Regulatory Alerts2006-09-26
Clarification of Expectations Regarding the Review of Executive Expenses
The Office of Financial Institutions requires financial institutions to establish written policies governing the authorization, documentation, and approval of executive expenses. Examiners will verify compliance by sampling selected expenditures to confirm adequate records and adherence to internal controls, rather than auditing all payments. When exceptions are identified, the Audit Committee must conduct targeted reviews and implement corrective safeguards to ensure ongoing policy adherence.
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