Jim Vilker, AuditLink leader and VP of Professional Services, engaged the audience during his presentation on BSA risk assessment methodology, and Marvin Johnson, AuditLink manager, presented on enhancements to existing and new compliance related CU*BASE tools, demonstrating the new transaction pattern abnormal activity monitoring software. A live demonstration of under-utilized and/or unknown tools was incorporated into the jam-packed day of compliance discussion. Based on prior feedback from attendees, the demos provide immediate value for practical application once they return to their credit unions.

Jim Thiemet, CTO of Madison County Federal Credit Union shared, “Overall, I am really happy that I attended the conference. I found it to be a very valuable event, I learned a great deal by attending. I highly recommend attending to anyone who wants to get more out of CU*BASE. I am looking forward to attending the next Conversations on Compliance!”

Today, AuditLink is managing over 1,000 critical vendor relationships including over 3000 due diligence documents. Per Vilker, it is not uncommon to have over 90% of a credit union’s critical relationships already under management at the original risk assessment meeting. “One of the real benefits to our credit unions and CUSOs is not just the monitoring of required due diligence, but also the review that continuously keeps credit unions up to date on the status of the critical relationships,” Vilker added.

Drew Schmid, EVP of Special Projects of 1^st Community Federal Credit Union explained the reason his credit union decided to use AuditLink: “First, it is a very well documented process from risk assessment to implementation, to the ongoing monitoring and reporting to my team and third-party auditors. The process was obviously built with credit union and CUSO involvement and is one of the most comprehensive services I have seen. AuditLink immediately became an extension of my team and helped us focus on the critical areas requiring review, saving us valuable time. It’s almost like they have a desk in our building feeding us just what we need to pay attention to. On top of that they built this business with the FFIEC guidelines and examiner checklists at the heart of it.”

Vilker concluded, “In this regulatory environment, it is almost impossible for the average credit union to stay on top of their vendor management programs. Utilizing a shared execution service like AuditLink takes 80% of the heavy lifting off vendor managers and helps them concentrate on the overall relationship vs. running vendors down and reviewing due diligence.”

Keri Lillie of Lillie & Company joined AuditLink representatives to present on suspicious activity reporting (SAR) best practices. Jim Vilker, AuditLink leader and VP of Professional Services, sparked engagement during his presentation on BSA risk assessment methodology, and AuditLink Manager Marvin Johnson presented on enhancements to existing and new compliance related CU*BASE tools and also demonstrated the new transaction pattern abnormal activity monitoring software. A live demonstration of under-utilized and/or unknown tools was incorporated into this jam-packed day of compliance discussion. Based on prior feedback from attendees, the demos provide immediate value for practical application once they return to their credit unions.

Donna Holloway, compliance officer at Cincinnati Ohio Police Federal Credit Union shared, “I appreciated the small informal setting because it made it easier to network with the other credit unions and ask the presenters questions. The subject matter was relevant and included recent regulatory changes and the discussions yielded great tips and out-of-the box approaches to risk mitigation. Definitely looking forward to participating in the next event.”

Review of BSA cash logs, dormant accounts, teller reversals, wire transfers, and file maintenance changes are among the areas monitored as components of the overall DLM offering. “Having an independent third-party review transactional activity fulfills a requirement that many credit unions may not have the capacity to meet on their own,” Johnson explained.

The AuditLink team is made up of nine practitioners with experience serving a diverse client base that spans coast to coast ranging in asset sizes between several million to hundreds of millions. With a dedicated team at work, their goal is to provide relief to clients so they can allocate more time to other important areas within their organization.

The Transaction Pattern Change Management & Data Governance booklet is now available on the AuditLink Store. The booklet describes the pattern configuration process from adjustment of default configurations to recordation and justification of changes. “We’ve even created templates to help facilitate the documentation and justification process to make things easier for our credit union partners,” said Johnson.

It is common for auditors and examiners to inquire about change management methodologies, so credit unions must have a way to justify configuration changes. The booklet and template were developed to help credit unions do just that.

The new functionality is configurable by individual credit unions and there is no limit to the fraud and money laundering detection patterns credit unions can configure across a vast amount of member information. Because AuditLink currently reviews suspicious activity for over 100 credit unions and has done this work for the past 13 years, the division pioneered the development of the new functionality. Vilker went on to say that the AuditLink financial intelligence unit are fraud detection practitioners and used its collective experience to build the analytics behind this new functionality. The new functionality gives CU*Answers clients a much quicker response to activity that could cause losses as it is being analyzed daily. “This puts our credit unions in a position of preventing losses vs. reporting that the loss occurred.”

The new abnormal activity monitoring and fraud detection functionality went live for all credit unions in late May and because it is part of the core CU*BASE application it came with no additional cost.

“Most vendor management providers were born out of rudimentary contract management websites,” said Jim Vilker, VP of Professional Services. “AuditLink came to market years ago first with a strong vendor management platform and associated service, which we felt met the biggest need. With that robust platform firmly established, we set our sights on adding contract management second.”

The new functionality was created after extensive research and interviews of existing clients on the needs associated with managing vendor contracts. As with the already existing platform, it was designed collaboratively with credit union and CUSO involvement to hit the nail on the head right out of the gate. “The most important aspect from our clients’ perspective was keeping critical dates and notifications completely configurable by the credit union,” added Vilker. “This allows for all departments who have specialties in other areas such as IT to utilize the system to manage their specific review responsibilities. In essence it creates a portal for all areas of operations to collaborate on contract management responsibilities.”

Lillie & Company is and has been one of the main CPA firms contracted to perform forensic analysis for the NCUA when insider dishonesty is suspected. In Fall 2020, Lillie & Company and AuditLink formed an alliance revolving around BSA and ACH audits for CU*Answers clients, as well as aligning strategic objectives for both firms. One of the firms’ major objectives was training credit unions on best practices related to internal controls. “The shear amount of embezzlements in our industry has been on the rise and the main reason is the lack of basic internal controls,” said Steve Lillie, President of Lillie & Company. “Educating credit unions through the use of real-life stories drives the point home on how much this problem is costing the industry, insurers, and NCUA.”

Jim Vilker, VP of Professional Services of AuditLink pointed out “it’s about the basics of segregation of duty, appropriate oversite, and awareness of the basic internal control to prevent these types of embezzlements—many of which resulted in the merger or liquidation of the credit union.”

The web conference concentrated on real life embezzlements, the events surrounding each case, and what internal controls broke down that led to the event. Lillie & Company performed the forensic analysis on these investigations and in some cases was assisted by AuditLink. Steve Lillie stated in the conference it is all about opportunity and motive. “The main point is that loose internal controls open the door for bad actors who are motivated to take advantage of the resulting vulnerabilities.”

Vilker added, “What was so self-evident 10 years ago relative to a culture of internal controls seems to have been lost. It is almost like the old guard is not training the new guard on the basics”.

The conference was highly attended and well received, with many participants asking for a follow up event.

Review of BSA cash logs, dormant accounts, teller reversals, wire transfers, and file maintenance changes are amongst the areas monitored as components of the overall DLM offering. “Having an independent third-party review transactional activity fulfills a requirement that many credit unions may not have the capacity to meet on their own,” Johnson explained.

“Our team is made up of nine practitioners with experience with a diverse client base that spans coast to coast ranging in asset sizes between several million to hundreds of millions. With a dedicated team at work, our goal is to provide relief to our clients so they can allocate more time to other important areas within their organization.”