Pub. 6 2011-2012 Issue 5

www.nebankers.org 22 Extraordinary Service for Extraordinary Members. SECURITY OFFICER’S BY-WORD H OWEVER, THE AMOUNT OF THE embezzlement losses suf- fered by the banks has been drastically reduced. Other side benefits of this early de- tection are that the innocent family members of the embezzlers have seldom been damaged. The dishon- est employees do lose their jobs but seldom serve long prison terms; and, other bank employees who may have otherwise turned to embezzlement are deterred from the crime by see- ing others suffer the consequences of such acts. We have finally found a more effec- tive means of detecting and deterring bank employee dishonesty than had previously been available to the bank- ing industry. A bookkeeping supervisor, who had the authority to refund overdraft charges, credited her personal ac- count $20 every time the computer automatically charged her account the normal overdraft charge of $10. The total amount of excess over the proper refund was $80 over a period of five months. Since most embezzlements start with very small amounts taken, this embezzlement was nipped in the bud because of the bank’s policy of checking employees’ accounts. Embezzlement is certainly not lim- ited to employees other than officers. A bank president issued fictitious loans to his relatives, forged their names on the loan documents, and credited his per- sonal account in excess of $850,000. He played the futures market with the stolen funds. He lost the money in the futures market and is now in prison. If the bank had been checking his per- sonal checking account, he might not have committed the crime that ruined his life and that of his family. If your bank has not yet installed the procedure of checking officers’ and employees’ personal accounts monthly, we urge you to do so promptly. The fact remains that more than 80 percent of bank embezzlements involve the employee utilizing his or her personal account or relatives’ personal accounts. Some banks, especially the very large banks, have complained that the checking of all employees’ accounts on a monthly basis is too time consuming and expensive. It need not be. All that need to be checked are the deposits to the account. If the number or amounts of deposits seem out of line for that particular person, only then do the individual deposit items need to be checked. Many banks have determined what the bank assumes to be the nor- mal total monthly deposits for each employee. If the total deposits for any employee exceed the assumed norm, the account is automatically flagged by the computer and the individual items deposited into the account are checked. If those deposits are debit tickets or unusual checks, the embezzlement will be nipped in the bud. Z The Very Best Embezzlement Preventor Donald M. Towle , President, Kansas Bankers Surety Co. The effect of more and more banks checking the personal checking and savings account statements of all officers and employees has been amazing. The number of embezzlements being detected by banks has risen sharply. For more information, please contact Kansas Bankers Surety Co. at (785) 228-0000.