I am currently performing our BSA audit and there appears to be a disagreement about when "annual" reviews should be performed on exempt persons. My thought is that if you perform an annual review in January of 2001, then your next review should be performed in January 2002. Our BSA Manager is under the impression that if the review was performed in January 2001, then the next one just has to be performed sometime before December 2002. I know this type of calendar applies to mailing Privacy disclosures, but I am not interpreting any part of the BSA regulation that allows for this type of review schedule. A clarification sure would be appreciated!

IMHO - The regulation says: "must be reviewed and verified at least once each year" and if my regulator was going to cite me for not doing it every twelve months because we did one in January in year 1 and didn't do it again until December in year 2, I would be screaming blood murder that it complied because it just says once each year and that is exactly what we had done. Now, to the internal folks, since I don't want to have to have that kind of conversation with my regulator, I would tell them that they better be doing these things on the twelve month anniversary or you are going to let them explain to the board of directors why you got cited by the regulators for a Bank Secrecy Act violation.

Thank you for your opinion.

I don't stick to a hard "12 month" schedule, but neither do I go to the other extreme. I ususally try and schedule the BSA audit within a month or two of when the prior audit was conducted. This way I reduce the potential for regulator criticism and have a little more flexibility in my audit schedule.

I think that there is a big difference in an audit schedule and performing annual exemption reviews. If you have your Audit Department completing exemption reviews, I think you should re-examine your audit approach so that you maintain a separation of (a)those who do and (b)those who check that you do. Otherwise, you really are not accomplishing an independant internal audit.

I would have to agree that extending the annual exemption review to 23 months would be pushing it.

I am the auditor and we are auditing the annual reviews. The BSA Manager is the responsible party to perform the annual reviews. Maybe I wasn't clear on that earlier.

The FDIC DOS Manual of Examination Policies states that independent BSA reviews must be performed "annually". Also, as a former FDIC examiner, I can tell you that they would definately cite an institution for letting 23 months lapse between BSA audits. Even though no time frame is actually stated in Part 326.8, regulators definitely consider the requirement for annual audits to be implied. I don't know who your regulator is, but I would imagine that most would view the issue similarly.

We were cited for this very issue three months ago by the OCC. The lead Examiner (a charming young woman named Mary) copied a page from Websters Dictionary, and asked our 78 years-old chairman what part of annual did he not understand. (We have 103 CTR exemptions.) It was one of those moments I wish I could have frozen in time. The old cheapskate was squirming like a worm.

We are now looking for our fourth BSA Officer in four years. (I'm the IT guy, and have nothing to do with BSA.)

Is anyone using a BSA system that they really, really like, which can help with Exemptions and AML?

At my former employer I was BSA Officer (along with CRA, Privacy and Compliance) and performed audit functions. We had an Excel spreadsheet and every day we would enter the amount our exempt customer deposited (or withdrew). I would keep this quarterly and review for any changes. This might be too bulky if you had 103 exempt customers, but we were a mid-size bank and only had about 40 exempt customers. It worked great and the FDIC loved it.

Our BSA software works great for this purpose. It will provide a report of all your customers' cash transactions, sorted by amount or date.

It will also generate the CTR exemptions forms for you, and, help you keep track of when the biannual renewals are do.

Please give us a call if you'd like more information, or visit our web page at www.barnettsoftware.com.

Regards,
Wayne Barnett, President
Wayne Barnett Software
877-945-4344
wbarnett@barnettsoftware.com

I am interested in your software but I could not link to your website.

I'm sorry for the inconvenience. It seems to working fine now. So if you don't mind, please try us again at www.barnettsoftware.com

Regards,
Wayne Barnett
wbarnett@barnettsoftware.com
877-945-4344

Thanks for responding. I tried again and got the following message:

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dmitch@inna.net

I conduct the BSA Reviews for six independent banks on a semi-annual basis as part of the overall review. I validate the exemption based on the activity from the last review to the current. Treasury wants BSA Reviews to be conducted at least annually - the examiners like the sem-annual reviews.