(Dec. 17, 2021) Meanwhile, the board also approved a $320.1 million operating budget that was $6 million less than that proposed. To reach that lower level, the agency also cut 46 full-time equivalent (FTE) positions that were proposed last month. For next year, the agency will carry 1,196 FTEs.
However: the board also decided to reduce the amount that federal credit unions (FCUs) pay to fund the remainder of the NCUA operating budget (the OTR will fund 62.7% of the agency operations, the FCU operating fee 37.3%). The agency is doing that by crediting to FCUs $15 million from “accumulated cash in excess of funding needs.” As a result, on average, in 2022 FCUs will pay approximately 24% less than they paid NCUA in 2021.
The agency said there the $15 million credit (from the agency’s operating fund), represents past-year, unspent operating fee cash collections “the NCUA does not currently require.” “It is important to note that the OTR is billed throughout the year for actual expenses, so there are not excess funds collected that can be ‘returned’ at the end of each year,” NCUA explained. However, as NASCUS has previously argued, a problem with the OTR and budgeting process is that, once the OTR is set, there is no reconciliation to affirm or correct the workload analysis assumptions that drive the OTR calculation, itself.
As another point in explaining the credit for the operating fee, the agency also said that, based on call report data through Sept. 30, average asset growth is calculated at 16.3%, an increase of approximately 200 basis points from the 14.3% projected asset growth included in the draft budget.
The decrease in the operating fee is 23.7% compared to 2021, NCUA said, adding that it is also “a 1,250 basis point reduction from the estimate provided in the staff (budget) draft.”