SAVANNAH, Ga. – The layers of governance reform that have largely come from the Sarbanes-Oxley Act of 2002 have already impacted credit unions, but some are still wondering if they're doing enough. Speaking to NACUC attendees at a breakfast session, Michael Daigneault, principal & director of advisory services at DeLeon & Stang, a CPA firm in Maryland, said there are several changes including the requirement of firms having a record retention and document destruction policy. An October 2003 Letter to Credit Unions from NCUA urged FCUs to "periodically review their policies and procedures as they relate to matters of governance and auditing." As a result of Sarbanes-Oxley, credit unions are now seeing an evolution of best practices including CEOs and CFOs publicly attesting to financial statements and the rise of the audit/supervisory committee. The industry is also seeing changes from the CPA and insurance firms they work with in the areas of accountability and compliance. Certain key governance reforms credit unions are also now seeing includes more objectivity and stronger internal controls. "Every credit union that I do a fraud audit for has learned that there is more they could have done," Daigneault said. Ten ways credit unions can improve governance include actively fostering a dialogue about the topic; creating a governance committee; and conducting a board of governance assessment, Daigneault recommended. Of the latter, he said he has yet to see one "that has yielded tangible results." Still he remains optimistic that in areas like whistle blowing and retaliation, that the majority of credit unions and other firms want to create a safe environment to report concerns. "I would say retaliation from whistle blowing happens less than 1% of the time," Daigneault said. "I really believe that organizations can build a level of trust." He said a strong governance committee knows its roles and responsibilities; has a diverse composition; is knowledgeable; does a self-assessment and has a plan to develop successors. -

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