We have businesses that drop off deposits throughout the day to a teller but do not stay during the transaction. They are processed under dual control and then the business is given a receipt when they come back in. The tellers have been logging these transactions in the night deposit log, but auditors state that they cannot do this because the deposit wasn't taken out of the night deposit..... Should we keep a separate log for these or are they considered regular deposits since we were open and they handed the deposit to a teller? Should we have the customer sign some type of agreement for these types of transactions?

If they are handed to a specific teller, how are these processed under dual control? This is a bad practice. If they want to drop and run - have them use the night drop.

Most of the time they are in a sealed envelope. Once the teller is given the deposit, it is opened and worked under dual control.

That is not dual control and is putting your teller at risk.

I worked at a bank that allowed businesses to do this, but there were too many discrepancies. In order to continue dropping bags, they had to use a bank issued night deposit bag. The bank had the key to unlock the bags under dual control so they were opened under dual control and processed under dual control. The night drop was opened early in the day so if they dropped a deposit there, it wouldn't be processed the same day. We logged them on a separate log which was just like the night drop log, just had drop offs on it. This worked pretty well and we never had any issues.

Did you have them sign a separate agreement to keep on file for the drop offs during the day?

There was an agreement they signed for dropping off and they had to tell us who was allowed to drop and pick-up the bags. They signed that they were dropped off and then picked up. Because of the time involved, there was an additional charge. Many chose to make their employee stay and wait for the deposit to be processed. They just weren't large enough to offer armored car service. No, it wasn't true dual control, but it was a better control than just dropping off a sealed envelope. Some of these smaller community banks have been doing this for customers for years and you aren't going to change managements opinion until something bad happens.

We have had customers wanting to use this method. Our first recommendation for the customer was to drop the transaction in the night drop. For the instances in which a customer did not utilize the night drop, the bank created an indemnification agreement for the customer to complete for instances in which there were deposit adjustments and how the deposit would be processed.

Thanks for the information from everyone!

Have a different solution to "drop and run's". Provide the customer with clear, disposable plastic deposit bags. One tamper-proof pouch for the cash; a second for the checks and deposit ticket. Bag has place to record customer name, account number, breakdown of cash in pouch. Customer hands bag to teller; he/she confirms cash stated on deposit ticket agrees with cash stated on bag - deposit is processed quickly and customer given receipt. No log needed since deposit was processed through teller system. Cash is still untouched in tamperproof pouch. It can then be verified at leisure or included in currency shipment out for verification by vendor, with subsequent adjustment for discrepancies. Special agreement - customer accepts count of the Bank as final. Worked very nicely in former life at very busy cash-heavy commercial branches. Customers also used the bags for night drops. Customers were charged for cash verification - tiered rate, based on $$, usually included in analysis charges and offset by earnings allowance.

thanks!

Senior management is questioning the drop offs stating that to them, they are regular deposits so why should we be logging them down? They asked that if we are required to log them, then do we have to log drop offs where a customer comes thru the drive-thru, puts a deposit in the tube, then drives off? What are your thoughts?

Timeline and Cape Codder have provided some thoughtful responses; within them lies an intelligent solution for any bank with thoughtful management.

As for the "drop and run" person (my most recent example was a church representative who did not want to provide CTR information) I would place the deposit under dual control and reach out to a responsible party and to say the deposit would be processed when a representative came in to allow us to verify the cash portion and provide identification.