Domestic Wire Transfer Internal Control Questionnaire

Section 410.4

55. Does the bank prohibit new employees from

working in sensitive areas of the wire transter

operation? Physical Security 56. Are bank terminal operators or others in wire

transter operations denied access to computer

areas or programs? 57. Do procedures prohibit computer personnel

from gaining access to bank terminals or test

key information? 58. Is the wire transfer department arranged so that

access is restricted to teletype, computer termi

nal or other message preparation equipment? 59. Does wire transfer equipment have physical

and/or software locks to prohibit access by unauthorized personnel at all times.

60. Are codes identifying authorized personnel to

computers or terminal equipment frequently

changed? 61. Does the bank maintain back-up communica

tions systems? 62. Are back-up systems periodically tested by

bank personnel? 63. Does the use of back-up equipment require ap

proval by supervisory personnel? 64. Has the bank developed contingency security

and internal control procedures in the case of a

crisis or emergency? 65. Do operating agreements between bank, ven

dors and bank customers clearly delineate responsibilities of all parties in case of an emer. gency?

Comptroller's Handbook for National Bank Examiners Docomoar 1977

Domestic Wire Transfer Verification Procedures

Section 410.5

1. Balance incoming transfer requests to completed

transaction tickets. 2. Using appropriate sampling techniques, select

wire transfer messages from bank records and:
a. Determine that messages or transfer requests

that require test codes or signature verification

are properly authenticated. b. Determine that tickets supporting incoming and

outgoing transfer requests agree with entries posted to the Federal Reserve bank, corre

spondent banks and customer's accounts. c. Determine that a proper explanation has been

recorded and approved for rejected or unpro

cessed messages. d. Review funds transter messages and deter

mine if those transfers were initiated within indi

vidual lines of authority. e. Review, for content,transfer requests forms sud

porting wire transfer messages. Check to see that the forms contain, at a minimum:

The name of person, firm or bank making the request (also specific transferror).

The test code authentication (if applicable). • The amount.

The date,
Paying instructions.

The sequence number (or space for).
f. Review any income and expense items related

to the sampled messages and trace the offsetting entries to bank or other customer ac

counts. 3. Review signature cards and test key files and de

termine if they contain information on inactive or

closed customer accounts. 4. Select items from suspense or adjustment ac.

counts and determine their authenticity.

Comptroller's Handbook for Nanonal Bank Examiners December 1977

Section 600.1

.

.

three examinations. Current examination data should be placed in the right-hand column. Certain statistical data required in the sheet may not be readily available from prior examination reports. Therefore, examiners may omit the historical intormation on certain items if it cannot be obtained easily. Although certain unavailable information may be eliminated from the sheet, the corresponding lines, with the exception of lines 71-74, must be completed. The following symbols may be used only when information is not provided:

N/A — applies to intormation where the dollar value, percentage, ratio or number of the line

item is not applicable. • N/P - applies to information requested on the

line which is (or was) not within the scope of the examination. Use of this symbol would oc

cur most often for specialized examinations. • 0 (zero) - applies to information requested on

the line where the dollar value, percentage, ra.

tio, or number has a value of 0 (zero). The completed sheet will accompany all reports submitted to the regional office and those forwarded to the Washington office. However, it will not be attached to the copy of the report forwarded to the bank.

.

Reports of Examination
The report of examination will be used for all general
and specialized examinations. Its primary purpose is
to communicate meaningtul information effectively to
the Office of the Comptroller of the Currency (OCC).
In supervising national banks, OCC furnishes the
bank with a copy of reports. Thus, the examiner must
determine the appropriate section of the report for
each finding and recommendation.
The components of the report of examination are:

Regional Administrator's Letter
Statistical Data Sheet
Cover Page
Index
Letter to the Board of Directors
Comment Section
Appendix

Confidential Section Except for the index and regional administrator's letter, the report is completed by the examiner-incharge and forwarded to the regional office at the conclusion of the examination. Regional Administrator's Letter Whenever a bank's composite rating is 3 or below, regional administrators must communicate with the board of directors through a formal transmittal letter inserted in the report of examination immediately behind the hard cover. For ratings above 3, regional administrators may elect to incorporate a letter for any reason. The first paragraph of the letter must include the following language:

This letter is supplemental to and part of the enclosed (general or specialized) examination repor conducted by national bank examiner completed on

Its pure pose is to highlight matters in the examination report that require the attention of the board of directors. Since the letter is part of the examination report, its contents are to be treated with the

same degree of confidentiality. The regional administrator's letter is not listed in the index.

.

Cover Page The captions on the top of this page will be completed to indicate name and location of the bank, charter number, region, name of examiner, examination date, commencement date and closing date. The examination date will be the "as of'' date; that is, the date as of which most of financial information used for the examination is prepared. The examination date will usually be the month-end immediately preceding the commencement date. The commencement date will be the day on which the actual examination commenced and not the date that any separate pre-examination analysis began. In those cases where the pre-examination analysis was performed immediately prior to beginning the examination or concurrently with the examination, the commencement date should be the day on which the examination team entered the bank.

Statistical Data Shoot The statistical data sheet is prepared as of the examination date and includes data from the preceding

Comptroller's Handbook for Nanonal Bank Examiners Sepianoer 1979

Section 600.1

The examiner must indicate whether the examination
was a general or specialized examination. See "Spe-
cialized Examinations" for description of those exam-
inations. This caption should tie into the first para-
graph of the letter to the board.
The remainder of the report cover states the confi-
dential nature of the report and the possible penalties
resulting from improper disclosure of the contents. It
further states that the contents of the report reflect an
examination and not an audit of the bank. The option
of the board of directors to request a conference with
representatives of the regional office when they are in
substantial disagreement with the contents and con-
clusions of the report is also clearly stated.
The concluding paragraph directs correspondence to
the appropriate regional office, to the Washington Ot-
fice and to the examiner-in-charge.
Index
The index is usually completed to accompany copies
of the report distributed from the regional office. How-
ever, it can be filled in for the pencil copy that is for-
warded to the regional office, particularly when nu-
merous supplemental pages are included. The vari-
ous pages and final index will be numbered in the
regional office. When numerous schedules and ex-
hibits are included in the repon, the spaces provided
should be expanded to permit listing of major items in
the index.
Letter to the Board of Directors
The letter is mandatory for all reports and should be
developed to cover three basic areas:

• Scope of Examination
· Significant Matters Requiring Attention

Overall Conclusions It is designed for a free flowing narrative, therefore, the use of captions should be avoided. It is not in. tended to be an index, and examiners should avoid reterring to specific pages. Scope of Examination The report will be used for the two types of examinations: general and specialized. Those examinations will consist of performing varying degrees of examination and verification procedures. Comments describing the types of examination covered will be somewhat standardized for consistency and brevity.

The following are examples of the types of descriptions that should be used: a. A general examination of your bank com

menced April 12, 19xx using financial information as of March 31, 19xx. The examination was conducted in accordance with standard examination procedures of the Office of the Comptroller of the Currency (applicable to general examinations of banks with good internal control and/or acceptable internal or external audit procedures where no verification proce

dures were performed).
b. Same as (a) with addition of third sentence. Be-

cause of the lack of adequate internal control
or audit procedures the scope of the examina-
tion was extended to include performance of
verification procedures in the
department(s) (applicable to banks with weak.
nesses in internal control or audit procedures

in particular area(s)).
C. A general examination of your bank com-

menced on April 12, 19xx. The examination was conducted in accordance with standard examination procedures of the Office of the Comptroller of the Currency. Because the work of the internal audit department (or external auditors, or both) was inadequate, the scope of the examination was extended to include verification procedures as outlined in the Comptroller's Handbook for National Bank Examiners (applicable to banks with no internal or exter

nal auditors or an unacceptable situation). d. A specialized examination of your bank com

menced on April 12, 19xx. The scope of the examination was limited to the minimum procedures for specialized examinations as outlined in the Comptroller's Handbook for National Bank Examiners (applicable to banks where only minimum specialized examination proce

dures were performed). e. A specialized examination of your bank com

menced on April 12, 19xx. The minimum examination procedures outlined in the Comptroller's Handbook for National Bank Examiners were extended to include examination procedures in the

department(s) (applicable to

.

Comptroller's Handbook for National Bank Examiners

September 1979