M&M Consulting LLC performs audits of Asset and Liability Management (ALM) functions on a regular basis for its clients as part of our risk-based audit approach. Our procedures include reviews of the following*:

Bank Policy

• Review and evaluate the specifics of Bank policy to ensure that the policy includes elements required by the Federal Financial Institutions Examination Council's (FFIEC) joint policy statement.

Asset and Liability Management Process and Procedures

• Review the organization's structure and process to determine conformance to its Asset and Liability Management Policy.
• Review internal and external reports used by management in the ALM decision-making process.

Modeling

• Review procedures used for input of information. Evaluate the bank's control procedures for ensuring the accuracy of the reported data.
• Compare a selection of asset and liability data to the bank's general ledger for accuracy.
• Verify additional selected data, for example maturity and re-pricing schedules.
• Review the bank's procedures for comparing forecasts to actual performance.

Validity of Risk Measurement Calculations

• Test a selection of calculations for accuracy. (In-house prepared models may require more verification than 3rd-party commercial models.)
• Determine whether assumptions used are reflected in data produced by the model.
• Perform a comparison of the net interest income or income forecast to the actual for the period.

Reports to the Board

• Review reports to the Board of Directors. Ascertain whether reports provide highlights of actual ALCO findings.
• Ascertain whether reports highlight policy deviations and review minutes for approval of policy deviations.

*These procedures are provided as examples only and are not intended as a complete list of our audit steps.

To contact us:
Phone: 207-650-4665
Email: Audit@mmconsulting.info