ALEXANDRIA, Va.–NCUA’s Office of Inspector General (OIG) has released a new report that examines the effectiveness of the agency’s scheduling of examination hours.
The OIG noted that in 2021 a study found NCUA budgeted significantly fewer examination hours for supervised credit unions than the federal bank deposit insurer did for supervised banks in the periods covered, according to an inspector general report from June posted online recently.
The release of the report was first reported by Regulatory Report.
The new NCUA study references and discusses the study as it reported on the OIG’s own scrutiny of the effectiveness of the NCUA’s scheduling of examination hours. According to the OIG, its testing of examination hours showed just a 2.2% difference in 2023 between budgeted hours and actual hours expended.
The OIG said it found NCUA to be effective in budgeting examination hours and ensuring proper regulatory safeguards.
What Comparison Revealed
According to the report, the 2021 study noted above compared the average number of examination hours the FDIC used from 2018-2020 to the average number of examination hours the NCUA budgeted for 2022. The study, which was conducted by the NCUA’s Office of Examination and Insurance, detailed numerous differences between bank operations and credit union operations, between how the two agencies log their examiner hours, and between processes each uses for allocating resources.
Regulatory Report cited the OIG’s finding that where the FDIC uses a “top-down” process when allocating resources, the NCUA uses a “bottom-up” process, in which “NCUA examiners and [supervisory examiners] establish the number of examination hours budgeted for each credit union to be examined in the coming cycle."
The Conclusion
“We have concluded that NCUA was effective in establishing examination hours and would not recommend changing its approach,” the OIG stated.
The full report can be found here.