Examples Of Nearman, Maynard, Vallez's “Teamwork” In Action:
During our audit of a credit union in New Mexico, we tested the accounting for life savings loan protection insurance. By asking the right questions, we discovered this was not a self insured plan and had the credit union make an adjustment to increase income by $30,000.
At a $400+ million credit union in Florida, we made recommendations regarding the internal controls behind the teller line and significantly reduced the credit union's exposure in this area. Also at this credit union, we discovered that members were being undercharged on certain fees for share accounts and helped accounting personnel correct this problem.
During a surprise cash count at a credit union in Connecticut, we discovered a teller was short $1,200 after counting the straps in her drawer. The teller admitted taking the money and was dismissed.
During the verification process for a credit union in South Carolina, we detected the loan officer was using closed accounts to conduct fraudulent VISA activity for personal use.
One of our clients in Florida had another CPA firm perform some special work to address ATM problems and several general ledger accounts. To solve the problems, the credit union was instructed to write off several hundred thousand dollars. During the audit, we discovered the cause of several of the problems and were able to recover nearly $200,000 of the write-offs.
During our audit of a credit union in New Jersey, we helped accounting personnel automate procedures, saving time with the use of a custom spreadsheet for prepaid subsidiaries and the allowance for loan losses calculations.
In reviewing a recent fraud investigation during the audit of a client in Connecticut, we discovered the credit union had audit insurance coverage from CUNA to investigate potential fraud. The credit union was not aware they could apply for coverage (up to $15,000) for the time the internal auditor, CFO, and accounting manager had spent investigating the fraud.
As part of our “Best Practices,” we share written policies with the consent of our clients. Back in 2002 when the National Credit Union Administration issued Interpretive Ruling and Policy Statement #02-3 (IRPS) regarding the ALLL account for federally-insured credit unions, we obtained an excellent policy from one of our clients and provided it to others looking for a good policy to address this issue.
During an audit of a credit union in Georgia, we made a recommendation to the credit union to increase a certain type of insurance from the credit union's provider based on our experience of fraud and what our other clients were carrying. Two weeks after obtaining this additional coverage, the credit union experienced a fraud and was reimbursed approximately $20,000 for fees they incurred.
One of our clients experienced a fraud related to a loan officer and had not filed a claim with their insurance provider. We told the credit union to file a claim and as a result the credit union was able to recover approximately $60,000.
Another client had experienced a fraud and was conducting its own investigation. However, the credit union was unaware that there was a time limit in which the credit union was to notify the insurance company on the potential fraud. The credit union was fast approaching this deadline when we informed them of this requirement. The Credit Union was able to collect under this claim.
On several occasions after we examined certain credit unions’ pension plans, we were able to provide the credit unions with several options concerning the timing of contributions to the pension plan provider, which resulted in the savings of thousands of dollars for the credit unions.
One of our clients had requested proposals for a pension plan audit; however, after examining the specifics as it relates to the credit union it was determined that the credit union did not need to have a pension audit performed. The credit union subsequently confirmed this with the IRS and did not need the audit. Nearman, Maynard, Vallez was the only CPA firm out of 5 firms that informed the credit union of this situation.
During an audit of a credit union in Florida, we recomputed the dividend expense on a sample of members’ accounts and found out that the computer processor did not apply the rates approved by the credit union's Board of Directors. The Credit Union was able to recover approximately $16,000.
Many times during an audit, we get asked “How do other credit unions handle this issue?” Because of our diverse client base, we can easily introduce and link credit unions together to help solve similar problems. One example of this “networking” occurred during a recent audit in which a credit union with a new community charter was experiencing increasing charge-offs and wanted to know how to reduce its losses. We recommended the use of the Bankruptcy Navigator score as part of the underwriting and were able to give the staff a contact at another credit union who had implemented this into their underwriting for the same reason.
During an audit of a credit union in Florida, we found the dividends on the club account were not posted as of June 30, 2006. For the credit union to be in compliance with their Truth–In-Savings disclosure, the 9/30/06 dividends had to be reversed. The 6/30/06 dividends were then posted effective 9/30/06. The 9/30/06 dividends were then posted effective 9/30/06 so the members’ dividends would compound correctly.
Performing a site visit to a sample of ATM machines is an important part of any TG3 audit (also known as a PIN Security Compliance Review). We perform a site visit for a variety of reasons including but not limited to the following: to inspect the location and set up of the ATM for PIN entry observation opportunities; to ensure the ATM is operating in its intended manner and environment; to inspect the ATM device for tampering, determine if extraneous devices such as skimming devices are attached; ensure cables are adequately protected, etc. Credit union personnel should also periodically inspect the ATM machine and location as part of their balancing and/or cash replenishment procedures.
During a Bank Secrecy Act audit of a credit union, we requested the credit union produce a report of cash transactions greater than $3,000 over a week's time. We requested they obtain this report to monitor for suspicious activity. Once the credit union obtained this report and started the review, the staff at the credit union found suspicious transactions from a head teller at one of their branches. This head teller was consistently performing large cash transactions. The credit union staff filled a Suspicious Activity Report (SAR) on the head teller and started to monitor her closer. We were subsequently asked to come into the branch to perform a surprise cash count. In doing so, we discovered the head teller was stealing from the vault.