The NCUA Office of Small Credit Union Initiatives (OSCUI) has
posted the first three in a series of what will be six short videos on fraud prevention
at credit unions. “The potential for employee fraud should always be a concern
for credit union officials and volunteers,” NCUA Board Chairman Debbie Matz
said. “Unfortunately, employee fraud led to $311.4 million in losses for the
Share Insurance Fund between 2010 and 2013 at liquidated credit unions.”
In the video series, staff from the Office of Small Credit
Union Initiatives, in partnership with CUNA Mutual Group, discusses how credit
unions can bolster their internal controls to deter insider fraud and employee
dishonesty. This video series is part of OSCUI’s strengthening focus on
preventing fraud at small CU’s.
The first video was an introduction to the series:
- Since 2010, CU’s have suffered $311 million in
losses from fraud.
- Fraudsters are often driven by financial
stresses, seek rationalization for the fraud, and then take advantage of fraud
opportunities that are presented to them.
- The video series includes tips on preventative
measures and internal controls, such as surprise cash counts.
The second two videos contained tips on preventing fraud:
Video 2: Fraud Policy
- Develop a fraud policy (separate from an employee
policy) that covers both employees and volunteers.
- Have all employees review and sign on an annual
- Send a strong message of zero tolerance for
- Include in the policy deterrence/detection of
fraud, whistleblowing procedures, investigation procedures, etc.
Video 3: Surprise Cash counts
- Ensure that supervisory committee conducts surprise
cash counts on at least an annual basis. However, it should really be done at
least quarterly basis, and as a surprise to everyone in the CU, including the CEO.
- Make cash counts in the teller drawer, ATM, and
vault, while the responsible employee is present.
- Break down bundles and count individual bills,
in case someone has mixed the bundles to disguise a theft.