I had an employee ask if when the bank runs checks through the "proof machine" does that count at the endorsement? I dont really know how to answer that completely. What it was was that another bank called and said they received a check that was drawn on them and our bank accepted for deposit here and the check was nevfer endorsed by the customer.

A customer's endorsement is not always necessary in order to complete the deposit of a check. Section 4-205 of the Uniform Commercial Code provides that a bank can accept a check for deposit from its customer without the customer's endorsement, and the bank still becomes the holder of the check. In such cases, the bank warrants that its customer received cash or credit for the check.

Except in cases in which a paying bank knows that its customer requires payee endorsements on checks (such might be the case for a life insurance company, for example), there is really no reason to return checks for missing endorsements.