Oct. 18, 2012 – A material loss review of the defunct O.U.R. FCU of Eugene, Ore., uncovered poor controls, ineffective board oversight and red flags missed by NCUA examiners prior to the credit union’s closure, NCUA’s Office of Inspector General said in a recent report.
The resolution of O.U.R. FCU resulted in a $3.7 million loss to the National Credit Union Share Insurance Fund. That’s well below the loss level that automatically triggers an MLR, but NCUA’s OIG also reviews cases involving smaller institutions where the circumstances are unusual enough to warrant a review.
In this case, the agency found numerous issues. Besides poor procedures and oversight, the OIG found the manager was involved in “highly suspicious activities that deliberately manipulated the accounting and misstated financial reports,” the report says. “Numerous inconsistencies and unsupported entries were found, the most flagrant of which was a $1.6 million imbalance between the member share subsidiary and general ledger.”
The report also faults examiners for incomplete examination procedures, ineffective resolution of issues raised and ineffective risk assessment.
O.U.R. FCU was liquidated by NCUA last December and its members and shares purchased and assumed by Northwest Community CU of Springfield, Ore. At that time, O.U.R. FCU, a community development credit union, had deposits of about $4.25 million, NCUA said.