As an individual takes on more responsibility and handles it well, he or she can expect to eventually be rewarded with a fatter paycheck. That's the way it works, for example, with credit union CEOs. As the credit union gets larger and more complex, the CEO has every right to expect that his or her contributions to the overall success of the credit union will be recognized by the board of directors. A number of CEO salary surveys would seem to indicate that CEOs and boards understand that. It also works that way for a number of CU management staff positions; pay increases right along with responsibilities. However, there's one important credit union position that seems to have fallen in a crack. The exact title may vary, but that position is commonly known as the credit union internal auditor. As the credit union grows, so does the laundry list of things for which they are responsible. For example, they play a key role in alliances, partnerships, CUSOs, facilities expansions, technological developments, an exploding number of compliance issues, asset growth, employee and volunteer issues, independent contractor arrangements, member relationships, and have an involvement in a rapidly expanding list of products and services common at most CUs today. Sounds like an important job, and it is. In fact, like the CEO and management staff positions, the job changes as the credit union changes. Looking at such things as titles (few VPs), pay (low), ranking on the staff totem poll (isolated), and prestige (lacking), one would never know that the job of credit union internal auditor has gone from being important to being very important in only a few short years. Why is that? Could it be that the typical CU internal auditor serves two masters, typically reporting both to the supervisory committee and to the credit union's CEO? Could it be that there is an ongoing image problem, namely, that the internal auditor is regarded by both elected officials and management staff as some sort of a credit union policeman whose major responsibility is to catch someone doing something wrong? Is it that the position has traditionally not been given the respect it deserves? Or is it the person currently in the job? From dozens of credit union internal auditors I've talked to, the answers to all these questions is a pretty universal yes. Whatever the reasons, credit union internal auditors, in general (there are a few, very few exceptions) are underpaid and getting more so as their day-to-day responsibilities increase. They are not considered a part of the management team. They are not invited to board meetings. For whatever reason, they are being left behind. Consider the low pay issue. Don't take my word for it that internal auditors are far from the top of the pay scale. A survey of CU internal auditors just released by the Association of Credit Union Internal Auditors (ACUIA) includes a section on compensation. It shows pay ranges of respondents by credit union size. If an observer didn't know anything at all about what an internal auditor does, or how much their responsibilities have increased in recent years, it might appear that the reported compensation makes sense. Does it? No, unless that same observer (perhaps a volunteer or CEO of the credit union) sees the internal auditor as just above the bean counter level. Recently I had occasion to ask a group of internal auditors themselves, as well as a CEO, a number of board members, several supervisory committee members, and an independent certified public accountant who specializes in credit unions, an admittedly blunt and sensitive question. I asked all of them if they felt that credit union internal auditors were underpaid. All answered yes without hesitation. Where it got sticky was trying to determine why this is so. The current ACUIA chairman, Randy Manscill, who in real life is Vice President Audit of America First Credit Union in Ogden, Utah, may have put his finger squarely on this discussion when he started his chairman's column in the spring issue of ACUIA's The Audit Report, an impressive quarterly publication of ACUIA, by asking a leading question: "Is your internal auditor the best kept secret at your credit union?" Later, in that same piece, he makes his best point: "I would like to think (as an auditor for America First Credit Union for the past 22 years) that over the past 10 years (at least) auditors have played a part in the success and financial strength of individual credit unions and the credit union movement." To which I would ask, is there any doubt? In a face-to-face conversation on the need for internal auditors to improve their own image and to market their skills, Randy pointed out that many internal auditors have increased their value to the credit union by taking on the added role of internal consultant. According to Randy, credit unions can benefit greatly by utilizing this aspect of an internal auditor's professional job skills before a decision is made, rather than wait for the internal auditor to discover possible resulting problems at a later date. It would seem to me that it is time for both bosses (supervisory/audit committee and the CEO) of the typical credit union internal auditor take a hard look at the job in today's environment, with special attention paid to how job responsibilities have changed over the last several years. At the same time, credit union internal auditors need to do an honest and candid analysis of themselves as a credit union professional and be realistic about their weakness as well as their strengths. They may all come to the obvious conclusion that the role of the credit union auditor has changed markedly. If they do, this fact needs to be recognized in the pay envelope and on the credit union's organizational chart. The real winner will be the credit union. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].