BSA/AML Examiner School - Case Study Oct 2023

AJ & R BANK & TRUST BANK SECRECY ACT/ANTI-MONEY LAUNDERING INDEPENDENT TEST REPORT DECEMBER 2015

directors to approve the BSA compliance programs." Based on BBC's review of the June 30, 2015 Board meeting minutes, it appears that the policy was to be reviewed by each Director after the meeting and approved or denied through email. Based on email documentation, the Policy was approved; however, this approval was not recorded in any of the meeting minutes subsequent to the June 30, 2015 meeting which we reviewed. Recommendation It is recommended that the July 2015 BOD minutes be revised to reflect the approval of the BSA/AML Policy via email by the Board. Management Response The Board will revise the July 2015 Board of Director minutes to include the approval of the BSA/AML policy via email. I have been taking minutes since November 2015. BSA Officer will meet with XXXX to revise the July 2015 Board of Director minutes. According to the 2014 FFIEC BSA BSA/AML Examination Manual, one of the four minimum requirements for a bank's BSA Program is training for appropriate personnel. The Manual states: "At a minimum, the bank's training program must provide training for all personnel whose duties require knowledge of the BSA... The training program should reinforce the importance that the board and senior management place on the bank's compliance with the BSA and ensure that all employees understand their role in maintaining an effective BSA/AML compliance program." Seven new employees were hired by the Bank from February through December 2015. Of those seven employees, four had not received training as of this Independent Test: President/CEO, Loan Officer, Administrative Assistant, and the teller. Failure to train employees could potentially lead to increased BSA/AML risk to the Bank, as well as possible scrutiny from regulators. Recommendation It is recommended that the individuals noted above receive BSA/AML training as soon as possible. In addition, the Bank's BSA/AML Policy should be revised to include a timeframe for new employees to complete training on the Bank's BSAIAMUCIP policies and procedures such as within 30 days from hire date. On-line training for new employees should be completed within 90 days of date of hire. Finally, to enhance the BSA/AML training, it is recommended that all employees receive a copy of the BSA Policy, and sign to acknowledge their receipt and understanding of the Policy and its requirements. Management Response The Bank has several resources for training. The most used is Digital University for all employees and the Board of Directors. In addition, I have shared that You Tube videos are available from the FDIC for training on various topics.

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