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Actually Count the Money

Here’s a news item that may have slipped beneath the radar of many mobility managers: A bank teller at the First National Bank in Edinburg , Texas (FNBE) was convicted of stealing USD$1.25 million over a ten-year period.

This blurb should raise questions about how we steward the funds that flow into our transportation operations. There are a number of important lessons to learn here . . . before its too late.

First, the news . . . Bank Teller Convicted of Theft

Jill Marie Myers was the teller supervisor at FNBE, once the 12th largest bank in the state of Texas (U.S.). She was also entrusted with the daily closing count of cash in the bank vault. This count was documented in day-to-day bank records and the amounts recorded are included in statements of the bank’s assets. The 42-year-old Myers stole an average of USD$10,000 per month (or about USD$500 per working day) over a ten-year period by fudging entries in the bank’s closing count ledger.

This surprisingly easy method worked perfectly for Myers until the bank was acquired by PlainsCapital Bank. She would shortchange the funds, inflate the actual amount recorded and walk out of the vault with the difference in cash.

As part of due diligence for the sale of FNBE to PlainsCapital, state regulators and bank auditors apparently did something no one else had done for ten years:

Actually count the money.

Myers’ theft was quickly uncovered and prosecuted. Aided by the U.S. Department of Justice and the Federal Bureau of Investigation, the case was a slam dunk. Myers confessed, it was announced, and plead guilty. She will serve up to 30 years in prison, make full restitution and face a punitive fine of USD$1 million.

All ends well, no?

The end of this unsavory episode does not tell the whole story. There are not yet many details on how this scam played out. But there are some inferences here that we can make – and learn from:

  • Good Employee Goes Bad – Many of us have employees like Ms. Myers. We entrust them with the very keys to our business. With the lack of conflicting evidence, we are going to assume that Ms. Myers labored over time and earned the trust of her managers. She worked her way into a position where she was given total control over a financial process. This is nearly always a mistake. The temptation to steal, unbridled access to funds and little chance of discovery is a recipe for corrupting even the most honest employee.
  • Employees Play Follow the Leader – FNBE was already in a sad state prior to this event. The bank was tattooed by allegations of insider loans. It was found guilty of defrauding a local businessman by coercing him to buy additional properties (read: more bank loans) to obtain favorable financing terms. FNBE repeatedly failed to maintain adequate reserves, destroyed records of bad loans and was closed by Federal regulators in 2013. Some might say this was just the banking business as usual. But corruption and rot breed alike. Meanwhile, employees are watching what we say and do. Like Ms. Myers, they are taking notes if what we do speaks louder than what we say.
  • Reputations Were Destroyed – Myers, while not a victim here, is among these. But we must assume FNBE employed a number of hard-working, blameless individuals. The fallout for those with FNBE on their resume will echo for many years. Perhaps some lost their jobs when FNBE was acquired. For those in responsible positions who should have detected the theft, good-intentioned or not, their reputations are in tatters. Mobility managers who fail to routinely audit their operations internally (with their own processes) and externally (by experienced, independent audit professionals) may face a similar fate.
  • Head in the Sand? PlainsCapital chose not to mention this event in a cursory check of their press releases. Of course, this was not their mess, they just bought the mess and were trying to straighten it out. But this is an interesting PR strategy question: Do you just ignore bad news and let it drip, drip, drip? Or, do you get out in front of it by taking justifiable credit for saving FNBE investors and depositors by helping uncover the fraud? Most PR experts would likely suggest the latter course of action. 
  • Actually Count the Money – Everything going into – or out of – a count room should be counted. The vault at the failed FNBE is equivalent to our parking and transportation count rooms. A manager or supervisor should have been checking a count employee (like Ms. Myers) before and after the count to verify that no extraneous and unnecessary items (say, like baggies and tape) are going into the count room and nothing unauthorized (say, like cash) is exiting the count room.
  • Never entrust a process to a person who is also tasked with auditing that process – Ms. Myers made the daily counts – that’s fine, someone has to do it. But then she was also responsible for documenting the results. When you are auditing yourself, you are not auditing at all. If you maintain a cash bank, a more appropriate structure here is to have one person verify the funds and another person watching – ore recounting separately – to validate that verification.
  • Watch your permanent change funds – Many MM operations utilize change funds, such as those provided cashiers who interact with cash-paying customers. Many times we sign out a change fund to an employee and forget about it. But it is a common mistake to trust that those cashiers issued change funds are handling those funds appropriately. Spot checks on cashiers beginning their shifts are an excellent means to both monitor this and spread the message that a change fund is not a “free bank” from which to borrow – or steal. Failing to routinely check on change funds is an invitation to employees like Ms. Myers that may be too tempting to resist.

More about Count Room Security here in an H2H2H White Paper.

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