BSA/AML Examiner School - Case Study Oct 2023

AJ&R BANK & TRUST BANK SECRECY ACT/ANTI-MONEY LAUNDERING INTERIM REVIEW REPORT APRIL 2015 REVISED JULY 17, 2015

Regarding the BSA Officer's ability to complete her BSA responsibilities, BSA Officer Collins has many conflicting responsibilities which appear to preclude her from having adequate time to complete the daily BSA/AML tasks and to receive additional training. It is noted that the Bank has hired Amy Grant to assist BSA Officer Collins. Although BSA Officer Collins has prior banking experience, her BSA/AML experience is limited. Both individuals require significant training in order to adequately administer the Bank's BSA Program. The BSA/AML/CIP Program that was presented to, reviewed, and approved by the Board of Directors at the January 23, 2015 Board meeting appears to be a sample provided to the Bank by BSC during the previous review. The approved Program document does not appear to have been revised to represent specifically the Bank's actual Program and practices and was missing certain elements such as policy statements concerning the four BSA pillars. Additional findings regarding specific areas tested are presented below. A BSA/AML, OFAC and Product risk assessment was not provided for review at the time of the April visit. A risk assessment dated January 31, 2015 was provided in July of 2015. This risk assessment appears sufficient for the Bank. Board Reporting According to management, the Board is receiving BSA updates on a regular basis via the monthly Board meeting. However, although meeting minutes provided for this follow up include discussion of BSA related items, written BSA/AML Board reports were not provided to BSC for review. Written BSA/AML reports should be included in the Board "packet" in addition to the documentation of discussion of these issues provided by the meeting minutes. BSA Officer Training It was recommended that BSA Officer Collins receive proper BSA/AML training as soon as possible. Ms. Collins attended the annual BSA/AML training presented by BBC on January 23, 2015 and Pegasus's "BSA-AML Compliance Management 2015" training on January 26, 2015. In addition, the Bank contracted with "Compliance Alliance" in April 2015 to enhance its training in this area. Compliance Alliance offers webinars, legal advice, and has compliance experts available to answer questions. Continued BSA Officer training is essential to the success of the Bank's BSA/AML program, particularly in light of both the BSA Officer and BSA Assistant's inexperience regarding BSA program requirements and administration. Review Findings Risk Assessments

For Training Purposes Only

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