BSA Audits

Brode Consulting Services, Inc. ("BCS") maintains a BSA Audit Program that is reflective of regulatory guidance. The program is reviewed annually and revised as necessary given changes in regulatory guidance and industry standards. Additionally, it should be noted that the scope of the audit will also be driven by risks previously identified within the bank’s BSA program (e.g. increased transactional testing, most often). The scope of our Audit Program is outlined below.

 

BSA Audit Program:

  • We will review prior regulatory examination reports, internal and external audit reports, written BSA/anti-money laundering/CIP/USA Patriot Act policies and procedures and other documentation that gives us a foundation from which to understand the administrative portion of the bank’s program.

 

  • Determine whether the board has adopted a written anti-money laundering program designed to ensure compliance. Review and test such program.

 

  • Determine whether the Board has adopted a written customer identification program for new accounts that meets the requirements of 31 CFR 103.121. Review and test such program.

 

  • Determine whether the bank has adopted account opening and monitoring guidelines that are appropriate for the bank's size, location, products, customers and strategic focus. Review and test such guidelines.

 

  • Determine whether the bank has Phase I and/or Phase II exemptions and if so, audit the monitoring and documentation for these exemptions.

 

  • For sales in currency in amounts between $3,000 and $10,000, inclusive, of bank checks, bank drafts, cashier's checks, money orders, or traveler's checks, determine that the required records are maintained. Assess whether the bank has a system for capturing multiple cash sales of monetary instruments in one day in amounts totaling $3,000 or more.

 

  • Review and test wire transfer activities of the bank and its branches.

 

  • Review and test the bank’s OFAC procedures for deposits, loans, wires, safe deposit boxes, new accounts, etc.

 

  • Determine whether procedural guidelines provide for the minimum five-year retention of the original, microfilm, copy or other reproduction of the required items.

  • Review and test the bank’s program to comply with Section 314(a) information requests.

 

  • If the bank has chosen to share information with other financial institutions for the purpose of identifying and reporting activities involving possible terrorism or money laundering, review and test program.

 

  • Determine whether the bank has any customers who are designated at Money Service Businesses and whether the bank has the appropriate procedures in place to monitor these customers.

 

  • Review any unusual trends in lending activities (e.g., CD secured loans paying off, loans with initial late payments, OFAC requirements, etc.)

 

  • Determine the effectiveness of the suspicious activity monitoring systems (manual, automated, or a combination) used for BSA/AML compliance. Review of reported SARs and circumstances in which SARs were considered, but not filed.

 

  • Review the bank’s listing of High Risk Customers and the method by which customers are designated as such. Test sampling of high risk customers.

 

  • Review the bank’s risk assessment given the bank’s risk profile (products, services, customers, and geographic locations)

 

  • Review the bank’s training program for BSA/CIP/USA Patriot Act/Anti-Money Laundering.

 

  • Determine the level of board oversight with BSA.

 

  • Evaluate management’s efforts to resolve violations and deficiencies noted in previous audits and regulatory examinations

 

  • In view of all of the above, determine whether the bank has a BSA/AML program sufficient to identify suspicious transactions and unusual trends or patterns of account activity.