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As the NCUA works to simplify supervisory committee audit requirements, NAFCU is requesting members' feedback on how the proposed rule would affect credit unions. The association would also like to know if credit unions think other areas of review should be included in the new Appendix A to Part 715 of the NCUA's regulations.

The NCUA advanced the proposed rulemaking, which is intended to simplify compliance requirements and provide credit unions with more flexibility under regulations regarding supervisory committees' responsibilities in obtaining an annual audit of its credit union, during its February board meeting.

In a Regulatory Alert sent to members Monday, NAFCU notes that the proposal:

• removes the "report of examination of internal controls over call reporting" alternative audit option;
• removes the "supervisory committee guide" alternative audit option and replaces it with the option to conduct an audit using minimum requirements outlined in a new streamlined Appendix A; and
• removes the language in engagement letters to outside, compensated auditors requiring a written report within a 120-day deadline and replaces it with a flexible standard with no articulated deadline.

In seeking members' feedback on the proposal, NAFCU asks if any other areas of review should be included in new Appendix A, such as loans to insiders, pay and benefits to employees and board members, regulatory compliance or compliance with the Bank Secrecy Act.

NAFCU also wants to know if the new Appendix A provides flexibility in fulfilling the annual audit requirement, and if any credit unions currently utilize the "balance sheet audit" alternative.

Credit unions can submit feedback on the proposal through NAFCU's Regulatory Alert until April 12; comments are due to the NCUA April 26.