Best Practices for an NCUA Call Report
For anyone responsible for a credit union call report, the concept of down time is more myth than reality. Between all the heads down days of putting together either a quarterly Form 5300 or monthly Form 5310 for the National Credit Union Administration (NCUA), teams don't have much time to take a deep breath and actually improve the process.
The very nature of the call report requires coordination across an organization to build a report you can trust. Disruptions like what we saw in 2020 raised the stakes for credit union leaders to make sure the call report gets done on time—efficiently and accurately— even when employees can't get to the office.
Common challenges to creating the call report
Roughly 40% of the industry operates with five or fewer full-time equivalent employees, according to Credit Union National Association Chief Economist Mike Schenk. Even for larger organizations, it's up to a few key, skilled employees to complete the call report. Business continuity can be threatened simply by illness or someone taking a new job. Those who are left face challenges regarding:
- Access and confidence in underlying data
- Visibility into data drivers and flexibility for ad hoc analysis
- Inflexibility in managing form updates
- Ability to file directly with the NCUA
- Multiple data sources for peer-to-peer analysis
- Duplicative work for external and internal reporting
- Lack of end-to-end auditability
- Key person risk
7 ideas for a more streamlined call report process
Just because there are high expectations for producing a timely, high-quality call report doesn’t mean it has to feel like moving a mountain to get it done. Credit unions can use technology to simplify the collection of both quantitative and qualitative artifacts and streamline consolidation, reconciliation, reporting, and governance.
I'd suggest starting with any of these steps:
1. Automate data sourcing and aggregation in a controlled central repository for all supporting data. (If you can, attach supporting information directly to the spreadsheet cell or page where it applies.) This should improve consistency, visibility, and control. When regulators, auditors, and credit union leaders ask for details or documentation for statistics, delinquencies, or investments, that information will be easier to find.
2. Enable collaboration in a secure, centralized environment. There's nothing worse than missing a revision buried deep in an email thread or working off the wrong version of a document on deadline. Working in a single cloud platform or application where colleagues can embed questions, comments, and responses to each other can help streamline communication, eliminate version control issues, and provide an audit trail of revisions.
3. Automatically generate XML-formatted data to send directly to the NCUA. Put this on the wish list for a developer on staff or a vendor to build for you.
4. Roll forward reports from one period to the next. Why start from scratch for each new call report?
5. Link data that appears in both call reports and internal reports for consistency and easy updating.
6. Design financial statements to align with what you'll need to disclose on the call report, the Missouri Division of Credit Unions suggests. (Then link financial statements to your call report draft, so that when information changes in the financial statement, it automatically updates your call report draft as well.)
7. Don't wait to let reviewers do their thing. I recommend using a platform that allows an author and reviewer work on the same document at the same time. The author can use labels to flag which sections are ready for review while continuing to work on what's in progress.
Technology is changing not only the speed of financial reporting and controls tasks but also the whole way we work. I'll have much more to say in upcoming posts about what we're seeing in the financial industry and how teams are simplifying complex reporting challenges. Subscribe to the blog so you won't miss a thing.
About the Author
Heather Markheim is the Senior Director of Product Marketing for financial services at Workiva. She drives the go-to-market strategy and execution for Workiva solutions supporting banking and insurance. Before joining Workiva in 2020, Heather spent 17 years in the financial services industry in a wide range of roles, including enterprise data management, CCAR, model risk management, and enterprise strategic transformation. Her research and areas of interest include big data and analytics, explainable AI, and machine learning.