Tamkeen - Final IA Report - HR Process-English

Performance Audit Services
Tamkeen
Performance Audit Final Report: Human
Resources process
March 2016
March 20, 2016
Dear Mr. Jarrar,

In accordance with our provision of performance audit any other persons. Full details regarding our audit and
Mr. Hassan Amin Jarrar report limitations are stated in our Letter of Engagement
outsourcing services for Tamkeen dated June 30th 2015, we
Chairman of the Audit
have completed our activities related to the performance with Tamkeen dated June 30th 2015.
Committee
Tamkeen audit task assigned by Tamkeen and we are pleased to We would like to take this opportunity to thank the
P.O. Box 18131, present our final performance audit report for the human management and staff of who assisted us in the course of our
Manama, resources process. work.
Kingdom of Bahrain
The primary objective of this performance audit exercise was
to evaluate the existing controls related to the human Yours faithfully
resources process at Tamkeen. The resulting issues and
recommendations were discussed with the management
during the course of the audit and prior to the finalisation of PricewaterhouseCoopers
this report.
Our performance audit review was performed in accordance
with the Standards for the Professional Practice of Internal
Auditing as prescribed by the Institute of Internal Auditors
(IIA). The procedures we performed did not constitute an
examination or a review in accordance with generally
accepted auditing standards or attestation standards,
accordingly we do not provide an opinion, attestation or
other form of assurance with respect to our review, except as
may be specified in this report.
Further, we did not plan and perform our work with the
objective of preventing or discovering fraud. Our procedures
under this engagement are also not designed to and are not
likely to reveal misrepresentation by the management of the
company. Consequently, we give no assurance on whether
the period covered by our audit was free of fraud (whether by
management or by external parties), other irregularities or
misrepresentation by the management of the company or
PricewaterhouseCoopers M.E Limited, CR # 47378, 13th Floor, Jeera I Tower, PO Box 21144 – Seef District, Kingdom of Bahrain.
Telephone: +973 17 11 8800 | Fax: +973 17 540556, www.pwc.com/middle-east
Contents 1
2
Executive Summary
Summary of Audit Observations
1
6
3 Detailed Observations and Recommendations 9
1 Meetings Conducted 28
2 Documents Reviewed 30
Section 1
Executive Summary
Tamkeen • Performance Audit Final Report: Human Resources process March 2016
PwC 1
Section 1 – Executive Summary
The criteria adopted for classifying the importance of each observation as

High, Moderate or Low are as follows:
Serious and substantial impact on the Tamkeen’s ability to achieve objectives

Priority 1
High Conditions which would have a significant impact on the Tamkeen’s overall performance, the achievement of its
objectives, arising through significantly deficient or degraded control processes or inefficient/ineffective working
practices. These could include incidents involving failure to report or react to situations where activities are placed at risk;
acts of employee infidelity; failures on of managerial staff to adequately direct activities or supervisory staff to adequately
control their areas of responsibility; significant violations involving segregation of duties; gross breaches of standing
instructions or policies; failure to correct more material conditions previously reported; conditions which have continued
for extended periods in management’s knowledge.
Priority 2 Moderate impact on the Tamkeen’s ability to achieve objectives

Moderate Situations might include “one off errors” arising through misunderstandings rather than neglect; less material omissions,
but those of a recurring nature; variations in systems, where controls need refinement to ensure adequacy, or levels of
effectiveness while not wholly unsatisfactory, require enhancement, incidents where reporting requirements have not
been fulfilled on a timely basis; breaches of procedural requirements where corrective action is required to avoid loss.
Priority 3 Minimal impact on the Tamkeen’s ability to achieve objectives

Low Deficiencies which are unlikely to cause other than a low level disruption to the achievement of objectives, but
nevertheless represent areas where working practices could be improved, or where controls require minimal
improvement to fully achieve their objective, attention should be paid to them at some stage, but early resolution is not
critical.
This report has been prepared on an exception basis and consequently only matters that come to our attention during our review, that require to be addressed to
management, have been reported.
Our report has been prepared solely for your information and the management of Tamkeen and is not to be used for any other purposes. It should not be
included or referred to in any document or publication made available to persons outside Tamkeen without our written consent. We do not accept responsibility
to any other party to whom it may be shown or who on their own volition may decide to rely on it. Our engagement has been performed on out-sourcing basis.
PwC 2
Executive Summary
Background Objective and scope of this report

Tamkeen’s senior management and audit committee have decided to The objective of this report is to provide Tamkeen’s senior management and
embark on a performance audit project; in this regard, PwC was appointed audit committee with our performance audit observations and
to perform an inherent-based risk assessment, develop a 3-year internal recommendations over the human resources process, which were established
audit plan, and execute audit reviews over specific processes that were based on our (PwC) standard performance audit activities and procedures.
mutually agreed with Tamkeen’s audit committee.
Our approach included the following steps:
Engagement objectives • Conducting meetings with Tamkeen’s management and Audit Committee
The objectives of this engagement are to: members to confirm the objective of the audit exercise and identify areas
of concerns;
• Provide an independent and objective report on Tamkeen’s selected
operational and support functions by bringing a systematic and • Conducting meetings with the relevant process owners in order to obtain a
disciplined approach to evaluating the risks and controls’ over these holistic understanding of current departmental practices;
functions and recommending opportunities for improvements. • Submitting an initial List of Requirements (LOR) and requesting samples
• Conduct a follow up review over the previous performance audit from the relevant process owners;
findings • Obtaining, reviewing and testing the selecting samples;
Audit period and time line • Preparing and submitting the draft performance audit report to Tamkeen’s
management for feedback and further discussions.
The audit review covers the period from January 1st, 2011 to December 31st,
2014. We have assessed the specific risks identified within each scope area, • Preparing and submitting the final draft performance audit report to
evaluated the associated mitigating controls, and commented on the Tamkeen’s management and audit committee inclusive of
results of our audit procedures which were performed on sampling basis. feedback/management responses.
Management should be aware of the inherent limitations of the results of
using a sample; if the tests were expanded to 100% of the population,
observation details could have differed.
PwC 3
Executive Summary (Continued)
Audit scope and objective Summary of audit results

The audit included gaining an understanding of the various activities The purpose of the chart below is to provide Tamkeen’s senior management
within the process, evaluating the overall control environment and testing and audit committee with a high level summary of the overall risk levels
various documents/files to provide reasonable assurance that the corresponding to our audit observations.
identified internal controls are operating as designed. Based on our
developed performance audit program, the performance audit comprised Total number of observations: 11
the following areas:
• Total % of observations with a High Risk rating: 73%
• Recruitment
• Total % of observations with a Moderate Risk rating: 18%
• Training and Development
• Total % of observations with a Low Risk rating: 9%
• Employee Separation
• Leaves and Attendance AUDIT RESULTS BY SEVERITY LEVEL
• HRMIS System
The main objective of our performance audit was to assess the 9%

effectiveness of the existing controls related to the human resources
process. We performed our audit through inquiry, observation of
applicable policies and procedures, and inspection of relevant 18%
documentation. The “observations/risks” section on the following pages is
intended to propose improvements to the existing controls over these
risks, which, when implemented, could improve the efficiency and
effectiveness of current operations. 73%
Low Moderate High
PwC 4
Executive Summary (Continued)
Summary of observations and potential risks Hiring and on-boarding process
Below is a summary of the key observations with a high priority rating. During our audit review, we noted that none of the employees had an
Details are set out in section 2 of this report. employment contract in their files. Also, for new joiners, we noted that “pre-
employment & on-boarding” documents were missing from the files. This
Departmental effectiveness: could lead to non-compliance with Article 19 of the Bahrain Labor Law.
During the course of our review, we noted that the HR department Leaves and attendance:
currently does not possess an approved Manpower nor a Succession Plan,
During our review of the “Leave, Time and Attendance” process, we noted that
which may impact Tamkeen’s ability to ensure that competent staff are
leave forms were not maintained in employee files. Moreover, the Human
available to fill key positions. Additionally, we noted that the department
Resources department does not use an automated system to maintain
lacks monitoring and control of documented objectives and key
employee leave activities and related balances; instead, these records are being
performance indicators to ensure proper alignment with the overall
maintained using excel sheets, which have resulted in substantial variances
corporate strategy, as well as adequate monitoring of departmental
between the balances calculated and the actual annual leave days taken by the
activities to enhance decision making.
employees.
Moreover, we have noted significant inconsistencies in the performance
HRMIS System:
appraisal process; for instance, over 56% of the tested files were missing
performance evaluations documentation. Also, over 50 % of the tested files During the course of our audit review over the MIS system, we have noted that
were missing the appraiser’s signature. On the same note, in June 2014, the HR department lacks a comprehensive Human Resources Management
there was no appraisal process conducted for any employee. Information System (HRMIS) System. Thus, the recruitment process, on-
boarding, attendance, leaves, and payroll processes are being performed using
Employee separation: excel sheets without updating are the HRMIS system.
We have noted that the process of handling separated employees, (i.e.

resignations, terminations, retirements), is significantly inconsistent and
does not comply with Articles 99 and 100 of the Bahrain Labor Law.
Additionally, there are no documented policies and procedures for
separated employees; currently, the HR department does not conduct exit
interviews with departing employees.
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Section 2
Summary of Audit Observations
PwC 6
Section 2 – Summary of Audit Observations
Human Resources process
The purpose of this section is to present Tamkeen’s executive management with a high level summary of the number of observations that were identified during
the course of the engagement. A priority level has been assigned to each observation; the detailed internal audit observations are shown in Section 3.
Ref Observation Rating Page
1 Absence of succession planning process High 10
Lack of monitoring and control of departmental objectives and key performance

2 High 11
indicators (KPIs)
3 Inconsistency in dealing with separated employees High 12
4 Inconsistencies in performance appraisals High 14
5 Inadequate hiring process High 16
6 Inadequate on-boarding process for new joiners High 18
7 Low employee satisfaction High 20
8 Absence of HRMIS System High 22
9 Absence of detailed manpower plan Moderate 24
10 Ineffective training and development plan Moderate 25
11 Incomplete employee files Low 27
PwC 7
Section 2 – Summary of Audit Observations
Observations layout & disclaimer
Observations The observations were derived from discussions with concerned managers and process owners, in addition to
evaluating the process flows and the representative sample selected during our course of work. Management should
be aware of the inherent limitations of the results of using a sample; if the tests were expanded to 100% of the
population, observation details could have differed. The recommendations listed are proposed to enhance the
process and its execution. Management should assess the relevant cost to benefit formula of implementing such
recommendations before deciding on doing so.
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Section 3
Detailed Observations and Recommendations
PwC 9
Section 3 – Detailed Observations and Recommendations
1 – Absence of succession planning process – High
Observation
During the course of our audit, we requested the Succession Planning related documents as part of the List of Requirements submitted to Tamkeen. We noted
that currently, there is no succession plan in place.
It is also noteworthy to mention that similar observations were raised previously in 2013 by the previous auditors under the title of:
• “Inadequate Succession Planning” (Protiviti Performance Report - March 2013/4.1/pg36)
• “Absence of Succession Planning ” (Tamkeen’s Internal Audit - 2013 - HR and Payroll Audit - 7.)
Potential Risk and Impact

• Inability to replace competent staff, or devise other mitigating actions, within a favourable timeframe
• Hindered business continuity for key positions
• Absence of qualified employees
• Increased administration & HR related costs (recruitment and development of new employees)
• Adverse impact on the employee retention rate
Recommendation
Succession planning is the process of identifying and developing internal staff with potential to fill key business leadership positions within the organization.
This process increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. Hence, to
mitigate the above raised observation, it is recommended that a “Succession Plan” be put in place and all department heads should prepare succession plans for
their department stating suitable successors for all key job positions. Polices and procedures for succession planning should also be developed and implemented
at Tamkeen.
Management Response and Remediation Plan Responsible and Due date

Agree with the observation, policies and procedures in reference to succession planning practice are being created and Responsible: HR and
included in the newly revamped HR Manual, the reason the said system was not in place earlier is that many Administration Director
fundamentals that are essential for having an objective, fair and effective succession planning system in place were yet
to be designed and implemented ( i.e. proper performance management system, clear Job descriptions …etc. ) now that Due Date: Q4 2016
those systems are up and running and backed up by the appropriate, relevant policies and procedures.
PwC 10
2 – Lack of monitoring and control of departmental objectives and key performance

indicators (KPIs)– High
Observation
During the course of our audit, we requested for the HR&A department objectives and key performance indicators (KPI’s) as part of the list of requirements.
Initially, we were not provided with the departmental objectives and KPIs during the internal audit fieldwork; however, we were provided with HR related KPI’s
after the observations discussion session. As informed, the provided KPI’s are not monitored within the monthly reports and yet to be added.

• Lack of effective decision making
• Lack of efficiency and effectiveness
Recommendation
It is recommended that the Human Resources department at Tamkeen monitors and controls HR&A departmental Key Performance Indicators (KPIs) and
objectives pertaining to the various activities under its jurisdiction, and reports them to upper management. Furthermore, departmental goals and objectives
should be aligned with the company goals and objectives.
Relevant action plans for underperforming KPIs shall be continuously implemented and executed in order to maintain a high performance level.

Agree with the observation regarding previous years, KPI & HR departmental objectives are now available for this year Responsible: HR Manager
and will finalized by Q2 2016.
HR Monthly reports with relevant statistics are already actioned starting February 2016 Due Date: Q2 2016
PwC 11
3 – Inconsistency in dealing with separated employees– High
Observation
During the course of our audit, we have selected 5 personnel files out of the 7 separated employees who left Tamkeen during our audit period. We noted that the
current HR policies and procedures do not have any documented sections with regards to employee separation (handling resigned, terminated, retired
employees).
Based on our review of the employee files, we observed the following:
• Resignations letters were not found in 60% (3 out of 5) of the tested personnel files
• 80% (4 out of 5) of the selected sample have no End of Service Benefits (EOSB) calculation sheet within their personnel files
• Clearance forms are not available in 60% (3 out of 5) of the tested personnel files, while the 40% (2 out of 5) tested personnel files had clearance forms that
were incomplete
• 100% of the selected sample had no exit interview forms in the personnel files
The Bahrain Labour Law – Article 100 states that “… the party wishing to terminate the labour contract shall send the notice to the other party or his
representative and obtain his signature as an acknowledgment of receipt or send this notice by virtue of registered letter with acknowledgment of receipt to the
last address provided by the other party.”
The notice specified in Article 99 of Labour Law shall be sent in writing and the party wishing to terminate the labour contract shall send the notice to the other
party or his representative and obtain his signature as an acknowledgment of receipt or send this notice by virtue of registered letter with acknowledgment of
receipt to the last address provided by the other party.

• Inability to identify reasons for separated employees
• Hindered knowledge transfer to successors/replacements
• Loss of critical company information or assets due to incomplete clearance forms
• Incompliance with governmental entities and laws ( e.g. Incompliance with Labour Law )
PwC 12
3 – Inconsistency in dealing with separated employees– High (Continued)
Recommendation
It is advisable that the Human Resources department conducts “exit interviews” with departing employees. The primary objective of exit interviews is to learn
the reasons for the persons departure, taking into consideration that negative feedback is a driver for organizational improvement. Exit interviews are also a way
for transferring knowledge from the departing employee to successors/replacements.
Furthermore, it is recommended that the Human Resources Department updates its policies and procedures to add sections related to employee separation.
This should enforce the completion of the clearance form and the calculation of the end of service benefits, before the employee leaves Tamkeen. The employee
separation policies and procedures shall cover the following at a minimum:
• Types and conditions of termination

• Notice period
• Payment of Lieu of notice period
• End of Service Award
• Disciplinary Procedures
• Exit Interview
• Clearances

Agree with the observation, Inconsistency was due to amendments in the HR Manual that include all policies and Responsible: HR Manager
procedures .
Remediation plan : Due Date: Q2 2016
- Review all separated employees files and ensuring alignment with the new detailed procedure
- Implementing the new off boarding Policy and procedure with associated checklists
PwC 13
4 – Inconsistencies in performance appraisals – High
Observation
During our audit fieldwork, we reviewed the performance appraisals for 16 sample personnel files at Tamkeen who are eligible for performance appraisals. We
observed the following:
• Absence of June 2014 appraisal forms in all of the tested personnel files, after following up with HR department on this matter, it was noted that June 2014
appraisals were not conducted for any of the employees.
• In 13% (2 out of the 16) tested employees, the employee had the same appraisal results for 3 consecutive periods (June 2012, December 2012, June 2013)
• One employee had filed an appeal on her appraisal stating that she does not agree with the results of her appraisal, however there was no follow up
documented on the appeal
• 13% (2 out of the 16) tested employees for promotion did not have a promotion assessment form in their file, as indicated in Tamkeen’s policies and
procedures
• 56% (9 out of the 16) tested employees had missing Performance Evaluations in their file
• 88% (14 out of the 16) tested employee appraisals were not signed by the CE
• 50% (8 out of the 16) tested employee appraisals were not signed by the Appraiser
• 6% (1 out of the 16) tested employee appraisals were not signed by the Appraised
• One of the tested employees appeared to have high appraisal results (96%) from June 2011-December 2012, however, in December 2013 he received an
appraisal result of 79% and were promoted
It is also noteworthy to mention that similar observations have been raised in 2013 by the previous performance auditors under the title of :
• “Improvements needed to Performance Appraisal process documentation” (Protiviti Performance Report - March 2013/4.2/pg35)
• “Performance Evaluation Limitations ” (Tamkeen’s Internal Audit - 2013 - HR and Payroll Audit - 2.)
• “Inadequate performance appraisal of key senior individuals in receipt of salary increments and bonuses ” (Protiviti Performance Report – March
2013/5.14/pg46)
• “Performance Evaluations not in Employee Files” (Tamkeen’s Internal Audit - 2013- HR and Payroll Audit - 3)
PwC 14
4 – Inconsistencies in performance appraisals – High (Continued)

• Inability to effectively review, appraise and manage employee performance
• Lack of compliance with documented HR Policy
• Inability to identify employee’s competence
Recommendation
In order to mitigate the above observations, it is highly recommended to implement the following:
• Ensure that all employees are properly evaluated using the standard appraisal form
• Ensure that all appraisal fields are complete and that appraisals are signed by all concerned personnel
• Ensure that at least appraisals of the last three years are kept within the personnel files
It is also important to systemize the performance appraisal process, to ensure consistency and accuracy in the appraisals of all employees.
- There was no mid-year appraisal in 2014 due to the change in Performance system content and design Responsible: HR Manager
- December 2014 Appraisals were out for comparison purposes; we will place them back in the personnel files once
Due Date: Q2 2016
review round is completed
-Promotion assessment form was not in our policy, but now it is
-Remediation Plan :
-To put in place an Appraisal review process and include the same in the currently being finalized policies and
procedures , that includes Promotion Process being controlled by HR
PwC 15
5 – Inadequate hiring process – High
Observation
During the course of our audit review, we tested a sample of 30 new joiners’ employee files at Tamkeen, and reviewed the hiring process for each employee
within the sample. We noted that none of the employees have an employment contract within their files, as Tamkeen only issues a Job Offer and Executive
Resolution upon employment. However, under the Bahraini Labour Law, Article 19, organizations are required to have a labour contract for their employees.
Furthermore, we observed the following:
• 53% (16 out of 30) tested files, did not have the employee’s good conduct form
• 37% (11 out of 30) tested files had no documentation of conducted interviews or assessments during the recruitment process
• 30% (9 out of 30) tested files, medical insurance copies were not available
• 20% (6 out of 30) tested files, proof of pre-employment medical tests were not available
• 10% (3 out of 30) tested files, did not have the employee’s CV
• 6% (2 out of 30) tested were missing job offers
• Lack of detailed employee file checklist
It is also noteworthy to mention that similar observations have been raised previously, in 2013, by the previous auditors under the title of: “Recruitment Process
– Non-compliance to Recruitment Requirements” (Tamkeen’s Internal Audit - 2013 - HR and Payroll Audit – 5.)

• Ineffective hiring and selection process
• Failure to hire and select the right candidate
• Increased rate of low performing employees
• High employee turnover
PwC 16
5 – Inadequate hiring process – High (Continued)
Recommendation
To mitigate the above raised observation, it is recommended that the Human Resource department considers the following:
• Ensure that all approved policies and procedures related to the recruitment process are strictly adhered to
• Ensure that all Job Applications are accurately completed, acknowledged and filed
• Ascertain that background checks are being effectively carried out for all potential candidates (i.e. good conduct form, pre-employment medical test)
• Document recruitment interviews and assessments conducted during the selection process and file them in the employee file
• Ensure all new joiners are enrolled for medical insurance

Agree with the observation Responsible: HR Manager
Remediation Plan :
Due Date: Q2 2016
- Update employee personal files where possible
- Implement Employee file checklist
- New detailed hiring process is being included in the new policies and procedures
PwC 17
6 – Inadequate on-boarding process for new joiners – High
Observation
During our audit review, we tested 30 new joiners files and noted that Tamkeen follows an inadequate on-boarding process for new joiners, due to the following:
• 83% (25 out of 30) tested files did not have signed confidentiality or disclosure form
• 30% (9 out of 30) tested files had no Job Descriptions within the file
• 30% (9 out of 30) tested files did not have probationary evaluations
• 27% (8 out of 30) tested files had expired CPR copies
• 6% (2 out of 30) tested files had expired passport copies
• 3% (1 out of 30) tested files, the Job Description was not signed by the HR or CE
It is also noteworthy to mention that similar observations have been raised in 2013 by the previous performance auditors under the title of : “Employing
unqualified staff whose experiences do not match job descriptions” (2012 – HR - National Audit Court)

• Increased rate of low performing employees
• High employee turnover
Recommendation
It is recommended that the HR department ensures that all Tamkeen’s employees approve their Job Descriptions and confidentiality agreements by signing
them upon joining, and ensure that all signed and approved Job Descriptions and Confidentiality agreements are attached within employee files. It is also
important to document successful completion of employees’ probationary period and attach it within the employee files. Employee’s personal information in the
file should be valid and regularly updated (i.e. employee CPR, passport).
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6 – Inadequate on-boarding process for new joiners – High (Continued)
Recommendation (continued)
The Human Resources department should ensure that all required and approved forms are adequately completed and approved by necessary departments.
Moreover, the Human Resources departmental forms shall maintain standardized forms and include fields for signatures of responsible positions as per the
Human Resources policies and procedures and process maps of the department sub-processes.

Agree with the observation. Responsible: HR Manager
Due Date: Q2 2016
Remediation Plan :
-Update employee personal files system, that includes a detailed and clear workflow for the exercise,
-Employee file checklist
- On-boarding checklist + program review
- Governing policies and procedures are being finalized for sign off in April 2016
PwC 19
7 – Low employee satisfaction – High
Observation
During the course of our audit, we reviewed two Employee Satisfactions Surveys conducted in 2013 by Aon Hewitt and Talent Enterprise. We observed the
following:
• Based on Aon Hewitt research, organizations need an employee engagement level of 65% or better to drive superior business results. Tamkeen’s employee
engagement level is only 45%, according to Aon Hewitt.
• Moreover, the level of trusted leadership at Tamkeen was 29%, while organizations need a trusted leadership level of 61% or better to drive superior business
results
• The level of high performance culture at Tamkeen was 35%, while organizations need a high performance culture level of 57% or better to drive superior
business results
• The level of compelling employer brand level at Tamkeen was 55% while organizations need a compelling employer brand of 71% or better to drive superior
business results
• Employee satisfaction surveys are not done annually. Moreover, results of these satisfaction surveys were not shared with management and no action plans
were taken to improve the results.
In addition to the above, we also noted that Tamkeen lacks the motivational and cultural programs that engages employees. There is no documentation of any
such programs conducted between 2011-2014, that will help increase employee satisfaction.
It is also noteworthy to mention that similar observations have been raised previously, in 2013, by the previous auditors under the title of :
• “Disengagement evident in Employee Survey ” (Tamkeen’s Internal Audit 2013 – HR and Payroll Audit -14)
• “Labour Day Awards” (Tamkeen’s Internal Audit - 2013 – HR and Payroll Audit - 10)

• Low employee morale
• Low productivity
• Lack of innovation
PwC 20
7 – Low employee satisfaction – High (Continued)
Recommendation
In order to mitigate the above observations, it is highly recommended to conduct an employee satisfaction survey on a yearly basis to have a clear understanding
of the Fund’s standing from the employees perspective. Satisfaction survey results should be shared with management and accordingly and action plan should
be developed and implemented immediately. It is also recommended to implement a reward system and motivational programs that would encourage employees
to better perform and grow within the Fund.

-Policies and procedures are being updated to reflect that an employee satisfaction survey is to take place on annual Responsible: Human Resources and
bases. Administration Director
- For now, some efforts have already taken place to tackle reasons behind low employee satisfaction and rectify
Due Date: implemented already
accordingly , that includes but not limited to contracting with MSB consultancy in October 2015 , the project in
reference resulted in a number of recommendations that are being implemented already, that includes :
1- A Day in the Life of Tamkeen , an structured one day experience whereby all staff gather in one place and get
presented with the different functions roles and responsibilities by a representative of the relevant department in an
innovative, engaging manner
2- Leadership coaching program is to start soon as leadership style was highlighted in the MSB consultancy report as
one of the reasons behind the low employee satisfaction rate
PwC 21
8 – Absence of HRMIS system – High
Observation
During our audit review, we noted that Tamkeen’s MIS system does not fully support the Human Resources department. As we requested various documents to
test during our HR audit, we have received the same document in more than one format and version, since the department manages these documents manually.
We selected a sample of 25 employees and tested their leaves and leave balances. As a result, we found that 96% (24 out of 25) sample employees had variance
between the number of days carried over to the next year and the number of leave days they took during the year.
We also observed that documentation of employee information, attendance, leaves, payroll, trainings, etc. are all maintained on separate excel sheets, and there
is no correlation between them. Employee files are not backed up on an MIS system, in case of loss of employee files. In addition to that, the performance
appraisals are done by writing on paper and are not uploaded to the system.

• Loss of Employee Data
• Inaccuracy of Employee Data
• Inaccuracy and inefficiency in processing employee payrolls
• Inability to produce dynamic and real time information on Tamkeen
• Inefficient recruitment process
• Inefficient utilization of manpower
• Increased risk of Human Error
PwC 22
8 – Absence of HRMIS system – High (Continued)
Recommendation
It is highly recommended for the Human Resources department at Tamkeen, to implement a strong MIS system that will automate the processes of:
• Recruitment including posting vacancies, screening, shortlisting, assessment and hiring process of candidates
• Employee personal information including the department, division and position the employee works in
• Payroll
• Attendance and Leaves covering overtime, planned leaves, actual leaves
• Trainings which will include the competency assessments, trainings attended by employees, cost, exam results of professional certification,
• Performance Appraisals
The MIS system should also enable the department to maintain an electronic backup of the employee files. Furthermore, it is important to maintain all the
information related to each employee under one umbrella, and link the information together.

Agree with the observation, work to rectify have started in midyear 2015, an RFP was launched and we have received a Responsible: Human Resources and
number of proposals, however selection is not finalized yet. Administration Director
Due Date: Q4 2016
PwC 23
9 – Absence of detailed manpower plan– Moderate
Observation
During the course of our audit, we reviewed the Manpower planning process at Tamkeen. We received a manpower plan, which was not approved or dated that
identifies the number of required employees per department, available employees per department, and planned number of employees to be hired per
department; however, the Human Resources department does not possess / maintain a detailed Manpower Plan which takes into account the manpower budget
plan. In addition to that, the current manpower plan is not updated periodically to show the number of required employees per department. We also noted that
the hiring process is not being done with reference to the approved manpower plan. Moreover, the manpower plan does not take into account the positions that
have been filled by the outsourced employees.

• Inefficient hiring and selection process
• Manpower shortage
• Excessive Hiring
• Increased cost due to dependence outsourced manpower
• Interrupted operations due to shortage of planned resources
Recommendation
To mitigate the above raised observation, we recommend that the Human Resources department works closely with department heads to establish a Manpower
Plan in order to include job titles, job qualifications and experience, brief job profiles and expected yield and return from the new employees. In addition, it is
essential that the manpower budget/plan is prepared keeping in mind the approved organization structure. Any additional new positions, as laid out in the
manpower budget plan, should be included within the organization structure, including outsourced employees.
Moreover, the Manpower Plan should show the status of every required employee and whether the employee shall be transferred from another department or
hired from outside the Company. Finally, “Workload Analysis” can be an effective tool to be used when considering effective manpower planning.
Workload Analysis: A tool used to predict and plan future work and skills requirements based upon historical data. Once a workload baseline has been
established using past performance adjustments are made for expected changes in demand or other factors which impact the work scope.

- Agree and will implement recommendations , that includes maintaining a periodically reviewed manpower plan Responsible: Human Resources and
with associated costs and budget, however to clarify, HR was not included in the outsourcing activities took place Administration 2016
between 2011 and 2014 General manpower plan is available for the new structure launched in July 2015
Due Date: Q2 2016
- New policies and procedures are to include manpower planning as part of the recruitment policy
PwC 24
10 – Ineffective training and development plan– Moderate
Observation
During the course of our audit, we reviewed the documents received related to the Training and Development process. We noted that the Human Resources
department at Tamkeen has a Training Plan in place that details the name of the trainings employees who are planning to attend during that year and the cost of
that training. However, the plan does not have a training budget for each department. The total cost spent on training was as follows:
2011 2012 2013 2014
Training Cost (BD) 97,035 69,343 118,343 122,639
Number of Trainees 44 33 60 49
Cost per Head (BD) 2,205 2,101 1,972 2,502
The table above illustrates that the average cost of training per head decreases in 2012 and 2013 and then increases in 2014 indicating lack of control on cost of
training.
Furthermore, following our review of the conducted trainings, we noted that there were no competency assessments or training needs analysis conducted before
planning the trainings.
Moreover, we observed that 3 out of 25 tested employees have attended the same training twice within the audit period (2011-2014). Following the training,
there was no documented certification of attendance in the employees’ files, training report, or any monitoring of the employees performance. Although
Tamkeen’s HR policies and procedures states that “6.5 …. A record of all courses attended by employees and the results will be kept in their personal files
maintained by HR”.
Moreover, similar observations have been raised previously, in 2013, by the previous auditors under the title of:
• “Lack of competency assessment” (Protiviti Performance Report - March 2013/4.1/pg34)
• “Failure to monitor an employees performance subsequent to their completion of specialized training” (Protiviti Performance Report – March 2013/4.4/pg
36)
• “Absence of competency assessment reporting” (Tamkeen’s Internal Audit - 2013 - HR and Payroll Audit - 17.) and “Training Budgets ” (2013 - HR and
Payroll Audit – 20)
PwC 25
10 – Ineffective training and development plan– Moderate (Continued)

• Unaligned employee performance with overall organizational direction / objectives
• Failure to develop effective employee growth
• Lack of motivation and decreased employee satisfaction
Recommendation
To mitigate the above raised observation, it is recommended that the Human Resources department works closely with concerned department heads in order to
develop the required training & development plan for staff. Based on an approved cost/benefit analysis the Human Resources department shall decide if the
training is to be conducted internally or externally. Records of any trainings that are undertaken by members of staff should be included in their respective
employee files.
Moreover, the training plan should be approved, updated, and communicated to respective employees. Employees should be informed, at a minimum, of the
time and location of the training in order to adequately plan for leaves. The training plan should also include a training budget for all the departments within
Tamkeen, in order to plan trainings accordingly.
Furthermore, the training and development policy should be further improved to include the process of requesting a training, which should include a template
of the “Training Request Form” and the process for approving the requested trainings. A training needs analysis (TNA) should be conducted periodically, to have
a clear understanding of the trainings that would benefit Tamkeen the most.

-Training plan for 2016 are now being created based on gaps in performance taken from 2015 appraisal as well as Responsible: HR Manager
business needs identified after meeting with the different department heads
Due Date: Q2 2016
- Also, HR policies and procedures are being updated to include
* Actual training details (cost & attendance)

* Training calendar creation and training requests workflow
* Training Evaluation
* Training Impact
PwC 26
11 – Incomplete employee files – Low
Observation
During the course of our audit, we reviewed a sample of the employee files and observed the following:
• 1 out of the 51 employee files only contained pension papers, and all other documents were missing
• 1 out of the 51 employee files requested had no actual file in place, instead a group of papers clipped together. It was mentioned that this employee joined the
fund for 8 months only and hence, did not have an employee file
• Based on a selected sample of 27 employee files, 44% (12 out of 27) employee salaries stated on the GOSI documents in the employee files did not match the
actual salary of the employee.

• Potential financial loss due to inefficient clearance process
• Disputes with employee due to incomplete undertaking forms
• Unauthorized approvals
Recommendation
In order to mitigate the above raised observations, the Human Resources department should ensure that all document relevant to the employee should be filed
in the employee file. Once a new employee joins Tamkeen, the Human Resources department should create an employee file to file all required documents. In
addition to that, the employee file should be updated on a timely basis to contain the latest employee information.

Agree with the observation
Remediation Plan : Responsible: HR Manager
- To file where possible Due Date: Ongoing

- To maintain a PF check list and perform annual update to relevant documents
- To reflect the new detailed personnel file maintenance procedure in the new policy
PwC 27
Appendix 1
Meetings Conducted
PwC 28
Appendix 1 – Meetings Conducted
Meetings Conducted
During our information # Name Position

gathering process and
fieldwork, our engagement 1 Ms. Abeer Al Matooq Human Resources Director
team held several meetings
with personnel from the 2 Sheikh Hassan Al Khalifa Human Resources Analyst
Human Resources
3 Ms. Alla Bardestani Human Resources Officer
department.
Listed here are some of the

key attendees.
PwC 29
Appendix 2
Document Reviewed
PwC 30
Appendix 2 – Document Reviewed
Documents Reviewed
During our information # Document

gathering process and List of employees (detailing names, grades, job titles, employee ID#, date of joining license no. and nationality)
fieldwork, our 1
engagement team 2
List of all new joiners during 2011-2014
reviewed the following
List of al resigned employees during 2011-2014
main documents, 3
received from Tamkeen’s List of all employees with increments/merit increase during 2011-2014
4
HR department.
List of all employees promoted during 2011-2014 along with respective letters of promotion
5
Updated and approved organizational structure for the HR department and other departments
6
Last updated and approved HR Policies and Procedures
7
Approved job descriptions for HR personnel and for other departments
8
Code of Conduct/ Ethics
9
Copy of all contracts with manpower supply agencies
10
11 Training budget, plan and list of all conducted courses during 2011-2014
Monthly over-time summary sheets/reports during 2011-2014
12
PwC 31
Limitations and Responsibilities
Limitations inherent to the internal auditor’s work
We have undertaken the review associated with evaluating the existing controls within Tamkeen’s HR process, subject to the limitations outlined
below:
Internal control
Internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor
judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding
controls and the occurrence of unforeseeable circumstances. The observations raised within this report are resulting from conducting our audit
within the limited time of each audit. The observations were raised based on a risk-based audit approach where the focus was to highlight
observations to Tamkeen Audit Committee based on the risk exposure of the department or function. Action plans and deadlines were committed by
Tamkeen management process owners based on agreement on the raised observations.
The work we performed did not constitute a review in accordance with generally accepted auditing standards or attestation standards. Accordingly,
we do not provide an opinion, attestation or other form of assurance with respect to our work.
Future periods
Our assessment of controls relating to this Internal Audit review is for the period from 01 January 2011 to 31 December 2014. Historic evaluation of
effectiveness is not relevant to future periods due to the risk that:
• the design of controls may become inadequate because of changes in operating environment, law, regulation or other; or
• the degree of compliance with policies and procedures may deteriorate.
Responsibilities of management and internal auditors

Despite the fact that we did not plan and perform our work with the objective of preventing or discovering fraud or misrepresentation by Tamkeen, it
is management’s responsibility to develop and maintain sound systems of risk management, internal control and governance and for the prevention
and detection of irregularities and fraud. Internal audit work should not be seen as a substitute for management’s responsibilities for the design and
operation of these systems.
We endeavour to plan our work so that we have a reasonable expectation of detecting significant control weaknesses and, if detected, we shall carry
out additional work directed towards identification of consequent fraud or other irregularities. However, performance audit procedures alone, even
when carried out with due professional care, do not guarantee that fraud will be detected.
Accordingly, our examinations as performance auditors should not be relied upon solely to disclose fraud, defalcations or other irregularities which
may exist.
Disclaimer
This report has been prepared in accordance with our Agreement and Agreements Terms and Conditions with Tamkeen dated 30 June 2018,
and has been prepared for Tamkeen only and not for any other purpose. To the extent permitted by law, PricewaterhouseCoopers, M.E.
Limited does not accept or assume any liability, responsibility or duty of care for any use of or reliance on this document by anyone, other than
(i) the intended recipient to the extent agreed in the Agreement for the matter to which this document relates (if any), or (ii) as expressly
agreed by PricewaterhouseCoopers, M.E. Limited at its sole discretion in writing in advance. Accordingly, regardless of the form of action,
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any kind and disclaims all responsibility for the consequences of any person acting or refraining to act in reliance on the contents of this report
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Tamkeen - Final IA Report - HR Process-English

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Performance Audit Services

Dear Mr. Jarrar,

The criteria adopted for classifying the importance of each observation as

Serious and substantial impact on the Tamkeen’s ability to achieve objectives

Priority 2 Moderate impact on the Tamkeen’s ability to achieve objectives

Priority 3 Minimal impact on the Tamkeen’s ability to achieve objectives

Background Objective and scope of this report

Executive Summary (Continued)

Audit scope and objective Summary of audit results

• Leaves and Attendance AUDIT RESULTS BY SEVERITY LEVEL

The main objective of our performance audit was to assess the 9%

Low Moderate High

Executive Summary (Continued)

Summary of observations and potential risks Hiring and on-boarding process

We have noted that the process of handling separated employees, (i.e.

Human Resources process

Ref Observation Rating Page

1 Absence of succession planning process High 10

Lack of monitoring and control of departmental objectives and key performance

3 Inconsistency in dealing with separated employees High 12

4 Inconsistencies in performance appraisals High 14

5 Inadequate hiring process High 16

6 Inadequate on-boarding process for new joiners High 18

7 Low employee satisfaction High 20

8 Absence of HRMIS System High 22

9 Absence of detailed manpower plan Moderate 24

10 Ineffective training and development plan Moderate 25

11 Incomplete employee files Low 27

Observations layout & disclaimer

1 – Absence of succession planning process – High

• “Inadequate Succession Planning” (Protiviti Performance Report - March 2013/4.1/pg36)

Potential Risk and Impact

Management Response and Remediation Plan Responsible and Due date

2 – Lack of monitoring and control of departmental objectives and key performance

Potential Risk and Impact

Management Response and Remediation Plan Responsible and Due date

3 – Inconsistency in dealing with separated employees– High

Based on our review of the employee files, we observed the following:

Potential Risk and Impact

3 – Inconsistency in dealing with separated employees– High (Continued)

• Types and conditions of termination

Management Response and Remediation Plan Responsible and Due date

4 – Inconsistencies in performance appraisals – High

4 – Inconsistencies in performance appraisals – High (Continued)

Potential Risk and Impact

Management Response and Remediation Plan Responsible and Due date

5 – Inadequate hiring process – High

Potential Risk and Impact

5 – Inadequate hiring process – High (Continued)

Management Response and Remediation Plan Responsible and Due date

6 – Inadequate on-boarding process for new joiners – High

Potential Risk and Impact

6 – Inadequate on-boarding process for new joiners – High (Continued)

Management Response and Remediation Plan Responsible and Due date

7 – Low employee satisfaction – High

Potential Risk and Impact

7 – Low employee satisfaction – High (Continued)

Management Response and Remediation Plan Responsible and Due date

8 – Absence of HRMIS system – High

Potential Risk and Impact

8 – Absence of HRMIS system – High (Continued)

Management Response and Remediation Plan Responsible and Due date

9 – Absence of detailed manpower plan– Moderate