Audits and reports of state savings banks and state savings and loan associations

The audit report filed with the division must be certified by the CPA conducting the audit. If a savings bank fails to cause an audit to be made, the division must order an audit to be made by an independent CPA at the savings bank's expense. A savings bank must also file annually with the division a report of its activities containing specified information, including a copy of a statement of its condition and operations as of the end of the savings bank's most recent fiscal year.

Current law also requires each S&L association to be annually audited in a manner satisfactory to, and in accordance with the policies established by, the division. The S&L association's board of directors must designate the auditors, which must be independent CPAs in this state. An S&L association must promptly file with the division a copy of the audit report. However, in lieu of these requirements, the S&L association's board of directors may request the division to conduct an audit of the books and accounts to check the assets of the association and to determine losses, although the division may refuse the request. The division may also, at any time, make or cause to be made an audit of any S&L association, with the cost to be paid by the association.

This bill repeals all of the foregoing audit and report requirements and replaces them with new requirements applicable to both savings banks and S&L associations.

Under the bill, the board of directors of a savings bank or S&L association must do one of the following: 1) hire a CPA or other qualified person to conduct a comprehensive annual audit of the records, accounts, and affairs of the savings bank or S&L association; or 2) appoint an auditing committee of one or more capable persons to annually audit the records, accounts, and cash of the savings bank or S&L association and to verify customer accounts, with verification procedures conducted according to the savings bank's or association's auditing program or the rules of the division. Audit reports must be submitted to the board of directors of the savings bank or S&L association and retained as records of the savings bank or association.