To learn about a bank's "spending culture," you don't need expert auditors. You can just talk to the people who sell to it and examine what is bought from them.

Sometimes you can learn of poor practices by accident. I was talking to an Amtrak agent who told me about the individual who regularly bought a first-class Metroliner ticket from Baltimore to Washington when for a quarter of the cost he could have taken a regular coach train that takes six minutes longer.

I asked where the traveler works. A major New York bank, I was told.

One solution to this waste of bank money is to have an auditor go over every check the bank issues. But a companion step that some community bankers suggest is for management to get on friendly terms with the purchasing agents and vendors who sell the supplies that the bank buys.

Don't Be Obvious

Naturally a bank officer can't call up a purchasing agent and ask "Has my staff been buying unnecessary supplies?" or "Have my people been paying more than they should for services and goods you provide?"

Any purchasing agent who responds to those queries with specific examples of waste is bound to lose this account. You can be sure that the people who buy the supplies in the bank will find other suppliers as soon as they find that the present agent is a snitch.

But there are positive ways that the same results can be accomplished.

Invite Them to Lunch

One positive step is to call in the manufacturers' reps and sales agents who service the bank and let them go through the organization to see if the bank is up-to-date.

Sit down with these reps, preferably at an informal lunch. Hear what they have to say about what the bank can use in the way of new products and services, or about where the bank's approach and equipment is obsolete because of new developments. You can learn a lot.

Purchasing agents say yhey love to tell the managers how the bank can become more efficient, as this cements the relationship.

An Executive Responsibility

Why does top management have to become involved?

Sometimes this is needed simply because the employees who now do the ordering do not feel they should take initiative, but should simply follow the orders issued to them when they took over the responsibility.

In other instances, the top management can see opportunities from discussion with manufacturers' reps that the staff people could not glean out of a discussion, due to their limited expertise and responsibility.

Even in many of those cases where the manufacturers' rep knows that the bank has been ripped off by its own employee, it is likely that the rep will either talk directly or allude to the problem in an informal meeting.

A good rep knows that if the bank is being taken advantage of by its purchasing people, eventually this will be found out. Then the bank is likely both to fire the employee and break the relationship with the rep who allowed this to happen.

Cultural Issue

Finally, the managers of the bank must take the attitude that talking to the reps and sales-people is not just a case of looking for dishonesty.

Rather it involves probing to see if the entire bank culture needs changing.

How many banks have found that the staff looked at telephone calls as a free good until management found that they were getting so out of hand -- like calls to Aunt Minnie in Hawaii -- that the bank had to develop a system of control?

Talking to the people who service the bank can root out such attitudes in other areas of the organization to the benefit both of the bank and of the people who sell it the goods and services it uses.

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