PROCESS-RISK CONTROL MATRIX

Agency: Home Development Authority Prepared By/Date: _________________

Audit Period: Jan – Dec. 2010 Reviewed By/Date: _________________
Approved By/Date: _________________

Significant Process: Window B: End-user Financing Program

Sub- Process Grant of housing loan to member-borrower
a. Critical path of the process:
Our documentation of the flow of the process may be in narrative form or graphical form through the use of process mapping flowcharts. The form of documentation depends on the size and complexity of
the process.

See attached Process in narrative form

(File name: Process narrative_HDA_End-User)

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b. Identify Process-level Risks and Relevant Controls

Impact
Accounts affected Control Reason if
Process Risks Statement Design
Existing Controls inadequate
(including Risk to PAPs Assessment
assertions)

Loans may be granted to Mortgage Contract Unqualified Review details of the adequate n/a
fictitious or unqualified member- Receivable – borrowers may be membership status by
Existence and granted housing the Senior Mortgage
borrower
Regularity loans that may Loans Specialists.
deplete the funds of
Provision for
projects for the
Impairment –
legitimate
Valuation
beneficiaries
Interest Income -
Occurrence

Housing loans may be granted to Provision for Increase in Review of the Credit adequate n/a
member-borrower with no Impairment – uncollected Investigation Report
Valuation Mortgage Contract by the Chief of the
capacity to pay
Receivable Credit Investigation
Division
Low Collection
efficiency

The amount of loan granted to
the member-borrower may be
more than the appraised value of
the property being mortgaged.
None - for the Increase of acquired Review and approval n/a
adequate
period under audit. assets that may be of the Confirmation of
difficult to dispose in Appraisal by the Chief
case of default by of the Credit Appraisal
the borrower. and Property Valuation
Division.

The Notice of Loan Approval may Mortgage Contract Increase in Review and approval Adequate n/a
not be supported by: Receivable - uncollected of the Notice of Loan
Accuracy Mortgage Contract Approval (NOA) by the
 Duly certified Credit Receivable Manager of the Loans
Interest Income –
Investigation Report Evaluation Dept.
Accuracy

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 Impact
Accounts affected Control Reason if
Process Risks Statement Design
Existing Controls inadequate
(including Risk to PAPs Assessment
assertions)

 Duly approved
Confirmation of Appraisal
and PVIR
 Duly approved Loan
Evaluation Sheet

The amount of housing loans Mortgage Contract 1. The Request for n/a
Increase in Adequate
released to member- borrower Receivable - Payment (RFP) is
uncollected
Accuracy reviewed by the Chief
may not be equal to the amount Mortgage Contract
of the Loans
as per the Notice of Loan Interest Income – Receivable
Evaluation Division.
Approval. Accuracy
Low collection 2. The Vice President
efficiency of the Housing Loan
Sector reviews and
signs the RFP.

c. Summary

KEY OBSERVATION RECOMMENDATION

The design of control for the granting of loan to end-user or - None -

directly to the member-borrower is adequate to address the
identified process risk.

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