Problems and improvement measures in the Internal Control Mechanism of Rural Credit Cooperatives

For a long time, the contradictions accumulated by rural credit cooperatives due to internal control system, internal control and supervision have become increasingly prominent, which has posed more and more risks to their own healthy development. Strengthening the internal control and restraint mechanism and improving the internal control measures have become the key for rural credit cooperatives to standardize business behavior, prevent business risks and ensure sound operation. In this paper, the author tries to analyze the problems existing in the internal control system of rural credit cooperatives, and puts forward some improvement measures and methods.

Existing problems

In recent years, although some achievements have been made in the work of rural credit cooperatives, the situation is not optimistic, and potential unsafe factors still exist, mainly as follows:

The internal control system is not perfect. It is mainly manifested in the lack of comprehensive, systematic and scientific rules and regulations, and there are blind areas for monitoring some business operations; some rules and regulations no longer meet the needs of business development and must be revised and perfected; in the development and promotion of new business or the implementation of new management models, corresponding rules and regulations are not formulated in time, and there is a lag in system formulation.

The organizational structure and post setting are not standard. At present, the organizational structure of rural credit cooperatives has failed to achieve the purpose of mutual checks and balances. Although the board of directors and the board of supervisors have been set up in accordance with the regulations, its operation procedure and purpose are far from achieving the prescribed effect. In addition, the internal control responsibilities of the business functional departments are not clear, and the business management departments are not put in the central position of internal control and self-discipline. Due to the differences in the distribution of personnel, there are also great differences in the setting of posts, and individual rural credit cooperatives have the problem of one person with multiple posts and supervision out of control.

Audit supervision is not in place. It is mainly shown in that with the acceleration of the pace of electronic construction, the corresponding internal control of the computer information system has not yet adapted, and there is no effective supervision over the design and operation of computer programs and the flow of computer data; supervision and inspection are dominated by ex post supervision and lack of supervision in advance and in the event. Due to the lack of comprehensive professional knowledge of the inspectors, the computer, international business, intermediary business and other aspects have lost effective monitoring.

The quality of staff needs to be improved. In some places, the employees of rural credit cooperatives lack effective ideological and moral education, and a small number of employees have a bias in their outlook on life, morality and values, which damage the credibility and interests of rural credit cooperatives to a certain extent.

The accountability is not strong enough. The internal control binding force of rural credit cooperatives failed to play a role, due to mistakes in decision-making or major mistakes caused by moral problems of the main responsible persons and out of control of management, the investigation of the management or the main responsible persons appears to be powerless.

Measures and methods

In order to make rural credit cooperatives strictly implement the internal control management system in their business activities, reduce loopholes and hidden dangers in their work, and resolve operational risks, the author thinks that at present, rural credit cooperatives should strengthen the construction of internal control from the following aspects:

First of all, we should focus on the construction of the system and constantly strengthen the internal control management mechanism. To strictly implement the internal control system and reduce work loopholes and hidden dangers, we must establish a set of perfect internal management mechanism, so that every link and every part of the whole business activities have rules to follow, and violations must be investigated.

The first is to establish a self-control management network. Establish post responsibilities and a set of scientific responsibility assessment methods from top to bottom, so that there is a clear division of labor between departments and departments, between professions and professions, and between posts and posts.

The second is to establish a mutual control management network. Establish and improve a fully independent and authoritative internal supervision system, implement omni-directional and system-wide management of internal control, establish an internal control mechanism of power checks and balances and procedural constraints among relevant departments of business functions, and strengthen mutual supervision and restriction between departments, posts and posts, as well as between employees and employees. For the responsible persons of functional departments, directors of grass-roots rural credit cooperatives and important personnel, the supervision and restraint mechanism should be strengthened through the implementation of rotation, post change, term responsibility audit and departure audit. At the same time, strengthen the professional training of inspectors, improve the level and coverage of inspection, eliminate the inspection area, and make the inspection work meet the needs of business development.