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The NCUA posted their 2018-2019 Budget Justification to their website. The document provides detailed information on NCUA’s 2018-2019 budget and justifications for the budget. We are still reviewing the document and will have a thorough analysis next week, but we do have initial thoughts.
For 2018 the budget would be $298.2 million, which represent a 2.1 increase or $6.1 million over the 2017 restated budget. According to the NCUA the budget “reflects necessary expenditures to ensure successful execution of the agency’s mission and strategic plan under the Board approved Agency Reform Plan.”
NCUA also noted that the request “continues five straight years of reduced growth in the NCUA operating budget.” The Operating Fund Budget was increases were 4.2% in 2015, 4.1% in 2016, 2.5% in 2017 with increases in 2018 and 2019 set to be 2.1% and 1.5% respectively.
NCUA does appear to be making many changes that impact the budget through reorganization and updates to the exam processes. These changes will lower the agency’s authorized staffing level from 1,247 FTE in the 2016 approved budget, down to 1,174 in the 2019 budget, a reduction of 73 FTEs, or nearly 6 percent. This is also a cumulative reduction of 95 positions, or seven percent from a peak of 1,269 authorized FTE in 2015. The agency is also reducing leased office space by 80 percent, which is the result of restructuring which is eliminating two regional offices, reducing the size of AMAC and realigning supporting functions to central offices.
It appears that NCUA is trying to increase efficiency while improving operations. The agency’s capital budget for 2018 is $15.4 million, which is slightly lower than 2017; however, it reflects a continued modernization of NCUA software and hardware, which is needed to meet the agencies efficiency goals.
NCUA’s budget process under the leadership of Chairman McWatters and boardmember Metsger has been much more open over the past few years. NCUA will hold its second straight budget hearing on October 18 where CUNA and other stakeholders will be able to present suggestions directly to the NCUA board.
After a brief analysis of the document we think that NCUA is headed in the right direction with consolidating operations and improving efficiency, which requires less staff. We have long advocated for and supported NCUA in taking these actions.
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