So you don’t know how the Bank of the City of Buenos Aires gives loans to large companies? Well, don’t worry because after nearly four months of work the Auditor General of the City of Buenos Aires (AGCBA, for its acronym in Spanish) could not figure out how they are given.
It is that, in general, the Watchdog found that "there are designed tools to account for how those credits are granted." From an accounting point of view is not possible to evaluate the activity as "missing written policies for the sector and indicators they are insufficient to reflect them."
The report made by the AGCBA assessed all loans that the Bank gave major companies through Area Management Large Enterprises throughout 2012, totaling $ 6.125.997.971.The credit lines from which the money is granted were several: Overdrafts, Export Financing Loans, Redeemable Loans for Working Capital Loans to Intermediate Construction Companies, among others.
Importantly, the audit selected a sample to evaluate some significant variables function choosing, for example, the top five largest amount agreements. It took into account the 46.76% of total loans in pesos and 36.27% of total profits in dollars.
Among the main irregularities detected by the AGCBA, it stresses that "there is no refined accounting information on the universe of loans Management of Large Companies" and therefore "could not verify every debt." There is no evidence of the work of this sector "so its action is unknown."
With regard to money laundering, "the implementation of prevention manual of this activity in relation to the request for an order to report to the Deputy for Prevention of Money Laundering on the transactions performed was not verified".
Although one of the objectives of the management was to update the files on all above one million pesos and less than three million, "no evidence of compliance was found."
Moreover, although a monitoring unit was established by resolution of the Board, "it was never in operation, indeed, even the steps were taken to bring this about." This situation, according to the AGCBA, "affects the monitoring and regularization of debts owed" in the audited period, like in 2012.
Speaking in Numbers
Of the 92 credit agreements evaluated "in 100% of them the documentation with the history of the firm was not present, as well as the disbursement of credit, the tracking of the loan and the information to the Deputy Laundering."
In 87 of 91 agreements "a copy of the contract by mutual agreement effected was not seen" in 25 cases of 92 "no request for Credit Rating was found" and four did not have Credit Risk Assessment.
In 22 of the 22 files relieved by the auditors there was no copy of the relevant insurance.
According to the AGCBA, in its report adopted in May 2014, there is a constant lack of "attentive to the knowledge of how the loan was granted and all its consequences.”