LOS ANGELES - Submissions for RSM McGladrey's Best Practiceawards continue to grow each year making selecting the winners amore arduous process. More than 100 credit union representativessent in their submissions within seven categories: accounting andfinance; internal audit; compliance; information technology;lending; policies; and miscellaneous. Seventeen nominationfinalists were selected and three winners and four honorablemention recipients were ultimately recognized. The winners areDerrik Wynkoop, CFO at $1.9 billion Hudson Valley FCU for"Measuring the Effectiveness of Relationship Pricing"; Bill Pelter,audit manager at $1.4 billion SECU CU for "Internal Audit RiskAnalysis and Risk Assessment Process"; and Erin Ewart, compliancefraud and security manager at $1.1 billion Redwood CU for "MemberInformation Security Compliance Program." Honorable mentions wereawarded to Shauna Smith, information security manager at $141million Allegiance Credit Union for "Disaster Recovery Plan";Michael Denny, acting controller at $370 million ChristianCommunity CU for "Accounting Department Flowchart"; RussellDennick, controller at $428 million Credit Union of SouthernCalifornia for "Indirect Lending Monitoring Reports"; and JonathonStorment, internal auditor at $260 million FAA Credit Union for"Code of Ethical Conduct Policy & Declaration." "The BestPractices forum demonstrates the spirit of cooperation and sharingwe don't think could exist in any other industry and we are veryexcited to be a part of it," said Tom Lent, managing director,credit union services for RSM McGladrey. Lent said the forum alsorecognizes "excellence in credit union financial analysis andinternal controls and acknowledges the CEOs, CFOs, InternalAuditors and other credit union professionals whose analyses,spread sheets, graphs, studies and internal control procedures arevoted Best Practices by their credit union peers." Wynkoop fromHudson Valley FCU called on his 19 years of banking and creditunion experience to come up with a model that "closes the loop" onmeasuring the effectiveness of a relationship pricing programlaunched by the CU in 2003. "Unfortunately, an all too commonindustry practice is to launch a program or strategic initiativeonly to forget about the critical `measurement piece,'" Wynkoopsaid. The former strategic planning college instructor came up witha measurement methodology that quantified the premium paid ondividends to members; giveback of non-interest income (fees) tomembers; total monthly dollar amount of giveback to members;results of the program to date to its overall goal; and membershipmitigation into the upper tiers of the program. As a result of themeasurement methodology, Hudson Valley FCU was able to exceed atwo-year capital goal of $1.4 million by $3.6 million. It alsomigrated more members within a three-tier system: Choice, formembers with up to $10,000 in aggregate loan balances; Plus,$10,000-$20,000; and Ultimate, more than $20,000, where members getnearly all of their services for free, Wynkoop said. "It encouragedmembers to bring their services over from other financialinstitutions," Wynkoop said. The credit union also saw success withits "Steal a Loan" program, which provided enticing car loans ratesand its "Mortgage Originators on the Road," where CUrepresentatives made visits to mortgage firms to establishrelationships. Wynkoop said more than 15 CUs have approached himabout using the model but cautioned them that it was specificallytailored for Hudson Valley FCU. Above all else, credit unions canshare one common trait when it comes to measuring the impact ofrelationship pricing - not being afraid to close the loop. "You getso excited about a program, you launch it and then sometimes wedon't do that Monday morning quarterbacking," Wynkoop said. "Weneed to look at what worked and what didn't work." Another BestPractice winner, Pelter at SECU CU in Linthicum, Md. prepared acomprehensive risk assessment of various areas to determine thecredit union's annual internal audit plan. Depending on the variousrisk factors, attributes and ratings, a score was given for eachaudit area to determine which areas needed auditing. A budget ofthe hours involved for each audit was also incorporated into theinternal audit risk analysis. Pelter said having the time toconduct the audits is a critical piece for credit unions. "Thereare only so many hours available to perform the audits, you want tofocus on the areas where a credit union will get the biggest bangfor its buck," Pelter said. Pelter is a member of the Associationof Credit Union Internal Auditors and in his travels to conferencesand in conversations with colleagues, the risk assessment processkept coming up. Generally speaking, Pelter said auditors shouldknow what their specific goals are, come up with a plan and followthrough. While the award is a career highlight, there's anotherbenefit that outweighs it, he said. "It's particularly gratifying(that I), at a bigger credit union, can help some of the smallercredit unions" that may not have the resources or expertise to dorisk assessment. That was the case for a small, one-person run NewYork credit union, Pelter recalled. The president sought out Pelterat an industry conference. There in the hotel lobby, Pelter wentthrough the model with her. Lent said a number of areas are lookedat in picking the winners. "The submissions are selected based ontheir overall integrity of application, innovation in presentingnew ways of looking at critical information, achievements inidentifying and analyzing risk and value in helping non-financialprofessionals understand and interpret risk and other financialinformation," Lent said. Nominations for consideration for the 2005Best Practice awards may be sent to [email protected] ormailed to Best Practices,150 North Hill Drive, Suite 27, Brisbane,CA. 94005. [email protected]