Special Department of Internal Control (SDIC) is a subdivision of TVEL Fuel Company’s organization engaged in internal control activities with respect to various spheres of business.
SDIC of TVEL JSC (the unit of the Director for Internal Control and Audit) operates in accordance with regulatory legal acts of the Russian Federation, local regulations of TVEL JSC and ROSATOM State Corporation, and the provisions on these structural subdivisions.
SDICs were created in 9 companies of TVEL Fuel Company: AECC JSC, VNIINM JSC, KMZ PJSC, MSZ PJSC, NCCP PJSC, SGChE JSC, UEIP JSC, ChMP JSC.
In accordance with ROSATOM Internal Control Development Concept the main purpose of ICS is to promote the achievement of the Fuel Company’s strategic goals, to contribute to corporate governance improvement in TVEL JSC and companies forming the management system of the Fuel Company, in compliance with the requirements of the Russian Federation law, regulatory state authorities and international standards.
The purpose of ICS development is to maintain corporate governance mechanisms, primarily the regulatory ones, consistent with changing external and internal conditions
The main subjects of the Internal Control System in TVEL Fuel Company are the following: President of TVEL JSC, the Board of Directors of TVEL JSC, TVEL JSC Management, the Director of the Unit for Internal Control and Audit of TVEL JSC, and the governance bodies and SDICs of TVEL JSC subsidiaries.
The objects of control are as follows: TVEL JSC, subsidiary companies, and their structural subdivisions
Table 12
Indicator | 2015 | 2016 | 2017 | 2017/2016, % |
|---|---|---|---|---|
Number of control activities in accordance with the plan, including: | 120 | 125 | 118 | 94% |
with Audit Committees | 15 | 2 | 1 | 50% |
audit of financial and business activities including procurement and personnel record management | 84 | 75 | 71 | 95% |
internal audit | 12 | 8 | 16 | 200% |
Apart from the scheduled inspections, the workers of SDIC in TVEL Fuel Company conduct unscheduled inspections by the order of the governance. They also participate in the working groups in the audits of their organizations and in inspections conducted by ROSATOM State Corporation.
The key directions for the internal control system development in TVEL Fuel Company are as follows:
- further integration of adequate control procedures in the processes, and allocation of duties and responsibilities to the participants of the processes for the efficiency of internal control;
- development of mechanisms for involving critical stakeholders in internal control activities;
- ICS reliability and efficiency monitoring development by introduction of various methods to promote continuous and regular assessment of the internal control system state;
- SDIC competence and potential development.
Main results 2017
In accordance with the approved plans for 2017, the workers of SDIC conducted 118 control activities. Reduction of the number of scheduled inspections, as compared to the previous period, is connected with the change in the approach to control activities, and introduction of the methods and practice of appraisal and assessment activities
The inspections conducted at the enterprises of TVEL Fuel Company revealed violations and deviations in implementation of financial and economic operations, including procurement activities. Based on the revealed facts, corrective measures were developed, and disciplinary measures were applied to employees who committed violations.
In 2017, SDIC of TVEL JSC organized an audit of the internal control system at all stages of the life cycle of the investment project. Auditing of eight investment projects of TVEL Fuel Company being in various stages of accomplishment was carried out. The audit identified the main problem areas, developed and approved measures to improve the level of reliability of the internal control system at certain stages of the life cycle of investment projects.
Plans 2018:
- increasing the competence in the field of internal audit;
- timely and full identification of material violations in the activity of the companies of TVEL Fuel Company, identification of "weak" places at control facilities and development of recommendations for the integration of preventive control procedures;
- contribution to the achievement of strategic goals of the Fuel Division with regard to increase of the share in the international market, reduction of prime cost, increase of revenue from new products.