June 7, New York City Financial Network Action 2013

NEW YORK CITY FINANCIAL NETWORK ACTION CONSORTIUM “Promoting Affordable Financial Services for all Communities” Ysemny (Nachi) Abood Senior Staff Accountant Accounting/Auditing Services /Compliance Training June 7, 2013 New York City Financial Network Action

June 7, 2013 New York City Financial Network Action NCUA Examination Common Findings & Exceptions

INTERNAL CONTROLS NCUA Examination – Common Findings & Exceptions June 7, 2013 New York City Financial Network Action

NCUA Examination – Internal Controls Exception Examples –Inadequate Bookkeeping Example: Aging unresolved items June 7, 2013 New York City Financial Network Action

NCUA Examination – Internal Control Exception Examples -Bank Account Reconciliation Example: No review or approval is apparent within the reconciliation June 7, New York City Financial Network Action 2013

NCUA Examination – Internal Control Exception Examples -Separation of Duties Example: Vault/ATM transfers June 7, New York City Financial Network Action 2013

NCUA Examination – Common Findings & Exceptions INDEPENDENT OVERSIGHT FUNCTIONS June 7, 2013 New York City Financial Network Action

NCUA Examination – Independent Oversight Exception Examples INDEPENDENT OVERSIGHT FUNCTIONS –Supervisor Committee verification of transactions and processes Examples: No monthly/quarterly review of file maintenance report No monthly/quarterly “surprise” cash counts June 7, 2013 New York City Financial Network Action

NCUA Examination – Independent Oversight Exception Examples -New & Closed Accounts Examples : No verification or review of closed accounts No review of new member files to ensure qualifications & documentation as per CU policies June 7, New York City Financial Network Action 2013

NCUA Examination – Independent Oversight Exception Examples –New LoansExample: No review of files for proper documentation, verifications, and approvals as per CU policies & procedures June 7, New York City Financial Network Action 2013

NCUA Examination – Common Findings & Exceptions COMPLIANCE RISK June 7, 2013 New York City Financial Network Action

NCUA Examination – Compliance Risk Exception Examples COMPLIANCE RISK -Inadequate procedures for structuring monitoring Examples: No documentary evidence CU reviews large cash transactions to monitor suspicious activities June 7, 2013 New York City Financial Network Action

NCUA Examination – Compliance Risk Exception Examples - -CTR’s & SAR’s FillingsExamples: Missing CTRs & SARs No recording logs maintained for CTRs & SARs June 7, New York City Financial Network Action 2013

NCUA Examination – Compliance Risk Exception Examples -OFAC Verification Examples: No evidence of ongoing verification after OFAC releases updated SDN list No evidence of verification on wire transfers June 7, New York City Financial Network Action 2013

NCUA Examination – Common Findings & Exceptions Additional questions ? – June 7, 2013 New York City Financial Network Action

NCUA Examination – Common Findings & Exceptions THANK YOU June 7, 2013 New York City Financial Network Action