Supervisory Committee Duties and Responsibilities

This short guideline notes that the supervisory committee’s principal objectives are to perform, or select a qualified individual to perform the annual audit, member account verification, and periodic internal audits of operational areas throughout the year. It stresses that because of the technical nature of the supervisory committee it is imperative that the elected committee members have “hands on” experience in accounting and auditing. Very few committees are capable of performing the auditing procedures nor do volunteers usually have enough spare time to adequately perform the necessary audit steps. However, many newly chartered or small credit unions cannot afford an external auditor, so their only option is to have the supervisory committee perform all auditing functions.

It is suggested here that the supervisory committee should only be allowed to perform the audit if operations are simple. That is, the credit union offers only the most basic of services such as short-term consumer loans, ownership share accounts, term deposits, no cash on site, limited or no investment in fixed assets, etc.

Hence, the note states that if the supervisory committee is to perform the auditing functions, then each member should fully understand their duties and responsibilities. This note sets out items that should be included in the job description of this committee.

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