ALEXANDRIA, Va. (6/14/10)-- Sperry Associates FCU, of Garden City Park, N.Y. has been ordered by the National Credit Union Administration (NCUA) to take a series of corrective actions. Those actions include efforts to correct:
* Declining capital; * Participation lending losses; * Potential unrecognized investment losses; * Inadequate due diligence; and * Inadequate testing of high risk areas.
The NCUA, as it released the letter Friday, said the agency and credit union are working closely “ to make a sustained, conscientious effort to correct noted adverse conditions.” The credit union did not return a call ionviting comment. Also on Friday, the NCUA released highlight of a speech by board member GIgi Hyland, to the National Association of Credit Union Supervisory and Audit Committees in Baltimore, on the vigilance needed in the supervisory committee role. The Supervisory/Audit Committee’s role is not “just about counting cash and making sure the books are in order,” but rather includes ensuring management and board members are “fulfilling their responsibilities as good stewards of the members’ money.” She added, “Your auditor should report to you and not management or the board of directors. (This) concept is universal regardless of the size or composition of the organization. "When we as a regulator and insurer see serious breakdowns in these basic principles of independence, we often encounter serious and emerging problems in the organization. Erosion of the principles is often symptomatic of a larger lack of diligence and integrity of the overall control environment.”