PRACTICAL SOLUTIONS
provide a wealth of information for senior
management. This secondary group’s focus
is to review the SARs filed and validate the
information reported against the information
contained in the institution’s customer and
account systems.
The independent SAR QA group may have its
own procedures and scoring methodologies in
place to properly evaluate the SAR filings by
group or even by individual. The SAR QA group
is an additional layer to determine accuracy,
completion and timeliness of the SAR. Since
the decision to file a SAR is often a subjective
determination, the SAR QA group is generally
not focused on determining whether or not the
decision to file a SAR was warranted. However,
it should consider reviewing determinations
by the investigations group that a SAR is not
warranted to determine that the investigations
unit is adequately documenting these decisions.
Both the independent SAR QA group and the
investigations reviewers can also provide some
internal filing trends and identify patterns
of SAR filings that may be of importance to
senior management. The review teams also
facilitate the identification of specific errors
by particular preparers, enabling the institution to tailor refresher training to correct the
issue and prevent future errors. The tracking of
SAR quality by preparers can also be used as a
barometer of individual and team performance
during regularly scheduled personnel reviews.
The function can also help resolve matters
prior to a formal audit or regulatory exam.
Impacts of poor quality SARs
There are a number of significant impacts
of poor quality SARs. While implementing
a SAR QA process entails expending a fair
amount of resources in terms of dedicated
staff time, the costs outweigh the adverse
consequences. Poor quality SARs can result
in revisions or amended filings, which, if these
occur frequently, can result in a less than
satisfactory examination by regulators, who
likely will see a deeply flawed process. While
some systems may have automated controls
that assess whether or not information is
contained within the required reporting fields,
these often are not able to assess the quality
or accuracy of the information, two aspects
that can lead to amended filings. As with any
less than satisfactory examination, an institution will be required to spend a significant
amount of resources to repair the deficiency
— often by implementing a SAR QA function that should have been in place. Further,
continuous filing errors in SARs can result in
monetary fines by the regulators, which can
lead to reputational damage should the settlements be made public.
However, outside of the direct impact to the
institution, a poor quality SAR can lead to
a delay in investigating potentially criminal
activity. For example, if an institution does
not provide accurate information, it could
prevent law enforcement from investigating
the correct suspect. If an institution does
not convey the correct account information, )