Bank Secrecy Act: Financial Institution Regulators' Compliance Examinations
GGD-86-94
Published: Aug 01, 1986. Publicly Released: Sep 03, 1986.
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Highlights
In response to a congressional request, GAO evaluated regulatory agencies' efforts to ensure that financial institutions comply with the Bank Secrecy Act.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Treasury | The Secretary of the Treasury should initiate a program to compile and analyze targeting information, including cash flow data on an exception basis from the Federal Reserve System (FRS), and share the results with the regulatory agencies. |
Closed – Implemented
Treasury established a targeting group that developed an on-line system for data.
|
| Department of the Treasury | The Secretary of the Treasury should develop, with the regulatory agencies, an improved set of examination procedures, including tailored examinations for broker-dealers and credit unions, verification that reports are being filed, and review of cash transactions at all currency-handling facilities examined. |
Closed – Implemented
A new quarterly report has been initiated. On June 29, 1988, a working group issued a standard format for the regulatory agencies to use in examinations.
|
| Office of the Comptroller of the Currency | The Chairman of the Board of Governors, FRS, the Chairman, Federal Deposit Insurance Corporation (FDIC), the Comptroller of the Currency, the Chairman, Federal Home Loan Bank Board (FHLBB), the Chairman of the Board, National Credit Union Administration (NCUA), the Chairman, SEC, and the Commissioner of Internal Revenue should institute policies to comprehensively examine constituent institutions on a random basis. |
Closed – Not Implemented
The Treasury's Financial Analysis Division of Customs targets geographic areas and the regulatory agencies can use Treasury's on-line database.
|
| Internal Revenue Service | The Chairman of the Board of Governors, FRS, the Chairman, Federal Deposit Insurance Corporation (FDIC), the Comptroller of the Currency, the Chairman, Federal Home Loan Bank Board (FHLBB), the Chairman of the Board, National Credit Union Administration (NCUA), the Chairman, SEC, and the Commissioner of Internal Revenue should institute policies to comprehensively examine constituent institutions on a random basis. |
Closed – Implemented
IRS established a new automated list of firms to help control audits. It also increased staffing.
|
| Federal Deposit Insurance Corporation | The Chairman of the Board of Governors, FRS, the Chairman, Federal Deposit Insurance Corporation (FDIC), the Comptroller of the Currency, the Chairman, Federal Home Loan Bank Board (FHLBB), the Chairman of the Board, National Credit Union Administration (NCUA), the Chairman, SEC, and the Commissioner of Internal Revenue should institute policies to comprehensively examine constituent institutions on a random basis. |
Closed – Not Implemented
FDIC has adopted new examination procedures. Treasury databases are available for institutions to examine.
|
| Federal Home Loan Bank Board | The Chairman of the Board of Governors, FRS, the Chairman, Federal Deposit Insurance Corporation (FDIC), the Comptroller of the Currency, the Chairman, Federal Home Loan Bank Board (FHLBB), the Chairman of the Board, National Credit Union Administration (NCUA), the Chairman, SEC, and the Commissioner of Internal Revenue should institute policies to comprehensively examine constituent institutions on a random basis. |
Closed – Not Implemented
FHLBB agreed with this recommendation and procedures were revised. Treasury databases are available for institutions to examine.
|
| Federal Reserve System | The Chairman of the Board of Governors, FRS, the Chairman, Federal Deposit Insurance Corporation (FDIC), the Comptroller of the Currency, the Chairman, Federal Home Loan Bank Board (FHLBB), the Chairman of the Board, National Credit Union Administration (NCUA), the Chairman, SEC, and the Commissioner of Internal Revenue should institute policies to comprehensively examine constituent institutions on a random basis. |
Closed – Implemented
The agencies adopted new examination procedures, and FRS membership is small enough to conduct more comprehensive examinations.
|
| National Credit Union Administration | The Chairman of the Board of Governors, FRS, the Chairman, Federal Deposit Insurance Corporation (FDIC), the Comptroller of the Currency, the Chairman, Federal Home Loan Bank Board (FHLBB), the Chairman of the Board, National Credit Union Administration (NCUA), the Chairman, SEC, and the Commissioner of Internal Revenue should institute policies to comprehensively examine constituent institutions on a random basis. |
Closed – Implemented
NCUA reviews credit union policies for compliance as part of regular examinations. NCUA does not undertake random testing.
|
| United States Securities and Exchange Commission | The Chairman of the Board of Governors, FRS, the Chairman, Federal Deposit Insurance Corporation (FDIC), the Comptroller of the Currency, the Chairman, Federal Home Loan Bank Board (FHLBB), the Chairman of the Board, National Credit Union Administration (NCUA), the Chairman, SEC, and the Commissioner of Internal Revenue should institute policies to comprehensively examine constituent institutions on a random basis. |
Closed – Implemented
SEC has revised its procedures.
|
| Office of the Comptroller of the Currency | The Chairman of the Board of Governors, FRS, the Chairman, FDIC, the Comptroller of the Currency, the Chairman, FHLBB, the Chairman of the Board, NCUA, the Chairman, SEC, and the Commissioner of Internal Revenue should direct field examiners to fully document the examinations performed, using GAO audit standards as a guide. |
Closed – Implemented
OCC issued circulars to examiners to improve documentation.
|
| Internal Revenue Service | The Chairman of the Board of Governors, FRS, the Chairman, FDIC, the Comptroller of the Currency, the Chairman, FHLBB, the Chairman of the Board, NCUA, the Chairman, SEC, and the Commissioner of Internal Revenue should direct field examiners to fully document the examinations performed, using GAO audit standards as a guide. |
Closed – Implemented
IRS revised examiner procedures and training.
|
| Federal Deposit Insurance Corporation | The Chairman of the Board of Governors, FRS, the Chairman, FDIC, the Comptroller of the Currency, the Chairman, FHLBB, the Chairman of the Board, NCUA, the Chairman, SEC, and the Commissioner of Internal Revenue should direct field examiners to fully document the examinations performed, using GAO audit standards as a guide. |
Closed – Implemented
Results are documented in accordance with FDIC guidance.
|
| Federal Home Loan Bank Board | The Chairman of the Board of Governors, FRS, the Chairman, FDIC, the Comptroller of the Currency, the Chairman, FHLBB, the Chairman of the Board, NCUA, the Chairman, SEC, and the Commissioner of Internal Revenue should direct field examiners to fully document the examinations performed, using GAO audit standards as a guide. |
Closed – Implemented
Results are documented in accordance with FHLBB guidance.
|
| Federal Reserve System | The Chairman of the Board of Governors, FRS, the Chairman, FDIC, the Comptroller of the Currency, the Chairman, FHLBB, the Chairman of the Board, NCUA, the Chairman, SEC, and the Commissioner of Internal Revenue should direct field examiners to fully document the examinations performed, using GAO audit standards as a guide. |
Closed – Implemented
FRS issued a policy statement to examiners.
|
| National Credit Union Administration | The Chairman of the Board of Governors, FRS, the Chairman, FDIC, the Comptroller of the Currency, the Chairman, FHLBB, the Chairman of the Board, NCUA, the Chairman, SEC, and the Commissioner of Internal Revenue should direct field examiners to fully document the examinations performed, using GAO audit standards as a guide. |
Closed – Implemented
When NCUA finds a credit union has no program, it must document this in the examination report.
|
| United States Securities and Exchange Commission | The Chairman of the Board of Governors, FRS, the Chairman, FDIC, the Comptroller of the Currency, the Chairman, FHLBB, the Chairman of the Board, NCUA, the Chairman, SEC, and the Commissioner of Internal Revenue should direct field examiners to fully document the examinations performed, using GAO audit standards as a guide. |
Closed – Implemented
SEC advised field examiners to more fully document findings and work.
|
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Topics
Banking regulationFinancial institutionsInternal controlsMonetary policiesRegulatory agenciesReporting requirementsFinancial instrumentsMoney launderingFederal deposit insurance corporationCredit unions