We have recently been sited ,in a BSA Audit, for not monitoring C.O.D. Secured Loans after they have been initiated. Does anyone have a checklist for monitoring such loans (as they pertain to BSA) and what to look for?

You need to look for:
Why
Where
How

Why is the borrower taking out this loan if they have the money? Does the reason make sense? If this is a business loan, is there a SOLID business purpose?

Where is this money coming from? Source of Funds? Where will the proceeds be going to? (which ties back to purpose.)

How will the loan be repaid? From income or revenue? Or just a lump of money that magically appears?

Many times loan officers go on "auto-pilot" with "cash" secured loans. They don't bother to look at financial statements, calculate cash-flows, or any other due diligence. Why should they? They're cash secured!
(Except if the collateral is laundered money in which case you may wind up with NO collateral because the funds were seized by the government.)

Bonnie offers some good suggestions for preparing to even off deposit secured loans. I'd like to add some red flags to look for once the loans are on the books:
Structured payments- in addition to structured cash payments, keep an eye out for monetary instruments that may have originated fromm structured purchases.
Large lump sum payments (this goes with Bonnie's question about how the loan will be repaid)- large, unexpected payments made with cash, monetary instruments, loan proceeds from another FI, or early redemption of the collateral deserve closer scrutiny.
Churning- repeatedly paying off loans, usually well ahead of schedule, and re-using the collateral to secure new loans.