I need your help. I was recently reviewing the results of a safe deposit audit I had performed with our audit committee. One of the comments I made was that the custodial "guard" key was in a drawer accessible to all bank employees. My recommendation was that the bank keep better control of the key by making it accessible to only a few employees. The audit committee members responded by saying " what's the big deal"? as long as the customer has one key and a bank representative has another key that should be control enough. I didnt have a good response. Please help!

One thing you could bring up would be any bank owned safe deposit boxes. There goes your dual control. Some banks have all of their "extra keys" in a safe deposit box, someone with access to that key AND the custodian key would have unlimited accessibility to teller drawers, etc.

The safe deposit area must have a standard that is followed all all times. Any compromise to any part of the standard puts the entire standard in jeopardy.

Dual Custody and key control are done for a simple purpose. To protect the renters as implied by the mere term SAFE deposit box, and SAFE deposit area.

They are in place to also protect the bank. If the bank ever gets sued by someone claiming that something of value is missing from their box. The bank can testify that the safe guards in place are never compromised - ever. If an attorney can show that the banks security procedures are not followed and access to guard keys are not protected, you are on you way to loosing the case, as it give credence to the fact that someone could access a renters box. Renters key aside, if one procedure is violated there is no reason to not believe others have been as well.

There was a post on BOL recently about an illegal access and the bank was on the hook for a bundle, because the bank thought safety deposit procedures were an overkill and they could save a couple of bucks by ignoring them.

It doesn't happen often and you may never see a problem in an entire banking career. BECAUSE PROCEDURES ARE NOT COMPROMISED. Perhaps its because the tried and true standrds have been working for years lulls directors into believing nothing can happen.

thank you I hadnt thought of that.

I too had the same problem & had made audit recommendations for 4 consecutive yrs. Suddenly a "career criminal" came to to case the bank & saw how lax the controls were. Strictly by coincidence, the SDB he chose to rob was the one containing securities we held in safekeeping for our customers. With bonds & coupons attached, his take was $7.2 mil. The FBI captured him a year later but, in the meantime, he'd hit 5 other banks...that we know of. He's doing life in Levenworth now & there are some bank employees who will never forget being under suspicion by law enforcement, management & their fellow employees.

It's all public knowledge now so if you want to contact me I'll give you all the sorted details.

Luckily for me, I had issued audit reports to management about the lack of security so my --- was covered. INSIST THOSE KEYS BE PROTECTED AT ALL TIMES.

Sandra jwwerdo1759@netscape.net)