The NCUA Board last week-with a full complement of three members for the first time in 18 months-approved a new budget for 2006 that calls for a 1.9% increase in spending to $151 million.
The budget will pay NCUA employees pay raises averaging 3.1% for next year, the same as most federal workers, and trim the staff by three positions to a nine-year low of 958. Since 2000, NCUA has reduced its staffing level by 9%, or 91 full-time positions.
As always, salaries and related employee benefits make up the largest portion of the budget, about 75%.
The biggest capital expenditure, an estimated $4.5 million, will be allocated to finance a new agreement to lease laptop computers and peripheral equipment for NCUA staff and state examiners, who the agency traditionally equips. NCUA usually leases, rather than buys, computers because it helps "smooth out" the costs over several years, rather than accruing the costs at one time, according to Dennis Winans, chief financial officer for the agency. The $4.5-million expense would be spread out over three years.
NCUA Chairman JoAnn Johnson praised the budget as one of fiscal restraint, saying that the credit union regulator is not driven by the concept of "spend it or lose it"-that is, the need to spend all funding allocated-as some government agencies may be.
Despite the increase in spending, the continued growth in credit unions' assets, estimated at 4.25% for the year, will enable NCUA to cut the rates on operating fees charged all federally chartered credit unions by approximately 2%. Because of the projected growth in assets this year, all brackets for determining operating fees will be increased by 4.25%.
Under the new fee scale, 334 small federally chartered credit unions under $1 million in assets will continue to pay no operating fees; credit unions with average assets of $5 million will pay $1,031; those with an average of $100 million will pay $20,615; and those with $1 billion will pay $171,813.
Federally chartered credit unions can calculate their annual operating fee by going to NCUA's website at NCUA.gov and accessing the NCUSIF queries connection. All operating fees are due to be paid to NCUA by April 17, 2006.
The majority of the budget, 57%, will be funded through the overhead transfer rate, by which funds are transferred from the National CU Share Insurance Fund to pay operating expenses, the same rate as last year.
All three NCUA board members voted for the new budget, including new members Rodney Hood and Gigi Hyland.
