CUNA commissions study of NCUA's budget process

WASHINGTON - Show me the money, or in this case, show me where the money is going. That's what CUNA is saying regarding NCUA's budget. CUNA has commissioned a study of the budget and budget process of NCUA. CUNA stresses that while it will assist in the study, the bulk of the analysis and investigation of NCUA's budget will be conducted by a third-party. Jim Atherton, a former examiner of the U.S. Office of Management and Budget, will perform the study. The CUNA Board allocated up to $60,000 to complete the analysis, which is expected to be finished by year-end 2001. CUNA has done NCUA budget analyses in the past, but this is the first time it has brought in a third-party. "We know this is a sensitive issue for the agency, and we thought having a third-party would bring objectivity to the issue. It may come back that NCUA has a lot of things to address, or maybe it will say they are acting consistently with other agencies," said Pat Keefe, vice president of communications and media outreach for CUNA. The agency's budget became a target of CUNA and NAFCU earlier this year when the agency approved a $135 billion fiscal year 2000 budget-a 10.6% increase over fiscal year 1999. Former NAFCU President/CEO Ken Robinson was particularly vocal on the budget increase, questioning why NCUA's budget is going up while the number of credit unions has decreased by some 22% over the last decade. NCUA says, however, that the increasing complexity of credit union operations is one of the primary reasons for the budget increases. The CUNA analysis will include a comparison of NCUA's budget process with that of the Federal Deposit Insurance Corporation's. While NCUA's budget increased by 10.6% this year, the FDIC's budget actually went down. The FDIC approved a 2000 budget of $1.187 billion, a 2% decrease from 1999. At the time, the FDIC said staff reductions were key to the savings. Keefe said CUNA members have been raising concerns about NCUA's increasing budget. "Credit unions have a deep appreciation of how their money is spent," said Keefe. "This is in response to their concerns." CUNA & Affiliates' President/CEO Dan Mica said CUNA isn't out to make NCUA look bad. "Our ultimate aim is not to criticize NCUA or its staff, but to achieve a better understanding of the agency's allocation of resources and, where possible, identify problem areas that can be addressed by the agency," said Mica. "Credit unions have spoken on this issue to CUNA and believe that proper oversight on their behalf is necessary," said Mica. Keefe said one obvious area that needs explanation is NCUA's decision to keep additional examiners, brought in to assist with Y2K, on the payroll. NCUA has since said that those examiners were not brought in just for Y2K. -pgentile@cutimes.com