[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR715.9]



[Page 539]

 

                       TITLE 12--BANKS AND BANKING

 

            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION

 

PART 715_SUPERVISORY COMMITTEE AUDITS AND VERIFICATIONS--Table of Contents

 

Sec. 715.9  Assistance from outside, compensated person.



    (a) Unrelated to officials. A compensated auditor who performs a 

Supervisory Committee audit on behalf of a credit union shall not be 

related by blood or marriage to any management employee, member of 

either the board of directors, the Supervisory Committee or the credit 

committee, or loan officer of that credit union.

    (b) Engagement letter. The engagement of a compensated auditor to 

perform all or a portion of the scope of a financial statement audit or 

supervisory committee audit shall be evidenced by an engagement letter. 

In all cases, the engagement must be contracted directly with the 

Supervisory Committee. The engagement letter must be signed by the 

compensated auditor and acknowledged therein by the Supervisory 

Committee prior to commencement of the engagement.

    (c) Contents of letter. The engagement letter shall:

    (1) Specify the terms, conditions, and objectives of the engagement;

    (2) Identify the basis of accounting to be used;

    (3) If a Supervisory Committee Guide audit, include an appendix 

setting forth the procedures to be performed;

    (4) Specify the rate of, or total, compensation to be paid for the 

audit;

    (5) Provide that the auditor shall, upon completion of the 

engagement, deliver to the Supervisory Committee a written report of the 

audit and notice in writing, either within the report or communicated 

separately, of any internal control reportable conditions and/or 

irregularities or illegal acts, if any, which come to the auditor's 

attention during the normal course of the audit (i.e., no notice 

required if none noted);

    (6) Specify a target date of delivery of the written reports, such 

target date not to exceed 120 days from date of calendar or fiscal year-

end under audit (period covered), unless the supervisory committee 

obtains a waiver from the supervising NCUA Regional Director;

    (7) Certify that NCUA staff and/or the State credit union 

supervisor, or designated representatives of each, will be provided 

unconditional access to the complete set of original working papers, 

either at the offices of the credit union or at a mutually agreed upon 

location, for purposes of inspection; and

    (8) Acknowledge that working papers shall be retained for a minimum 

of three years from the date of the written audit report.

    (d) Complete scope. If the engagement is to perform a Supervisory 

Committee Guide audit intended to fully meet the requirements of Sec. 

715.7(c), the engagement letter shall certify that the audit will 

address the complete scope of that engagement;

    (e) Exclusions from scope. If the engagement is to perform a 

Supervisory Committee Guide audit which will exclude any item required 

by the applicable section, the engagement letter shall:

    (1) Identify the excluded items;

    (2) State that, because of the exclusion(s), the resulting audit 

will not, by itself, fulfill the scope of a supervisory committee audit; 

and

    (3) Caution that the supervisory committee will remain responsible 

for fulfilling the scope of a supervisory committee audit with respect 

to the excluded items.



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