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#208499 - 07/07/04 07:22 PM
Surprise Cash Counts
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Anonymous
Unregistered
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How often are surprise cash counts to be performed? Is there a regulation that sets guidelines for the cash counts?
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#208500 - 07/07/04 10:14 PM
Re: Surprise Cash Counts
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Anonymous
Unregistered
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There aren't any laws or regulations that stipulate the frequency of surprise cash counts. This is a policy that would be left entirely up to your bank mgmt. The frequency may differ for the various cash funds, teller, vault, ATM, and should be based on the risk your bank feels is acceptable.
In my experience, tellers are audited on a surprise basis quartely with special counts (announced), such as vacation leave, temination,etc. performed when needed - which are not counted as a required qtrly audit.
A Vault audit, depending on your custody controls, may be as often as monthly but no more than quarterly.
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#208501 - 07/08/04 01:04 PM
Re: Surprise Cash Counts
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10K Club
Joined: Dec 2002
Posts: 40,766
Turnpike Exit 10
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Quote:
In my experience, tellers are audited on a surprise basis quartely with special counts (announced), such as vacation leave, temination,etc. performed when needed - which are not counted as a required qtrly audit.
A Vault audit, depending on your custody controls, may be as often as monthly but no more than quarterly.
Our IA dept. does surprise cash audits on a monthly basis for all 25 branches. He tried to narrow it down to quarterly, but when his risk assessment was reviewed by the Audit committee, they wanted it back to monthly, to "set a tone", so to speak.
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Get your facts first, then you can distort them as you please. - Mark Twain
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#208503 - 07/08/04 01:36 PM
Re: Surprise Cash Counts
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10K Club
Joined: Nov 2003
Posts: 12,846
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Quote:
I think when you do risk assessments and compare the risk of loss from a teller window to wire transfers or loans there is no need for monthly cash counts. There is no comparison between a $100 loss due to teller embezzlement and a $100,000 loss in the wire transfer or loan area. Adequate internal controls is the key.
What controls do you have over teller cash except for a regular, independent count? (Wires should never be able to be sent without a second person.)
I don't think it takes so long to count teller cash on a monthly basis by a supervisor that this should be eliminated. Just my opinion.
Quote:
How many losses has everyone had in the teller area? Not outages but teller embezzlement. I have been here 30 years and we have had two of minor amounts.
How do you know that none of your offages are embezzlements?
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#208504 - 07/08/04 01:42 PM
Re: Surprise Cash Counts
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100 Club
Joined: May 2003
Posts: 127
Heartland
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I agree with Donna. Cash is a low risk item in my bank also. Operations performs counts quarterly, and the auditor (me) audits it annually. If you do a risk assessment and consider the size of transactions, frequency of loss, and the controls in place, cash is a very low risk.
_________________________
"Everything that irritates us about others can lead us to an understanding of ourselves." Carl Jung
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#208507 - 07/08/04 01:55 PM
Re: Surprise Cash Counts
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Diamond Poster
Joined: Jul 2002
Posts: 1,722
Oklahoma
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Quote:
How many losses has everyone had in the teller area? Not outages but teller embezzlement. I have been here 30 years and we have had two of minor amounts. I am in a rural low crime area so maybe location makes a difference.
It is easy to say that this may not be considered a high risk area, but I think that it deserves more attention than what some are saying here. We have good internal controls, but folks, when people are desperate for money it is going to happen anyway.
We had an incident where our head teller embezzeled thousands of dollars from the vault and simply walked out of the bank. Whenever you put people in charge of cash and typically don't pay them very well....eventually it is going to happen.
Everyone has to decide where their resources and time is most needed, but this should not be considered a low risk area by any means.
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#208508 - 07/08/04 02:24 PM
Re: Surprise Cash Counts
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Diamond Poster
Joined: Jun 2002
Posts: 1,815
Minnesota
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As part of our certification process, the branch completes an entire branch count monthly (not including vacation or termination counts). Audit does a surprise count annually and as needed. The director of operations does a surprise count annually and as needed. Our outages have decreased significantly now that the branch is responsible for doing this monthly and the branch manager signs the certification.
Previously, audit was the only one in there doing a count and it was done quarterly.
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Do what you can, with what you have, where you are.
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#208509 - 07/08/04 04:06 PM
Re: Surprise Cash Counts
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Power Poster
Joined: Nov 2001
Posts: 6,719
PA
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Quote:
There is no comparison between a $100 loss due to teller embezzlement and a $100,000 loss in the wire transfer or loan area.
There may be no comparison in terms of dollars and impact, but there is a relationship. How many of the embezzling wire and loan staffers started out as embezzling tellers? I'd be willing to bet the majority did. A theft of $100 from the till may seem 'small,' but the problem will not stay small (or go away) if left unchecked.
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#208510 - 07/08/04 04:28 PM
Re: Surprise Cash Counts
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Joined: May 2003
Posts: 127
Heartland
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Keep in mind that operations/branch management is performing the monthly or quarterly surprise cash counts. The cash is being monitored. Audit then comes in later to ensure the proper cash controls are in place.
_________________________
"Everything that irritates us about others can lead us to an understanding of ourselves." Carl Jung
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#208511 - 07/08/04 04:47 PM
Re: Surprise Cash Counts
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Joined: Nov 2003
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Quote:
Keep in mind that operations/branch management is performing the monthly or quarterly surprise cash counts. The cash is being monitored.
But how frequently - is it quarterly or is it monthly? That was at the heart of the question that was asked.
I personally don't think that it is a good use of auditor time to conduct regular cash counts. I'm more concerned with testing the controls - that cash counts are being conducted appropriately, that they are random, that they are documented.
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#208512 - 07/08/04 04:48 PM
Re: Surprise Cash Counts
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Platinum Poster
Joined: Jul 2002
Posts: 645
Pandora
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Audit should spend the most time in areas that are going to have a big impact on bank performance and capital. Not doing monthly cash counts to see if Mary Jane took $100. If you have a large audit staff, then you maybe can justify the time and budget expense. And it will make a difference if you do have frequent teller outages/losses. If you have high $ losses in the teller area you do might do cash counts more frequently, but I just don't see how a surprise cash count is going to deter fraud. If a teller is going to take money, he/she will only wait unitl the day afer the cash count. Security cameras, supervision, training on the consequences of fraud, and internal controls will deter theft in the teller area.
The only time we have ever uncovered teller fraud is by another teller reporting their suspicion that something was going on. We have never found embezzlement during a "routine" surprise cash count.
BUT when we do audit cash, we time it a day or two before payday. 
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#208513 - 07/08/04 05:54 PM
Re: Surprise Cash Counts
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Joined: Nov 2003
Posts: 12,846
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Quote:
If you have a large audit staff, then you maybe can justify the time and budget expense.
The question was not how often audit should perform surprise cash counts; it was how often they should be performed.
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If a teller is going to take money, he/she will only wait unitl the day afer the cash count.
They will probably take it when they need it and feel unlikely to be caught (motive + opportunity). If the counts are truly by surprise, there is a strong deterrent to taking it.
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Security cameras, supervision, training on the consequences of fraud, and internal controls will deter theft in the teller area.
Again, what is a better internal control than the knowlede that surprise count are performed?
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We have never found embezzlement during a "routine" surprise cash count.
And, ideally, you never will because your tellers know that your bank performs surprise count.
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#208514 - 07/08/04 06:53 PM
Re: Surprise Cash Counts
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100 Club
Joined: Apr 2001
Posts: 205
Dallas
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Here are some common guidelines that I see...
Quarterly surprise counts of each teller drawer by operations manager / teller supervisor.
Monthly surprise counts of vault (and vault teller's regular drawer) and ATM.
Annual surprise counts at each branch by internal audit...generally counting the vault, ATM, and a sampling of teller drawers will suffice. I've seen a movement away from a full count of all drawers, though it's still pretty common.
I agree with the comments regarding focusing on testing the controls. Make sure outages are being monitored, investigated, and tracked. Make sure the cash counts are random (not on the 5th of EVERY month / quarter, or only on Wednesdays, etc.). One best practice is to always throw in a few extra random cash counts each month / quarter. If drawers are always counted only once a quarter, then the teller knows that once their count has been completed, they have the rest of the month off. Coming back around on a random basis will keep everyone guessing.
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#208516 - 07/09/04 10:01 PM
Re: Surprise Cash Counts
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Platinum Poster
Joined: Jul 2002
Posts: 645
Pandora
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Vault counts are a competely separate animal than teller window cash counts. Risk of loss is much higher. We had a trusted Asst. Cashier embezzle here eons ago (not teller cash). We now trust internal controls - expecially dual controls - instead of employees. (What kind of auditor would only count straps?) 
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#208517 - 07/13/04 04:54 PM
Re: Surprise Cash Counts
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Diamond Poster
Joined: May 2004
Posts: 1,475
Big Brother knows and that's a...
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Monthly surprise cash counts are conducted by branch management on each teller. Results are sent to IA and Branch Admin. In addition, all cash is counted when it is transferred to another teller or a teller is leaving for vacation.
IA relies on the surprise cash counts that management performs. We do not count any cash when we perform our branch audits- it takes too much time and the risk just is not there!
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#208518 - 07/14/04 09:29 PM
Re: Surprise Cash Counts
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Junior Member
Joined: Apr 2004
Posts: 45
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We do monthly cash counts by branch management and by Internal Audit once annually. As far as bills versus straps - Internal Audit alternates, so the branch never knows if IA will be doing a full count or just counting straps.
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