Pub. 10 2015-2016 Issue 6

March/April 2016 23 Extraordinary Service for Extraordinary Members. This article is for general information purposes only and is not to be considered legal advice. This information was written by qualified, experienced BKD professionals, but applying this information to your particular situation requires careful consideration of your specific facts and circumstances. Consult your BKD advisor or legal counsel before acting on any matter covered in this update. Article reprinted with permission from BKD LLP, bkd.com . All rights reserved. The head teller subsequently admitted to taking the cash. To accomplish this, she would access the vault for large amounts of cash (as much as $90,000 at a time) and put it in her teller drawer area, which was right above where she kept her purse. As in Example 1, her teller tape/journal showed significant amounts of coin recorded, such as more than $100,000 in quarters or half-dollars, on numerous occasions. In addition, she indicated the cash bags were, to her knowledge, never opened or counted by any regulator or bank employee. Inventory Security In both examples, some controls and measures were in place—at least on paper—to prevent the schemes, but they weren’t enforced. In many other cases, internal controls weren’t in place at all. Here are some options to implement andmitigate potential embezzlement: • Establish dual-control procedures over the vault—two tellers access the vault each time activity must be conducted in the vault; • Use an access log for those accessing the vault; • Place surveillance cameras around the vault entrance and inside the vault; • Have unannounced cash counts by bank personnel other than those typically accessing the vault; • Open bank bags and unbundle cash for each count; • Include coin in vault cash counts; • Compare surprise or audit counts with daily vault records; • Periodically review daily vault cash count sheets, looking for unusual items such as large amounts of particular coin; • Involve more than one person in the flow of currency in and through the bank; and, • Complete compliance checks to ensure policies are being followed. For more information on how your institution can pre- pare for these situations or others, contact your accounting advisor. 