Important changes to remember when conducting annual ACH audit

By: Kathy Miesse, Member Implementations Team Leader, AAP

Each year by December 1 all participating Depository Financial Institutions (DFI) and Third-Party Service Providers (TPSP) that provide ACH services are required to complete an annual ACH self audit of the previous year’s transactions to ensure they processed such transactions in line with the latest ACH Rules and Regulations. Having recently managed the completion of Corporate One’s ACH audit, I wanted to take this opportunity to remind those of you conducting your own audits of important changes in the Rules and Regulations that are new to this year’s audit.

Here are the top four changes to the 2010 Rules that also impact this year’s audit, as well as an explanation and/or helpful hints on how you can appropriately address the changes within your audit:

1. Authorization and Returns- Effective March 19, 2010
The Rules were refined to bring the NACHA operating Rules and Regulation E more unison.

• Clarify the language for an Authorization to be "clear and readily understandable"
• Change the "greater than" to "different than"
• Changed the WSUP to WSUD – Written Statement of Debit
• Retention of the WSUD is now one year from date of return
• Timeframe to request copy of WSUD is now 10 banking days instead of 60 days
• Expanded the use of the R39 for duplicate check/check conversion – if returned with two banking days no WSUD is needed

2. Stop Payments and Regulation E- Effective March 19, 2010

• Eliminate the six month time period for stop payments. Stop payment is in effect until all debits have been stopped
• Receiver will have to provide in writing the revoked authorization with Originator with 14 days timeframe or stop payment will cease
• Removed redundant language for R08 return code

3. Direct Access Registration- Effective June 18, 2010

• ODFI’s that had not registered under the current registration process will need to have registered no later than June 18, 2010.  ODFI’s that have already registered, or that registered prior to the effective date, will not need to re-register once the Rule becomes effective: Only to provide updates and changes.

4. Risk Management and Assessment Rule –Effective June 18, 2010
This rule provision outlines certain rights that ODFIs have related to their Originators and Third-Party Senders including, ODFIs are required to address the rights in the new agreements:

• Right to Terminate or suspend Originator
• Right to Audit and Originator or TPS and its Originators’
• The right to place restrictions on the types of ACH transactions being originated

If you have any questions regarding your annual ACH Audit, you may contact your Regional Payment Association or one of Corporate One’s Accredited ACH Professionals (AAP), Kimberly Craig: kcraig@corporateone.coop or Kathy S. Miesse: kmiesse@corporateone.coop.