FDIC TE - Section 1.1 Basic Examination Concepts
and Guidelines Questions and Answers
Interim Contact Communicating with management within 30 days of the midpoint
between risk management examinations. A way to monitor institutions and help plan exams
Exam Planning Helps Helps support risk-scoping decisions, helps determine staffing
needs, it can enhance exam efficiency and reduce burden on the institutions
How long before an exam must the bank be told it's happening? FS or SE must call
management at least 90 days ahead of the projected start date
When must external audit workpapers be reviewed? Significant concerns exist or the
institution is rated 4 or 5. If not performed i must be stated why.
Shared Loss Agreement (SLA) Contract between the FDIC and institutions that acquire
failed bank assets. FDIC agrees to take on some losses, but must be paid back if recoveries are
made. Usually under a specified timeframe. Usually FDIC incurs 80% of losses and recoveries
FDICs reimbursement for losses covered by an SLA Measured in relation to assets book
value on the date of failure
Promote open communication Examiners should promote open dialogue with
management and invite board members to participate in any meetings, emphasizing it is
voluntary.
Exam planning management meeting 6-8 weeks prior to the exam start date. Preliminary
description of the business mode, risk profile, and complexity. Another meeting is held to
discuss exam logistics.
, Attendees for Meetings with Directors 4 or 5 = EIC and regional director or designee
3 = EIC and regional office representation is up to the regional director
1 or 2 = EIC and optional regional office
Trust Department Acts in a fiduciary capacity when the assets it manages are not the
bank's but belong to and benefit others.
Uniform Rating System for Information Technology (URSIT) IT operations are rated in
accordance to this. 1-5 scale as well
Four IT components Audit, Management, development and acquisition, and support and
delivery
Financial Recordkeeping and Reporting f Currency and Foreign Transactions Act of 1970 (BSA)
Purpose is to ensure US financial institutions maintain and file appropriate records and
file certain reports involving currency transactions and customer relationships. No separate
rating
Summary comments at a minimum should: - Detail examination findings and
recommendations
- Describe supporting facts and logic, and
- Record management responses and completion dates for promised corrective actions.
Regional Automated Document Distribution and Imaging System (RADD) Examiners
should manage and store general exam workpapers here
BSA Workpaper retention time 5 years and must be kept separate from risk management
exam workpapers
Workpaper retention times - Line sheets = generally 1 exam cycle
and Guidelines Questions and Answers
Interim Contact Communicating with management within 30 days of the midpoint
between risk management examinations. A way to monitor institutions and help plan exams
Exam Planning Helps Helps support risk-scoping decisions, helps determine staffing
needs, it can enhance exam efficiency and reduce burden on the institutions
How long before an exam must the bank be told it's happening? FS or SE must call
management at least 90 days ahead of the projected start date
When must external audit workpapers be reviewed? Significant concerns exist or the
institution is rated 4 or 5. If not performed i must be stated why.
Shared Loss Agreement (SLA) Contract between the FDIC and institutions that acquire
failed bank assets. FDIC agrees to take on some losses, but must be paid back if recoveries are
made. Usually under a specified timeframe. Usually FDIC incurs 80% of losses and recoveries
FDICs reimbursement for losses covered by an SLA Measured in relation to assets book
value on the date of failure
Promote open communication Examiners should promote open dialogue with
management and invite board members to participate in any meetings, emphasizing it is
voluntary.
Exam planning management meeting 6-8 weeks prior to the exam start date. Preliminary
description of the business mode, risk profile, and complexity. Another meeting is held to
discuss exam logistics.
, Attendees for Meetings with Directors 4 or 5 = EIC and regional director or designee
3 = EIC and regional office representation is up to the regional director
1 or 2 = EIC and optional regional office
Trust Department Acts in a fiduciary capacity when the assets it manages are not the
bank's but belong to and benefit others.
Uniform Rating System for Information Technology (URSIT) IT operations are rated in
accordance to this. 1-5 scale as well
Four IT components Audit, Management, development and acquisition, and support and
delivery
Financial Recordkeeping and Reporting f Currency and Foreign Transactions Act of 1970 (BSA)
Purpose is to ensure US financial institutions maintain and file appropriate records and
file certain reports involving currency transactions and customer relationships. No separate
rating
Summary comments at a minimum should: - Detail examination findings and
recommendations
- Describe supporting facts and logic, and
- Record management responses and completion dates for promised corrective actions.
Regional Automated Document Distribution and Imaging System (RADD) Examiners
should manage and store general exam workpapers here
BSA Workpaper retention time 5 years and must be kept separate from risk management
exam workpapers
Workpaper retention times - Line sheets = generally 1 exam cycle
