LAS VEGAS (12/9/15)--In the credit union ecosystem, the supervisory committee serves as “the eyes and the ears of the membership” to make sure the board is acting in the best interest of the members.
Tuesday’s lively, back-and-forth discussion between attorney David Reed and Scott Neat, director of division of supervision, National Credit Union Administration Office of Examination and Insurance, offered insights into what an effective supervisory committee should look like.
Reed and Neat kicked off the CUNA Supervisory Committee and Internal Audit Conference in Las Vegas Tuesday during the morning general session.
“If an examiner sees an active supervisory committee, they can go through an exam more quickly,” Neat said. Reed noted that the examiner might not interact with the board during an exam, but the examiner should interact with the supervisory committee at every exam.
An examiner will determine whether the supervisory committee audit and verification meets the requirements laid out in NCUA regulations or the “grand marching orders,” as Reed referred to them.
Those responsibilities include:
A successful supervisory committee will have independence from the board, but that doesn’t mean there isn’t any interaction, Reed said. An active supervisory committee is a board’s best friend because it helps strengthen the M (management) part of CAMEL ratings.
Neat also said access to “absolutely everything”--including credit union records and full board minutes--is necessary for the supervisory committee. Reed added that a “high-functioning” supervisory committee will review financials, call reports, audits and internal controls.
“Trust but verify” will get you a long way down the road to being an effective supervisory committee member, Neat said.