Arohan Financial Services Limited | Annual Report 2022-23

Management System (FMS) for faster reporting, tracking and closure of fraud cases in the business. The platform is integrated into its in-house mobile application, meraArohan. It is a completely in-house developed platform that provides a “Report to Resolution (R2R)” facility with real-time tracking and a dashboard of all fraud cases. This platform also enables the teams to create a database of the types, geography, branch, and employee-wise database for future ready reference. The Data Analytic team, in the Internal Audit function, continuously endeavours to provide insightful leads to the management, along with various audit inputs for field audit verification, enabling quicker and more accurate decision-making. Methodology and Reporting The Internal Audit function at Arohan conducts an audit of all operative branches once every quarter. The audit is focused on a three-pronged approach namely: • Field Processes: The Field Process includes an audit of the logs and practices of business operations includingverification, collection, anddisbursements to name a few. • Back-End Activity: The Back-End Activity approach is designed to screen for deviation in any documentation and administration-related activities that drive business continuity. • Customer Contact: Through the Customer Contact process, the vertical cross-checks all systems and processes that result in customer interaction and business or behavioural transactions. Each of the approaches mentioned above is assigned appropriate weightage within a dynamic range, to reflect the final audit score of each branch, having undergone an audit every quarter which contributes to a significant share of the performance appraisal programme of all concerned parties. Additionally, Snap Audit covers the highly important aspects of the full audit process and is undertaken by a senior audit resource to ensure in-depth exploration and analysis of high-risk areas, with a much shorter Turn Around Time. Branches are covered under regular audits and snap audits alternatively on a half-yearly basis. Support functions, including Compliance, Human Resources, Administration, Information Technology, Central Operations, Finance, and Accounts are also audited at least twice a year. Formal reporting is done to the Audit Committee once every quarter. Vigilance In the business of microfinance, Vigilance plays a key role in helping an organisation ensure clean business transactions, proficiency, effective output, and transparent practices. Internal Audit in Arohan is ably supported by its Vigilance Department, headed by an ex-serviceman, with requisite experience and training in the relevant area. The function acts as an ombudsman to curtail any possibility of fraud and is entrusted with the responsibility to deep-dive large frauds and effective liaising with the local government agencies for any support as and when required. Going forward, Internal Audit at Arohan will continue to impress high emphasis on monitoring adherence to compliance and regulatory requirements as prescribed for NBFC-MFIs under different statutes, while playing a key role in the quality assurance of the Company. Management Discussion & Analysis Annual Report 2022-23 | 60