Interfront 2023 Annual Report

51 GOVERNANCE PART Five Interrelated Components of Internal Control  CONTROL ENVIRONMENT  entails the practice of ethical values by employees, and employees’ commitment to competence and their own development. Interfront endeavours to maintain a robust control environment through the recruitment of competent and qualified personnel who are dedicated to upholding Interfront’s ethical values. Our Code of Ethics serves as the guiding principle for our conduct, and our staff members are unwavering in their commitment to ethical behaviour, integrity and accountability. The leadership team has fostered a culture that emphasises the significance of adhering to policies and procedures, complying with regulations and effectively managing risks, as is evident in the twelfth consecutive unqualified audit report on the Annual Financial Statements that Interfront received in the previous financial year, with eleven years of clean audit opinions. Moreover, our Personal Development Process offers both staff and management the prospect of embracing personal growth and pursuing continuous improvement and development.  RISK ASSESSMENT  is the process whereby internal and external risks posed to Interfront are detected, evaluated and mitigated. This assists the management team in establishing and understanding which risks are likely to occur, as well as how the risks arising will be managed to ensure that Interfront achieves its strategic outcome-orientated goals. Risks are assessed by the Interfront Risk Management Forum and are reviewed by EXCO and the SARS/Interfront Audit and Risk Committee, as well as the Interfront Board.  CONTROL ACTIVITIES  are an essential part of providing a structured approach to ensuring operational integrity, managing risks, complying with regulations, protecting assets, maintaining financial accuracy, preventing fraud, optimising efficiency and promoting business continuity. Policies and procedures are created to ensure that directives are known, understood and diligently adhered to. This includes, inter alia , approval authorisation, verification, reconciliation, performance appraisals, the security of assets and the segregation of duties. Control activities are primarily managed through the Interfront Delegation of Authority and approved policies and procedures adopted and implemented in Interfront. Interfront’s performance is reviewed every quarter against its annual targets, as set out in its Annual Performance Plan. The Financial Statements, Cash Flow Projection and Budgeted Expenditure vs. Actual Expenditure reports are submitted for review at every Board meeting. Policies and procedures have been developed and adopted to ensure sufficient controls to safeguard Interfront’s assets and regulate their movement and control.  INFORMATION AND COMMUNICATION  strengthen internal controls and are important for day-to-day functioning. Management and employees must have access to relevant, complete, reliable, correct and timely information to make informed decisions. It is important that communication flows both top-down and bottom-up. EXCO meets with line managers monthly to discuss matters and concerns within their teams and company-wide risks, as well as matters that require management attention  MONITORING ACTIVITIES  entail ensuring that internal controls are understood and adhered to. The Delegation of Authority is continuously reviewed and updated to ensure and maintain the segregation of duties. Policies are reviewed and aligned according to changes in circumstances and Internal Audit reviews, and the AGSA conducts annual audits. INTERNAL CONTROL UNIT Internal Control Unit Interfront does not have a standalone internal control unit. However, Interfront subscribes to five interrelated components that are essential for managing the activities of internal control. Each of these is discussed in this section. CONTROL ENVIRONMENT RISK ASSESSMENT INFORMATION AND COMMUNICATION CONTROL ACTIVITIES MONITORING ACTIVITIES