Overview
The financial environment in West Africa is unique in that it offers an intermediary solution called microfinance to low-income communities or those unwilling to entrust their savings to traditional banks. This intermediary solution enables rural communities, associations, and micro-businesses to use banking services in small groups and to save as little as the tax collected by banks on cash deposits. As part of its gradual bankification approach, it also seeks to be closer to its clients. Thus, it is not uncommon to see microfinance collection agents visiting their clients' homes daily to collect savings. This modus operandi is obviously subject to more risks than the traditional banking system, and only microfinance institutions that manage to build a minimally functional internal control system can survive.
The Confederation of West African Financial Institutions (CIF-AO) is the leading private financial institution in the West African Monetary Union (WAMU) in terms of both membership and service points. It is a group of six national financial institutions serving over 4.5 million members in five West African countries and is a systemically important institution in the decentralized financial landscape of West Africa. In fact, according to the metrics, CIF-AO and its members contribute between one-fourth and one-third of the aggregates. This situation necessitates, from a risk-based perspective, an effective internal supervision structure steered by governance bodies with a good command of risk monitoring and prevention.
Strengthening internal supervision by enhancing the information system
As assigned by the prudential authorities, the CIF-AO performs a supervisory role over its affiliated federations. It has established internal channels and mechanisms to swiftly exercise its prerogatives, but challenges have arisen. In 2020, the CIF decided to significantly enhance its supervision system by automating the relevant controls. This important project was fully supported by its key strategic partner, the World Bank. The work was entrusted to a college of experts, including Excellence, who was responsible for the information systems component. The purpose of our due diligence was to enable an alignment between the institution's procedures, structure, information system, and human resources. More specifically, we were to evaluate the role of the MIS in the supervision system of the CIF and its affiliated federations, and to propose improvements.
We conducted a comprehensive assessment of the CIF-WA MIS controls and reported our results to World Bank and CIF-WA specialists. This effort provided a solid foundation for decision-making in the process of improving the control environment of the institution.
The benefits of an application audit
As with the CIF-AO, a business application is frequently the backbone of all activities and the internal control system in major institutions. The presence of undiagnosed or uncorrected flaws leads to incidents that are difficult to manage and can even seriously raise going concern. An application audit enables compliance with specifications to be evaluated, as well as the detection of errors or configuration problems, missing controls, and manufacturing faults. It is also a precursor to a significant update or migration. This audit could be limited to only one module in the case of an integrated software.
From the identification of the mission's scope, its specific objectives, and the work to be conducted, to the phase of execution and monitoring of the deployment of required corrections on your information system, we collaborate with your teams. We are conscious of the fact that our clients expect us to provide solutions, and not a laundry list of problems. Consequently, we adopt a consulting approach on our contractual audit assignments.
