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#1148859 - 03/20/09 05:28 PM external audit issue
agent99 Offline
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We recently had an external audit - one of the findings was that the CRA notice at our main office was actually the notice for a branch office. I think this happened because the bank switched main offices a few years back (before my time)and the signage was never changed.

I agree with the recommendation to have the correct sign, but I find it hard to believe that it is a "critical" issue requiring immediate attention. Would anyone out there agree with me? Or, do you think it is critical.

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#1148918 - 03/20/09 06:14 PM Re: external audit issue agent99
rlcarey Online
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Yawn - huh? what?

Critical - I would say not......... Technical violation at best.
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#1149175 - 03/20/09 09:03 PM Re: external audit issue rlcarey
Kathleen O. Blanchard Offline

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I would put that under the technical violation, go fix it this afternoon category.
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#1149209 - 03/20/09 09:18 PM Re: external audit issue Kathleen O. Blanchard
agent99 Offline
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Thank you both, exactly my thoughts. One other critical finding was that the bank had closed a loan production office in 2008, which was noted in the CRA file. However, the critical finding was that we did not include the geography for that office.

First of all, I don't think this is a criticial issue. Second, I'm not sure we have to have the geography for a loan production office since it was not actually a branch. Thoughts on this would be appreciated. Thank you!

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#1149227 - 03/20/09 09:24 PM Re: external audit issue agent99
Skittles Offline
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FWIW - I agree. An LPO is not a branch and shouldn't be listed as such. I would say neither of these 'violations' are critical.
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#1149235 - 03/20/09 09:29 PM Re: external audit issue Skittles
Kathleen O. Blanchard Offline

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LPOs are not branches and not counted for CRA. Of course, their location is considered in its effect on your lending patterns, but that has nothing to do with being a branch.
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#1149377 - 03/21/09 12:59 PM Re: external audit issue agent99
rlcarey Online
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Originally Posted By: agent99
Thoughts on this would be appreciated. Thank you!


My thoughts are you need a new external audit firm.
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#1150434 - 03/24/09 04:46 PM Re: external audit issue rlcarey
OkieDokie Offline
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Until recently we had not had a CRA branch notice, I guess the examiners were not interested enough to visit our branches.

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#1151592 - 03/26/09 12:14 AM Re: external audit issue OkieDokie
agent99 Offline
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I questioned the auditor who said that the problem was our rating system and using the ratings for compliance that were applied to internal audit. The definition of "critical" was any compliance violation, or repeat finding, among other things, such as exposing the bank to risk, etc.

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#1151595 - 03/26/09 12:54 AM Re: external audit issue agent99
Kathleen O. Blanchard Offline

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So any risk is critical? Seems extreme.
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#1151670 - 03/26/09 12:59 PM Re: external audit issue Kathleen O. Blanchard
edAudit Offline
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You are here
Pehaps the bank needs to review the risk rating system. When all is risk are critical none are critical.
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#1153550 - 03/30/09 01:17 PM Re: external audit issue edAudit
David Dickinson Offline
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I agree this is technical. No risk here. If they won't budge, find a new audit firm (as Randy stated above).
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#1153655 - 03/30/09 02:45 PM Re: external audit issue David Dickinson
agent99 Offline
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Okay,I've been going back and forth with the audit firm to revise the rating definitions. Without a revision in the definitions (adapted before my time)the audit co. probably won't amend the ratings.

I did a search on BOL and found one posting with the subject of ratings. Is anyone is willing to share the ratings system they use if they find it effective?

A related question is once an audit and the findings within the audit are rated, what sort of expectations do others use for clearing or addressing the items? I'm pressing for any critical or major deficiency (which would include repeat findings)to be corrected within 30-45 days of the final report being issued. Or, at least have significant progress being made to address the issue, and a clearly identified solution alogn with a resolution date.

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#1153668 - 03/30/09 02:52 PM Re: external audit issue agent99
A_G Offline
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Does anyone else find it odd that the externals were looking at signage compliance stuff? crazy
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#1153683 - 03/30/09 03:02 PM Re: external audit issue A_G
agent99 Offline
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Sorry, I should have stated that it was a Loan Compliance Audit conducted by an external audit firm.

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#1153691 - 03/30/09 03:08 PM Re: external audit issue A_G
Kansayaku Offline
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Okay, please nobody shoot me. I am with an "external audit firm" but work in an internal audit function. Generally speaking our risk ratings are such that if it has, or could have, significant financial or regulatory impact on the institution it is high priority. From what you have said, I don't see high priority here.

(To Just J@y: External audit firms are often hired for compliance, IT, financial, etc. They have specialists in each field to assist their clients.
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