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This report is intended for use by the management of the Variable Annuity Life Insurance Company ("VALIC") and its subsidiaries.
VALIC Retirement Services Company ("VRSCO") and VALIC Financial Advisors, Inc. ("VFA"), its user entities, and the independent
auditors of its user entities, and is not intended and should not be used by anyone other than these specified parties.
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Control Objective 3
- Controls provide reasonable assurance that remittances are credited to participant accounts
accurately, completely, and in accordance with instructions received from plan sponsors or participants.
VALIC Control Activities
Tests of Operating Effectiveness
Results of Tests
3.8 Automated controls within the
loan repayment application
require the payment amount to
equal the amount allocated to
the account. If the amounts do
not match or a loan does not
exist, the system will not allow
the payment to be allocated
or the payment’s batch to be
processed.
Observed allocation of payment in loan
repayment application to determine
whether the application prevents a
Loan CSP from allocating a payment to
an account without a loan.
No exceptions noted.
3.9 An independent quality review
is performed to ensure the
accuracy in applying the loan
payment to the participant’s
account. If all payments were
allocated correctly, the payment
is approved for processing. If an
error is found, the quality review
will flag the payment and correct
the allocation.
Test performed by the FCU team:
Inspected a sample of loan payments
to determine whether a quality review
was performed and errors, if any, were
corrected.
Determined once all payments were
allocated correctly, the payment was
approved for processing.
No exceptions noted.
No exceptions noted.
3.10 Automated controls within the
loan repayment application
prevent duplicate annuity
lockbox transmittals and will
not allow the transmittal of the
lockbox payment transactions
to the record keeping system
unless payments have been
allocated, reviewed/approved,
and the bank deposit and
lockbox amounts match.
Observed a Customer Service
representative resubmit a lockbox
payment transaction to determine
whether the system prevented
duplicate transmittals.
Observed a lockbox payment
transaction to determine whether
the system prevented transmittal of
the lockbox payment transactions
unless payments have been allocated,
reviewed/approved, and the bank
deposit and lockbox amounts match.
No exceptions noted.
No exceptions noted.
3.11 Automated controls within AWD
require an independent quality
review.
Observed a loan remittance transaction
to determine whether AWD prevented
a Loan CSP from quality reviewing his/
her own transaction.
No exceptions noted.
IV. VALIC control objectives and controls, and PricewaterhouseCoopers LLP's tests of operating
effectiveness and results of tests