Does your supervisory or audit committee perform cash counts on a regular basis? Perhaps management performs these or you hire an outside third party. What is the purpose of these counts, how should you go about performing them, and what should you look out for?
Well of course the objective of counting cash is to ensure that the amount of cash on hand equals what is shown on the general ledger. There are a number of ways to go about verifying cash on hand.
The first consideration is coordination with management. In most cases (unless you have a really small shop) management will not be responsible for a cash drawer or the vault, so you should coordinate your counts with management. You will probably want to avoid paydays or days when large cash shipments have been received unless there is suspicious activity that is suspected on these days. That makes more work for you and causes unnecessary disruption in servicing members.
You do not have to necessarily count all cash on hand every time you count. You can pick teller drawers or the vault at random. However it is a good idea to make sure you are not consistently counting the same tellers – spread the love around!
Get a copy of all teller and vault ending cash totals. Even if you are not counting all cash on hand you will still need these to agree to general ledger totals. Use your copy as a guide when you are counting the cash. You can use these copies to document what you verified in the cash drawers.
Never count the cash alone. You always need either the teller or a supervisor with you at all times. That way if a drawer turns out to be short, you will not be under suspicion. Ask the person with you to sign the count sheet when you are done to document the dual control.
Ask about bait money. Bait money is used to assist the authorities in the event of a robbery, and can be maintained several ways. The most basic is simply bills whose serial numbers have been recorded. These are normally segregated in some way so that they are not accidentally given out to the members, but they should not be conspicuous so that a robber would refuse to take them. If this is the type of bait money you have, you need to be sure and record at least one or two serial numbers and agree them to the master log to make sure it is accurate. Some credit unions maintain photocopies of the bills. If photocopies are maintained, they should be reduced to 75% of the original size or enlarged to 150% of the original size per Title 18 of the United States Code, Section 504.
Bait money may also be maintained in an alarm trap or may be a dye pack. It is important to know this before hand as you do not want to set off any alarms!
If money is strapped, do not break the straps. Simply fold the stack of bills in half and slide off the intact wrapper, and then do the same to return the wrapper when you are done counting.
If coin is bagged and sealed to be sent to the Federal Reserve Bank, do not open the bag. Likewise, do not open rolled coin. (If a half roll is kept in a drawer, you may want to go ahead and empty it and count it.)
Don’t forget about cash dispensers (machines that tellers use to get money instead of having to open the vault) and ATMs. These need to be periodically counted as well.
And perhaps the most important – don’t be afraid to use the currency counter. It’s your friend!
At the end of the count, ask for a general ledger printout showing the ending cash balances. Agree all totals to the general ledger balance. And be sure and document all your hard work!
By Cheryl Ehmann, AVP Staff Analyst, Credit Union Resources, Inc.