WASHINGTON - In an effort to stem what it views as a weakening of audit and internal control systems at national banks, the Office of the Comptroller of the Currency on Wednesday held a telephone briefing for more than 2,000 bankers to outline its expectations and recommendations for strengthening controls.
"We've seen significant slippage in the quality of audit and internal control functions industrywide," said Mark O'Dell, the deputy comptroller for core policy. Though slack procedures "haven't yet compromised the soundness of institutions," he said, the agency is sufficiently concerned to start taking preemptive action.
Bankers at 525 sites nationwide were addressed by Mr. O'Dell and by John Bodnar, the OCC's deputy comptroller for the Southwest district, based in Dallas, and Kit Sugiyama, the assistant deputy comptroller in Denver.
In an interview after the briefing, Mr. O'Dell said the officials first described the breakdown in bank procedures that the agency's examiners have uncovered, then outlined regulatory expectations for bank policies.
"We have three overriding principles in audit and internal controls," Mr. O'Dell said. "Board and senior management cannot delegate responsibility for an effective audit and internal controls program; bankers and examiners must both verify the integrity of both" programs. The "OCC is committed to doing these assessments through on-site exams," he said.
Finally, he said, the regulators highlighted initiatives the agency has undertaken "to focus bankers and examiners on the need to improve." These include the publication of handbooks for bankers, creation of tools that directors can use to assess their own programs, and specialized training in the subject for bank examiners.
Mr. O'Dell said the telephone seminar may be the first of many. "It will depend on the response we get to this call," he said, "but if it is well received we do plan to do more."