Internal Control Questionnaires and Verification Procedures

Loan Charge-offs

1. Is the preparation and posting of any subsidiary records of loans charged off performed or reviewed by persons who do not also:

   1. Issue official checks and drafts singly?

   2. Handle cash?

2. Are all loans charged off reviewed and approved by the board of directors as evidenced by the minutes of board meetings?

3. Are notes for loans charged off maintained under dual custody?

4. Are collection efforts continued for loans charged off until the potential for recovery is exhausted?

5. Are periodic progress reports prepared and reviewed by appropriate management personnel for all loans charged off for which collection efforts are continuing?

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