Auditing the Compliance Program
There are lots of audit procedures for compliance, but not very many look at the compliance program itself? In her speech to the ABA National Regulatory Compliance Conference, Governor Susan Schmidt Bies outlined some important elements of a compliance program. Many of her concerns translate directly into audit procedures for a compliance program. These concerns are reflected in the following steps for an audit of your compliance program.
Directors:
- How often does the Board discuss compliance?
- Does the board do more than give auto-approval to compliance policies?
- Are some board members active in their attention to compliance?
- How knowledgeable is the board with respect to compliance?
- What resources does the board provide for compliance?
- How do budget decisions by the board reflect the priority placed on compliance?
Senior Management:
- Where does compliance report? How senior is the manager that has responsibility for compliance?
- What responsibilities and accountabilities do senior managers have for compliance?
- How does senior management show active support for compliance?
- Are there examples of decisions that place compliance and ethics at risk for the goal of growth or profits?
Compliance Manager and compliance staff:
- Does compliance staff have adequate resources for ongoing education and training of themselves and other bank staff?
- Does the compliance manager have direct access to the board of directors?
- Does the compliance staff have access to senior management and line managers?
- Is there an effective process for developing and implementing corrective action when needed?
- Does the compliance manager participate in development of new products and services?
- Does the compliance manager participate in the selection of software and vendors?
Line Managers:
- Are line managers held accountable for the compliance performance of their staff?
- Do line managers hold their staff accountable for compliance performance?
- Do line managers understand their compliance responsibilities?
- Are line managers responsible for compliance monitoring? And for correcting findings?
- Do line managers have goals and targets that conflict with compliance goals? If so, how are these conflicting goals balanced?
- Do line managers work to create a compliance-friendly environment?
- What do recent examinations and audits reveal about compliance under the supervision of line managers?
Staff:
- Is compliance as it relates to each job a part of the job description?
- Is staff adequately trained to perform compliance requirements accurately?
- Does staff have tools to support compliance?
- Is staff held accountable for compliance performance in performance evaluations?
- Do compliance audits and monitoring reflect a satisfactory level of compliance? If not, how are weaknesses identified, prevented and cured?
Copyright © 2003 Compliance Action. Originally appeared in Compliance Action, Vol. 8, No. 7, 7/03
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