You, the supervisory committee, have two general goals. You must ensure that:

1. Management’s financial reporting objectives have been met.
2. Management practices and procedures safeguard members’ assets.

To meet these two general goals, you are responsible for determining whether your credit union managers have:

1. Established and maintained effective internal controls to achieve the credit union’s financial reporting objectives. These controls must meet the requirements of the supervisory committee audit, verification of members’ accounts and your additional responsibilities.
2. Promptly prepared accounting records and financial reports to accurately reflect operations and results.
3. Properly administered the relevant plans, policies, and control procedures established by the board of directors.
4. Established policies and control procedures that safeguard against error, carelessness, conflict of interest, self-dealing and fraud. You make those determinations primarily through conducting audits and verifications.

At least once every calendar year, you must complete (or have completed) the Supervisory Committee Audit, and provide a report on the audit to the Board of Directors. The audit must cover the period elapsed since the last audit period. At least once every two years, you must conduct a verification of members’ accounts. You must ensure that the board of directors is safeguarding assets, and that management complies with their policies and plans. You must report to members at the annual meetings as stipulated in Article V of the standard bylaws.

You also should:

• Review internal controls.
• Hire and work with an internal auditor (if feasible for the credit union).
• Hire and work with the external auditor (if feasible for the credit union).
• Review examination and audit findings and follow-up to ensure that management takes the necessary corrective action. The action taken must be adequate to correct the findings.
• Meet with the federal examiner as you or the examiner may request.
• Research member complaints.
• Complete other recommended procedures.

While your responsibilities encompass a range of areas, the depth of your review can vary. The internal control structure, size, complexity, and financial stability of your credit union will influence the extent of your review. The supervisory committee serves a very important function in smaller credit unions in particular, because of limited internal controls. Smaller credit unions have fewer staff members and they cannot segregate job responsibilities well. Supervisory committee functions help to compensate for limited controls. Active supervisory committees help to improve the credit union.