If i am not associated with the BSA function( i am the compliance officer) can i perform the independent BSA audit, or does it have to be done by an external audit firm?

I'm currently doing ours as the Compliance Officer and Internal Auditor. I have no BSA functions with my job so therefore I can be deemed independent.

have your examiners ever equested you have an external audit performed instead?

Well, I just started here, but the last bank I worked for the Internal Auditor performed the review and the examiners did not have an issue with that. I guess they could if they didn't feel the review was thorough.

OK. Where did you get your auditing forms? Do you know where i can get some quality training on how to perform a BSA Audit?

I, as the Compliance Auditor, team up annually with a member of the Internal Audit Dept. (neither of us are responsible for any aspect of the BSA function) and we utilize the Core Procedures from the FFIEC's BSA/AML Exam Manual (the most recent being 2007)...step-by-step.

Thankfully, we've never had to go to the Expanded Procedures (knock on wood, as we're in the middle of the audit currently).

If you need something in print stating that an external audit firm is not necessarily required, look at page 30 of the BSA Exam Manual:

"Banks that do not employ outside auditors or consultants or have internal audit departments may comply with this requirement by using qualified persons who are not involved in the function being tested. The persons conducting the BSA/AML testing should report directly to the board of directors or to a designated board committee comprised primarily or completely of outside directors."

That section also gives some information on the minimum requirements for what to cover in independent testing.

thanks for all your help

The Manual linked above is as close as you will come to generally accepted auditing standards for BSA/AML/OFAC compliance. Nevertheless, it will not show you "how" to do it.

Review the workpapers developed in support of prior independent reviews. Look for a program specific to BSA/AML auditing.

Does anyone no of some quality BSA training i can attend. I already looked to CBAI, IBA, and CFT and they don't have anything i am looking for. Are there any other local (Illinois) or country wide training firms that have some sort fo BSA Auditing training?

I found a BOL Webinar from last year... I can vouch for Pat's experience in the subject matter and her speaking ability.

Also, I did another BOL BSA audit webinar on making sure you cover everything in a BSA audit, sample sizes, etc. earlier in 2009. It was an extension of a session from the BOL BSA conference.

I can vouch for Kath's experience in the subject matter and speaking ability too. It's my confidence in my ability to find things in Learning Connect that is weak...

Sure, sure.