The annual audit of loan contracts: a preventive tool
Why audit loan contracts annually?
A crowdfunding loan portfolio can have hundreds or even thousands of active contracts. Each with its own parameters: amount, rate, duration, schedule, possible guarantees. Over time, inconsistencies may appear between signed contracts and data managed by the platform's computer system.
The annual audit of loan contracts is a systematic verification exercise that aims to detect and correct these anomalies before they become problems — especially in the perspective of possible extinctive management.
The objectives of the audit
- Check consistency between legal contracts and technical data (amounts, rates, dates)
- Identify calculation anomalies on timelines (interest, amortization, fees)
- Check for completeness files: does each loan have all the necessary documents?
- Evaluate the quality of the portfolio : unpaid rates, delays, defaults
- Preparing for transferability : is the data in a format that can be used by a third party provider?
The audit methodology
Phase 1: Extraction and mapping
The audit starts with an exhaustive extraction of the platform's database. The auditor draws up a complete map of the portfolio: number of active loans, distribution by status (in progress, overdue, in default), financial volumes involved.
Phase 2: Automated checks
Verification scripts are run across the portfolio to detect systematic anomalies: interest calculation discrepancies, date inconsistencies, duplicates, missing data. These automated controls allow a large volume of contracts to be processed quickly.
Phase 3: Sampling verification
A representative sample of contracts is verified manually from start to finish: from the signed contract to the current schedule, including payment history. This thorough check makes it possible to validate the reliability of automated controls and to detect more subtle anomalies.
Phase 4: Report and recommendations
The audit concludes with a detailed report including the list of anomalies detected, their classification by criticality level and corrective recommendations. This report is a valuable management tool for the platform.
Frequently detected errors
The experience of audits carried out by Runoff has made it possible to identify several categories of recurrent errors:
- Cumulative rounding differences : small differences in cents that, multiplied by thousands of maturities, create significant differences
- Contracts amended without traceability : restructuring or amendments not properly recorded in the system
- Incomplete KYC data : missing or outdated identity verification records
- Date inconsistencies : loan start or end dates that do not correspond to the signed contract
- Duplicate payments : due dates recorded twice or payments not reconciled
The concrete benefits for platforms
Beyond regulatory compliance, the annual audit generates tangible operational benefits. It allowsimprove data quality, which facilitates reporting to regulators and communication to investors. It is also a continuous preparation for a possible migration, making the transfer more fluid when the day comes.
Chez Runoff, the annual audit is part of a global approach to prepare for fire extinguishing management. Coupled with semi-annual migration tests, it forms a comprehensive prevention system that secures the wallet throughout the life of the platform.
The annual audit is not a punitive control exercise. It is a preventive tool that turns raw data into a reliable, auditable and transferable portfolio.
