Development Best Practices in Credit Union Supervision: Examination Process - Management Review

This paper details the management review that forms a part of the examination process of a credit union. The paper states that:

• The review determines whether the current management is capable of responding to financial pressures and economic and local market changes;
• The quality of the management should be evaluated by determining the effectiveness of the board of directors, the committees and the operational management;
• The assessment of the management should be based on reviews of:
  • Internal controls;
  • Management conduct;
  • Service to members;
  • Business strategy/financial performance.

The paper discusses:

• Objectives of the management review;
• Scope of the review;
• The necessity to document all the review steps in writing, including the work papers;
• Board minute review;
• Internal control review, which assesses the quality of established internal controls, some of which are:
  • Audit program;
  • Accounting;
  • Training of personnel;
  • Succession planning.

The paper concludes by:

• Listing signs of warning that the examiner should look for;
• Discussing management deficiencies.