Internal Control Questionnaires and Verification Procedures

Proof and Transit

  1. Are individuals working in the proof and transit department precluded from working in other departments of the bank?

    1. They are prepared and sent on a daily basis?

    2. They are photographed before they leave the bank?

    3. Copy of proof or hand-run tape is properly identified and returned?

    4. Records of cash letters sent to correspondent banks are maintained with identification of the subject bank, date, and amount?

    5. Employees independent of those who send out the cash letters receive remittances for cash letters?

  2. Are all entries to the general ledger either originated or proved by the proof department?

  3. Are all entries prepared by the general ledger and/or customer accounts department reviewed by responsible supervisory personnel other than the person preparing the entry?

  4. Does the proof operator in proving deposits corrected by another employee or designated officer detect errors?

  5. Are all postings to the general ledger and subsidiary ledgers supported by source documents?

  6. Are returned items:

    1. Handled by an independent section of the department or delivered unopened to personnel not responsible for preparing cash letters?

    2. Reviewed periodically by responsible supervisory personnel to determine that items are being handled correctly by this section and are clearing on a timely basis?

    3. Scrutinized for employee items?

    4. Reviewed for large or repeat items?

  7. Are holdover items:

    1. Appropriately identified in the general ledger?

    2. Handled by an independent section of the department?

    3. Reviewed periodically by responsible supervisory personnel to determine that items are clearing on a timely basis?

  8. Does the proof and transit department maintain a procedures manual describing the key operating procedures and functions within the department?

  9. Are items reported missing from cash letter promptly traced and a copy sent for credit?

  10. Is there a formal system to insure that work distributed to proof machine operators is formally rotated?

  11. Are proof machine operators prohibited from:

    1. Filing checks or deposit slips?

    2. Preparing deposit account statements?

  12. Are proof machine operators instructed to report unusually large deposits or withdrawals to a responsible officer (if so, over what dollar amount $ )?

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