State Auditor Tom Schweich’s office has released the partially completed audit of the Department of Insurance, Financial Institutions and Professional Registration, Division of Finance (DOF).
“The DOF is responsible for regulating state-chartered banks, trust companies, consumer credit facilities, mortgage brokers and savings and loan institutions. DOF must ensure the safety and soundness of those institutions and the monitoring of compliance with laws and regulations,” his office. “In the areas audited, the overall performance of this entity was rated Fair. However, The DOF refused to release most financial institution examination records to the Auditor’s Office. Subsequently, until these records are provided by the DOF, the audit will be filed as Incomplete.”
Auditor Schweich has also announced that his office will immediately begin a new audit of the DOF and is issuing subpoenas for the records withheld by division.
“The division’s refusal to comply with repeated requests for these documents is both highly troubling and has no basis in the law,” he says. “Our auditors are bound by an oath of confidentiality and by law are entitled to review these records. It is important for Missourians to know how their government is operating. Considering the problems with bank oversight and the relationship to the current economic recession, this is more important than ever. I am hopeful that the division and department will cooperate with our office and allow us to perform the task of holding government accountable for the taxpayers of Missouri.”
The audit released by the state auditor’s office today revealed that 47 percent of the time, the DOF was late in performing association examinations. In addition, there were several errors in the association examination tracking database. The audit also found that all three written agreements the DOF has with federal agencies for the sharing of examination responsibilities are outdated.
The State Auditor’s Office also found that in three years, the DOF collected more than $1.5 million over the necessary amount from banks for their examination costs. The DOF claims that overhead rates for association and trust assessments are reviewed annually, but there is no documentation of such a review and the rates have not changed in several years. The DOF currently adds a 40 percent overhead to rate association examination costs and a 25 percent overhead rate to trust examination costs to cover personnel costs. The DOF must review these rates each year and adjust them accordingly.
To view the complete audit report, Citizens Summary and audit rating scale, visit www.auditor.mo.gov/press/2011-17.htm
This report is from a press release sent out by the State Auditor.