Supervisory Committee Duties


The Supervisory Committee is appointed by the Board of Directors and shall consist of at least three, but not more than five, members one of whom may be a director other than the Treasurer.  Terms of Committee members shall be for periods of one, two or three years as determined by the Board.  No member of the Committee may be compensated.

The Committee should have an organizational meeting each year after being appointed by the Board.  At the organizational meeting, the Committee should elect:

Chairperson –  presides over meetings and acts as moderator, prepares an agenda, and sets dates for meetings

Vice Chairperson –  performs the duties of the Chairperson in his or her absence, performs other duties as assigned by the Committee

Secretary – prepares and maintains records of all actions of the Committee


The Supervisory Committee is responsible for determining that the financial condition of the credit union is accurately and fairly presented in the credit union’s statements and that management practices and procedures are sufficient to safeguard members’ assets.  The following procedures are mandated by statute to assist in carrying out these responsibilities:

Federal Credit Union Requirements:

  1. An annual audit must be completed.
  2. Member accounts must be verified not less frequently than every two years.
  3. If the credit union does not meet the annual audit requirement, the regulatory agency may require an opinion (certified) audit.

In addition to activities mandated by statute, the Committee should determine that the credit union’s accounting records and reports are prepared promptly and accurately reflect operations and results, that internal controls are established and effectively maintained to safeguard credit union assets and that the plans, policies, and control procedures established by the Board of Directors are being properly administered.  The Supervisory Committee is also responsible for reviewing policies and control procedures to safeguard against error, carelessness, fraud, and self-dealing (conflict of interest).

  1. The Supervisory Committee selects the external auditor, reviews the audit fee, and the engagement letter.
  2. Reviews external audit reports.
  3. Follows up on items contained in the audit report.
  4. Reviews internal audit reports.
  5. Reviews regulatory examination reports and replies by the staff.
  6. Reviews monthly financial statements.
  7. Meets regularly with the staff liaison to the Committee to discuss:
    • internal audits conducted by the staff
    • changes in laws and regulations
    • changes in policies and procedures
  8. Other duties as needed to complete their responsibilities as described above:
    • conduct or supervise periodic cash counts
    • review bank reconciliations periodically
    • review all expenses
    • examine meeting minutes
    • review insurance coverage
    • review employee accounts for unauthorized access, overdrafts, or kiting
    • review non-financial transaction registers and spot check back to individual loan files
  1. By unanimous vote the Supervisory Committee may suspend any director, executive officer, or member of the Credit Committee.  In the event of such suspension, the Committee shall call a special meeting of the members to act on said suspension.  The meeting must be called within fourteen days, but not less than seven days, from the date of the suspension.
  2. By majority vote the Committee may call a special meeting of the members to consider any violation of the laws affecting the credit union or any practice of the credit union which the Committee deems to be unsafe or unauthorized.

The Supervisory Committee should conduct an annual audit planning session including:

  • Setting goals
  • Detailing an audit work schedule for the year
  • Preparing a budget
  • Planning staffing levels

Your annual audit plan should include:

  • Scheduled meeting dates for the Supervisory Committee
  • Scheduled times for the annual audit and verification of accounts
  • Scheduled times for surprise cash counts
  • Vacation schedules for staff members such as the CEO and accounting staff members
  • Notes of other important scheduled events such as computer conversions or office moves
  • Plans for attendance at educational seminars
  • Scheduled times for closed account verifications
  • Scheduled times for other internal audit work

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Every credit union has different requirements. Contact Daren B. Tanner, P.C. to learn what a credit union specialist can do for your credit union.