Sec. 36a-451a. Supervisory committee. Members. Powers. Duties.
Sec. 36a-451a. Supervisory committee. Members. Powers. Duties. (a) The supervisory committee shall consist of not less than three members of the Connecticut
credit union, none of whom shall simultaneously serve on the credit committee or as
an officer of the Connecticut credit union or be otherwise regularly employed by such
credit union, and only one of whom shall simultaneously serve as a director of the
Connecticut credit union, and all of whom shall be annually appointed by the governing
board and be members in good standing. The supervisory committee shall be responsible
for ensuring that members of senior management and directors meet required financial
reporting objectives and establish practices and procedures sufficient to safeguard members' assets. To meet its responsibilities, the supervisory committee shall determine
whether internal controls are established and effectively maintained, accounting records
and financial reports are promptly prepared and accurate, relevant plans, policies and
procedures established by the governing board are properly administered, and the governing board's plans, policies, and control procedures are sufficient to safeguard against
error, carelessness, conflict of interest, self-dealing and fraud.
(b) The supervisory committee shall have the sole authority to engage or terminate
outside and internal auditors. Upon authorization of the expenses by the governing
board, the supervisory committee may engage any assistance necessary for the performance of its duties, including having any audit, examination or verification required by
law, regulation or bylaw. Any agreement between the supervisory committee and an
outside auditor shall be documented by an engagement letter that specifies the terms,
conditions and objectives of the engagement or statement of agreed upon procedures
in accordance with this subsection. The supervisory committee shall make or cause to
be made a comprehensive annual audit of the books and affairs of the Connecticut credit
union, including its assets, liabilities, capital, income and expense accounts and the
minutes of all governing board and board-appointed committee meetings. Such audit
shall cover the period elapsed since the last audit. Any compensated outside auditors
performing audits for the supervisory committee shall be independent of the credit
union's employees, members of the governing board, member of any board-appointed
committee, the credit manager and loan officers and members of the immediate families
of any of the above. The annual audit shall meet the following minimum guidelines:
(1) A Connecticut credit union with total assets of three hundred million dollars or
more shall have an opinion audit of the credit union's financial statement performed by
an independent licensed public or certified public accountant; and
(2) A Connecticut credit union with total assets of less than three hundred million
dollars shall have:
(A) An opinion audit of its financial statements performed by an independent licensed public or certified public accountant;
(B) An agreed upon procedures engagement performed by a person having adequate
technical training and proficiency as an auditor commensurate with the level of sophistication and complexity of the credit union under audit, provided if such engagement is
not comprehensive, the supervisory committee shall satisfy any remaining requirements
of a comprehensive audit in accordance with this subsection; or
(C) A comprehensive audit performed by the supervisory committee or the credit
union's internal auditors or the internal auditor of another financial institution.
(c) The supervisory committee shall perform or cause to be performed a verification
of members' accounts at least once every two years through:
(1) Verification of share and loan accounts of all members;
(2) Statistical sampling of member share and loan accounts done in connection with
an opinion audit of the financial statements performed by an independent licensed public
or certified public accountant; or
(3) A statistical sampling method that results in a random selection that is representative of the membership.
(d) The supervisory committee shall make any additional audits and supplemental
verifications and examinations of the affairs of the Connecticut credit union that it deems
appropriate, or that the governing board or commissioner requires.
(e) Promptly following the completion of an audit or other verification or examination, the supervisory committee shall (1) file a written report at the main office of the
Connecticut credit union; (2) present the report to the governing board at its next meeting,
and a summary thereof to the members at the next annual meeting or if the audit was
not performed by the supervisory committee, the outside auditor shall present the report
or summary thereof; and (3) file a copy of the written report with the commissioner.
(f) The supervisory committee shall provide related working papers, policies and
procedures concerning the annual audit, internal audit, examination and verification to
the commissioner, upon the commissioner's request, and shall require any independent
licensed or certified public accountant, internal auditor or any other auditor to provide
such related working papers, policies and procedures concerning the annual audit, internal audit, examination and verification to the commissioner, upon the commissioner's
request. The governing board shall require that the auditor submit to such board a signed
report of the audit or examination showing the condition of the Connecticut credit union
within a reasonable period of time from the effective date of the audit or examination.
(g) At any time that the supervisory committee discovers any operating practices
of the Connecticut credit union that it deems unsafe which have not been corrected by
the governing board, the supervisory committee shall give notice to all credit union
members of a special meeting of members to be held for the purpose of receiving the
report of the supervisory committee of such operating practices. The membership of
the Connecticut credit union shall have, by majority vote, the authority to accept or
reject the report of the supervisory committee. The supervisory committee shall take
any action the members deem necessary.
(h) The supervisory committee shall meet as often as necessary and at least annually
and shall keep complete minutes of all of its meetings, including the names of those
members present.
(i) The supervisory committee shall have the power to suspend at any time, by a
two-thirds vote of its members at a meeting called for that purpose, any director or
employee of the Connecticut credit union or any member of a board-appointed committee for cause. The suspension shall take effect immediately and the commissioner shall
be notified promptly of such suspension. Not later than seven business days after the
effective date of the suspension, the supervisory committee shall cause notice to be
given to all members of the Connecticut credit union of a special meeting of members
to be held for the purpose of hearing the report of the supervisory committee regarding
the suspension and voting on removal, provided such notice shall not be given if the
director, employee or member of a board-appointed committee who is subject to suspension resigns. The special meeting shall be held no more than twenty-one business days
after the date of suspension. The membership of the Connecticut credit union shall have,
by majority vote, the authority to accept or reject the report of the supervisory committee.
The supervisory committee shall take any action with respect thereto as the members
deem necessary. If such action involves removal, the credit union shall promptly notify
the commissioner of such removal.
(P.A. 02-73, S. 48; P.A. 03-84, S. 53.)
History: P.A. 03-84 changed "Commissioner of Banking" to "commissioner", effective June 3, 2003.