Internal Control Questionnaires and Verification Procedures

Records

1. Is the preparation, addition, and posting of subsidiary other real estate owned records performed and/or tested by persons who do not have direct, physical or accounting, control of those assets?

2. Are the subsidiary other real estate owned records balanced, at least annually, to the appropriate general ledger accounts by persons who do not have direct, physical or accounting, control of those assets?

3. Is the posting to the general ledger other real estate owned accounts approved, prior to posting, by persons who do not have direct, physical or accounting, control of those assets?

4. Are supporting documents maintained for all entries to other real estate owned accounts?

5. Are acquisitions and disposals of other real estate owned reported to the board of directors or its designated committee?

6. Does the bank maintain insurance coverage on other real estate owned including liability coverage where necessary?

7. Are all parcels of other real estate owned reviewed at least annually for:

   1. Current appraisal or certification?

   2. Documented inquiries and offers?

   3. Documented sales efforts.

   4. Evidence of the prudence of additional advances?

   5. Anticipated methods for disposal of the property?

   6. Changes in tax status, zoning restrictions, other liens, etc.?

Previous: Internal Control Questionnaire Next: Other Procedures