I'm looking for a checklist and/or procedures to use when auditing employee accounts. Can anyone help me out?

Our reveiw includes
Deposits outside of normal payroll dates
Even dollar deposits
Frequent NSF activity
Appearance on the Kiting Suspect Report
Use of a post office box as the account address
Policy
And a review to determine if the employee is kiting. Example writes checks at Kroger with cash back-deposits the cash the next day-check clears two days later.

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I would include overdraft approval process, and whether the accounts are coded so that they are confidential and not all employees can see the employee accounts.

Bear in mind that a lot of this review gets captured via BSA these days, including the PO Box address since a physical address must be provided. You may be able to piggy back on those processes.

Thanks for all the input! Greatly appreciated!

I also included a look at employee accounts in my service charge audit - specifically looking at waived service charges.

In my shop, audit cannot view employee accounts, but I can make sure that they are set to the proper account type and that the accounts are not set to "waive."

As a related question, I would like to know: How often do you review your employee's accounts? Do you review accounts of all employees or ones with "higher risk" positions.

I am a one-person audit "dept" in a bank with approx. 125 employees. I am struggling to do a review of everyone's account each year (as our external auditor's have suggested).

I am a one-person audit "dept" also with approx. 140 employees. I took our employee list and divided it out so that I review about 25 employee a month which ends up that I audit each employee twice a year. I also add in a few suspects or high risk ones to do monthly. It's a big job but if I dedicate one day or 2 1/2 days that usually is enough time to review the accounts.

All of our employee accounts are "flagged" in my kiting/BSA software. If one pulls into the suspect report, along with the other customers of our bank, then I look into it ... I haven't found a reason to dig any more than that.

We code ours in our AML software, if they don't break a Cash, Wire, ATM, or ACH rule - no need to look further. If they deviate from any of our rules, we then analyze the account and determine the reason. This works great. We have appox. 385 employees; will never be able to review all of them and if we only select a sample - we might miss those that "needed" to be reviewed.

I have query on all employee accounts generating list of all deposits, NSF's, waived fees. I review list for unusual deposits or waived fees and then further review that account. This enables me to review all employee accounts (115) monthly. Takes me about 4 hours month(includes further research if needed)

Looks like you have a lot of bank employees who are stupid enough to do their personal finances where they work.

I noticed that a lot of you have mentioned BSA or AML software - I am not certain that we have any of this type of software so I would appreceiate some information on this type of software. If you would feel better you can send me a pm.

Thanks!!

We are "asked" not required to have our accounts here. Most of our employees do this. At the time of employment most of us didn't know enough about banking to have our accounts somewhere else. And once it is set up it is sometimes more trouble than its worth to change banks.

Newbsa and MJC, what is the name of your BSA/AML software?

There is some helpful information in this post. I've reviewed employee accounts in the past but have neven run across anything concerning. However, in a recent review a newer employee had some activity that I thought was a bit odd. The employee appears to have four or five accounts at different banks and writes even dollar checks between these accounts as well as even dollar deposits. Nothing has shown up on a kite report to date. Given the employees position, I think this is a definite watch. When writing my review report, I will mention the watch status but not the name of the employee. Any other suggestions?

Just because it doesn't show up on a kiting report, does not mean it is not kiting. If they have 4-5 banks involved, it is not going to show on most kiting reports if all the report looks at is uncollected balances. Why watch the status? Call the employee in and point blank ask them what is going on.

I agree. We had the same thing happen. When asked, the employee knew exactly what they were doing was wrong and were trying to cover up another issue they had going on.

So, then what? They quit doing it? Did you continue to monitor? Did you report to the BOD Audit committee?

I'm not convinced there is kiting going on at this point. I just think the activity is odd at this point. I think there needs to be a little more digging before confronting the person.

We gave disciplinary action and now monitor the account extra close. Also suggested the employee seek help from EAP. The next question is, why would someone need accounts at that many banks and why would they need to transfer between them. They may be doing it just to get by until pay day or to avoid a late fee, but it is still writing checks off uncollected funds. If the employee is in a cash handling position, I would watch the variations and do surprise audits. We never want to suspect our employees of bad behavior but it happens.

The question about why there is a need to have accounts at so many banks is one of my questions. One bank is a former employer.

If you found the activity during an audit, did you report the situation and action taken to the BOD?

Thanks for the comments

When that occured our HR was still looking at the statments. It went as high as the President/CEO, but I don't believe it went the BOD.

If there was kiting and it involved an employee wouldn't that warrant a SAR?

Absolutely - insider abuse has no dollar amount threshold for reporting.

I agree.