Just in case anyone did not notice, the Swiss Cheese series is back, in part due to the interest shown in discussing internal controls by this forum over the past couple of weeks. Part 7 addresses Bank Controlled DDA Accounts and can be accessed at Swiss Cheese Part 7.

In regards to these types of accounts, we require that all internal accounts be reconciled at least monthly. Internal audit reviews these reconciliations on a quarterly basis. One thing we have talked about is, in addition to reviewing the accounts at quarter end, to review a sample of the reconciliations on a surprise basis during the quarter.

Thanks again to Gene Bucciarelli for continuing the series...

As a small bank, all Bank owned accounts are set up as "Hold Mail" and the account(s) are subject to the same monthly review as the employee accounts. Periodically the audit department will conduct a Bank owned account audit to ensure that transactions flowing through the account are for the intended purpose and that signature cards are kept current. People leave and often they forget to get them off the signature cards. Also to ensure that if any criteria is established, such as "requires two signatues", "officer signature for an amount over $xxx.xx", etc., that these account restrictions have been adhered to.

I was glad to the see the series continued........
I wonder if Mr. Bucciarelli has a comprehensive manual on internal controls or any other related internal audit publications for sale. Don't get me wrong, I love the FREE stuff but love to get my hands the complete "manual/publication" right now!

One other thing to consider is establishing policy/procedure for authorization of opening a new account. With mulitiple branch environments, it is conceivable and probable that a bank owned account could be set up w/o the knowledge of proper mgmt. I would always run a report to identify bank owned accounts by keying on the banks tax id number. Too often I would find new accounts set up for various reasons that were not being properly handled or reconciled. I always recommend that only limited personnel have the authority to establish such accounts, and that your audit include a method to ensure you have identified all bank owned accounts.

roydil, I emailed your question on to Mr. Bucciarelli in case he isn't monitoring this forum regularly. I would also love to see a good resource that provides thorough explanations of the departments / functions / processes rather than just the actual audit procedures and internal control questionnaires.

I mentioned in a previous post that the study manual for the Certified Bank Auditor exam does include some pretty good discussions. When I took it, it was very dated...I believe BAI has some updates available now. Here is the link... http://www.bai.org/cba/

Sorry - I don't have a manual of internal controls except for whats in my head. I hope to write one some day...

Gene

Gene-

Could you hurry up and make "some day", today? I could really use that manual too.