Follow-up Audit of the Implementation of the Risk-Focused Exam

FOLLOW-UP AUDIT OF THE IMPLEMENTATION OF THERISK-FOCUSED EXAMINATION PROCESSAudit Report No. 00-016OFFICE OF AUDITSOFFICE OF INSPECTOR GENERALMay 5, 2000 Federal Deposit Insurance Corporation Office of Audits Washington, D.C. 20434 Office of Inspector GeneralMEMORANDUM TO: James L. Sexton, DirectorFROM:SUBJECT:(Audit Report No. 00-016).Audit of Implementation of the Risk-headquarters management. In response to our audit, DOS took prompt action to incorporate ourBACKGROUNDgreatest risk exposure. Under the risk-focused approach, examiners target examination resourcesexamination process designed to focus bank examinations on bank functions that pose theConference of State Bank Supervisors (CSBS), began implementing a new risk-focusedOn October 1, 1997, the FDIC, in conjunction with the Federal Reserve Board and thestate banking department. examinations jointly with a the use of the risk-focused examination approach in situations where the FDIC conductsexamination approach since our last review. DOS also requested that we include in our reviewThis report assesses the overall progress DOS has made in implementing the risk-focusedmodules.established a committee to obtain feedback from examiners and to update the examinationrecommendations in regional director memoranda and ongoing training initiatives. DOS alsoapproach, the process was not being implemented in field offices as intended by DOSDOS recognized the need to develop and initiate a ...