As an internal auditor performing a branch audit, do you piece count the vault?

We require the branch to have their vault piece counted during their monthly cash audits. When we perform a branch audit we strap count all money in the vault and then randomly select bundles and piece count them. We also piece count in mutilated money that is in the vault.

We do the same thing that you do, strap count everything, and then pick a sample of bundles to piece count. We also fan the bundles to make sure the bundles are all the same denomination.

We do the same as you.

We have done away with audit verification of teller cash. In place we have branch managers conduct quarterly surprise counts of each teller, ATM and vault reporting the results to the audit department for tracking. This system has worked very well for over three years. This fits nicely into our "risk based" approach to audit as cash is a relatively low number on our balance sheet and the time is well spent on other areas.

We strap count everything, piece count all $100s and $50s, and take a sample of other denominations to piece count.

Forgot to mention, we do not piece count $1s at all, just the strap count.

We did this at the first bank I worked at, and it did work out great. I tried to sell the same process here, but I could not get management and the audit committee to buy into it.

But for it to work, the branch managers have to truly do a random, surprise audit, not a "random" audit on the third Wednesday of every month.

They way we got rid of it was to total the expense of sending us to count cash. The numbers don't work. Not to mention the time lost auditing things of higher risk.

But Backstreets is right....if the managers aren't doing it randomly, you've lost. At my current bank, I surprise them when I'm in town and have one mgr count another on a surprise basis and submit the forms to audit. Keeps them on their toes.

To answer the original question though..... my auditors and I count straps in the vault, spot-count the straps and then fan. Fully piece count a drawer.

Thank you all for your responses and ideas.

Per the Board and management I MUST piece count the high denominations ($100s & $50s) and sample the lower denominations ($20s, $10s and some $5s). Singles are strap counted and fanned.

The reason - Our CEO was a member of another bank's board. That bank suffered an $80,000 loss from their vault under a "strap" count only system. The "long-time, trusted employee" who ALWAYS assisted with the vault counts was simply passing the same, previouly looked at, straps to the auditor! And not surprisingly, the vault always balanced!

Which also points out another good procedure - initial and date the straps you've counted!

Yeah, but a loan officer makes a bad loan and it costs the bank $500,000 and they chalk it up to the risk associated with lending. Same applies here.

Plus, your real problem was the following. Anyone associated with the vault cannot be involved in the audit process. This was a typical internal control problem, not with the counting.

The "long-time, trusted employee" who ALWAYS assisted with the vault counts was simply passing the same