What Makes a Good Verification of Member Accounts?
Posted by Mr. Chad Stanislav, VP Financial & Technology, Credit Union Resources, Inc on 9/13/2013

Every two years credit unions are required by regulations to perform a verification of member accounts.  This can be accomplished by the Supervisory Committee or Audit Committee or a third-party vendor on behalf of the credit union.

What are the most important items when conducting the verification of member accounts?  Being independent, cooperation, and documentation/follow up are the three main important items of the verification of member accounts process.

Being Independent is first and foremost, the most important part of the verification process.   This is why it is critical for the Supervisory Committee, Audit Committee or a third-party vendor handle the verification process from beginning to end.  The Supervisory or Audit Committees are independent of the credit union and are responsible for seeing the verification is performed.  A third-party vendor who can conduct the verification of member accounts from beginning to end is further independent of the credit union.

Cooperation is necessary to having a successful verification performed.  Whether it is the Supervisory or Audit Committee or a third-party vendor, cooperation among all the individuals that are part of the verification process is extremely important.  Cooperation with credit union employees, data processors, and mail house are necessary to avoid errors.  More than likely, if an error were to occur, it will happen in the printing or mailing of member statements.   The challenges are further compounded with the addition of online member statements or accounts closed since the last verification of member accounts.  Specific, detailed communication with the credit union, data processor, and the mail house are paramount.

Retaining communication, documenting the process, and documenting the result of the verification are the last items to successfully complete the verification.  If a member makes an inquiry concerning their account, documenting the research and follow up with member assists in bringing closure to the member’s concern.  When reviewing the undeliverable member statements, it is important to review the statement, research, and document the results based on what activity is found.

Though the verification of member accounts is not necessarily a complex process, it is a lengthy process to set up the verification, communicate with all parties that will be involved, ensure all statements were provided to the members, whether via mail or online, review statements where appropriate, and document the process and findings.  How do you conduct your verification of member accounts?

Categories: Financial & Auditing
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