Supervisory Committee Annual Report
Dr. Evhen Lylak

     In April 2008, the Rochester Ukrainian Federal Credit Union Board appointed the Supervisory Committee (SC) for the 2008-09 year. Regular members Evhen Lylak (Chair), and George Hanushevsky continued their terms of service, while Alex Riznik was appointed to the committee as a new member.

      As most members know, this year has been a difficult one for UFCU- as it has for many financial institutions and the U.S. economy.  Several factors contributed to the credit union’s first-ever loss of $2.7 million.  As chair of the UFCU SC, I want to reassure the membership that the board and the management are addressing and carefully monitoring our current financial position.  

      To ensure that management has been meeting the financial reporting objectives set out by the Board of Directors, and that practices and procedures are in place which safeguard and protect the interest of the members and the assets of the Credit Union, the SC engaged a team of independent auditors from the accounting firm The Bonadio Group to perform an audit of the Credit Union’s financial statements in accordance with auditing standards generally accepted in the United States.  In addition to the  audit by The Bonadio Group, the SC also received audits from the NCUA (the National Credit Union Administration), and Sciarrabba/Walker (a separate accounting firm) to meet the requirements spelled out in the NCUA guidelines for operating Federal Credit Unions.  The report from The Bonadio Group indicated that the credit union’s financial statements are fairly stated in accordance with generally accepted accounting principles.  The Sciarrabba/Walker report indicated that the credit union is safeguarding member information and processing members’ transactions efficiently and effectively.  The report from the NCUA indicated that the credit union is being operated in a safe and sound manner for the benefit of members.  The SC was pleased to receive each of these reports, and believes that these reports indicate that the credit union is being operated competently by the UFCU management team.

      The SC also hired a new internal auditor in August 2008 to continue the internal auditing process put in place three years ago.  The internal auditor has been performing a number of internal audits as set out by the SC and has been reporting regularly to the SC with recommendations that modify various procedures, policies, and processes as the need arises.  

      Additionally, the SC has undertaken a number of its own audits.  This past year, the SC reviewed the Travel and Expense Reports submitted by the UFCU Board and UFCU Management.  The committee made recommendations to the Board to ensure that T&E Reports meet the guidelines for proper reporting and the audit review process will continue on a regular basis.

      In March 2009, the SC received a written report from the Bonadio Group that provided an unqualified opinion on the Ukrainian Federal Credit Union’s financial statements as of and for the year ended December 31, 2008.  The SC is satisfied that the financial condition of the UFCU is being reported accurately. Based on reports provided by various the external auditors (the Bonadio Group, Sciarraba/Walker, and the NCUA) and the internal audits and examinations conducted throughout the course of the year by the SC and the Internal Auditor, the SC has verified that the condition of the UFCU reported control environment meets the criteria and standards set forth by the NCUA.

      Over the course of the year, the SC has met with the Board on a monthly basis and held its own separate committee meetings throughout the year to fulfill its fiduciary responsibilities.  The SC has met regularly with UFCU management over the past year and based on our review of management-issued financial and operating reports, the SC believes that management is taking appropriate action to implement the Board of Directors approved strategic plans, and is maintaining a high quality of service to its membership.  The SC established a plan of work at the initial committee meeting in April 2008, and that plan together with all the minutes generated by the SC during the year are on record at the main offices of the Credit Union. 

      Finally, the SC has also resolved a number of member complaints in a timely and fair manner.  The SC has met with various members personally, and has been in contact with members in California, Portland, Albany, and Syracuse, as well as Rochester to resolve member issues that were brought to our attention.

      As a result of both the internal and external audits, and the periodic reviews by the Supervisory Committee of the Credit Union’s practices and procedures, the SC reaffirms that the Ukrainian Federal Credit Union is being managed, operated, and guided in accordance with NCUA guidelines for the benefit of the membership.

Dr. Evhen Lylak