1. (a) Audit requirements. The board of directors shall obtain or cause to be performed an annual audit of the credit union in accordance with generally accepted auditing standards by a licensee of the Texas State Board of Public Accountancy or as permitted under the provisions of part 715 of the National Credit Union Administration's rules and regulations (12 CFR, Chapter VII, Part 715).

2. (b) Definitions.

   1. (1) A record-keeping deficiency is serious if the commissioner reasonably believes that the board of directors and management of the credit union have not timely met financial reporting objectives and established practices and procedures sufficient to safeguard members' assets.
   2. (2) A serious recordkeeping deficiency is persistent when it continues beyond a usual, expected or reasonable period of time.
3. (c) Verification obligation. The board of directors shall, at least once every two years, cause the share, deposit, and loan accounts to be verified against the records of the credit union as prescribed in §715.8 of the National Credit Union Administration's Rules and Regulations (12 CFR, Chapter VII, Part 715).

4. (d) Remedies. The commissioner may compel a credit union to obtain an audit, performed by an independent person, for any year in which any of the following three conditions is present:

   1. (1) the credit union has not obtained an annual audit or caused an audit to be performed;
   2. (2) the credit union has obtained an audit or performed an audit which does not meet the specified requirements; or
   3. (3) the credit union has experienced serious and persistent recordkeeping deficiencies.
5. (e) Opinion audit required. The commissioner may compel a credit union to obtain an opinion audit performed in accordance with Generally Accepted Auditing Standards by an independent person who is licensed by the state for any year in which the credit union has experienced serious and persistent recordkeeping deficiencies. The objective of such an audit is to obtain an unqualified opinion on the credit union's financial statements.

Source Note:The provisions of this §91.516 adopted to be effective May 11, 2000, 25 TexReg 3952.