ALEXANDRIA, Va. (12/28/11)--The National Credit Union Administration's (NCUA) Temporary Corporate Credit Union Stabilization Fund (TCCUSF) received a "clean"--or unqualified--audit of its 2010 financial statements, the agency announced Tuesday.
The Credit Union National Association has been concerned that sufficient information has not been provided to credit unions regarding the agency's handling of the legacy assets of the conserved corporate credit unions and had also expressed concerns about the tardiness of the year-end 2010 TCCUSF financial statements.
The purpose of the audit opinion, of course, is to express an opinion on whether the financial statements of the stabilization fund are fairly presented. The audit was executed by KPMG LLP, the independent firm that also issued a clean audit on the financial statement of the National Credit Union Share Insurance Fund in May.
The firm also reviewed the internal control structure of the stabilization fund, as well as evaluated compliance with laws and regulations, as part of its audit.
Although the audit references a number of reasons for delay, the report does fault the timeliness of the agency's reporting.
The KPMG finding acknowledges that the NCUA faced "unprecedented developments related to finalizing the 2010 financial statements" and makes recommendations to ensure that the agency produces timely reporting in the future.
The finding states:
"During 2010, the National Credit Union Administration undertook a new initiative, the Corporate System Resolution Program…as a result of the failing corporate credit unions (CCUs)due to the financial system crisis. The broad-reaching inter-related implications of this unprecedented initiative, which included actions to accumulate and value assets of liquidated CCUs and their corresponding temporary bridge entities, presented significant financial reporting challenges.
"Simultaneously, the agency was transitioning to new accounting standards for another fund as well as implementing a new accounting system. This unprecedented initiative and its reporting challenges hindered NCUA's ability to fully plan and execute timely all the related accounting requirements for the TCCUSF and contributed to delays in the publication of the financial statements by OMB [Office of Management and Budget] established deadlines."
Last year, the 2009 audit--also "clean"--was released in July. KPMG issued a clean audit for the NCUSIF for that year at the same time.
The stabilization fund was created by the U.S. Congress in 2009 to provide flexibility to the NCUA as it worked to manage the impact of the costs to consumer credit unions associated with the troubled mortgage-backed securities purchased by the five failed corporate credit unions.
Use the resource link to access the audit.