Internal Control System

Internal Control System means all the policies and

procedures (internal controls) adopted by the management of the
entity to assist in achieving managements objective of ensuring,
as far as practicable, the orderly and efficient conduct of
business, including adherence to management policies,
safeguarding of assets, prevention and detection of fraud and
error, the accuracy and completeness of accounting records, and
the timely preparation of reliable financial information. The
internal control system extends beyond those matters which
relate directly to the functions of the accounting system and
comprise:

Control environment which means the overall attitude,

awareness and action of directors and management
regarding the internal control system and its importance in
the entity. The control environment has an effect on the
effectiveness of the specific control procedures.
Control Procedures which means those policies and
procedures in addition to control environment which
management has established to achieve the entities specific
objectives.

During the course of Audit for the year 2011-12, several

objections have been raised by Government Auditors with regard
to Loose Internal Control System in TCP. To rectify the inherent
lacunas, IAD has come up with following proposals:

1- Standard Operating Procedures:

Most of the Divisions in TCP, including regional and sub

regional offices, are working without well established System
Manuals/SOPs. To ensure accountability, performance measure
and performance Audit, It is imperative that the SOPs be
developed for all Divisions. Therefore, a committee may be
constituted to devise SOPs for all the divisions of TCP including
regional and sub-regional offices.

2- Rotation Policy

No proper rotation Policy is being exercised in this

organization. It has been noticed that certain positions are
preoccupied with officers/officials who have not been
transferred for years. Resultantly, in the wake of leave or
retirement of such officials, intricacies relating to their work
are not easily comprehended by those who step up to their
post. Besides, the management, more often than not, is left
with no option other than re-appointing such officials after
super-annuation. Therefore, it is strongly proposed that
rotation policy of three years must be enforced to increase
work exposure of employees of this corporation.

3- Capacity Building
It has also been noticed that culture of capacity
building/trainings in this organization is at discount. There
must be periodic trainings (short and long courses) for
employees of all the divisions in their relevant
area/departments to keep abreast of latest trends and
knowledge.

4- Proper utilization of Human Resource

It has been noticed with grave concern that considerable
strength of staff ( Drivers, Naib Qasids, Junior assistants) are
unnecessarily posted at regional , sub-regional offices and
CPCs . Whereas, P.O is facing dearth of lower staff
specifically drivers and naib Qasids ever since 197
 contractual were regularized in 2011.Presently, TCP is not
engaged in any cotton operation and the staff deputed there
must therefore, be posted back to Principle Office.

5- Lack of Computerization
Lack of computerization is one of the key lacunas which
requires immediate attention of the management. A
customized software application must be developed for PF
Cell, payroll management, financial management,
management of commodities lying in godowns etc. It must
have functionality to report relevant head in which
expenditure is incurred. Besides, the system must be fool
proof and be accessible to authorized persons only.

6- It is also proposed that photocopy approval be prohibited in

this corporation.

7- There must be a member of Audit Division in all sorts of

prequalification processes.

8- Any service provider/ supplier who fails to deliver the

services/goods must be blacklisted permanently.

9- Release of Bank guarantees must be audited by IAD.

10- Payment through online system

Payment of Personal Claims: Claims like TADA, Medical

Re-imbursement , salary , Eid Assistance, Bonus,
honorarium, leave encashment, education subsidy, re-
imbursement of telephone facility and many others which
falls in the category of Personal Claims must be credited into
employees salary accounts without using cross /open
cheques.
11- It has been pointed out by Commercial Audit that there
remain some activities which, presently, are not being
audited by Internal Audit Division

Investment activities

Payment/preparation/amendment of LC Documents.

Sale of Sugar/Rice

Renting out of TCP properties to rentee.

12- Vetting of Agreements

All agreements which are being made by all operational
and administrative divisions vis rent agreement, hiring of
consultant, hiring of transporter, Godown Surveying, Port
surveying, Clearing and forwarding, sugar surveying, hiring
of muqaddams, security and others must be vetted by Legal
and Audit divisions.

13- Bid Evaluation Committee

Presently, a committee namely bid evaluation
committee has been assigned a task to evaluate all sorts of
bids and has fixed members. It is being strongly proposed
that separate committees may be formed for evaluation of
different bids on the recommendation of concerned
Divisions Head. Besides, the committee must be devoid of
officers of the concerned / procuring Division.
14- Due care may also be taken to avoid same officer in
various bid evaluation committees.
 Remanining Points
__________________________________________________________
15- Constitution of Audit Committee: reference______, Audit
committee must be made to_______

16- It is being proposed here that as a part of pre-

qualification process, it must be ensured that all the service
providers must be Sales Tax and ____registered.