Internal Control Questionnaires and Verification Procedures

Accounting, Records, and Controls

1. Does the institution receive cables or other advices from its customers indicating amounts to be paid and received and the source of covering funds?

2. If the detail of receipts is not received, is the institution advised by its customers of the total amount to be received for the day?

3. Is this information maintained and followed for exceptions?

4. Is an intraday posting record kept for each customer showing opening collected and uncollected balances, transfers in, transfers out, and the collected balance at time payments are released?

5. Are significant CHIPS or FedWire payments and receipts by other departments of the institution on behalf of a customer communicated to a monitoring unit promptly during the day to provide adequate information on each customer’s overall exposure?

6. Does the demand deposit accounting system give an accurate collected funds position?

7. Have limits been established within which a designated person may authorize release of payments after reviewing the activity of the customer? Is a record of approvals of such releases maintained by the institution?

8. When an overnight overdraft occurs, is a determination made as to whether a fail caused the overdraft? If so, is this properly documented? Is adequate follow-up made to obtain the covering funds in a timely manner?

9. Does the institution have a record of payments it failed to make promptly?

10. Is the record reviewed to evaluate the efficiency of the department?

11. Is corrective action initiated when appropriate?

12. Are investigations and follow-ups for failed payments conducted by personnel independent of the operating unit?

13. Do credit advices sent to customers clearly indicate that credits to their accounts received through CHIPS are conditional upon final settlement at the end of the day?

14. For the settling institutions on CHIPS, are the net debit positions of the non-settling participants relayed to appropriate personnel as soon as they become known?

15. Who is responsible for verifying that respondents’ net debit positions are covered the same day?

16. Are the follow-up procedures adequate to facilitate the receipt of funds?

17. Is senior management required to make decisions to refuse to cover a net debit settlement position of a respondent?

18. Has the institution devised and maintained an adequate system of internal accounting controls as required by the Foreign Corrupt Practices Act of 1977?

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