Page 394 - Onboarding May 2017

Internal Control Plan

each Associate to identify goals, objectives, and expectations for the year. Associates
use the document to understand their key accomplishments.

Annex D outlines control matrices for functional areas which show key controls that address
specific risks.

Monitoring
Monitoring is the process that assesses the quality of internal control performance over time
and taking actions as necessary to ensure it continues to address the risks of the
organization. Monitoring is effective when it leads to the identification and correction of
control weaknesses before they materially affect the achievement of the organization’s
objectives. Monitoring is a cost-effective approach to providing timely information about the
continued effectiveness of an internal control system. As such, effective monitoring is a net
benefit to organizations and their stakeholders. Effective and efficient monitoring is best
achieved by:

1. Establishing a foundation for monitoring, including a proper tone at the top,
organizational structure and a baseline understanding of internal control
effectiveness
2. Designing and executing monitoring procedures that seek to evaluate "persuasive"
information about "key controls" addressing "meaningful risks" to organizational
objectives
3. Assessing results and reporting them to appropriate parties

CSCS internal control program, including this document, will be reviewed annually with the
Boards’ Audit & Finance Committee. The Co-op communicates risk policies to employees and
external business partners on an ongoing basis. The executive team constantly reviews the
status of risks, losses and major control breaches.

Besides reviewing the results of the annual internal control audit with the Audit & Finance
Committee, ad hoc reviews will be conducted for certain functional areas such as compliance
reviews on various contracts to determine any gap that needs to be addressed. Annex E
provides samples of Internal Control Questionnaires utilized by CSCS’s Compliance Team.

Information and Communication

Information and communication are the identification, capture, exchange of information in
a form and time frame that enable people to carry out their responsibilities, and are essential
to effecting control.

CSCS currently uses an integrated supply chain management system provided by a third
party supplier. The web-based solution enables CSCS to:

• Manage data on brand products, operators, restaurants, vendors, contracts, and
distribution partners,
• Connect with distribution partners to update daily inventory information, purchase
orders, and sales to restaurants,

Centralized Supply Chain Services, LLC. Page 8