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The cash department is the most popular stop on any Federal Reserve Bank tour. Visitors can watch as high-speed processing equipment counts and sorts currency at the rate of 90,000 notes per hour. Depository financial institutions order cash from the Fed to meet their customer’s, demands and deposit excess or worn currency. Each Federal Reserve Bank and Fed Branch pay out and receive millions of notes per day. The cash departments perform four separate functions: receiving, verification, paying and administrative support. U. S. Currency is printed by the Bureau of Engraving and Printing (BEP),
in Washington D. C., and Fort Worth, Texas. Each year, Federal Reserve
Banks instruct the BEP on how many bills of each denomination to print.
Each Federal Reserve Bank then orders the amount of new currency that
meets the demands of financial institutions and replaces worn currency. Receiving Currency arrives at Federal Reserve banks in two ways. Armored carriers contracted by financial institutions deliver currency on a daily basis. The Bureau of Engraving and Printing deposits new currency at Federal Reserve Banks, while the U.S. Mint deposits new coins.Currency arrives at Federal Reserve Banks in sealed, tamper-evident bags. Cash department employees, working in teams, inspect the bags to ensure that no seals have been broken and that the bags have not been torn or damaged. The deposit is then verified in bulk, stored in the vault and later extracted to individually verify each bill. If the receiving employees find evidence of tampering, each piece of the deposit is verified immediately. New currency received from the BEP does not require individual piece verification except in the case of suspected tampering. The average Federal Reserve Bank receives more than 750 million notes per year. Coins are received with each denomination bagged separately. The bags are weighted to verify the stated amount, stacked on racks by denomination and stored in a coin vault. Verification The next stop for deposited currency is high-speed verification. High-speed currency processing machines operate day and night during the week. Each machine can verify 90,000 notes per hour. These machines not only count the money, they evaluate the fitness of the notes, check for counterfeit and shred notes too worn or soiled for circulation.An average cash department verifies 800 million notes annually. Currency determined fit for circulation is bagged and sealed, then returned to the vault for pay out. About one-third of the notes in denominations of $20 and below are considered unfit and must be shredded. Approximately $500 million dollars per day in notes are shredded by Federal Reserve Banks. Counterfeit bills are turned over to the U.S. Secret Service. Paying In the paying section, employees prepare currency for delivery to financial institutions and other Federal Reserve Banks. Financial institutions place orders for currency and coin through a voice response system.As in receiving, all prepared orders are independently counted by a team of cash department employees. Once the currency orders are ready for shipment, armored carriers pick them up from a secured location. Cash departments pay out an average of 750 million notes per year. The U.S. Mint ships the majority of new coins to contracted terminals, as well as Federal Reserve Banks. Arriving coin is verified by weighing each bag. Coins are counted individually only if the bag falls outside weight requirements. The majority of all coin is paid from the contracted terminals per Fed instructions. Administrative Support The cash departments administrative support group reviews and approves currency and coin orders before sending them to the paying teams. The group prepares reports to the Board of Governors on the amounts of currency and coin received, paid and destroyed. Administrative personnel are responsible for setting up and maintaining records that allow institutions to access the ordering system. They balance all daily transactions and administer customer support services, including notices to financial institutions. They also respond to inquiries and training employees in counterfeit detection and deposit quality. |
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