We are also a small community bank. It appears that what you are referring to is similar to our loan review. It is completed quarterly and encompasses a sampling of new loans along with regular review of larger credits, and delinquent and watch list credits. I (internal audit)perform loan review each quarter and report to the audit committee. In addition, I perform an internal audit for loan administration based on our internal risk assessment, the results of which are also reported to the audit committee.
Just my 2 cents worth--for what its worth!!