i. Cashier's Checks. The stubs detached from cashier's checks by those authorized to sign are collected, sorted, recorded by numbers, and filed, and the total amount verified against the general bookkeeper's figures at the close of business each day. If there are any missing numbers, the checks are immediately located, so that under no circumstances can a cashier's check be lost or stolen in the bank itself. On each stub is inscribed the name of the account which has been charged, and on the day following its issue an investigation is made to ascertain that the proper entries have been made to reimburse the bank for the payment of the cashier's check.
Such is the procedure pursued in all payments constituting a debit against a general or capital account of the bank. In the case of letters of credit and travelers' checks which are issued against guaranty or trust receipts, the stub is held until the con tract is returned signed. This is then examined to see that it bears an authorized signature and the import and export accept ance stubs, and the opening of the credit is also verified on the books of the department.
This verifying subdivision checks, records by numbers, and files all stubs, including those of federal reserve and travelers' checks, rent receipts, stubs of acceptances issued by the com mercial credit departments, and the credit notes issued by the foreign tellers. These tellers' credit notes are listed, and after the totals have been proved, they are checked against the credits on the accounts current sheets, particular attention being paid to maturity (or value) dates.
2. Commercial Acceptances. The acceptances of the com mercial credit departments are checked on the tickets for maturity dates; the files are then referred to for the proper authorization covering the acceptance, and finally the entry in the ledger is checked, primarily to make sure that the customer's credit has not been overstepped. Whenever an acceptance is made by the bank, a carbon copy of the record is forwarded to the auditing department, which immediately checks the in strument against the various records in the commercial credit departments.
3. Commercial Letters of Credit. Offering slips covering the establishment of commercial letters of credit are referred to the verifying subdivision, which examines the contract and makes sure that the signatures are identified and that everything is in order.
4. Certified Checks. The outstanding certified checks are proved weekly with the general bookkeeper's figures. When a certified check has been outstanding for any length of time, the department communicates with the maker and endeavors to have it presented if possible, in order both to render a service to the customer and to prevent its possible mixture with other checks.
5. Certified Balances. The bank has standing instructions from certain depositors and also receives each month requests from other depositors to certify over an official signature the amount of their balances at the close of business on a particular date. For its own protection the bank complies with these re quests by a form letter in which it states that the amount given is the balance according to its books. This amount is checked and initialed by the bookkeeper handling the account and by a member of the auditing department. Frequently a customer who is having his books examined by public accountants requests that the bank furnish his auditors with certain necessary informa tion. Before any such information leaves the bank it is checked by the auditing department.
6. Federal Reserve Bank Accourit. The federal reserve bank renders a daily statement of the member bank's account with it, and it is one of the duties of the verifying subdivision of the auditor's department to see that all entries are properly passed through this account and also that the account is reconciled.
7. Telegraphic Deposits and Payments. Code telegrams ad vising the bank that it will receive certain deposits and copies of those authorizing the bank's correspondents to make payments are translated and the entries resulting therefrom are checked to their proper accounts. All confirmations of cablegrams and telegrams, all money transfers and receipts for currency ship ments, and all overdraft telegrams are carefully checked.
8. Non-Payment of Collection Items. The bank may, on its cash letters used for sending country checks to correspondents for collection, have printed instructions to the effect that the bank is to be advised by wire of the non-payment of all items of, say, $500 or over. Upon the receipt of any such advice the auditing department relays the information by telegraph or telephone to the bank's last indorser, and if the facts war rant such action, places a hold for the amount against the account.