ACH Audit Services
The NACHA Operating Rules require every participating financial
institution to conduct an annual audit of their ACH operations and
related processes to ensure system-wide
compliance. This audit must be conducted no later than
December 1st each year.Who better to conduct your annual ACH Audit than your
resource for training and answers to ACH processing
questions?
An Accredited ACH Professional (AAP) from The
Payments Authority staff can conduct your annual ACH audit and examine
each facet of your ACH operations including receiving, originating, risk
exposure, customer service risk, treasury payment risk, and certify your
audit by reviewing each risk exposure point. The audits that we have
performed to date indicate that many financial institutions face
potential losses due to lack of staff training, ACH contingency plans,
management and audit policies, contracts with third-party processors and
written documentation for ACH processing procedures.
ACH Audit
Certification Letter
The Payments Authority audit services
include:
- Performance of audit
requirements as required by Appendix Eight of the ACH Rules
- Review of operating
procedures and internal controls
- Review of balancing and
reconciliation functions
- Written ACH Audit
Management Report with findings and recommendations for improvement at
the conclusion of the audit
Essential
areas of compliance:
- Open of business funds
availability
- Dual control for processing
and balancing
- Correct and timely ACH
returns
- Stop Payment and Affidavit
procedures
- Proper handling of Federal
Government transactions
The survey
says…
In a recent
survey conducted by The Payments Authority, members provided their
thoughts on the topic of audit services, allowing us to address their
questions and concerns...
“Our internal
auditor conducts our ACH audit.”
Many of our
members utilize their internal auditors to conduct the annual ACH audit.
It is important that they attend training at least once a year to stay
abreast of changes in the ACH rules. Remember that whoever
conducts the audit should have nothing to do with daily processing or
balancing. Consider purchasing our ACH Audit Interactive Workbook, which is designed to help your conduct,
complete and document your ACH Audit.
“Our
CPA firm conducts our ACH audit. Why should we have The Payments
Authority do it instead?”
Many audit firms have recognized the
need to provide full audit services, including the ACH audit, and
several firms have sent their auditors to our ACH training. If you
feel comfortable that your auditors understand your ACH risk and
requirements, there is no reason not to use them.
“It’s too
expensive.”
How expensive is
taking a loss for errors or non-compliance? The ACH is growing and with
so many new transactions, exception processing is more complicated than
ever. The ACH Audit is a small investment to make to assess your
potential risks. If you don’t fully understand return time frames
and restrictions, you may already be incurring unrealized
expenses.
“We haven’t taken a loss
yet and feel the ACH audit is unnecessary.”
That’s like saying you’re
not going to buy automobile insurance because you’ve never had an
accident. Do what you can to recognize and minimize possible
loss.
“We have a third party
processor.”
Third party
processors do not audit financial institutions for whom they process and
are not responsible for keeping you in compliance. It is important to
review your third party contracts and determine whether they contain a
“hold-harmless” clause in the event that the processor makes
an error that could cost you money and harm to your
reputation.
Fees for
Audit Services vary depending on asset size, whether you are
currently acting as an RDFI only, or if you offer ACH Origination
services. For more information, contact Cindy Thompson via e-mail
at cthompson@thepaymentsauthority.org
Schedule
your ACH Annual Audit now and be assured of a timely and accurate
audit!
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