The Green Book & ACH Payments

Transcription

1 Your State Association Presents The Green Book & ACH Payments Program Materials Use this document to follow along with the webinar presentation. Please test your system before the broadcast. Be sure to print enough copies for all listeners. Tuesday, October 4, 2016 Presenter: Mary Kate Cole Technical Support (for faster service please submit inquiries via or online): (Registration & Tech Support): - Phone- (877) FOR ADDITIONAL ASSISTANCE PLEASE REFER TO OUR FAQs

2 Kate Cole, AAP MK Cole Consulting

3 Green Book overview Chapter 1 Enrollment Chapter 2 Payment Processing Chapter 3 Non-receipt Chapter 4 Returns Chapter 5 Reclamations Chapter 6 Notification of Change Chapter 7 Contacts Chapter 8 Glossary This presentation and applicable materials are intended for general education purposes only and nothing in this presentation should be considered to be legal advice. Reference the NACHA Operating Rules and the Green Book for further information. MK Cole Consulting 2

4 Comprehensive guide to FIs that receive and send ACH payments to the federal government Comprised of the ACH Rules and 31 CFR 210, 208 & Book/greenbook_home.htm Last updated in 2016 All electronic Updates on the website MK Cole Consulting 3

5 Enrollment is for those that are already receiving Federal Government Benefit Payments Benefit Enrollment options: At the agency when they qualify for benefits At the financial institution via: ENR Paper SF1200 Telephone (customer must be present) Payment Cycling Corporate Enrollment FEDI SF 3881 MK Cole Consulting 4

6 ENR Standard Entry Class Code You need to know your government agency You need all data on person receiving benefits Only 15 characters of the last name Only 7 characters of the first name Social security number Is there a Representative Payee? What is the account number and type of account Special return reason codes for ENR R40 R47 MK Cole Consulting 5

7 FI s should be aware of the following: Enrollment in DD is not permanent; taxpayer must elect each filing year Payments must be returned when they can not be properly posted! NOCs can not be used to correct any information. The FI is responsible to post the DD to the account indicated on the ACH Record. You have met your responsibility if you post based on account number. If the taxpayer or the taxpayer s agent gave the incorrect account information, neither FMS nor the IRS will assist the taxpayer with recovering the funds, and the taxpayer is free to pursue civil action. If, however, the IRS made the error, it will make the taxpayer whole. MK Cole Consulting 6

8 Financial institutions may close an account to which benefit payments are currently being sent thereby revoking the enrollment authorization by providing a 30-day written notice to the recipient prior to closing the account. In cases involving fraud, accounts may be closed immediately. The financial institution cannot revoke the enrollment authorization by notifying the Federal agency and not the recipient. The 30-day written notice should remind the recipient to make other arrangements for the handling of his / her payments. The financial institution must credit to the recipient s account any payments received during the 30-day notice period. The financial institution must also immediately return to the Federal government all payments received after the 30-day notice period. A financial institution that closes the account without properly termination the enrollment must make the funds available to the recipient until proper notice is provided. MK Cole Consulting 7

9 Financial Organization Master File (FOMF) Derived from FRB s ACH Customer Directory Is your name, RT and contact information Used for: Reclamation notices Trace inquiries Marketing material FI is responsible for updating information Info comes from FedACH Participation Agreement MK Cole Consulting 8

10 Prenotification Agencies will prenote according to the ACH Rules Social Security does for enrollments and changes Payment Formats PPD, CCD & CTX Account Requirements The name of the recipient or beneficiary must be on the account, with some exceptions MK Cole Consulting 9

11 Misdirected Payment FI can move an entry to the correct account if you can identify it, at your own risk Send an NOC to correct information FI is not required to verify name on account! Notice of Misdirected Payment Notify the agency Return the entry Availability of Funds Following the ACH Rules Electronic Transfer Account (ETA) Low-cost account designed by Treasury MK Cole Consulting 10

12 Identify Treasury payments Company Batch Header Regional Financial Center symbol number = 310 (Kanas City), 303 (Philadelphia), and 312 (San Francisco) Originating DFI = in fields 5 and 6 there is a 3 and 6 Consumer Payment format = PPD and with addenda Identifying the paying agency, see pages 2-11 to 2-13 Garnishments Determine the sum of protected Federal benefits Company Entry Description Field will have an XX in positions for funds that are exempt from garnishment MK Cole Consulting 11

13 Close to 75% of missing payments are at the FI Review records on and around the date the recipient feels the payment should have posted The recipient files a nonreceipt claim with agency Tele-TRACE Claim FMS Form FMS Form MK Cole Consulting 12

14 General Information An enrollment is terminated if you return the entry You must return if you have actual or constructive knowledge of the death or legal incapacity of a recipient or rep payee Return after you receive a DNE Return if the account is closed Return if you don t have an active account for that account number MK Cole Consulting 13

15 R02 Account Closed R03 No Account/Unable to Locate Account R04 Invalid Account Number R06 Return per ODFI s Request R14 Representative Payee Deceased or Unable to Continue in the Capacity R15 Beneficiary or Account Holder (Other Than Rep Payee) Deceased R16 Account Frozen R17 File Record Edit Criteria (Specify) & IRS Returns Opt- In Program MK Cole Consulting 14

16 Your official notification of the death of a recipient DO NOT accept any entries after receipt of DNE Watch your flags! If you have knowledge of the death you must notify the government, a return meets that requirement DNE Errors Return ACH entries through ACH MK Cole Consulting 15

17 Partial payment from Notice of Reclamation Done by check NOT to the Originating Federal Agency, information is on the reclamation Attach a cover letter MK Cole Consulting 16

18 You may receive a dishonored return Most common errors Trace number Effective entry date Amount of payment Individual ID number Dishonored Return Codes R61 Misrouted return R67 Duplicate return R68 Untimely return R69 Field errors R70 Permissible return entry not accepted MK Cole Consulting 17

19 1. Contact the Federal Agency 2. Notify the recipient 3. If you returned an entry in error, you may have started the DNE process. 4. Initiate a new enrollment TreasuryDirect will notify you in writing or electronic of an error or duplicate payment Notice will include the following: Deposit account name Deposit account number Date and amount of improper payment MK Cole Consulting 18

20 If Two identical ACH returns are made for the same payment Then The Government Disbursing Office will automatically return the duplicate return And No further action is required by the FI MK Cole Consulting 19

21 If An ACH return was sent and the same payment was returned by check The financial institution was debited for a payment that was already returned Then The financial institution should promptly write a letter of explanation to the Federal agency that authorized the payment and include copies of the following: And FI s claim for a refund Debit advice Other documentation to confirm the duplicate return The FI awaits further notification from the authorizing Federal agency. MK Cole Consulting 20

22 Social Security benefit or disability (SSA) Supplemental Security Income (SSI) Black Lung disability (Dept. of Labor) Military and Coast Guard retirement, including allotments (DFAS) Civil Service annuity (OPM) Veterans Administration benefits (VA) Railroad Retirement Board (RRB) annuity US Coast Guard Worker s compensation (FECA) DC Pensions Compensation Act (Dept. of Labor) Any other Federal retirement or annuity MK Cole Consulting 21

23 Payments not subject to reclamations Federal salary, allotments, and travel payments U.S. savings bond payments Vendor/miscellaneous payments IRS tax refunds Discretionary allotments Public Debt payments (TreasuryDirect) Other types of Federal ACH payments MK Cole Consulting 22

24 The RDFI is liable for ALL benefit payments received after the death or legal incapacity of a recipient or death of a beneficiary; unless the RDFI meets the qualifications for limiting its liability. If the RDFI does not qualify for limited liability, they will be debited for the full amount of the reclamation; the debit action is final. MK Cole Consulting 23

25 An RDFI may qualify to limit their liability if 1. It certifies that it did not have actual or constructive knowledge of the recipients' death or incapacity at the time of the deposit of any postdeath benefit payments 2. It returns all post-death payments it receives after it learns of the death and 3. It responds to the Notice of Reclamation completely and adequately, so it is received by the Government Disbursing Office within 60 days from the date of the notice. MK Cole Consulting 24

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30 Agency sends with 120 calendar days after they have actual or constructive knowledge of the death of beneficiary The RDFI has up to one day to react to reclamation The RDFI can protest if they feel the agency did not meet the deadline There is a 6 year limit to reclamations, but if there are funds in the account to cover the notice, you should pay it RDFI has 60 days to respond MK Cole Consulting 29

31 If you can limit your liability, you will only be debited for the 45-day amount The 45-day amount is the dollar amount of the postdeath benefit payments received within 45 calendar days following the death. MK Cole Consulting 30

32 FI receives 4 payments of $200 each after death of beneficiary. Total amount on the Reclamation is $800 Amount in account and paid by FI with Reclamation is $300 Amount due from account holders is $500 Amount collected from account holders is $250 Outstanding amount due is $250 Amount debited to the FI is $200 MK Cole Consulting 31

33 FI receives 4 payments of $200 each after death of beneficiary. Total amount on the Reclamation is $800 Amount in account and paid by FI with Reclamation is $300 Amount due from account holders is $500 Amount collected from account holders is $500 Outstanding amount due is zero MK Cole Consulting 32

34 FI receives 4 payments of $200 each after death of beneficiary. Total amount on the Reclamation is $800 Amount in account and paid by FI with Reclamation is $750 Amount due from account holders is $50 Amount collected from account holders is $0 Outstanding amount due is $50 Amount debited to the FI is $50 MK Cole Consulting 33

35 FI receives 4 payments of $200 each after death of beneficiary. Total amount on the Reclamation is $800 Amount in account and paid by FI with Reclamation is $0 Amount due from account holders is $800 Amount collected from account holders is $0 Outstanding amount due is $800 Amount debited to the FI is $200 MK Cole Consulting 34

36 An RDFI has constructive knowledge if the institution would have learned of the death if it had followed commercially reasonable business practices. The phrase commercially reasonable business practices is a flexible concept since, for example, what is a commercially reasonable practice for a large bank may not be commercially reasonable for a small rural bank, and vice versa. Return the entries using R14 or R15 MK Cole Consulting 35

37 If payment has been made Get a copy of front and back of any checks And / or receipt from the federal agency If all payments have been paid the RDFI should not receive the reclamation MK Cole Consulting 36

38 Notice of Reclamation form carries a unique Reclamation Ticket Number MK Cole Consulting 37

39 If the person did not die, you need evidence Driver s license, picture ID or other evidence similar to that required for cashing a check, if they appeared at the RDFI A signed, dated and notarized statement attesting to the fact that the recipient or beneficiary is alive if, he/she is unable to appear at the RDFI A written statement from the authorizing Federal agency verifying that the recipient or beneficiary is alive If the person has died and the date, month or year are wrong Send a copy of death certificate with Reclamation Write all of the information on the Reclamation There may be a subsequent notice of reclamation MK Cole Consulting 38

40 Use an NOC for recurring benefits C01 Incorrect Account Number C02 Incorrect Routing Number C03 Incorrect RTN and Incorrect Account Number C05 - Incorrect Transaction Code C06 Incorrect Account Number and Incorrect Transaction Code C07 Incorrect RTN, Incorrect Account Number and Incorrect Transaction Code MK Cole Consulting 39

41 Follow the ACH Rules for creating an NOC NOC should be processed within two payment cycles If not, confirm that you did not receive a refused NOC MK Cole Consulting 40

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45 Questions: Your Regional Payment Association Resources book_home.htm MK Cole Consulting 44