Weekly Reconciliation at a Currency Chest
A currency chest holds only Rs 500 notes, packed 100 notes to a packet, so each packet is worth Rs 50,000. At the start of the week the book balance was 512 packets. During the week the chest received 180 packets from the regional office, issued 296 packets to its 14 link branches, and sent 148 packets of soiled and unfit notes to the RBI issue office for remittance. On Saturday the verification team counted 247 sealed packets plus one opened packet containing 88 notes. The chest's sorting machine has shown an unusually high rejection rate since its last service, and two of the fourteen branches have reported that sealed packets were short by a few notes when opened. The chest officer wants to adjust the difference against the soiled-note remittance and close the week's books.
1. Compute the expected closing balance in packets and notes, and quantify the discrepancy the verification team found.
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Step 1 - expected closing balance. Opening 512 + receipts 180 − issues 296 − soiled remittance 148 = 248 packets. In notes: 248 × 100 = 24,800 notes = Rs 1,24,00,000.
Step 2 - physical count. 247 sealed packets + 88 loose notes = 24,700 + 88 = 24,788 notes = Rs 1,23,94,000.
Step 3 - discrepancy. 24,800 − 24,788 = 12 notes short, that is Rs 6,000.
What the number means: the books are short by 12 notes, not by a packet. A packet-level error would have shown as a multiple of 100; a shortfall of 12 points to a counting or machine error at the loose-note stage - the opened packet, the sorting machine's stacker, or a packet that was opened before issue. That reading is reinforced by the machine's high rejection rate since servicing. It is a clue, not a conclusion, and it should shape what is checked next.
2. The chest officer proposes to write off the difference against the soiled-note remittance. Evaluate the proposal and set out what should be done instead.
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Why the proposal must be rejected. The soiled-note remittance is a separate transaction with its own consignment, its own seal and its own acknowledgement from the RBI issue office. Netting a shortage against it does two damaging things at once: it conceals a shortage that the controlling office and RBI are entitled to see, and it falsifies the remittance figure, so the issue office's acknowledgement will no longer match the chest's record. A reconciling item is not a write-off.
What should be done instead:
- Record the Rs 6,000 in the discrepancy register the same day, and do not touch the books until the cause is established.
- Match the soiled remittance against the issue office acknowledgement - if the 148 packets were acknowledged in full, that head is clean and is excluded.
- Take up the two branch complaints: short packets at branches point to the packing or issue stage, so recount the loose notes and check the machine's stacker count against the packet slips.
- Pull CCTV of the issue counter for the week and check seal numbers on issued packets.
- Report the shortage to the controlling office and RBI within the prescribed time, in the prescribed format - never after the investigation, always at the point of detection.
- Fix staff accountability only after the investigation, and service the sorting machine before further issues.
3. Next week the 14 branches indent 310 packets. The chest will receive 120 packets from the regional office and must send 90 packets of soiled notes. Using the physically verified stock, can the indent be met in full? If not, state the shortfall and what the chest should request.
Read the worked answer
Step 1 - verified opening stock. Physical count = 247 packets + 88 notes = 247.88 packets. Use the verified stock, not the book figure of 248, because the difference is unexplained and must not be spent.
Step 2 - projected position. 247.88 + 120 − 90 = 277.88 packets available for issue.
Step 3 - compare with the indent. 310 − 277.88 = 32.12 packets short, worth 32.12 × Rs 50,000 ≈ Rs 16,06,000.
Step 4 - judgement. A fractional packet cannot be issued, so a request for exactly 32 packets still leaves the indent unmet. The chest should ask the regional office for 33 additional packets (Rs 16,50,000) before the indent date, which covers the shortfall with a small margin, and should say plainly in the request that 12 notes remain unreconciled from the previous week so that the additional remittance is not confused with the correction of that discrepancy. If the 33 packets cannot be supplied in time, the chest must inform the branches in advance and prioritise issues, rather than issuing short packets and repeating this week's problem.