The objective of the ILR Audit is to assess the governance, resourcing, procedural effectiveness, and internal control of the firm’s ILR function and related activities in assessing and reporting the Bank’s compliance with the Bank’s Lending and Credit Policies.

Specifically, the audit will assess:

• The overall governance structure of the ILR function to ensure adequate oversight, independence, objectivity, and positioning of the function within the organization.
• The comprehensiveness and completeness of Lending and Credit Policy in meeting regulatory and industry best practices standards.
• The mandate and objectives of the ILR function to meet regulatory requirements and expectations.
• The adequacy of ILR function’s staffing, technical competence, and ongoing training and development plans.
• ILR function’s risk assessment and planning processes including its loan universe review coverage, its periodic risk re-assessment program, and its program modification control processes.
• The adequacy of ILR function’s review process including its approach and methodology, workpapers supporting conclusions, and overall supervision and approval processes.
• The comprehensiveness and timeliness of issue tracking, remediation and reporting processes.

Accordingly, the audit will also, include, but not be limited to independently assessing:

• On a sub-sample basis, reperforming the loan review process and evaluate whether the conclusions and rating derived are consistent with those reached by the ILR function; and,
• Evaluating the policies, procedures and/or practices with respect to Allowance for Loan and Lease Losses (ALLL).