policy/procedures

Recent audit found several violations of bank lending procedures. Management responded by saying as long as bank policy was not violated the procedures violations did not matter.

I was under the impression that procedure violations were as bad or worse than policy violations.

Please advise.

Well, on a very basic level, what is the point of having procedures if they aren't going to be followed? And, why are the procedures not following what the policy intends? Basic questions that would need answers, in my opinion.

Policy says: This is what we are going to do.

Procedure says: This is how we will do it.

Violating one should also violate the other.

If you aren't going to do it, don't put it in writing.

I know for Fair Lending it is the actual practice that defines if you are in compliance. If your policy says one thing but your practice is to do something else it is the practice the examiners use. Makes sense that it applies to other areas of the loan policy besides Fair Lending. In reality, your practice actually dictates what your policy is. Your policy cannot stand up to scrutiny if it isn't practiced.