Superintendence of Solidarity Economy Intervenes Cooperative for SARLAFT Failures

This measure is due to a series of alleged omissions and inconsistencies in the financial statements, reluctance to provide information, non-compliance in investment valuations, and failures in the Anti-Money Laundering and Counter-Terrorism Financing Risk Management System (SARLAFT).

But what did the Superintendence find?

During an inspection visit, the Superintendence found multiple unidentified transactions in the income and expense vouchers for the year 2023. Between May and December 2023, 54 deposits and fund transfers were recorded without further information, amounting to 3054 million pesos (approximately USD 774,000). Additionally, in the bank reconciliation of the cooperative's main account, reconciling items from 2022 were detected without identifying the beneficiary.

The Superintendence also noted that the cooperative's SARLAFT policy manual did not include adequate controls for such operations, which violates the provisions of Title V of the Basic Legal Circular, approved by External Circular 20 of 2020. The lack of identification of risk factors and the inherent risk of operations carried out by the entity were critical aspects in the findings.

Another important finding was the due diligence of the associates. It was observed that some associates remained active only for one, two, or three months, and the cooperative explained that this was because many associates did not continue paying social contributions, most of them being from low-income strata. Additionally, the associate admission form did not contain the necessary information to understand the financial and transactional characteristics of the associates, which prevents identifying the source of their income.

The Superintendence of Solidarity Economy emphasized that…

SARLAFT should not only generate mechanisms for risk prevention and detection but also allow events to be reported before they can cause any impact, in order to anticipate and act with agility and efficiency.

How can we help you?

In Forvis Mazars we have professionals who are experts in Compliance. If you require support in the implementation or compliance with the obligations contained in this bulletin, please contact us at the email address provided, and we will be pleased to analyze the best way to assist you.