NCUA reconciliations need internal controls, OIG says

February 17, 2016

ALEXANDRIA, Va. (2/17/16)--The internal control environment of the National Credit Union Administration's (NCUA) Asset Management and Assistance Center (AMAC) restitution orders process needs improvement, according to an internal audit.

In a report released by the NCUA's Office of the Inspector General (OIG-16-01), AMAC analysis showed adequate documentation processes, but other areas in which management could improve.

AMAC conducts credit union liquidations and performs management and recovery of assets, as well as assists NCUA regional offices with the review of large complex loan portfolios and actual or potential bond claims.

"We determined the internal control environment over AMAC’s restitution orders process needs improvement," the report reads. "At the onset of our review, we determined that AMAC did not have policies and procedures over the restitution order process; therefore, we had to rely on interviews with management and walk-throughs of the process to assess internal controls over the restitution order process."

Specifically, the report determined that AMAC management:

  • Does not assist the Department of Justice (DOJ) through systematic follow-up regarding the status of offenders and receipt of payments. Specifically, AMAC does not take advantage of an available federal resource for assistance with the collection of restitution orders, or conduct periodic reconciliations with the DOJ on the number of restitutions ordered and the amount of restitution owed to liquidation estates;
  • Does not have write down policies and procedures for expired and uncollectible restitution orders, and
  • Had no policies and or procedures over the restitution process at the onset of the review.

In addition to AMAC needing to revise policies and procedures over the restitution orders process, thee OIG identified three areas in which AMAC needs to make improvements: follow-up efforts and reconciliations; write-down actions; and policies and procedures.

The report makes eight recommendations, which will help AMAC continue to improve its restitution orders process.