State of Washington Classified Job Specification
FINANCIAL EXAMINER 1
Class Series Concept
The Financial Examiner is a professional series that performs examination and analysis of regulated entities in accordance with regulatory standards including safety and soundness of compliance with federal or state laws. Positions in this series may specialize in one or more of the following areas:
Applications/Registrations or Analysis: Incumbents analyze financial statements and materials from regulated entities or associated persons for charters, registrations, licenses, or exemptions from registration or amendments to existing charters, registrations, licenses or exemptions and compliance with regulatory standards.
Examinations: Generally incumbents perform site visits to regulated entities to evaluate adequacy of operational or management methods and conduct a risk analysis to determine compliance with regulatory standards.
Enforcement: Incumbents analyze, investigate, and prepare to take action against regulated entities for non-compliance with regulatory standards.
The term “regulated entities” includes:
1. Financial institutions, financial services companies or issuers;
2. Insurance companies, health service contractors, health maintenance organizations, MEWAs, holding company systems, agents, brokers, CGAs, MGAs, reinsurance companies, guarantee associations, and any other organization regulated pursuant to the Washington Insurance Code.
“Financial institution or financial services company or issuer” includes commercial banks, alien banks, trust companies and departments, savings banks, saving and loan associations, credit unions, credit union service organizations, consumer loan companies, mortgage brokers, escrow agents, check cashers, check sellers, securities, franchises, business opportunities, commodity investments, or other persons or entities regulated by the Department of Financial Institutions and the holding companies, subsidiaries, and other affiliates of those entities.
The term “regulatory standards” encompasses safety and soundness; NAIC Accreditation Standards; standards adopted by the federal regulatory bodies or self-regulatory organizations; policies or guidelines adopted by organizations of state regulators of regulated entities or other state or federal law applicable to regulated entities.
Federal regulatory bodies means federal agencies adopting rules or standards application to regulated entities, including the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board, Comptroller of the Currency, Office of Thrift Supervision, National Credit Union Administration, United States Treasury Department, and Securities and Exchange Commission.
Self-Regulatory Institutions include the National Association of Securities Dealers and the New York Stock Exchange.
Incumbents perform the analysis and examination of regulated entities involving numerous and difficult legal, technical, and factual issues regarding regulatory standards or compliance with law with some degree of complexity.
Complex work generally means:
1. work having a high degree of political sensitivity; or
2. work in which a mistake could have a high cost to the agency or to the public; or
3. work involving novel issues not adequately covered by existing written procedures or manuals and therefore, requiring the development of new techniques and work methods and the exercise of a high degree of judgment; or
4. work involving problem or troubled entities.
Factors suggesting that particular work is complex include:
1. the regulated entity that is the subject of the work:
a. is involved in broad range of financial and business activities;
b. is involved in one or more activities which involves higher than normal degree of risk and may be a nontraditional activity;
c. has a complex capital or organizational structure;
d. is nationally significant, as defined by the NAIC;
e. has a large asset base; or
f. is regulated solely by the department.
2. the work includes
a. analysis prepared in anticipation of hearing or trial and the financial examiner preparing the analysis may be required to testify as an expert witness presenting and defending his or her analysis;
b. making an assessment of the relative culpability of two or more targets for violation of law in a business enterprise consisting of businesses of several types over various periods of time;
c. requires separate analysis of the finances of particular components of the enterprise for particular periods of time in order to support theories of the case concerning the scheme or schemes employed, the knowledge of the various participants over time of those schemes, and the scope, object, and means of any conspiracies relating to the violations of law; or
d. analysis and assessment involving multiple subsidiaries or affiliates operating in different business segments such as financial institutions, insurance, securities brokerage or real estate;
e. is regulated solely by the department.
In a training capacity and under close supervision, positions perform entry-level professional work conducting financial analysis and/or examinations of regulated entities. Incumbents learn various regulatory standards, laws, and regulations applicable to the functional areas of application/registrations or analysis, examinations, or enforcement. Positions work under clear guidance and may provide assistance to a higher-level examiner on more difficult analysis and/or examinations.
This is an in-training class designed to provide guidelines, training opportunities, and experience in a structured in-training program. Upon successful completion, incumbents will advance to the Financial Examiner 2.
Conducts initial analysis of compliance with laws and regulatory policy applicable to financial institutions, service providers or issuers; analyzes for compliance with mortgage industry regulations; conducts off-site reviews, disciplinary reviews and background checks;
Conducts interviews and documents findings; writes criticisms and recommendations for changes; confers with representatives of regulated entities examined regarding procedural problems and proposed changes; works with other regulators in enforcement, examination, coordinated review of applications and joint projects with prosecutors and law enforcement on enforcement matters; participates in applicable programs;
Collects and verifies data through examination or investigation or in connection with the review of applications; conducts a forensic accounting review or analysis of financial transactions; uses specialized software for examinations; analyzes financial transactions and accounts and investigations;
Conducts financial analysis which includes review and analysis of financial statements and information. Analyzes balance sheet, profit and loss accounts, interest rate risk and liquidity reports and other financial records to determine accuracy, adequacy, and propriety of accounts and reports; compiles working papers and exhibits and prepares reports summarizing findings;
Works with Financial Examiners, Certified Public Accountants, Certified Financial Examiners, Accredited Financial Examiners, and others;
Analyzes/examines less complex regulated entities and determines compliance with applicable laws, regulations, and standards including, but not limited to, financial compliance, investment compliance, audit failure, antitrust, security sale compliance, or “Ponzi” schemes on a state, national, and international level. Reads and reviews updated applicable laws, regulations, and standards using both text and computer-based sources to ensure analyses and examinations are appropriately conducted. Interprets and applies applicable laws, rules, and standards;
Assesses analysis/examination risk, materiality, and other matters; assesses inherent risk that the susceptibility of an assertion (there are five – existence or occurrence, completeness, valuation or allocation, rights and obligations, and presentation and disclosures) contains a material misstatement caused by three conditions – missing entry, erroneous entry, and the presence of entry that does not belong in the account; assesses the control risk that a material misstatement will not be prevented or detected on a timely basis by the regulated entity’s internal control; assesses risk management i.e., the ability of the regulated entity to identify and manage risk; assesses capital requirements i.e., the regulated entity’s ability to determine its capital requirements to cover potential claims; assesses materiality; assesses and reviews prior analysis/examination report, file, stated management and accounting personnel qualifications, bios, priority rating, and current filing; assesses acceptable low, moderate, or high detection risk; incorporates risk assessment into the analysis/examination procedures;
Develops an overall analysis or specific account(s) examination plan and designs specific procedures and tests to be accomplished in order to achieve regulatory standards analysis/examination objectives and deadlines; determines the nature, scope, timing, and extent of financial analysis/examination procedures;
Determines, obtains/downloads, prepares and maintains necessary filings, documents, worksheets, and information from various database sources that are required to conduct the financial analysis/examination; creates, places, and maintains evidence documents about regulated entity into the files;
Analyzes/examines less complex regulated entities’ filings, accounts, and documents containing financial information, correspondences, and articles of incorporation by laws, board minutes, and committee minutes, to assess and determine management effectiveness and regulated entity’s financial condition and compliance;
Logs, compiles, and extracts data to create documents required to complete financial analysis/examinations;
Reads, analyzes, and examines filings, documents, and other information to assess financial condition, statement assertions, and compliance with laws, regulations, and standards; prepares and completes checklists and/or additional analysis/examination procedures/programs; evaluates analysis/examination procedures, programs, and findings;
Writes analysis/examination reports for assigned regulated entities, including updating risk assessment, profile summary, and supervisory plan; documents report determinations to support final determination and any resulting recommended action;
Meets with affected parties concerning legal and/or procedural problems;
Conducts interviews and interrogations; documents in memorandum;
Works with other regulators in enforcement, examination, analysis, review of application and joint projects with prosecutors and law enforcement on law enforcement matters;
Identifies material adverse findings; follows established procedures to communicate the finding including for regulated entities not meeting capital, surplus, net worth, RBC requirements, etc.;
Follows established enforcement referral procedures for transfer of evidence to relevant enforcement personnel for illegal or noncompliant activities;
Reports to lead and supervisor on analysis/examination status, financial condition and compliance of regulated entity and findings for recommended changes or corrections;
Prepares special analyses/examinations of regulated entities admitted to or applying for admission to do business in Washington State; registers regulated entities in compliance with applicable, laws, regulations, and standards;
Performs other work as required.
Knowledge and Abilities
Ability to: learn to recognize problems and assist in developing solutions; write clear and concise findings, summaries, and reports; understand and carry out oral and written instructions; complete work assignments on a timely basis.
There may be instances where individual positions must have additional licenses or certification. It is the employer’s responsibility to ensure the appropriate licenses/certifications are obtained for each position.
NOTE: Incumbents may be required to travel for extended periods.
Class Specification History
Salary adjustment adopted 6/30/2015, effective 7/1/2015.