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3. CU Volunteer Training Board Training Strategic Planning
                                           
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4. Other ICUT Programs Laugh Your Way To The CU
                                           
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5. cuSchool.com Join Today Annual Membership Per CU $199.95
                                           
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6. Don’t Miss Our Next Class
Do’s and Don’ts of Being a CU Teller
Date: Tuesday March 16, 2010
Time: :30PM-4:45PM Eastern Standard Time
Understanding Self-Employed Taxes
FOR MAKING CREDIT DECISIONS
Date: Tuesday April 13, 2010
                                           

7. Today’s Facilitator
                                           

8. Supervisory Committee Duties & Responsibilities
Presented by ICUT Services
Will begin in a few minutes………….
                                          

9. Housecleaning Items Detailed Outline Hold Verbal Questions
                                           
Detailed Outline
Hold Verbal Questions
Use the Chat Feature
Polling
PowerPoint
Complete Class Survey
Send Me an ???
Door Prize Winner

10. Today’s Agenda Define Supervisory Committee
Qualifications & Power Of Committee
Duties & Responsibilities
Internal Review Program
Best Practices for CUs
Internet Scams, Fraud, Identity Theft
How To Manage The Committee
Open Mic
                                           

11. What Is The Supervisory Committee?
The Guard Dog or “Watchful Eye”
The Audit Committee
“The committee that helps minimize the possibility of the credit union incurring any kind of loss.”
                                          

12. How Does One Get On This Committee?
Appointed by the Board Of Directors
1 may serve as director
1,2,or 3 year terms
                                          

13. Who Can Serve? Qualifications Member In Good Standing (Shares & Loans)
Accounting
Non Accounting Backgrounds
Active & Cooperative Participant
Commitment To CU
                                          

14. Structure Of Committee
Committee Size (3-5)
Positions On Committee
Board Representation
                                          

15. What Power Does Committee Have?
Access To All Records
Can Call Special Membership Meetings
Removal Of Officers, Directors & CC Members
                                          

16. Duties & Responsibilities
Planning & Budgeting
Meet Regularly
Attend Board Meetings (?)
Understand Financial Trends
Understand The CU’s Risks
Surprise Cash Counts
                                          

17. Duties & Responsibilities
Planning & Budgeting
Meet Regularly
Attend Board Meetings (?)
Understand Financial Trends
Understand The CU’s Risks
Surprise Cash Counts
                                          

18. Understanding Financial Trends
Beginners: NAFCUNET.org / CUES.org / cuSchool.com
Intermediate: NCUA.gov (5300) / CUNA.org (Research & Statistics)
Advanced: ALM Reports, FPRs (NCUA.gov), Journal of Accountancy (COSO)
                                           

19. Duties & Responsibilities
Planning & Budgeting
Meet Regularly
Attend Board Meetings (?)
Understand Financial Trends
Understand The CU’s Risks
Surprise Cash Counts
                                          

20. Understanding CU Risks
Credit Risk
Liquidity Risk
Interest Rate Risk
Compliance Risk
Strategic Risk
Transactional Risk
Reputation Risk
                                           

21. Duties & Responsibilities
Planning & Budgeting
Meet Regularly
Attend Board Meetings (?)
Understand Financial Trends
Understand The CU’s Risks
Surprise Cash Counts
                                          

22. Surprise Cash Counts Cash Count Audit Review As of_____________
Drawer #________
COINS: CHECKS:
Pennies ________   ______________   ________
Nickels ________    ______________   ________
Dimes ________     ______________   ________
Quarters ________ ______________  ________
Halves ________   ______________  ________
Dollars ________  ______________  ________
  CURRENCY:
Ones       ________   ______________   ________
Twos       ________ ______________  ________
Fives       ________ ______________  ________
Tens       ________ ______________  ________
Twenties ________ ______________ ________
Fifties       ________ ______________ ________
Hundreds ________ _____________ ________
  Subtotal        $ ________ Subtotal        $________
Per Control $ ________ Per Control $________
Difference   $ ________ Difference   $________ I, ________________, owner of this drawer, certify that a member of the supervisory committee has counted all cash and checks in my possession as of ____________________. Signed___________________ Time & Date Name of Teller
                                           

23. Duties & Responsibilities
Review Loan Files
Evaluate Internal Control
Account Verification
Monitor Board
Review Bank Reconcilements
Work With Regulators & Follow-up
Confirm Account Closures
                                          

24. Duties & Responsibilities
Review Loan Files
Evaluate Internal Control
Account Verification
Monitor Board
Review Bank Reconcilements
Work With Regulators & Follow-up
Confirm Account Closures
                                          

25. Duties & Responsibilities
Review Loan Files
Evaluate Internal Control
Account Verification
Monitor Board
Review Bank Reconcilements
Work With Regulators & Follow-up
Confirm Account Closures
                                          

26. Duties & Responsibilities
Review Loan Files
Evaluate Internal Control
Account Verification
Monitor Board
Review Bank Reconcilements
Work With Regulators & Follow-up
Confirm Account Closures
                                          

27. Duties & Responsibilities
Review Loan Files
Evaluate Internal Control
Account Verification
Monitor Board
Review Bank Reconcilements
Work With Regulators & Follow-up
Confirm Account Closures
                                          

28. Duties & Responsibilities
Review Loan Files
Evaluate Internal Control
Account Verification
Monitor Board
Review Bank Reconcilements
Work With Regulators & Follow-up
Confirm Account Closures
                                          

29. Duties & Responsibilities
Review Loan Files
Evaluate Internal Control
Account Verification
Monitor Board
Review Bank Reconcilements
Work With Regulators & Follow-up
Confirm Account Closures
                                          

30. Confirm Closed Accounts
Dear Member:
As a valued member that planned to closed your account at the credit union we hope that you had a positive experience that you found our services of value. In an effort to improve our services, we would appreciate it if you would take a few seconds to respond to the survey shown below:
How long were you a member? ___________________________
Why did you close your account? __________________________
Would you ever join again? _____________________________
Did you know our policy is “once a member, always a member”?_____
Sincerely,
Supervisory Committee
                                           

31. Duties & Responsibilities
Plan Annual Audit & Follow-up
Review Returned Mail
Confirm Collection Accounts
Confirm Death Claims
Maintain Visibility
                                          

32. Duties & Responsibilities
Plan Annual Audit & Follow-up
Review Returned Mail
Confirm Collection Accounts
Confirm Death Claims
Maintain Visibility
                                          

33. Confirm Collection Accounts
Young & Young Law Firm
100 Best Way
Nocandu, Nebraska 08066
Dear Mr. Young:
On behalf of the supervisory committee for the ABC Federal Credit Union, I would like to confirm what credit union accounts have been forwarded to you for collection during the past twelve months. As part of our confirmation we would like to know the following information:
ACCOUNT NAME DATE RECEIVED ORIGINAL LOAN BALANCE CURRENT BALANCE STATUS
Again, we only need this information for accounts that you received between July 1, 20XX and the date of this letter.
Please forward all responses to this request to:
John Doe
c/o ABC FCU
12 Wayward Road
Nebraska City, Nebraska 08065
                                           

34. Duties & Responsibilities
Plan Annual Audit & Follow-up
Review Returned Mail
Confirm Collection Accounts
Confirm Death Claims
Maintain Visibility
                                          

35. Confirm Death Claims
CUNA Mutual Insurance P.O. Box Madison, WI ATTN: Death Claims
Dear Claims Department:
On behalf of the supervisory committee for the ABC Federal Credit Union, I would like to confirm what death claims have been presented to you for the credit union during the past twelve months. As part of our confirmation we would like to know the following information:
CU EMPLOYEE SUBMITTING CLAIM
MEMBER ACCOUNT NAME
AMOUNT OF CLAIM
DATE CLAIM WAS SUBMITTED
STATUS
Again, we only need this information for claims that you received between July 1, 20XX and the date of this letter.
Please forward all responses to this request to:
John Doe c/o ABC FCU 12 Wayward Road Nebraska City, Nebraska 08065
                                           

36. Duties & Responsibilities
Plan Annual Audit & Follow-up
Review Returned Mail
Confirm Collection Accounts
Confirm Death Claims
Maintain Visibility
                                          

37. Internal Review Program
The Supervisory Committee is the audit committee for the ABC Federal Credit Union. In that capacity, the committee will engage in regular activities that are intended to monitor the overall operation of the credit union. The structure of this committee will be compliant with the Federal Credit Union Act and the bylaws of the ABC Federal Credit Union. Accordingly, the committee will be responsible for the following:

38. Internal Review Program
Ø    Report all committee activities to the board of directors
Ø    Maintain minutes for all committee meetings.
Ø    Annually review the internal controls
Ø    Annually follow-up with Supervisory Committee audit findings
Ø    Annually follow-up with NCUA examination findings
Ø    Annually review the credit union’s strategic business plan.
Ø    Quarterly perform surprise cash counts.
Ø    Quarterly perform verification of deposits in transit
Ø    Quarterly perform a review of teller activity.
Ø    Quarterly review negative share report.
Ø    Quarterly review a sample of loan files for compliance.
> Monthly to monitor board activity

39. Identity Theft (Ijacking)
                                          
It is the use of another person’s identification, credit, or other data that involves fraud or deception, and economic gain is realized in the name of the victim. Unlike fingerprints, that are unique to each individual, personal data, like social security numbers, bank accounts or credit card numbers, telephone calling card numbers and other valuable identifying data can be used.

40. Identity Theft On The Rise
Recent reports put the numbers of ID Theft at 9.9 million per year… Insurance Journal January 2010
5% of the adult population in America
Cost $50 billion annually.
1 out of 4 Americans fall victim to ID Theft.
1000 cases of ID Theft occur each day.

41. 10 Most Risky Cities for Ijacking
1) San Francisco 2) Seattle 3) Denver 4) San Jose 5) San Diego 6) Atlanta 7) Salt Lake City 8) Las Vegas 9) Sacramento 10) Phoenix
Sperling’s Best Places

42. 10 Least Risky Cities for Ijacking
41) Rochester 42) Providence 43) Cincinnati 44) Cleveland 45) Virginia Beach 46) New Orleans 47) Birmingham 48) Louisville 49) Buffalo 50) Pittsburgh
Sperling’s Best Places

43. Justices Limit Use of Identity Theft Law
The Supreme Court on Monday rejected a favorite tool of prosecutors in immigration cases, ruling unanimously that a federal identity-theft law may not be used against many illegal workers who used false Social Security numbers to get jobs. …..NY Times May 4, 2009

44. The Law Identity Theft and Assumption Deterrence Act of 1998
Gramm-Leach-Bliley Act (GLBA) requires that financial institutions have policies, procedures, and controls in place to prevent and detect fraudulent access to such information.
Red Flag Rule

45. Best Practices For CUs Protect your member information.
Verify new accounts with a Member Identification Program
Verify and review address changes. Confirm old addresses or a simple callback to phone numbers on file.
Carefully review loan documents and compare social security numbers, addresses and employer names on application and the credit report.
Conduct a “System Penetration Test”.

46. Best Practices For CUs
Train all staff on security and privacy protection.
Policies should include steps to help victimized members.
Conduct criminal and civil background checks before hiring employees.
Don’t use SS# as employee ID numbers on paychecks, time cards, staff badges, etc.
Restrict system access to sensitive personal data to only those who need the information.

47. Best Practices For CUs
Ensure proper disposal of sensitive information.
Inform your members about business identity theft such as vandalized or mimicked Web sites.
Educate your members that financial institutions do not contact members to request or verify security information.
Consider software/hardware that regularly monitors the database to detect unusual financial patterns and activity.

48. Best Practices For CUs
Have a written privacy policy, adequately communicate the policy and provide training.
Lock up and limit access to personnel files.
Provide a secure location for employees to store their purses, documents, briefcases, etc. at the workplace.
Ensure that your vendors are protecting confidential employee data.

49. Internet Scams & Fraud Phishing/Pharming – Educate your members
Age-targeted Scams – Youths and seniors
Counterfeiting – Currency & Drafts
Records/Systems Hijacking – Zombie Programs
- designed to steal data, damage web sites, slow response time

50. Useful Resources http://www.IdentityTheft.org http://www.ncua.gov
NCUA Guide for Supervisory Committees
NCUA Federal Credit Union Bylaws
NCUA Rules & Regulations

51. Managing The Committee
Work As Committee & Individually
Delegate To Staff
Outsource
Plan
                                          

52. Planning Use The Entire Year Don’t Try To Complete Everything At Once
Have A Schedule (less than 30 min per month)
Let’s Look At A Sample Year
                                          

53. Month 1 Appoint committee members to positions
Introduce Training Resources
Schedule Activity for the year
                                          

54. Month 2 Cash Count Training
Elect one designee to review Accounting Checklist with management.
                                          

55. Month 3 Report on accounting checklist
Elect one to confirm collection accounts
Elect one to confirm death claims
                                          

56. Month 4 Report on collection accounts Report on death claims
Elect one to coordinate collection of returned mail
Do surprise cash count(s)
                                          

57. Month 5 Report on plans to collect returned mail
Report on cash count(s)
Meet with audit firm to discuss timing & scope
                                          

58. Month 6 Report on audit plans
Attend or coordinate a “HOW TO APPROVE A LOAN” training program.
Elect one to review minutes
                                          

59. Month 7 Report on training status
Report on board minutes (or activity)
Committee review of returned mail
                                          

60. Month 8
Have management or audit firm train committee on bank reconcilements
                                          

61. Month 9
Committee Review Of Loan Files
                                          

62. Month 10 Report On Loan File Review Perform surprise cash count
Solicit audit bids or engage audit firm
                                          

63. Month 11 Report on cash count Report on audit plans
Attend educational workshop
                                          

64. Month 12 Report on training
Review completed audit report and discuss corrective action with management.
                                          

65. Thank You
And the door prize winner is…