions close to insolvency and with viability issues will require more resources