Bina Artha Ventura Branch Office Operational Review Audit Alert Memo

Doc. No. 012/AAM/IACD/V/17

To From
Budhi Siswoadji – COO Miki Suryawan Muharam - Internal Audit and
Jaya Fatwa – CHRO Control Head
Surya Agung Meranga – Distribution Head
Hery Chandra – Province Manager Tel: (62)(21) 571 3947
Apik Anitasari Intan Saputri – Regional Manager 6 Email : miki.muharam@bina-artha.net

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Christian Banno – CEO The 2017 Annual Internal Audit Plan
Hartian S Widhanto – Chairman of Audit Committee
Massimo Vita – Audit Committee
Date
June 08, 2017

Bina Artha Ventura Audit Alert Memo – Branch Office Operational Review

A. BACKGROUND

According to the 2017 annual internal audit plan set and approved by BoD of Bina Artha Ventura. The Internal
Audit and Control (IAC) Department of Bina Artha Ventura (BAV) conduct a review on Tarub branch office, and
auditing some processes of HO are an integral part of the branch audit. The overall objectives of this review are
to:
 provide assurance to management that the controls and procedures are implemented effectively in the
branch offices, and no misbehaviour and fraudulent occur in the branch offices,

 identify areas of improvement to support future business growth,

 follow-up the action taken as required on the payment instalment review report.

The audit for both internal and external activities is performed on 30 – 02 June 2017 and the closing meeting
was held on Friday, 02 June 2017. The meeting is conducted to inform all findings for both temporary and
permanent findings and to get their corrective / preventive action.

Referring to the high level risk of findings, the alert memo is issued by IAC Head to Auditee and Management
(cc to Audit Committee) as the early warning phase to them to prepare some required action especially related
with the people and business continuity. The scope of findings described in this alert memo is all processes
which are implemented and executed in Tarub BO.

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Bina Artha Ventura Branch Office Operational Review Audit Alert Memo

B. FINDINGS

1. Dummy Payment – Other Client Payment

There were dummy payments using other client cash conducted by 2 RO’s (Lutvi Iko Priyatna & Adhe
Nugroho Titis Winoto) to cover installment client’s with total verified amount IDR 450,000. Detail as
follows:

Client Paid Allocated to

No Account ID Client Name Center Name PIC Due Days
Date Amount AccountID Client Name Center Name Date Amount
1 0100D5200099 DILAH BATIK 0 24-May-17 Rp. 50. 000 0100D2500113 TRI MUKTIANA MIWITI REJEKI 24-May-17 50,000
Lutvi Iko Priyatna 0100D5200026 WASLAH SRIKANDI 27-May-17 310,000
& Adhe Nugroho
2 0100D5200026 WASLAH SRIKANDI Titis Winoto ( RO) 0 27-May-17 Rp. 400.000 0100D2300014 MUTMAINAH BATIK 27-May-17 30,000
0100D5200099 DILAH BATIK 27-May-17 50,000

.
Based on interview with those ROs , They did that due to avoid PAR

Additional information, BM (Heri Susanto) acknowledge this practice models.

Root Caused (Control Ineffectiveness)

BM did not conduct PAR and current client visit frequently

Impact

It is a potentially high risk for

 Operational risk – fraudulent and company sustainability caused by misleading data,
 Reputational risk - company culture caused by wrong example, misbehavior and misconduct of the
leader.

Recommendation
A. People Related
BOD and Management shall:
 Take disciplinary action to employee who performs and involves in fraudulent findings by referring to
HR policy and standard fraud disciplinary action (See Appendix 1 for detail).
RO (Lutvi Iko Priyatna) – Dummy Payment – Other Client Payment  WL 3
RO (Adhe Nugroho Titis Winoto) – Dummy Payment – Other Client Payment  WL 3
 Review promotion to employee that involved in fraud.
 Re-socialize company code of ethic includes the disciplinary action taken. (DiC: Operation Dept. –
Distribution, HR Dept.)

B. Process Related
Operation Department shall:
 Enforce RM and AM to conduct regular monitoring activity by visiting supervised branch properly
and constantly.

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Bina Artha Ventura Branch Office Operational Review Audit Alert Memo

 Enforce BM to strengthen the internal control and follow the regulation during acquisition,
disbursement and collection and conduct random sampling on PAR and current clients.

Management Response
[Agree / Agree with Alternative / Disagree]

PIC :
Due Date :

Appendix 1 – Standard Fraud Disciplinary Action

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Bina Artha Ventura Branch Office Operational Review Audit Alert Memo

Standard Fraud Disciplinary Action

Amount / Other Standard Disciplinary
Description Category Description 2
description Verbal WL WL 1 WL 2 WL 3 Terminate
Dummy Payment - Other client payment All amount 1st 2nd
Dummy Payment Manipulation Dummy Payment - Personal money All amount 1st 2nd 3rd 4th
Dummy Payment - Company Money All amount 1st 2nd
Delay to submit installment received - Preclosure
All amount 1st 2nd 3rd
(Maximum3 Days)
Delay to submit installment received - Preclosure
All amount 1st 2nd
(More than 3 Days)
Delay to submit installment received - Partial
All Amount 1st 2nd 3rd
Payment (Maximum3 Days)
Delay to submit installment received - Partial
All Amount 1st 2nd
Delay to submit Payment (More than 3 Days)
Manipulation
installment received Delay to submit installment received - Arrear Clients
All Amount 1st 2nd 3rd
(Maximum3 Days)
Delay to submit installment received - Arrear Clients
All Amount 1st 2nd
(More than 3 Days)
Delay to submit installment received - WO
All Amount 1st 2nd 3rd
(Maximum3 Days)
Delay to submit installment received - WO (More
All Amount 1st 2nd
than 3 Days)
Submit client Pre Closure payment gradually to BO All amount 1st
Using client regular installment for personal interest All amount 1st
Using client WO installment for personal interest All amount 1st
Using client money for
Embezzlement Using client Pre Closure installment for personal
personal interest All amount 1st
interest
Excess Installment / Preclosure was not returned to
All amount 1st
Client - more than 1 week
Data Faking; Client Signature and/or Client
Information, included information informed in all Not Available 1st
document required in every step of loan process
Manipulating client personal details information (eq.
Client Information Manipulation Not Available 1st 2nd 3rd 4th
CIF Form)
Suggesting/helping/creating fake insurance claimfor
Not Available 1st
client or spouse
Creating fake client Not Available 1st
Enforce Client to pay additional fee for personal
All amount 1st
purposes
Borrow Client Money and/or Client Identity
All amount 1st
Documents for personal purposes
Spreading rumors that caused significant loss or Justified by
1st
reputational damage to the company Management
Requesting or receiving money or gifts of goods or
services fromemployees, suppliers, partners,
Other Improper Other Improper customers, or other third parties. Employees must All amount 1st
behaviour behaviour report to the direct supervisor when receiving a gift
or gratification fromsuppliers or clients.
Misuse the company asset that caused significant Justified by
1st
lost to the Company Management
Creating fake company’s document/stamp/personnel
Not Available 1st
signature
Manipulate reporting petty cash register/CV All amount 1st
Fake Receipt claimto Company All amount 1st
Faking signature on cheque Not Available 1st
*) Explanation : 1st,2nd and 3rd is the frequency of the same Employee committed to do Fraud.

Appendix 2 – Level of Auditee Cooperation

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Bina Artha Ventura Branch Office Operational Review Audit Alert Memo

Level Cooperation – Tarub

Tarub
RO RO BM
Criteria Weight
(Lutvi Iko (Adhe Nugroho (Heri
Priyatna) Titis Winoto) Susanto)
Pressure given 25% 20 20 20
Transperency 25% 20 20 20
Straight foward to the issue 25% 20 20 20
Negatif rumor built 25% 20 20 20

TOTAL Score 80 80 80

RULES (defined by IAC Dept.)

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