November 23, 2010 - 11:09am
#1
Have you in your audit career ever discovered fictitious loans in your random audit sampling?
My opinion is that these are generally discovered by a call from a member and are often not discovered by internal auditors, outside auditors or examiners.
Other than doing a random loan review each month or quarter is there anything else you are doing to unturn fictitous loans such as special reports, etc.
I recently went to a seminar in which a credit union manager stated that they had loan fraud by a loan officer with 24 years of service. What she was doing was reopening closed accounts and adding loans to them.
Your insights would be appreciated.
Carol Heffernan
Internal Audit
Summit Credit Union, Greensboro, NC
