Let’s take a minute to talk about repeat findings in audits. With any luck, we’ll be able to provide some insight—and possibly some reassurance.

But by the end of this blog, you should have a better idea on how to handle repeat audit findings at your credit union.

Hint: you’re probably 90% of the way there.

 

What Are Repeat Findings in Audits?

Before we get too deep into how to deal with repeat findings, let’s look at what they are.

When your auditors finish an audit, they’ll hand you a list of findings. Those findings are general observations about your policies, processes, and procedures. There are two kinds of findings:

  • Conforming
  • Non-conforming

Findings that show conformity are great! No extra work there. You’re already doing whatever it is your auditor wants to see. You get a (metaphorical) gold star.

Findings that show non-conformity highlight areas that don’t meet standards or regulations. These findings will come with recommendations for corrective action. The idea is that your credit union will change some things and you’ll be good to go for next time.

Repeat findings are when your non-conforming audit findings don’t get corrected (or the correction doesn’t stick). Basically, that thing you needed to fix? Well, it needs fixing again.

How to Handle Non-Conforming Audit Findings

Before we talk about repeat findings, let’s talk about how to handle just any non-conforming finding. Your auditors make it easy by telling you what’s wrong, what “right” looks like, and how to get there.

So, your credit union audit team should have a robust process and workflow in place to manage your findings. Going from finding, to response, to resolution should follow the same thorough steps each time. (What that looks like might be different for each credit union. It’s a topic for another blog.)

Your response should include your audit team and management. As you move into remediation—addressing the finding(s)—you’ll need to ensure that any actions occur on time, as expected, and that everyone stays accountable.

You’ll also want a validation process to guarantee the appropriate actions were taken before you close out the finding. If you don’t have a validation process, you’ll probably get repeat findings.

Dealing with Repeat Findings

This is really the meat of it, isn’t it? You know what findings are and how to handle them. To be fair, you probably already knew those things, but it’s reassuring to when someone else says it, right?

Repeat audit findings aren’t much different than regular findings. So, allow us to reassure you now:

  1. Repeat findings aren’t uncommon. They don’t necessarily show negligence on your credit union’s part. You’re going to be okay.
  2. You don’t need to change your audit processes if they’re sound. If you have a robust audit process and a consistent workflow, you already have the tools you need. No need to fundamentally alter your approach the second time around.
  3. Yes, you should take extra care with repeat findings. You might flag it as a repeat and put in a little extra effort. But ideally, you’re putting that level of intensity and scrutiny the first time around, so it’s not a big deal.

This is all to say that if you’re doing things right—the way they should be done—then you don’t need to change anything. Just do it like normal.

The fact is, a lot can change in 12–18 months. So, seeing a finding from last year pop back up doesn’t necessarily mean you didn’t fix it well. It might just mean that a new hire didn’t get fully trained (or something to that effect).

Now, if there’s a more sinister underlying cause to that repeat finding? Well, then it’s probably time to examine that area a little further.

audit checklist

FREE: Audit Checklist for Credit Unions

4 key principles and 13 questions to jumpstart your audit planning. From leading credit unions.

Further Reading

Subscribe to our blog to learn more about credit union audits and audit processes. Not only do we provide (potentially) helpful tips and commentary, we also create resources for your audit team that you won’t want to miss.

For example, we created a credit union audit checklist to help you prepare for your next audit or exam. We also made an audit and examination scorecard to show you which areas you should focus on next time you prepare for an audit.

HOW TO PREPARE FOR AN AUDIT: 11 AUDIT EFFICIENCY TIPS FOR CREDIT UNIONS

NEVER DO THESE TWO THINGS DURING YOUR CREDIT UNION EXAMS