Collaborate on Credit Bill Format for Supervision with Ease Using airSlate SignNow

Credit bill format for Supervision

WELCOME TO THE 2ND MODULE OF THE SUPERVISORY COMMITTEE TRAINING. IN THIS SECTION YOU'LL LEARN ABOUT MONITORING MANAGEMENT ACTIVITIES. HERE YOU'RE PLAYING THE ROLE OF QUALITY CONTROL MONITOR. IN YOUR ROLE AS QUALITY CONTROL MONITOR YOU'LL MONITOR MANAGEMENT ACTIVITIES ON A REGULAR BASIS. THIS MONITORING IS THE CORNERSTONE FOR A SAFE AND SOUND CREDIT UNION. THIS ROLE IS IMPORTANT BECAUSE, WHEN DONE WELL, IT WILL: ENSURE THAT MANAGEMENT PRACTICES AND PROCEDURES SAFEGUARD MEMBERS' ASSETS. YOU'LL BE REVIEWING MEMBER ACCOUNTS, LOANS, AND CREDIT UNION FINANCIAL STATEMENTS FOR ERRORS, COMPLIANCE, AND POTENTIAL FRAUD, JUST TO NAME A FEW AREAS. THE MONITORING ROLE ALSO ENSURES THE BOARD OF DIRECTORS FUNCTIONS IN THE BEST INTEREST OF THE MEMBERSHIP. YOU'LL NOTICE IN THE SAMPLE WORK PLAN THAT "FOLLOW-UP ON PRIOR AUDIT AND EXAMINATION FINDINGS" IS LISTED FOR EACH MONTH OF ACTIVITY. THIS MONITORING ROLE ALSO VERIFIES THAT MANAGEMENT CARRIES OUT THE APPROVED POLICIES. DIFFERENCES BETWEEN POLICY AND ACTUAL IMPLEMENTATION POSES RISK TO THE CREDIT UNION AND SHOULD BE ADDRESSED AS SOON AS POSSIBLE. ONE EXAMPLE OF THIS IS A CREDIT UNION HAVING A POLICY THAT REQUIRES THE COLLECTION OF TITLES ON CAR LOANS BEFORE THE LOANS CAN BE DISBURSED, BUT HAVING LOAN FILES MISSING CAR TITLES. FINALLY, THE MONITORING ROLE ALLOWS FOR TIMELY CORRECTIONS TO PROBLEMS FOUND BEFORE CONSEQUENCES ARE IMPOSED. FOR EXAMPLE, AN ACTIVE SUPERVISORY COMMITTEE AVOIDS THE CREDIT UNION BEING SUBJECT TO "DOCUMENT OF RESOLUTION" ITEMS FROM THE NCUA EXAMINER, LIKE IN THE CASE OF THE MISSING CAR TITLES. TIMELY CORRECTIONS ALSO IMPROVE THE CHANCES OF HAVING A CLEAN ANNUAL AUDIT. LET'S REVIEW WHAT'S INVOLVED IN MONITORING MANAGEMENT ACTIVITIES. FIRST, THE COMMITTEE WILL DEVELOP AN ANNUAL COMMITTEE WORK PLAN. THIS PLAN WILL DESIGNATE WHICH COMMITTEE MEMBERS COMPLETE WHICH ASSIGNMENTS. THE PLAN WILL ALSO DETAIL THE ACTIVITIES AND ASSOCIATED DATES FOR EACH. IN THE NEXT SLIDE YOU'LL SEE THE SAMPLE WORK PLAN FROM THE SUPERVISORY COMMITTEE GUIDE. ONCE THE WORK PLAN IS ESTABLISHED THE MEMBERS SHOULD FOLLOW THE SCHEDULE, COMPLETING THEIR TASKS AND DOCUMENTING THAT COMPLETION WITH "WORK PAPERS." WORK PAPERS ARE CHECKLISTS, MEMOS, SPREADSHEETS, OR ANY OTHER TOOL YOU'LL USE TO DEMONSTRATE AND REPORT ON THE WORK COMPLETED. YOU'LL SEE TWO SAMPLES IN THE NEXT FEW SLIDES. THE RESULTS OF THE ONGOING MONITORING WORK SHOULD BE REPORTED TO THE BOARD OF DIRECTORS AT LEAST QUARTERLY, PREFERABLY MONTHLY. IF ANY MAJOR CONCERNS WERE IDENTIFIED, THEY SHOULD BE HIGHLIGHTED IN THE SUPERVISORY COMMITTEE'S REPORT TO THE BOARD. THE COMMITTEE SHOULD MONITOR THE BOARD'S RESPONSE TO ENSURE THAT THE ISSUE IS COMPLETELY RESOLVED. FINALLY, IN ALL OF ITS PLANNING, REVIEWING AND MONITORING, YOU WILL OPERATE INDEPENDENTLY OF STAFF. FOR EXAMPLE, THE STAFF SHOULDN'T GET THE SCHEDULE AND KNOW WHEN YOU'LL BE CONDUCTING A CASH COUNT; THEY ALSO SHOULD NOT BE CHOOSING WHICH LOANS YOU'LL REVIEW. SO WHAT DOCUMENTATION WILL YOU USE TO DEMONSTRATE THE COMMITTEE'S WORK IN THIS AREA? WELL, THE COMMITTEE'S WORK PLAN IS THE FIRST START. ON THIS SLIDE YOU SEE THE SAMPLE WORK PLAN FOUND IN APPENDIX 4A OF THE SUPERVISORY COMMITTEE GUIDE. IT COVERS 12 MONTHS OF VARIOUS ACTIVITIES THAT A COMMITTEE MIGHT WORK ON. YOU'LL NOTE THAT ATTENDING THE MONTHLY BOARD MEETING AND FOLLOWING UP ON PRIOR AUDIT AND EXAMINER ISSUES ARE LISTED FOR EVERY MONTH. AGAIN, THIS IS A SAMPLE ONLY. YOUR COMMITTEE SHOULD CREATE YOUR OWN PLAN, OR START WITH THIS SAMPLE AND EDIT IT TO INCLUDE ACTIVITIES BASED ON THE NEEDS OF YOUR CREDIT UNION. ONE OF THE BEST THINGS ABOUT THE SUPERVISORY COMMITTEE GUIDE IS THE DETAIL IT PROVIDES TO TRAIN YOU ON HOW TO AUDIT ANY AREA NEEDED. CHAPTERS 8 THROUGH 20 ARE TITLED "HOW DO WE AUDIT..." FOLLOWED BY THE AREA OF REVIEW. SOME OF THESE MAY NOT BE APPLICABLE TO YOUR CREDIT UNION AND NOT ALL OF THEM NEED TO BE REVIEWED EVERY MONTH. LOOKING AT THIS LIST MAY HELP YOU DEVELOP YOUR WORK PLAN. IN THE FOLLOWING SLIDES YOU'LL FIND SAMPLE WORK PAPERS TESTING INTERNAL CONTROLS AND TWO CRITICAL AREAS OF MONITORING -- CHAPTER 8 -- AUDITING CASH, AND CHAPTER 10, AUDITING LOANS. MONITORING INCLUDES A REVIEW AND ASSESSMENT OF INTERNAL CONTROLS. INTERNAL CONTROLS ARE STAFF STRUCTURE, OPERATING PROCEDURES, AND OTHER MEASURES THE CREDIT UNION USES THAT: SAFEGUARDS ASSETS ENSURES ACCURACY AND RELIABILITY OF DATA ENCOURAGES COMPLIANCE WITH POLICIES, AND PROTECTS STAFF AND VOLUNTEERS FROM BEING SUSPECTED OR ACCUSED OF FRAUD THAT LAST ONE IS IMPORTANT BECAUSE IT POINTS OUT THAT THE CREDIT UNION LEADERS HAVE AN OBLIGATION TO ITS STAFF AND VOLUNTEERS TO PROTECT THEM FRAUD ACCUSATIONS AND TEMPTATIONS. ALLOWING A SOLE VOLUNTEER TO MANAGE ALL CASH RELATED ITEMS WITHOUT ANY REVIEW OR OVERSIGHT POSES AS MUCH OF A RISK TO THAT PERSON'S REPUTATION AS IT DOES TO THE CREDIT UNION. COMMON FORMS OF INTERNAL CONTROLS ARE THINGS LIKE REQUIRING STAFF TO LOGON TO TERMINALS WITH PASSWORDS SO THERE'S A RECORDS OF WHO COMPLETED ALL TRANSACTIONS; ANOTHER EXAMPLE IS FORCED DUAL CONTROL OVER VAULT ACCESS -- THIS MEANS NO ONE PERSON HAS FULL ACCESS TO THE VAULT AS ONE PERSON MIGHT HAVE THE ACCESS CODE AND THE OTHER PERSON THE KEY, BOTH OF WHICH ARE NEEDED TO OPEN THE DOOR; FINALLY, A GREAT EXAMPLE IS THE REQUIREMENT THAT THE 5300 REPORT BE REVIEWED AND APPROVED BY A 2ND PERSON IN ORDER TO CHECK FOR ANY ERRORS BEFORE IT IS SUBMITTED TO NCUA. WITHIN EACH OF THE "HOW DO WE AUDIT..." CHAPTERS IS A SECTION DISCUSSING THE INTERNAL CONTROLS FOR THAT FUNCTION. THE GUIDE ALSO INCLUDES A SAMPLE INTERNAL CONTROL CHECK LIST FOR EACH OF THE MAIN ELEMENTS OF THE CREDIT UNION FINANCIAL STATEMENT. FOR EXAMPLE, APPENDIX 10-A IN THE GUIDE IS A CHECKLIST FOR INTERNAL CONTROLS OVER LOANS. HERE'S A SECTION OF THAT CHECKLIST ON THIS SLIDE. YOU'LL NOTE THAT IT INCLUDES A LIST OF INTERNAL CONTROL "TEST" QUESTIONS, THEN A "PROCEDURE" FOR CHECKING THE TEST, THEN A YES AND NO OPTION BOX. AN INTERNAL CONTROL WEAKNESS IS ALL THOSE WITH A "NO" RESPONSE. THIS IS JUST ONE SAMPLE OF A WORK PAPER YOU WOULD KEEP ON HAND AS DOCUMENTATION OF THE SUPERVISORY COMMITTEE'S WORK. THE CHECKLIST SHOULD BE DATED AND SIGNED BY THE COMMITTEE MEMBER THAT COMPLETED IT. NOW LET'S LOOK AT TWO OTHER WORK PAPER TEMPLATES YOU'LL FIND IN THE SUPERVISORY COMMITTEE GUIDE. THEY APPEAR AS APPENDICES WITHIN THE ASSOCIATED CHAPTERS OF THE GUIDE. THEY'RE ALSO ALL AVAILABLE AS ELECTRONIC DOCUMENTS YOU CAN DOWNLOAD AND EDIT FROM THE NCUA WEBSITE. WE CHOSE TO SHOW YOU THESE BECAUSE THEY'RE APPLICABLE FOR ALL CREDIT UNIONS, NO MATTER WHAT ASSET SIZE. YOU WOULD USE THE "LOAN REVIEW WORK PAPER" TO DOCUMENT WHICH LOANS WERE REVIEWED, THE KEY UNDERWRITING FACTORS, AND ANY FINDINGS OR CONCERNS THAT SHOULD BE REPORTED TO THE BOARD. COMMON CONCERNS TO BE NOTED ABOUT LOANS MIGHT BE MISSING DOCUMENTS, MISSING SIGNATURES, AND ANYTHING FOUND THAT CONTRADICTS THE WRITTEN POLICIES RELATED TO LENDING. THE BANK ACCOUNT RECONCILEMENT WORK PAPER ALLOWS YOU TO REVIEW THE BANK STATEMENTS AGAINST THE BACKUP DOCUMENTATION AND VERIFY THE RECONCILEMENTS CONCUR WITH THE STAFF FINDINGS AND THE BANK RECORDS. EXAMPLES OF REPORTABLE CONCERNS IN THIS AREA MIGHT BE DELAYS IN RECONCILING, DELAYS IN CHECK CLEARINGS, OR MISSING APPROVALS ON EXPENSE PAYMENTS. FINALLY, HERE'S A BASIC SAMPLE OF WHAT A MONTHLY SUPERVISORY COMMITTEE REPORT MIGHT COVER. THE MAIN SECTION IS A LIST OF THE COMMITTEES ACTIVITIES COMPLETED, THE DATE, AND ANY FINDINGS. THERE ARE ALSO INSTRUCTIONAL NOTES AT THE BOTTOM TO HELP MEMBERS TO REMEMBER WHAT ISSUES THEY SHOULD BE FLAGGING. AGAIN, NCUA HAS A VARIETY OF WORK PAPERS. YOU SHOULD EDIT THESE OR DEVELOP NEW ONES TO BEST MEET THE NEEDS OF YOUR CREDIT UNION. SO BEFORE WE MOVE ONTO THE NEXT RESPONSIBILITY HERE'S AN ARTICLE THAT SUMMARIZES WHY THE ONGOING MONITORING ROLE IS SO VERY IMPORTANT -- PARTICULARLY IN SMALL CREDIT UNIONS. THIS ARTICLE REPORTS 5 CASES OF FRAUD IN SMALL, ONE-PERSON EMPLOYEE CREDIT UNIONS. EACH ONE INVOLVES FRAUD THAT WENT ON OVER SEVERAL YEARS. IN ONE CASE A 62 YEAR OLD WOMAN WILL SERVE 45 MONTHS IN PRISON. AS MANAGER, SECRETARY, BOARD MEMBER, AND SOLE EMPLOYEE SHE WAS ABLE TO CONCEAL HER CRIMES FOR YEARS USING A COMPLEX MONEY LAUNDERING SCHEME. IN ANOTHER CASE THE MANAGER STOLE FUNDS FROM MEMBERS' ACCOUNTS FOR NINE YEARS BEFORE THE CRIME WAS REVEALED. MEMBERS WERE NOTIFIED ABOUT THE TAMPERING OF THEIR ACCOUNTS AFTER THE CREDIT UNION WAS TAKEN OVER BY A LARGER INSTITUTION. HAVING AN EFFECTIVE AND ONGOING MONITORING SYSTEM IN PLACE PROTECTS OUR CREDIT UNIONS AND PROTECTS THOSE WHO RUN THE CREDIT UNION ON A DAY TO DAY BASIS. THAT'S THE END OF THIS MODULE. RETURN TO THE MAIN SCREEN TO REVIEW ANY OTHER MODULE IN THIS TRAINING.