Internal Audits

The Asset Liability Management (ALM) audit is designed to verify that the ALM policy, as it pertains to interest rate risk, is adequate and adhered to; to determine whether interest rate risk is effectively identified, monitored, and controlled, and to determine if appropriate internal controls have been established.

The Board Reports audit is designed to determine whether the reports submitted to the Board of Directors are accurate and complete.

The Capital Accounts audit is designed to determine whether policies, practices, procedures, and internal controls over the Capital Accounts, stock certificates, stock register, and dividends are adequate.

The Cash and Tellers audit is designed to determine that proper internal controls are in place over cash and to determine whether the policies, practices, and procedures regarding cash are adequate.

The Cash Items audit is designed to determine whether cash items are accounted for properly and clear in a timely manner.

The CDs and IRAs audit is designed to determine whether policies, practices, procedures, and internal controls for CDs and IRAs are adequate and to verify interest and penalty calculations.

The Charged-Off Loans audit is designed to verify that proper internal controls exist over charged-off loans and recoveries and to verify that repossessed assets are accounted for properly.

The Collateral Vault audit is designed to evaluate controls over the collateral vault and to verify that all collateral kept in the vault is recorded in the collateral records and properly coded in the loan system.

The Collections audit is designed to verify that proper procedures are followed while processing collections and to verify that there is proper accounting of collections income.

The DDA, Dormant and Savings Accounts audit is designed to determine whether policies, practices, procedures, and internal controls over the functions are adequate.

The Due from Banks audit is designed to determine whether the policies, practices, procedures and internal controls over due from bank accounts are adequate.

The Fixed Assets audit is designed to determine whether policies, practices, procedures, and internal controls over fixed assets are adequate.

The Follow-up audit is designed to determine whether actions outlined in audit replies have actually taken place.

The Garnishment audit is designed to determine whether garnishments are processed according to the federal and state laws and the instructions in the garnishment order. This audit also includes testing for the compliance with 31 CFR Part 212, Garnishment of Accounts Containing Federal Benefit Payments, which was effective May 1, 2011.

The Internal Control Program audit is designed to verify that the ICP approved by the Board of Directors is adequate and complete and to verify compliance with the ICP.

The Insurance audit is designed to determine whether (1) the bank’s insurance coverage adequately protects against significant or catastrophic loss (2) risk management policies and procedures are adequate, and (3) the Board of Directors has established reasonable guidelines for the retention of risk.

The Internal Risk Assessment is designed to review general bank information, prior audits, the balance sheet and income statement to establish an appropriate audit program according to risk.

The Investments audit is designed (1) to verify compliance with laws, rulings and regulations, (2) to verify that the Investment policy is adequate and that the policy is adhered to and, (3) to verify that assets and related accounts are accounted for properly.

The Liquidity audit is designed to determine if Board approved policies are appropriate and adhered to and whether management is planning for liquidity needs and determine if the bank can effectively meet anticipated and potential liquidity needs. Determine if management reports provide timely and accurate information necessary to facilitate the identification, measurement, monitoring, management and control of liquidity and funding risks.

The Loan audit is designed to determine whether the procedures and internal controls for processing loans are adequate and to determine the reliability of the information and the consistency of the application of accounting principles.

The OREO audit is designed to determine whether policies, practices, procedures, and internal controls over OREO are adequate.

The Operations and Item Processing audit is designed to determine if items are processed in a timely manner and are properly recorded, holdovers or suspense items are reviewed and approved on a timely basis, ensure adequate safeguards exist for the physical protection of items processed by the department, and ensure adequate internal control procedures are in place.

The Other Assets and Liabilities audit is designed to determine whether policies, practices, procedures, and internal controls over these accounts are adequate.

The Other Income and Expense audit is designed to verify compliance with applicable laws and the bank’s own policies and to verify that adequate internal controls are in place over other income and expense accounts, prepaid and accrued expenses and their related accrual accounts.

The Overdraft Protection audit is designed to verify that proper procedures are in place over the Overdraft Protection program.

The Payroll & Benefits audit is designed to verify compliance with bank policy and to verify that adequate internal controls are in place over the payroll processing function.

The Regulatory Reporting audit is designed to determine whether the bank has established procedures to ensure proper regulatory reporting.

The Remote Deposit Capture audit is designed to verify the effectiveness of a financial institution’s internal control processes over ACH, EFT/POS network, check item, electronic banking-related retail payments, and bankcard processing, clearance, and settlement.

The Retail Credit Classification Loans audit is designed to determine whether the bank’s procedures and internal controls for processing loans comply with the requirements of the Uniform Retail Credit Classification and Account Management Policy (OCC 2000-20). Retail Credit applies to: Open end and closed end credit extended to individuals for household, family, and other personal expenditures, includes consumer loans and credit cards *Loans to individuals secured by their personal residence, including first mortgage, home equity, and home improvement loans.

The Safe Deposit Boxes audit is designed to determine the adequacy and accuracy of the accounting systems and controls over safe deposit boxes.

The Statement Review audit is designed to detect any unusual or illegal activity including kiting and to identify situations that may indicate a high risk of embezzlement or defalcation.

The Teller/Vault Count audit is designed to verify that cash assigned to tellers is present and properly accounted for.

The Trust Department audit is designed to verify (1) compliance with laws, regulations, and rulings covering the Trust Department, (2) that proper accounting procedures are used, (3) that appropriate policies are in place, and (4) that the Trust Department operations are in compliance with these policies. This audit will be performed using MAi’s procedures adjusted to meet Bank’s agreed upon requirements.

The objectives of the Vendor Management audit are designed to assess the effectiveness of the institution’s risk management process as it relates to the outsourcing of information systems and technology services; determine the effectiveness of policies and procedures in place related to third party vendors and to ensure compliance with laws, regulations, and rulings.

The Wire Transfers audit is designed to verify that proper internal controls are in place over the Wire Transfer function and that proper accounting principles are used.