Okla. Admin. Code § 85:10-5-3

Current through Vol. 42, No. 6, December 2, 2024

Section 85:10-5-3 - Minimum control elements for bank internal control program

All internal control programs adopted by banks shall contain as a minimum the following:

(1) A requirement that each officer and employee, when eligible for vacation, be absent from the institution at least five consecutive banking days each calendar year, unless otherwise approved in writing by the bank's bonding company for bank officers and employees generally and then each officer and employee who may be excepted from this requirement must be specifically approved by the bank's board of directors and it shall be recorded in the board of director's minutes, that the officer or the employee may be absent less than the five consecutive banking days. During the absence of an officer or employee, the duties of the absent officer or employee must be performed by other bank officers and employees.

(2) A requirement that periodic reports be made to the board of directors, which must contain at least the minimum information described in 85:10-5-4.

(3) Require the control officer or auditor to periodically, as frequently as necessary but no less often than stated herein, perform or supervise performance of:

(A) Daily - Review all master file changes, by not less than two persons.

(B) Quarterly - on a surprise basis, count tellers' cash, including vault cash, review bait money, and ensure that established procedures are being followed.

(C) Monthly - On a surprise basis, prove to the general ledger and verify validity of all cash items. Also, all cash items held over 30 days that are not being currently worked for collection, must be charged off. The collection effort of these items should be documented in writing.

(D) Monthly - On a surprise basis, balance overdrafts to general ledger, scrutinize for large recurring overdrafts and report to the board of directors those overdrafts which are in excess of the minimum amount established by the board.

(E) Monthly - Review and prove to the general ledger:

(i) All customer deposit accounts, including demand, savings, time certificates and cashier's checks.

(ii) Official checks.

(iii) All loans.

(F) Monthly - Reconcile all correspondent bank accounts. Explain any item outstanding over fifteen (15) days and document resolution efforts.

(G) Monthly - Review teller's over/short.

(H) Quarterly - Review all officer and employee accounts in the institution and report any unexplained items to the board of directors or committee thereof.

(I) Monthly - Reconcile and prove to the general ledger all investment accounts.

(J) Monthly - Verify the unrealized gains or losses on securities account and associated tax account.

(K) Quarterly - Prove to the general ledger those accounts which have been determined by institution policy to be inactive or dormant.. Each time activity occurs in an inactive or dormant account that activity should be reviewed to establish the authenticity of the entry.

(L) Quarterly - Balance and verify all remaining asset and liability accounts which have had activity since last verification.

(M) Monthly - Balance to general ledger and verify all accruals including but not limited to loans, investments, and time deposits.

(4) Establish the maximum cash exposure the institution will have. This should include not only the total but the maximum amounts to be in each teller's unit.

(5) Establish a procedure for security of vault cash and for collateral held by the bank or trust company.

(6) Establish a procedure for dual control for the reserve stocks of all official checks, consigned items, and the reserve stocks of other items in the bank.

(7) All requirements of this section that are met, should be documented in writing, so that evidence exists that will substantiate to an examiner that this Section's requirements are being met.

Okla. Admin. Code § 85:10-5-3

Amended at 10 Ok Reg 735, eff 1-13-93 (emergency); Amended at 15 Ok Reg 1979, eff 5-27-93; Amended at 15 Ok Reg 2952, eff 7-15-98; Amended at 19 Ok Reg 1597, eff 6-13-02; Amended at 20 Ok Reg 1083, eff 5-27-03; Amended at 25 Ok Reg 1064, eff 5-25-08

Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/11/2020