GAO Verifies NCUA’s Legacy Asset Loss Estimates
The Government Accountability Office has verified the NCUA’s projected loss estimates for corporate credit union legacy assets, the agency said Monday.
That means the federal credit union regulator has met GAO’s recommendation regarding corporate estimates in its January 2012 report titled NCUA: Earlier Actions Are Needed to Better Address Troubled Credit Unions (GAO-12-247).
“Any credit unions with lingering concerns should rest easier knowing that GAO has completed performing their own due diligence on NCUA’s loss estimates for corporate credit unions’ legacy assets. This letter conveys that GAO has verified our loss estimates, the methodology used to derive them, as well as the 2010 Corporate Stabilization Fund clean audit,” said NCUA Chairman Debbie Matz.
When the GAO report was issued, NCUA was in last stage of finalizing the 2010 Financial Statement Audit for the Temporary Corporate Credit Union Stabilization Fund with accounting firm KPMG LLP.
With the final 2010 audit unavailable at that time, the GAO report recommended the NCUA provide NCUA’s Office of the Inspector General with the documentation necessary to support NCUA’s loss estimates from the legacy assets held by the five conserved corporate credit unions, specifically covering losses incurred from Jan. 1, 2008 to June 30, 2011.
The NCUA provided that documentation to the OIG, along with the completed 2010 TCCUSF unqualified audit by KPMG LLP which was completed just after the GAO issued its report.
In May, the GAO visited the NCUA to inspect the agency’s progress in fulfilling its recommendation. The OIG had already reviewed the final audit and supporting documentation, and concluded that the loss estimates were reasonable.
The GAO said it has now reviewed the 2010 final audit for the TCCUSF, and relevant supporting documentation. As the agency reports in its letter to the NCUA, “The methodology and key assumptions used to calculate the estimates were appropriately documented (and) the estimates were adequately supported in the documentation provided.”
According to NCUA spokesman John Zimmerman, the TCCUSF’s 2011 audit will be released sometime this summe