“We are in the process of appointing new bankers for the group and our Treasury department is being told by the bank that its systems do not allow it to distinguish between instructions in respect of payments to third parties and transfers of funds between our own group company accounts. This means that we are being asked to provide board resolutions to the bank which say that certain employees may give instructions without financial limit in any circumstances, although our internal delegated authorities (DAs) do place such a restriction on the employee in certain circumstances i.e. in respect of payments to third parties.
We are amending our financial procedures to make clear to employees that their ‘unlimited’ authority must in fact be exercised in accordance with the DAs but we are aware that there is an internal control issue concerning the difference between the authority given to employees under the DAs and the authority that they have under the bank mandates.
May I ask if other companies have experienced a similar situation and, if so, how they dealt with it? I have to admit to surprise that a major international bank claims not to be able to offer its global corporate customers what I would see as a fairly basic control process.”
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