Management Discussion & Analysis in enhancing the skill sets and knowledge of its employees, including Audit team members, through regular training and development initiatives. The Internal Audit team at Arohan comprises ~170 skilled auditors, strategically located across its operational areas, meticulously chosen through a rigorous selection process. During FY 2024, the department successfully conducted audits of over 950+ active branches on a quarterly basis, encompassing microfinance, Micro Enterprise Loan vertical, ArohanPrivilege Digital Lending vertical and Sourcing & Collection operations. Notably, the audit coverage rate for microfinance and Sourcing & Collection branches remained at 100% throughout all quarters of FY 2024. The function is facilitated by a real-time Audit Management System (AMS), bolstered by technological support from the in-house IT Department. This web-based system ensures seamless audit operations and systematically captures audit findings in a structured and scheduled manner. The platform enables real-time tracking of audit progress, facilitating swift escalation of significant issues and monitoring closures with optimized efficiency, all within predefined timelines. Furthermore, in 2023, an end-to-end fraud management system (FMS) was introduced for reporting, tracking and document repository of all fraud cases with better visibility, traction and coordination by all stakeholders. The Data Analytics team within the Internal Audit function consistently endeavors to provide management with insightful leads, alongside various audit inputs for field audit verification, thereby enhancing the overall effectiveness of Arohan’s Internal Audit processes. Methodology and Reporting The Internal Audit function at Arohan conducts audit of all operative branches once in every quarter. The audit is focused on a three-pronged approach namely: • FieldProcesses: The Field Process includes audit of the logs and practices of business operations including Verification, Collection and Disbursements to name a few. • Back-EndActivity:TheBack-EndActivity 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 results in customer interaction and business or behavioural transactions. The above heads, along with its various subheads, are assigned appropriate weightage within a dynamic range, to reflect the final audit score. Each branch, having undergone audit every quarter, is assigned an audit grading based on the observations and scores. The resultant grade acts as a significant parameter in defining the organisation’s quality parameter and contributes to a significant share of the performance appraisal process of all concerned parties. Branches are covered under regular audit and snap audit alternatively on a half yearly basis. 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. Support functions, including Compliance, Human Resources, Administration, Information Technology, Central Operations, Finance and Accounts are also audited at least twice a year. High emphasis is further enforced on monitoring the adherence to compliance and regulatory requirements as prescribed for NBFC-MFI under different statutes. Formal reporting is done to the Audit Committee once in every quarter. Vigilance function Arohan launched its own Vigilance Department in FY 2021, led by a seasoned ex-serviceman possessing extensive experience and training in the relevant domain. The Company aims to gradually augment the team over time. This department is tasked with conducting thorough investigations into significant fraud cases and maintaining effective communication with local Government Agencies to solicit assistance whenever necessary. Annual Report 2023-24 | 60
RkJQdWJsaXNoZXIy NTE5NzY=