Over the past several years, we have seen an uptick in the number of reported claims involving employee embezzlement of vault cash. As a reminder, please be sure that prevention measures are in place and enforced in order to prevent employee theft, such as:
- When performing vault counts, count all of the bills, not just the stacks, as it is possible to remove bills from a stack.
- Segregate duties among employees as much as possible to prevent any one employee from gaining control in such a way that he or she is able to circumvent your bank’s checks and balances.
- Have proper vault procedures in place and make sure that these procedures are enforced. For example, a recommended procedure is that the vault be maintained and balanced under dual control (i.e., it takes two employees to open or enter the vault).
- In addition to regularly scheduled internal audits, include ad hoc audits of vaults, ledgers, ATMs and cash machines. Maintain basic controls such as cash counts as part of your bank’s internal audit processes.
- If your bank has the resources, internal controls should be reviewed by external auditors as well.
- As an added check, have management staff from another location, such as the main office, perform simple checks periodically.
- Mandate and diligently enforce an employee vacation policy, such as requiring a minimum of one week away from the office. Prohibit employee access to bank systems and work space during vacation.
- Review employee accounts regularly. It is recommended that such reviews are part of your bank’s audit processes and are not just performed when suspicions arise.
Any discussion relating to policy language and/or coverage requirements is non-exhaustive and provided for informational purposes only. For details on coverage provided by your specific policy, please refer to your policy.