I was a bank auditor for about a year in my early career. One afternoon, the main branch manager called me to say one of her tellers was $1,000 short, and would I come downstairs to the branch to take a look. I was relatively new to the job, and cashing up a bank teller is not an easy task for a neophyte. There are checks cashed, cash back, cashier checks, loan payments, traveler check sales, savings withdrawals, etc. Everyone was somewhat upset. The branch manager had 30 years experience, was very skilled and professional, and ran the branch like a mother hen.
I asked them what steps they had taken and they walked me through their balancing process, which I was grateful for. I do not think I could have done the cash-up all on my own. I Looked over all the tapes and reports, etc., but I couldn’t find anything out of order. It was pretty clear there was $1,000 missing. I admitted that I was stumped. I asked them how many different people had counted the cash and they said three or four people had verified the actual cash count. “Well,” I said, “since I’m here, I guess I had better just count the cash again just to cover all the bases.”
I stood there in front of the branch manager and about four tellers, and counted out the cash drawer, and came up with $1,000 more than everyone else had. I did it again, and like magic, the $1,000 shortage disappeared. It was remarkable that all 3 or 4 people who had counted the cash had made the same mistake in counting.
Another time, I was auditing the cash office of a supermarket. At one time, when I started with the company, the cash office audits were done on a surprise basis. But after I had been working there for about 2 years, we took note that often, some key person would be on vacation or off on the day of the audit, and it made things difficult. We decided to try to schedule these in advance to make sure we had everyone available we needed.
Now I bet many experienced auditors would object and say that scheduling the audit in advance is a very bad idea because it gives the store a chance to cover their mistakes. But the internal controls in the cash offices were very good. Standard procedure required that the safe cash and other media (lottery tickets, video rental passes, etc.) be counted 3 times a day, at every bookkeeper change. Our job was to examine the documentation of these procedures and make sure they were being done properly. If they were slacking or not following the proper procedures, there was almost no way to cover that up.
On this one occasion, we got to the store and the office manager said, “I might as well tell you right off that we’re short $700.”
Well, OK, that can happen and it’s not the end of the world. But the sin at the store was they had not reported the shortage to the main office but had rolled with it for about 3 days, hoping to “find it.”
However, in counting up the cash, the auditor did a more thorough job than the store personnel did. So instead of simply counting an entire pack of 25 $1’s as $25, we counted up every pack of banded bills. They had a bunch of packs of $5 bills. And although you always put 25 $1 bills in a pack, you put 20 $5 bills in packs to make an even $100. What the store had done is bunch up 25 $5 bills in their packs, $125, but they had been counting it as only $100. So again, the auditors saved the day by simply performing the basics of the job.
cash flow, cash skimming, CIA, CISA, CPA, Employee Theft, fraud, grocery store, Internal Audit, internal controls