Bank Call Report Series: Who is Your Back Up?
This week I’m in Minnesota teaching two different call report classes for the ICBA so I thought it would be a great opportunity to go back to basics and write a short blog series on some of the most common issues we hear about in our classes.
Why Did You Start Preparing the Call Report?
I start every course by asking the attendees how long they’ve been preparing the call report. Inevitably, there are a half dozen people in the room that have either never prepared a call report before in their lives or last quarter prepared one for the very first time. When I dig a little deeper, I hear a lot of the following types of stories:
- The person who used to prepare our call report quit unexpectedly three days before quarter end and barely had time to show where the call report stuff was before he left.
- Our old preparer had been doing the call report for twenty years, but recently got diagnosed with cancer.
- We thought our call report preparer was coming back after her maternity leave, but decided to stay home instead.
So many stories of people unexpectedly “inheriting” the call report with little or no training or guidance from the person who did it before them. This causes a huge amount of stress and anxiety for person picking up the pieces.
Call reports come around every quarter whether we want them to or not. There are no such thing as extensions. They have to be filed within thirty days of each quarter end or you will get a call from the FDIC. It’s not something that banks can afford mess up, but I still find that many institutions, large and small, don’t have a good system in place if anything were to happen to their primary call report preparer.
So, who is your back up? What would your bank do if your preparer suddenly wasn’t there?
Mitigating the Risk
We can’t always prevent these situations, but there are certain ways to mitigate them. Even small institutions, can do the following:
- Ensure that call report supporting documentation from prior quarters is kept in a secure location that can be easily accessed by other employees
- Make sure that call report supporting documentation is easy to follow, well-organized, and complete
- Ensure at least two employees know how to access your call report software
- Train a second employee to assist in preparing certain call report schedules or in gathering the reports and documentation needed to prepare key schedules
- Have two employees work together to prepare the call report and periodically rotate schedules or duties
- Develop a succession plan for retiring call report preparers at least 6 – 12 months in advance of their departure
As with all key functions within the bank, it is important to have a contingency plan when it comes to your regulatory filings.
CLA is here to help you develop that plan. Please contact us.
Amanda Garnett is a principal in the financial institutions practice of CliftonLarsonAllen (CLA) from Peoria, Illinois. She currently leads the firm’s Midwest financial institution tax team and serves institutions ranging in size from $15 million to $3.5 billion in total assets. In addition to tax compliance, Amanda assists clients in the areas of tax consulting, mergers and acquisitions, and regulatory reporting. She also routinely teaches courses for banking associations across the country.
I finally have a second person who I am training to prepare the Call Report. This is the first time since the bank opened in 2007. This is such a relief! My stress level has gone down a lot.
As always, I really appreciate all your input with my Call Report situations, questions, etc..