In September 2007, the FSA sent every credit union a guide to management information (MI) and a self-assessment tool. The FSA encouraged credit unions to review the MI they produced and to consider whether it was being used effectively to inform decisions. The FSA also stated that it would be visiting some credit unions to look at how they used MI. The FSA visited 25 credit unions across the UK.
The FSA has now published a key findings report entitled Management Information (MI) project (the Report).
Overall the FSA found that there were different approaches to gathering and using MI in the credit unions it visited. Many gather useful MI, but a significant number of boards do not manage their credit union strategically. They focus solely on day-to-day operational management and do not make appropriate use of MI. Only 68% of the credit unions visited said that they had received the FSA’s MI guide and self-assessment tool. Of those who received the FSA documents, only two-thirds had used them to assess the MI they produced. All the credit unions visited understood the importance of producing and using MI about the financial position of the credit union. However, only two-thirds produced MI relating to systems and controls.
Overall only a third of credit unions could demonstrate that they gathered MI about all key aspects of their activities and only half of these produced information that was judged to be relevant, timely and acted upon.
Other key messages in the Report included:
- That it is vital that all Board members can understand the financial information provided. Some credit unions relied on reports and print outs produced directly from computer systems, which were often difficult for all directors to understand.
- The FSA recommends that all boards regularly review their performance against the requirements set out in the Credit
- Unions sourcebook.
- All credit unions should have a rolling three-year business plan, which covers the current financial year and the next two years.
- Credit unions need more than one person trained and able to produce MI.
- Boards should continue to request ad hoc MI to inform particular decisions.
View Management Information project - Key findings report, (PDF 59.8KB), 7 August 2008