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#671309 - 01/24/07 07:10 PM Proof vs. Back Counter
Whodunnit? Offline
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Joined: Apr 2005
Posts: 75
We no longer have a proof department, but a back counter device. Does anyone have an appropriate audit? (I may just have to adjust my current proof audit) But any suggestions would be appreciated.

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Audit
#677495 - 02/01/07 03:51 PM Re: Proof vs. Back Counter Whodunnit?
Cornfed Turtle Offline
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Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
We are in the same type of environment and I adjusted my regular proof audit. One thing to look for.....who is running the back counter device? We don't have a dedicated FTE on that device which means that tellers are "proofing." Look for controls to make sure they aren't proofing their own work.

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#731885 - 05/15/07 12:53 PM Re: Proof vs. Back Counter Cornfed Turtle
sunshinebanker Offline
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Joined: Mar 2006
Posts: 233
I have some additional questions on back counter:
We are in the same environment with various offices and some offices are proofing their own work. I'm trying to build a case to recommend that all branches have this segregation of duties. Here is my concern:
After the customer leaves, the teller still has the transaction in their work up to the time that it goes to another teller to run. In the interim, they could still reverse the transaction, re-run, adjust the cash, etc. If this occurs even with segregation of another teller running the proof, this would not be detected.
Also tellers aren't supposed to run their own personal checking/savings transactions. In most offices, we have only 2 teller. If they are given to another teller to run through their machine but then they end up proofing the work for their transaction, isn't this a conflict too?
How are other banks securing the checks after proofing the work? As these are negotiable items, we are trying to keep them locked up but have minimal storage at some offices. We are keeping for 60 days. Is this what other banks are doing?

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#733489 - 05/16/07 06:40 PM Re: Proof vs. Back Counter sunshinebanker
Happy Drugs Offline
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Happy Drugs
Joined: Feb 2007
Posts: 597
Central Texas
I know with our tellers you can view on their tape what they have reversed, but I see your point about the reversal process. What type of audit do you have in place to check your tellers, such as cash balancing, etc. We still have a proof dept., but will have the back counter with our new branches, so there is nothing in place yet for that.

We secure our daily on-us items in the bookkeepping vault, which is locked every night, and opened by the officer on duty that week. We file them in locked cabinets, and they are kept there for I believe 90 days, we have a contract with a company that does our shredding securely for us, they are used by a lot of banks in this area.

I to would like some more info from others on the teller issue, since I will have to incorporate into my audit next year.
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#733653 - 05/16/07 07:40 PM Re: Proof vs. Back Counter Happy Drugs
Nanwa Offline
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Joined: Oct 2001
Posts: 5,564
Clintonville, WI, USA
Oh man, that sounds like embezzlement waiting to happen. Dual control and segregation of duties are the absolute basic audit tenets. Proof HAS to be segregated from teller work. I know the bank is trying to save money, but they will need more than two tellers at an office if they use this back counter system. Or they can lose thousands in an employee embezzlement and the bad publicity surrounding it.
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#827952 - 10/03/07 02:26 PM Re: Proof vs. Back Counter Nanwa
complyyes Offline
Member
Joined: Apr 2006
Posts: 51
Midwest
I am still looking for some good back counter audit procedures. We have 20 branches. Looking at all of the teller tapes isn't going to work for our small department. We use ITI as our core processor. Anyone else use ITI and have added back counter processing?

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#828208 - 10/03/07 05:10 PM Re: Proof vs. Back Counter complyyes
Becky Offline
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Becky
Joined: Feb 2003
Posts: 215
Dallas, Texas
With many teller systems that have branch image capture integration, you will see transactions being "proofed" when the teller accepts the items and images the transaction. No back counter device, no segregation of duties. Might be a while before your bank goes there...but start thinking about it. When that happens, segregation of duties for proof work goes out the window.

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