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Banks are not required by statute or regulation to conduct a periodic, such as annual, independent evaluation of their deposit compliance operations and neither are they required by statute or regulation to perform ongoing monitoring.
However, all banking regulatory agencies’ Compliance Examination Manuals (CEMs) address the need for both auditing and monitoring as elements of a sound Compliance Management System and many banks have been taken to the woodshed for not heeding this strong urging.
While there may be many similarities between the scope, work papers, findings, report writing and skill sets necessary to accomplish both tasks, there are also many differences. First, let’s start with the scope and frequency of a compliance audit – each will each be set by the Board or a Board designated committee while the scope of the compliance monitoring work will be determined by the business units and compliance department. Next, let’s discuss the party who will perform the actual work and their level of independence. The audit will be conducted by a party independent from the business unit itself while the compliance monitoring may likely be completed by an employee of the business unit but who is not directly involved in the item being reviewed. Finally, the monitoring program will be proactive in nature, as its intended to identify deficiencies quickly, and is conducted on an ongoing, perhaps daily, basis while the audit is a reactive function which likely will take place on an annual basis.
Whether you choose to outsource all or part of your monitoring and auditing functions, this program will help you by providing necessary tools to do the job!
This two-hour program will address topics and related suggestions which may allow both your audit and/or monitoring personnel to better understand regulatory expectations along with industry best practices, and will include a discussion of resources and tools which should lead to more efficient and streamlined monitoring and auditing methodologies in line with regulatory expectations.
This is one of the very few programs which is intended for employees from all three lines of defense.
Banking regulatory agencies do not appreciate serving as a bank’s unpaid audit or monitoring personnel and, as such, expect all banks to have internal controls which will allow the bank to determine a pattern or practice of potential violations rather than reactively awaiting the findings from a regulatory examination at a much later date. The regulators expect banks to discover deficiencies and perform necessary corrective action(s), in a timely manner, for key consumer affairs laws and regulations that impact consumer deposit accounts.
This program will allow the bank to determine the differences in transactional testing methodologies between these two separate functions and the degree to which each of these parties relies upon transactional testing to support their conclusions. Comprehensive deposit audit and monitoring programs may result in reduced transactional testing by your regulator during an examination as your regulator may spend more of their time reviewing your monitoring process and validating your findings versus digging new holes. We will provide internal monitoring tools that will assist bank personnel in ensuring that each function has all the necessary resources with which to accomplish its necessary responsibilities.
Participants receive a detailed manual that serves as a valuable resource long after the conclusion of the program and was designed to serve as a vital resource in enhancing your bank’s deposit audit and monitoring programs.
Upon completion of the program participants understand regulatory expectations regarding:
- Use of a periodic Compliance Risk Assessment as a base reference document in determining frequency, depth and scope of compliance audits and monitoring;
- Factors influencing the timing and frequency of each function;
- Transactional Testing processes and volume;
- Sample selection methodology;
- Work-paper Preparation and Report Writing;
- Expectations regarding review of policies, procedures and processes;
- Determination of patterns or practices vs isolated technical findings;
- Risk rating of findings and which should be addressed in written reports versus deemed as isolated, technical violations not necessarily addressed in writing; and
- Responses from Business Units or the Audit Committee and Corrective Action Processes.
The program is designed for Compliance Officers, Branch Administration, Deposit Operations, Senior Management, Auditors, and those employees in any of the business units who might be responsible for handling monitoring activities.
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Deposit Compliance Auditing and Monitoring Programs
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