WASHINGTON-In a 183-page report, the U.S. General Accounting Office said that while the credit union industry is running smoothly, the agency should tweak its oversight. GAO, the government watchdog, has not performed an overall study of credit unions since 1991, but in that time, the number of troubled credit unions-those with a CAMEL 4 or 5 rating-declined from 578 (5% of credit unions) in 1992 to 211 or 2% in 2002. Additionally, NCUA implemented Prompt Corrective Action procedures in 2000, but very few credit unions have been subject to them due to the positive economic environment, GAO concluded. GAO's report recommended the following changes for NCUA: * Explore developing a risk-based funding system for the NCUSIF; * Improve the process for allocating overhead expenses for the fund; * Refine the process for estimating future insurance losses; and * Develop empirical data for measuring service to the underserved. In addition, GAO said that lawmakers should require internal control reporting and attestation requirements and provide NCUA the authority to oversee third-party vendors. GAO also said it found a division between large and small credit unions, which CUNA said came straight from the agency's consultation with the ABA on the study. CUNA objected to the ABA being included in an exclusively credit union report. The bankers used the study to attack the tax-exempt status of larger credit unions. In addition, GAO stated that American Share Insurance, the sole remaining private primary insurer of credit unions, is overly concentrated in some large credit unions and only a few states. ASI responded that the study was not thorough and "lack foundation in actuarial science." [email protected]