NCUA Inspector General Issues Report on NCUA's DOR Follow-Up Process

Oct. 18, 2011 - The National Credit Union Administration (NCUA) Office of Inspector General (OIG) has published an audit report on NCUA’s Document of Resolution (DOR) follow-up process. OIG's stated objective was to evaluate the process for NCUA's resolution/closure of DORs and determine the effectiveness of the resolution process. 

The report is available here.

The Inspector General concluded that NCUA failed to effectively monitor or follow up on unresolved DOR items and recommended the following measures:

  • That NCUA develop a standardized DOR monitoring process requiring E&I and the regions to generate and analyze DOR database reports on a regularly defined basis.
  • That credit union management be required to respond in writing to all DOR items not resolved within established timeframes, regardless of the credit union's CAMEL Rating.
  • That the NCUA region's takes stronger supervisory actions when a credit union fails to correct DOR items.
  • That NCUA establish specific time limits for examiners to resolve and close DOR items to help ensure DORs do not remain open indefinitely.

The OIG report includes NCUA's responses to the audit.  Among NCUA's remedial actions:

  • NCUA is establishing a uniform credit union supervision process for all regions. Individual regional supervision manuals will be replaced by The National Supervision Policy Manual (NSPM).
  • All credit unions will be required to resolve all DORs or respond in writing as to why DORs are unresolved.
  • NCUA will emphasize examiners ensure DOR resolution, however, the agency believes it impractical to establish standard resolution time frames.

The OIG report notes that long term unresolved DORs were present in numerous material loss reviews (MLRs) published by the Inspector General.