Dual control is a risk management concept that can help to reduce an MSBs losses due to accounting errors and employee theft. It can also help to deter unauthorized employee “borrowing” where an MSB’s employee shorts his drawer one day intending to pay it back; in many cases the “borrowing” grows over time becoming an outright theft.
Under dual control, two people count the valuables at various points in the work process, e.g. upon transferring responsibility for a cash drawer, transferring cash from one drawer to another, or when balancing out for the day.
- One employee physically counts all the valuables and arrives at a balance without knowledge of the balance expected by the paperwork balance.
- A second employee compiles the transaction information using supporting paperwork and tabulates the teller or store balance.
- The two employees then compare their findings.
- If a discrepancy exists, the two employees each verify the others work in an attempt to reconcile the difference.
- The two employees then sign the paperwork indicating the agreed upon balance.
- If the employees agree upon a balance and identify that a loss has occurred, they would then follow your difference procedures.
All employees, no matter how wonderful and trustworthy, are human beings subject to stresses outside of your knowledge and control. A great employee can become tempted and make a bad choice. Knowing that dual control procedures are in place and that any difference is likely to show up at the end of the day will dissuade employees from stealing. Any employee intent on stealing then must persuade a second employee to participate and collusion is not so easily accomplished.
By implementing dual control into your balancing procedures, you can not only help to protect your business from loss but can also help protect your employees from making a bad choice.