Generic (Not Riyad Bank) Diagram of Intellimatch in a Typical Workflow with Midas As The

INTELLIMATCH System (Financial Accounting) Procedure (for data retrieval and processing) (7-5-109)

Code Value

Description

Table of Contents

Code Value

Description

Generic (not Riyad Bank) Diagram of Intellimatch in a typical workflow with Midas as the GL System

Introduction

Midas Interface & System Diagram (not used at Riyad Bank)

Messages from Other Sources

IntelliMatch Processes

Financial Division Reconciliation Policies

Account Ownership

Definition

Business Units and Cost Centers

Responsibilities related to the ownership of GL accounts

Responsibilities of accounts’ owners in Treasury Back Office

Responsibilities of accounts’ owners in Reconciliation Department

Accounts’ Ownership List

Suspense Accounts

Definition

Use of Suspense Accounts

Types of Suspense accounts

Suspense Accounts Ownership

Functions of suspense account’s owner

Functions of Finance Division & Risk Management

Escalation Process

List of Suspense Accounts

Unclaimed Items

Process of opening new account in GL

COV/VLM Maintenance Form

System(s) will be affected

Suspense Accounts List

Business Tasks (Daily)

Troubleshooting

Extract from Midas AS/400

File Transfer from Midas AS/400 to PC

PreReformatter

Recollector

Databases

Create a New User (& User Group)

Create IntelliMatch Data

Create a Company

Create a Class

Create a Balance Pool

Create Accounts

Create a Ledger Account

Create a Statement Account

Create an Internal Account.

Add Opening Balances

Add Opening Balance for Ledger Accounts

Add Opening Balance for Statement Accounts

Take On a New Account

Overview

Create a Batch in Recollector

Insert Items in IntelliMatch

Manual Matching

Match Exact Amounts

Match where Amounts Differ (Tolerance Matches)

Overview

Define Write-off fields

Match Items Where Amounts Differ

Purging

Set Options to Purge Items

Purge Items to History

View Historical Items

Purge Items From History

Purge Balances

Purge Reconciliation History

Purge In/Out History

Appendix A: IntelliMatch Standing Data Supplied

Introduction

Company

Class

Recollector Look-Up Tables

1. Debit/Credit

2. Debit/Credit Balance

3. Available Balance Ledger Debit/Credit

4. Available Balance Statement Debit/Credit

Recollector Formats

Import Format Options

Reformatter Used

MKI Ledger Cash Import Format

MKI Statement Cash Import Format

All IntelliMatch Fields & their Size

Appendix B: Suggested IntelliMatch User Groups

Administrator

Clerk

Supervisor

Investigator

Generic (not Riyad Bank) Diagram of Intellimatch in a typical workflow with Midas as the GL System

Introduction

IntelliMatch is an account (nostro accounts at Riyad Bank) reconciliation application that simplifies the process of reconciliation. IntelliMatch reduces the time required to perform matching and increases the number of items matched without user intervention.

IntelliMatch is a suite of products:

-- IntelliMatch—the main system, which is used to match items, reconcile accounts, and perform research and resolution

-- Recollector—the data collection module, which is used to gather, format, and manage data in the IntelliMatch database

-- Admin—the administrative module, which is used to manage user security and control the job schedule

Accounting personnel may use IntelliMatch to perform research and resolution functions, including inquiry, maintenance, matching, and reconciliation.

-- Technical or information systems personnel may use Recollector to collect data, schedule jobs, and maintain the corporate database. Accounting personnel may also use Recollector to create batches of data for manual import.

-- Administrative or management staff may use Admin to oversee the daily operations of IntelliMatch.

Intellimatch (for nostro reconciliation) automates the task of reconciling general ledger details against incoming statements. Ledger details and statements are supplied to IntelliMatch by a source system, typically Midas or a SWIFT device but others may be used. They are then automatically compared with each other in a process analogous to checking check stubs against a monthly bank statement. This automatic matching is controlled by user-defined rules that can ensure a very high match rate. Items that cannot be reconciled are automatically identified for computer-assisted processing.

Midas Interface & System Diagram (not used at Riyad Bank)

The Midas Automatic Reconciliations III module interfaces to the Midas General Ledger and SWIFT Direct link modules. Statement information, in SWIFT MT940 or MT950 messages, are extracted from message management, after receipt from SWIFT via the Swift Direct Link module. Ledger information is extracted from the Midas General Ledger, also in MT950 format.

Messages from Other Sources

IntelliMatch will process SWIFT formatted messages from any source, not just Midas. For these installations, SWIFT formatted messages must be supplied as ASCII files for both Ledger (outgoing) and Statements (incoming) for IntelliMatch to access.

They can be supplied in any directory on the network that the IntelliMatch server can access.

The only other check required is that the source system should check if the file already exists in the directory. If it does exist, it means that IntelliMatch has not yet processed it for some reason, which situation should be investigated at once. It must not overwrite the previous file until it has been processed.

However, in normally operations, IntelliMatch processes the files as soon as they are created.

Note: There may be commercial implications for processing messages from other sources than SWIFT.

IntelliMatch Processes

All other activities then occur on PCs and are controlled by IntelliMatch.

As soon as IntelliMatch detects the existence of the SWIFT message files, it automatically loads them into the PC database; then automatically matches them.

IntelliMatch renames the source input files after processing, keeping the last 100 files.

Financial Division Reconciliation Policies

(from Riyad Bank, Accounts Ownership & Suspense Accounts Definitions & Policies)

The GL Accounts’ owner is the business unit that effects a transaction to an account and the business unit that has an account within its general ledger books.

The processor/controller/monitor of an account has the responsibility to ensure that the transactions being effected to the account are correct and that the account is liquidated in case of transit and suspense accounts.

Any doubt regarding unknown or mismatched transactions should be escalated and follow up made to correct the matter.

Account Ownership

Definition

Account ownership is defined as the identification of a responsible unit (independent ownership) or units (shared ownership) to operate, review, and clear the balances in that account.

Business Units and Cost Centers

The following business units/Cost Centers are the main account owners in the bank:

• Domestic Banking
• VISA & ATM
• Treasury & Investment
• Overseas Branches & Affiliations
• Corporate Banking
• Trade Finance
• Human Resources
• IT & Operations
• TBO & Investment Operations
• Reconciliation Department
• Operational Risk Management & TMO
• Central Accounts
• Shareholders Department
• Financial Accounting.
• Other profit and cost centers not included above as per approved structure in Finance Division, Management Reporting

Responsibilities related to the ownership of GL accounts

The owners of the GL accounts are responsible for:

• All activities in their accounts and the transactions posted therein (on a daily basis)
• Ensuring the correctness and genuineness of the transactions posted in their accounts (on daily basis)
• Daily review of balances in those accounts to ensure the correctness of entries posted therein
• Daily reconciliation of control accounts and the subsidiaries attached to those control accounts (at sub ledger-Eximbills, Systematics etc. and ledger level- GL)
• Daily and monthly review and clearance of entries appearing in the suspense and transit accounts of sub ledger(s) and ledger
• Ensuring preparation of age analysis on the entries appearing in suspense/ transit and sundry accounts for onward submission to Finance Division for review and resolution (on monthly basis)
• Assisting reconciliation department in reviewing and ensuring clearance, on daily basis, of un-reconciling entries appearing in auto reconciliation report between ledger and sub ledger
• Reviewing and ensuring correctness of all the manual entries posted in accounts under their ownership on daily basis
• Timely reporting of problems relating to any activity in their accounts to the head of Financial Accounting Department.

Responsibilities of accounts’ owners in Treasury Back Office

In addition to the responsibilities for which they are accountable as back office and owners of the account (as mentioned above), TBO is also responsible for the following process/activities that have a direct reflection in GL:

• Daily review of currency position and passing proper entries to ensure correct reflection of currency position in GL.
• Liquidation of Suspense Accounts under their controls on daily basis.
• Post and subsequent review of manual entries in GL:M and Midas for non interface products.
• Informing Finance Division in a timely manner, about any adjustment that is needed in Sub Ledger or Ledger

Responsibilities of accounts’ owners in Reconciliation Department

In addition to the responsibilities as account owners, Reconciliation Department works as a support between the various users of Ledger (GL) and Sub Ledgers (Eximbills, Systematics etc.). Their responsibilities include:

• Review of daily reconciliation of balances between Ledgers and Sub Ledgers and identifying adjustments needed in Ledger or Sub Ledger in consultation with the users
• Informing Finance Division in a timely manner, about any adjustment that is needed in Sub Ledger or Ledger for month end balances
• Assisting in the liquidation of suspense/ transit and other related accounts.
• Review/ preparation of Nostro reconciliation and passing/ recommending adjustment entries.

Accounts’ Ownership List

Account ownership list is located in the “Riyad Bank’s IntranetFinance” and is being updated semi-annually. Moreover, accounts not covered in the accounts’ ownership list are subjected to the general rules above.

Suspense Accounts

Definition

Suspense account is a temporary account that is used as storage of unallocated funds or securities for one day or more until an appropriate permanent decision is taken.

Use of Suspense Accounts

• Transactions should be debited or credited direct to the appropriate ledger and the use of suspense accounts should be kept to an absolute minimum.
• Any balance held in a suspense account at the end of a financial year fails to be recorded in the resource accounts according to whether it is in the nature of an asset, or a liability. It is essential therefore that any balances can be fully supported and justified to control units and external auditor.
• Suspense accounts should be reviewed and reconciled periodically by the relevant suspense account owner.

Types of Suspense accounts

• Transit account: is used for daily operations.
• Inter Application Account (IAA): it’s used as an intermediate suspense account among the different applications.
• System difference account (Error Recycle): is the suspense account that has been generated automatically by the system as a result of out of balance in a daily journal.
• Wash account: is an inter application account within a system e.g. Systematics and its applications IM, ST and ALS.
• Sundry Debtors accounts (SD): amounts in these accounts represent reserved balances from third party not settled.
• Sundry Creditors accounts (SC): amounts in these accounts represent reserved balances due to third party not settled.

Suspense Accounts Ownership

For each suspense account there must be a designated suspense account owner (the business area) responsible for its operations, review and clearance. Procedures covering these functions should be clearly set out in the department’s desk instructions manual. The names of suspense account owners should be notified to the appropriate department in Finance and Risk Management for audit and control purposes.

Functions of suspense account’s owner

• To ensure that all debit and credit entries in the account can be separately and individually verified by maintaining either an automated or manual reconciliation report. For control purposes, Aging report sorted by transaction date will be required.
• To review and reconcile each suspense account.
• To consider, particularly at the end of each financial period, in consultation with the relevant department in Finance and ORM, what action may be required to clear long-outstanding or slow moving balances.
• Holding the documents supporting liquidation of amounts that will affect Profit and Loss or needs special approval.

Functions of Finance Division & Risk Management

Finance Division is responsible for following up on some suspense accounts on a daily basis, monthly, yearly (e.g. see the table below).On the other hand, the responsibility of Operational Risk Management is to ensure that the area of control is performing its duties and the internal control systems are working properly.

* For more details about the control of other Finance Division’s departments, see suspense account list in the appendix

Escalation Process

• Reconciliation department’s employees are required to reconcile suspense, transit, inter-application, wash, and system accounts. There must be immediate escalation of amounts more than SR 500,000 to the Head of Reconciliation Department.
• For amounts below SR 500,000 that are still not resolved within the number of days defined in suspense accounts list in the appendix, they should be escalated to the Head of Reconciliation Department who will try and resolve it with the manager of the owning department. If, after a further of two days, they are still not resolved, the Head of the Reconciliation Department should escalate all items over SAR 50,000 to EVP, Operations. For amounts under SAR 50,000, the Manager of the Reconciliation Department should continue to work with the manager of the owning department. All items over 2 days old in addition to the above specified periods must be reported by the Monitoring Unit to EVP Operation and Chief Risk Officer for further actions.
• Exceptional cases that can’t be determined by number of days in the appendix should be reported to for amounts below SR 500,000 that are still not resolved within 7 days, they should be escalated to the Manager of the Reconciliation Department who will try and resolve it with the manager of the owning department, If, after a further of two days, they are still not resolved, the Head of the Reconciliation Department should escalate all items over SAR 50,000 to the EVP, Operations. For amounts under SAR 50,000, the Manager of the Reconciliation Department should continue to work with the manager of the owning department, all items over 14 days old must be reported by the Accounts’ Monitoring Unit to the Chief Risk Officer for his actions.
• All supporting documentation must accompany the item as it is escalated through the various levels
• Items over SAR 1,000,000 and outstanding for more than 10 days will be reported by the CRO to the CEO for his information and actions.

List of Suspense Accounts

See the Appendix below.

Unclaimed Items

The rule is defined by SAMA as ‘ if an account completes five years, including the above-mentioned one year period, with no transactions and no response from the respective customer or without the customer reporting to the bank to confirm his account, then the account shall be considered “unclaimed” and the bank must transfer the balance thereof to a pooled suspense account reserved for the balances of these accounts, a report shall be made to SAMA at the end of each calendar year, showing a unique sequence number for each account and the total balance, without stating customer’s personal data or the account number’. For further information refer to SAMA operational guidelines.

Process of opening new account in GL

1. There must be a request and business requirements to open a new account.
2. Once the request is fulfilled, it has to be approved by the specified departments. (See the attached opening account form in the Appendix)
3. The account can be opened after the specified departments and Financial Control Manager have approved the request.

COV/VLM Maintenance Form

System(s) will be affected