"As one customer who overheard our conversation about a cash shortage so aptly put it 'Banks have been handling cash since the Medicis (Italian banking family in 14th-century Italy). You'd think you would have it down by now!'"
Cash Controls
In this series I've been hesitant to write about cash controls, as it seems everyone has their own strong opinions on what are appropriate controls. It is always easy to find that the controls were not enough, especially after a mysterious disappearance, but what about too many controls. It's clear in a wire room that there probably can't be too many eyeballs and checks and balances, but is the same thing true about cash? Do no cash losses imply good controls or just luck or both? Another factor in the cash control equation is the attitude of senior management. While a loan loss is not a happy event it is considered a part of doing business, but a cash loss of any size usually creates a hurricane of disbelief and turmoil. Probably the reason most operations personnel would prefer too many controls over just enough.
In this article I will highlight some basic controls that appear to me to have kept cash losses to a minimum with a reasonable amount of effort. If you're doing more than what I advocate, please stay at your comfort level. However if you're doing less, you might want to take a second look as you might be on the luck side of the cash control equation.
Vault Cash
Consider the following controls:
Specific vault teller
Vault cash limit
Dual control entry into cash compartment
Vault log of cash in and out
TX (teller exchange) tickets for all in and out activity.
Completely filled out with signatures by both parties
Vault GL account
Daily balancing to the GL by a non cash party
Daily reconciling of the TX account
Bundle counted nightly
Detail surprise count monthly. Date and initial straps and bundles.
Vault alarms: silent, loud, motion and/or sound.
Vault opening delayed until ½ hour before opening
Other interesting/alternative vault controls:
Large bills (50's and 100's) in a safe deposit box
Detail count large and bundle count the rest daily
Coin kept in the vault but not in the dual control cash compartment.
Vault bait money
Vault camera
Cash deliveries from customers picked up and stored at a armored car transport company.
Teller Cash
Consider the following controls:
Total and top drawer limits
End of day over limit review
Bait money
Dual control cash can storage in the vault
Cash cans with lid and key
Over and short records
Over and short counseling standards
Teller drawer key controls
Teller GL account
Daily Balancing
Nightly bundle count by supervisor or another teller
Monthly surprise counts
Count before vacation
Unscheduled absence count no later than the second day
Robbery instructions/training
Teller alarm tests on a monthly basis
TX account for inter teller/vault transfers.
Teller trash kept for at least five days for research purposes
Other interesting/alternative teller cash controls:
Weekly balancing instead of daily
Cash sold to vault before vacation
Single custody cash cans
No lid cash cans
The cash loss equations are as follows:
Too few cash controls and no luck = too many cash losses
Too few cash controls plus luck = minimum/few cash losses
Enough cash controls = minimum/few cash losses
Too many cash controls = no/few cash losses plus extra cost and inefficiency
Which equation have you decided on?
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Gene Bucciarelli, MBA CPA is the principal of Internal Control Systems, a community bank auditing and consulting firm. He can be reached at genebucc@aol.com and 925.828.7360.
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