WASHINGTON–NCUA’s Office of Inspector General (OIG) has made three recommendations to bring the federal credit union regulatory agency’s quality assurance program (QAP) into full compliance with its own National Supervision Policy Manual (NSPM).
The three recommendations are included in Report #OIG-23-07.
“Our audit determined the NCUA substantially conducted its Quality Assurance Program in compliance with requirements,” the OIG stated. “However, we did not find full compliance with the requirements for performing or documenting quality assurance reviews and completing quality assurance reviews or issuing response memos within established timeframes.”
The OIG review focused on QAP activities from Jan. 1, 2020-Dec. 31, 2022, and its recommendations are directed primarily at NCUA’s Office of National Examinations and Supervision (ONES), which is responsible for supervising all corporate credit unions plus natural-person credit unions $15 billion or more in assets.
The Recommendations
The OIG recommendations include:
- Ensure the NCUA fully complies with the National Supervision Policy Manual and the ONES Division of Supervision (DOS) Policy and Procedures Manual requirements regarding when quality assurance reviews are to be performed and the number of specialist reviews to be completed.
- Ensure that ONES supervisory examiners are using the pre-release secondary review form to document their pre-release secondary review of examinations.
- Ensure NCUA personnel involved in quality assurance activities fully comply with the National Supervision Policy Manual and the Office of Examination and Insurance and ONES Guidelines for Communication and Collaboration requirements for completing quality assurance reviews within established timeframes.
Completed for All Exam Reports
“These reviews are completed on all examination and supervision contact reports where the NCUA issues the report, including federally insured, state-chartered credit unions where the NCUA performs solo examinations or where the State Supervisory Authority (SSA) participates on examinations led by the NCUA,” according to the report. “These reviews by supervisory examiners – focusing on, among other things, the quality of the examination report, verify that CAMELS and risk ratings are appropriate and ‘sufficiently’ justified – are supposed to be completed within 10 business days of receiving the completed examination work and draft report, the OIG wrote. The Division of Supervision is then required to complete its pre-release secondary reviews within 15 business days after it is notified that the supervisory examiner’s review has been completed and is ready for division review.”
The full report can be found here.
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