Internal Control Department

Finansbank Internal Control Department was established at the end of 2001 as an independent department separate from the other operational units, in accordance with the regulation of "Internal Control and Risk Management Systems" for banks.

The Internal Control Department, responsible for the performance, design, management and coordination of the Bank's internal control system, reports directly to the Audit Committee. Internal control system is defined as; all of the financial, operational and other control systems which are carried out by internal controllers and which involve monitoring, independent evaluation and timely reporting to management levels systematically in order to ensure that all the bank activities are performed by management levels in accordance with current policies, methods, instructions and limits.

The main goal of the internal control process is to detect systematic errors in banking operations, ensure far-reaching improvement and development through proposals and added value in process advancements.

Organizational Structure

Being accountable directly to the Audit Committee, Internal Control Department carries out its control activities independently and objectively. After the approval of the Audit Committee, The Board of Directors defines working procedures and principals of the department. The Internal Control Department is comprised of a Head and an adequate number of personnel. The Internal Control Department organization has three units: Internal Control System Management, Central Controls Management and Branch Control Operations Management.

Main duty of the department is to design internal control system and internal control functions with top-level management by taking all operations of the bank into the consideration.

Personnel work within an organizational structure that is set up to provide the necessary training on banking activities. Personnel are continuously supported with intensive and up-to-date training programs. On-the-job training plays an important role in career development. Internal Controllers are primarily responsible for the professional development of their assistants. Internal Control Assistants that perform well are promoted in accordance with the bank's title system.

Internal Control Activities

The internal control process and internal control activities are designed, planned and performed in consideration with the risk structure and nature of bank's operations. Using key control points, which are determined with top management annually, monitors the effectiveness of internal control functions.

Finansbank's Internal Control strategy consists of the following issues:

• Monitoring risks
  
• Establishing daily checks to be carried out and reports to be prepared by the related unit/branch personnel

Controls on the Head Office and Branch activities are implemented by using computer-aided tools. During the control activities, risk analyses are prepared and samples are taken with special software programs. Findings and suggestions are reported to the relevant management levels via electronic message medium.

The Internal Control Catalogue covers all of the products and functions of the bank. In all branches the self-control system is applied to enhance the effectiveness of first level controls. Monitoring the effectiveness of self-control system is also planned with second level controls.

Finansbank's Internal Control management strategy is in conformity with world standards and has adopted the following principles:

• It is not enough to find errors with continuous monitoring;
• Systematic errors are detected and eliminated so that the system can be improved.
• Monitoring processes (controls) are integrated into the computer system.