Internal Control Questionnaires and Verification Procedures

Verification Procedures

1. Balance incoming transfer requests to completed transaction tickets.

2. Using appropriate sampling techniques, select wire transfer messages from bank records, and:

   1. Determine that messages or transfer requests that require test codes or signature verification are properly authenticated.

   2. Determine that tickets supporting incoming and outgoing transfer requests agree with entries posted to the Federal Reserve Bank, correspondent banks, and customer’s accounts.

   3. Determine that a proper explanation has been recorded and approved for rejected or unprocessed messages.

   4. Review funds transfer messages, and determine if those transfers were initiated within individual lines of authority.

   5. Review, for content, transfer requests forms supporting wire transfer messages. Check to see that the forms contain, at a minimum:

      • The name of person, firm, or bank making the request (also specific transferor).

      • The test code authentication (if applicable).

      • The amount.

      • The date.

      • Paying instructions.

      • The sequence number (or space for).

   6. Review any income and expense items related to the sampled messages, and trace the offsetting entries to bank or other customer accounts.

3. Review signature cards and test key files, and determine if they contain information on inactive or closed customer accounts.

4. Select items from suspense or adjustment accounts, and determine their authenticity.

5. Select overdraft items, and determine that appropriate credit approval was obtained and payments were released within authorized intraday and/or overnight lending limits.

6. Review any payments released in excess of established limits to ensure that officers with sufficient lending authority made proper approvals.

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