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Supervisory Committee Duties and Responsibilities. Ashley M. Mobley C.U.C.E, B.S.A.C.S., A.A.P. Assistant Vice President Credit Union Auditing & Compliance Experts. Overview. Organization of a Credit Union. Basic Organization Structure.

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supervisory committee duties and responsibilities

Supervisory Committee Duties and Responsibilities

Ashley M. Mobley

C.U.C.E, B.S.A.C.S., A.A.P.

Assistant Vice President

Credit Union Auditing & Compliance Experts

organization of a credit union
Organization of a Credit Union

Basic Organization Structure

specific responsibilities of the supervisory committee
Specific Responsibilities of the Supervisory Committee

Determine whether:

1. Internal controls are established and effectively maintained in order to achieve the Credit Union’s financial reporting objectives which must be sufficient to satisfy the requirements of the Supervisory Committee audit, verification of members’ accounts, and its additional responsibilities.

2. The Credit Union’s accounting records and financial reports are promptly prepared and accurately reflect operations and results.

specific responsibilities of the supervisory committee cont
Specific Responsibilities of the Supervisory Committee Cont.

Determine whether:

3. The relevant plans, policies, and control procedures established by the Board of Directors are properly administered.

4. Policies and control procedures are sufficient to safeguard against error, conflict of interest, self-dealing, and fraud.

what must we do
What must we do?
  • At least once every calendar year, complete (or have completed) the Supervisory Committee audit, and provide a report on the audit to the Board of Directors
  • At least every 2 years, you must conduct (or have conducted) a verification of members’ accounts
  • Continuously monitor to ensure the Board of Directors is safeguarding assets, and that Management complies with the policies and plans set forth by the Board of Directors
  • Report to members at the annual meeting
other things to do
Other Things to Do
  • Continuously review and monitor internal control policies and procedures
  • Select and cooperate with external auditors, if applicable
  • Review examination and audit findings and ensure corrective action was taken and documented
  • Meet with the examiners and auditors as necessary
  • Research member complaints
  • Complete other recommended procedures
types of audits
Types of Audits

Annual Supervisory Committee audit

Quarterly, or interim, audits

ACH (Automated Clearing House) Audits

OFAC (Office of Foreign Asset Control) scrubs

BSA (Bank Secrecy Act) Audits

Account Verifications

IS & T (Information Systems & Technology) Audits

Compliance Reviews

Internal Control Reviews

interim audit procedures1
Interim Audit Procedures

Some of the more commonly completed interim procedures include the following:

  • Review account activity on the Credit Union’s employees.
  • Review and test a sample of reconciliations for Federal Reserve, correspondent bank, On-Us, and Corporate Credit Union accounts.
  • Review activity on suspense and clearing accounts related to the accounts listed above.
  • Confirm a sample of new loans, new deposit accounts, and/or closed accounts since the last quarterly interim or annual audit.
  • Review for compliance with the Credit Union’s loan policy a sample of new loans granted since the last quarterly interim or annual audit.
  • Review a selection of file maintenance reports for randomly selected days.
  • Review procedures for handling negative balance accounts, including timeliness of collection or subsequent write-off.
  • Review a sample of loan exception reports, including paid ahead loans, non-amortizing loans, open-end loans with balances greater than established credit limits, closed end loans with balances greater than original loan amount, and/or loans by interest rate.
  • Test classification of delinquent status on a sample of loans classified as delinquent since the last quarterly interim or annual audit, including a review for compliance with the Credit Union’s collection policy.
  • Review a sample of delinquent loans and document collection efforts relative to the collection policy.
  • Review for compliance with the Credit Union’s charge-off policy a sample of loans charged-off since the last quarterly interim or annual audit.
  • Review corporate expenses and charge card accounts, including compliance with the Credit Union’s written policies.
  • Confirm activity on dormant or inactive accounts removed from the dormant report since the last annual or interim audit.
ach audit1
ACH Audit
  • Must be performed by December 1 each year in order to be recognized by NACHA.
  • Credit Union must retain documentation supporting the completion of an audit for 6 years.
  • The retained documentation must be provided to the National Association upon request.
  • Audit provisions in Appendix 8 do not prescribe a specific methodology to be used for the completion of an audit, but identify key rule provisions that should be examined during the audit process.
be an active supervisory committee
Be an Active Supervisory Committee
  • The Supervisory Committee should be granted access to all of the Credit Union’s records without exception
  • The Supervisory Committee should adequately document all reviews performed
  • ALL CREDIT UNION INFORMATION MUST BE KEPT CONFIDENTIAL
questions

Questions?

Thank You!