ppms 101 corrections presented by lynn melton. 2 part 5 - corrections ach return & notification...

PPMS 101Corrections

Presented by Lynn Melton

2

Part 5 - Corrections

ACH Return & Notification of Change Report

Positive Pay ACH Reversals/Cancel an Advice Stop Payments/Check Cancellations Hand Drawn Checks PPMS Screens – PS1005, PS1006 &

PS1007

ACH Return & Notification of Change Report

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ACH Return & Notification of Change Report US Bank produces a report each

banking day that documents:Notification of Change

Transit Routing Number Account Number Coding (checking/savings)

Rejected PrenotesItems Returned

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ACH Return & Notification of Change Report Notification of Change

Lynn or Brenda will email the colleges banking contact with the Notification of Change obtained from the receiving bank of the state employee.

These changes stem from a variety of reasons why the receiving bank is requesting the change:

Information on PS0014 is incorrect Information on screen PS0014 partially correct, but

requires bank to manually post, versus automatically Employee changed account number and failed to notify

college Bank implements new system requiring new account

structure.

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ACH Return & Notification of Change Report Are these Notification of Changes

correct? About 98% of the time, yes.

Contact the employee to let them know that the next payment will be in check form.

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ACH Return & Notification of Change Report Notification of Change – Examples

To: Colleges Banking ContactRe: Bank Notification

I received notification from the bank today requesting the following change:

Employee NameChange account numberChange transit routing numberChange coding (checking/savings)

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ACH Return & Notification of Change Report Rejected Prenote

Lynn or Brenda will email the colleges banking contact with the Rejected Prenote.

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These changes stem from a variety of reasons why the receiving bank is rejecting the prenote:

Bank could not find employees account based on info from screen PS0014

Employee changed or closed account number and failed to inform college

Information on PS0014 is incomplete or incorrect for ACH purposes

Transit Routing Number was taken from a Deposit Slip

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Once you receive the email from Lynn or Brenda, the Payroll Payment Method field on screen PS0014 should be changed from a “D” (deposit) to a “C” (check) to create a check until the corrected information is received by the employee or bank.

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Once the corrected information (transit routing number, account number or account type) has been input into screen PS0014 and the Payroll Payment Method has been changed back to a “D” (deposit), a “Y” in the Prenote Indicator field will indicate that the next payroll processed for this employee will create a payment via a check and a test prenote.

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ACH Return & Notification of Change Report Items Returned

Lynn or Brenda will email the colleges banking contact with the Items Returned obtained from the receiving bank of the state employee.

The returned items stem from a variety of reasons why the receiving bank is rejecting the funds:

Closed or Frozen Account Account could not be located Account number is invalid Transit routing number was taken from a deposit slip

Banks have 72 hours to legally hold the funds prior to returning or posting the funds to an account.

Positive Pay

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Positive Pay Each payroll, the Bellevue office sends the

bank the employees name, SID and amount. When an employee negotiates a payroll

check, this is matched with the information on the tape. If it matches, great! Processing continues and the

check is considered negotiated and now void. If it does not match, the State Board gets notified

and a decision must be made regarding the payment or rejection of the check.

Positive Pay

Current trends Order checks from Office Depot with payroll bank

account and write checks to Safeway/Walmart. Steal check, endorse the back of check using the

employee’s name, then endorsing it again using fraudulent name.

Deposit stolen check through ATM with no endorsement.

Take very good copy of check, deposit copy….2 months later, deposit the original (valid) check.

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ACH Reversals/Cancel an Advice

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ACH Reversals/Cancel an Advice When to cancel an Advice (process

an ACH Reversal)Golden Rule: ONLY when funds have

been returned to the payroll account. (see also Items Returned)

Overpayment Contract/# of hours paid in error Leave without pay not posted NOTE: Garnishments not processed are no

longer a valid reason to request a reversal.

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ACH Reversals/Cancel an Advice When NOT to cancel an Advice

Employee closed their accountEmployee has frozen accountEmployee decides need check payment

(divorce, creditor/IRS have garnished checking account or theft)

Garnishments/child support not taken

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ACH Reversals/Cancel an Advice Deadline for requesting to cancel an Advice

One BANKING day (key word here - has nothing to do with our state work schedule), plus 2 banking hours after cut-off is the accepted deadline to start the process. For example:

Cut-off processed on Wednesday. Deadline would be Friday morning at 10:00am.

Cut-off processed on Friday with a Monday Banking Holiday.

Deadline would be Wednesday morning at 10:00am.

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ACH Reversals/Cancel an Advice If it is found that an advice must be

canceled after the 10:00am deadline has passed, call Lynn Melton at SBCTC. Lynn will determine if there is a possibility that the reverse can be processed successfully. All the steps remain the same, however, the waiting period is extended to 5 (five) days instead of 3 (three) days after payday and if given prior to the 5th day, the bank can take back on the 5th day.

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ACH Reversals/Cancel an Advice Once it has been determined that canceling

an advice is necessary, complete the following 3 steps in order:1. Complete the “US Bank ACH Services Fax

Adjustment Request” form.2. Call Lynn Melton or Brenda Philpott at (360)

704-4392 or email to [email protected] to request the Advice to be “reversed”.

3. Fax the form to US Bank at: (866) 822-0276. This is printed in the upper right corner of the form.

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Completing the “US Bank ACH Services Fax AdjustmentRequest” form

ACH Services RequestItem Adjustments

If you would like to confirm your request, please call (651) 495-7012 or (800) 944-7504, Opt. 2

Company Name: The Best Community College Company ID Number:

91-xxxxxxx

Requested by: Suzie Payroll Telephone Number:

(800) 123-4567

ACH File or Batch

Company Name – your college nameRequested by – person completing the formTelephone number – your direct telephone number, including ext.Item Adjustments – circle “Reversal”

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Individual ID number – employees SID (not SSN) Amount – the NET amount of Advice Circle Type – circle “CR” Account Number – account number shown on

screen PS0014

123-45-6789 246.17 CR/DR 45698701

Individual ID Number

Amount Circle type Account Number

Completing the “US Bank ACH Services Fax Adjustment Request” form

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R/T Number – routing transit number shown on screen PS0014

Individual Name – employees name Effective Posting Date – payday (not cut-off) Date file sent – leave blank

3250008471 Joe College

3/26/2012

RT Number Individual Name

Effective Posting Date

Date File Effective

Completing the “US Bank ACH Services Fax Adjustment Request” form

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Call SBCTC at (360) 704-4392 or email to [email protected] to request the advice to be “reversed”.

The required information needed is:1. College Name2. Employee’s Name (Last, First, Middle I)3. Net amount of advice

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After receiving approval from Lynn or Brenda, fax the completed form to:

Fax to: (866) 822-0276 Attn: ACH ADJUSTER Date: 3/21/2012


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After you fax the form to US Bank, the bank will call SBCTC to verify that processing is approved. This is necessary because the colleges do not have “signing authority” on the payroll bank account and cannot approve such a transaction. This is recorded and monitored at the SBCTC for further processing.

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Once all the steps have been completed, it is not known that the funds will, or can, be returned to the payroll account. This is only verified (not guaranteed, but verified) the next banking day after payroll occurs.

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If the advice was for an incorrect amount or a deduction was/was not taken correctly and the employee is to receive a different net amount, a hand drawn check may be produced. However, SBCTC will not guarantee that the funds will be returned to the payroll account until the three-day waiting period has expired.

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The three (or five) -day waiting periodUS Bank has a “Two Day Recall” clause, which

simply means that they can take the funds out of the payroll account because complications from the receiving bank have made it impossible for them to retrieve the funds from where they were initially sent.

(Note: The three-day becomes a five-day waiting period if the initial request to process the ACH Reversal passes the 10:00am deadline.)

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Some of these complications include: The receiving bank account has a negative

balance and the funds are no longer there to retrieve the net pay sent via advice. (In other words, the employee’s account was NSF and the receiving bank will not refund the total net amount. Partial amounts are not an option, only full net payments will be negotiated.)

The employee withdrew all the funds from his/her account after the deposit and therefore there is nothing to send back to the payroll account at US Bank.

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Some of these complications include: The account entered in the PPMS system

sent it to a closed account. In this case, the receiving bank will “reject” the $’s and send it back to the payroll account at US Bank. If a reverse is put on this transaction, it creates a “double” transaction for only one “issue” (the “reject” is the first and the “reverse” is the second). This causes bank reconciliation problems between SBCTC and US Bank and quite often delays the process of getting the dollars back into the payroll account.

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Three days after payday, US Bank will guarantee the funds that have been returned to the payroll account. This is when the SBCTC will also guarantee funds to be distributed to the employee by a hand drawn check. It is your college policy allowing the college to incur the liability to pay the employee on payday, even though the funds are not guaranteed until the third day after payday (five days if the process started after the 10:00am deadline).

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ACH Reversals/Cancel an Advice If the funds come back to the payroll

account, Lynn or Brenda will email the College’s Banking Contact the name of the employee and the amount deposited into the payroll account.

If the funds do not come back, there will be no email.

In other words….no news is bad news .

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ACH Reversals/Cancel an Advice Once notified that the funds were deposited

into the payroll account, a cancellation of the advice is input into PPMS, a hand drawn check can be produced and input into PPMS and finally given to the employee.

If the funds did not return to the payroll account, a cancellation of the advice does not make the funds come back. In fact, that simply wins you a call from Lynn asking you to reverse the cancel.

Stop Payments/Check CancellationsThe dog ate my check….I shredded my check….my check was stolen….…and other perils of processing checks

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Stop Payments/Check Cancellations

There is no such thing as a stale dated check (a check that is over 90 days old). US Bank has negotiated checks that are 13 years old.

*Yes, these get rejected because they have already been dealt with.

- Canceled and Reissued- DOR, Unclaimed Wages

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Check demolition The dog/bird ate my check The check was washed The check was shredded

Lost/Stolen/Theft Lost in the mail Purse/wallet stolen Car broken into

An “Affidavit of Lost or Destroyed Check” must be completed, emailed/faxed to the State Board prior to requesting a StopPayment.

When to request a Stop Payment:

**NOTE: THE ONLY TIME STOP PAYMENTS ARE PROCESSED IS IF YOU DON’T HAVE THE ORIGINAL CHECK IN YOUR POSSESSION AND YOU HAVE A COMPLETED “AFFIDAVIT OF LOST OR DESTROYED CHECK”.

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Stop Payments/Check Cancellations When NOT to request a Stop Payment

You have possession of original check“Affidavit of Lost or Destroyed Check”

not completed, accurate or un-readable Limitations for processing a Stop

PaymentStop Payments can not be processed on

Banking Holidays and after 3:00 on banking days.

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Process Verify check is on US Bank Account Reconciliation Plan

report. Complete an Affidavit of Lost or Destroyed Check Fax Affidavit to (360) 704-4417 or Email scanned Affidavit to [email protected]

Stop Payment processed on US Bank SinglePoint website

Documentation emailed back to requesting college Failed Stop Payment: can request copy of check DO NOT CANCEL Successful Stop Payment – can reissue if appropriate

CANCEL CHECK

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Verify check is on US Bank Account Reconciliation Plan report

Why?Because if it’s not listed on this report it is no longer an outstanding check, meaning the bank has negotiated (deposited or cashed) the check.

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Stop Payments/Check Cancellations Stop Failed – Check Already Paid

DO NOT cancel check in system as the check has been negotiated

Can request a copy of the front/back of check to verify signature

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Stop Payments/Check Cancellations Stop Payment Placed Successfully

Verify if Stop Payment is still valid the following banking day

Cancel check on next available payroll - Stop is valid for 12 months

Check is entered into the Incomplete Stop Payment database at the State Board and remains on report, sent monthly, until check has been correctly canceled in PPMS

Process a Hand drawn check, input into PPMS and give to employee (don’t forget to pay taxes).

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Stop Payments/Check Cancellations Why cancel the check in PPMS?

Once the check has a valid stop payment, it becomes a non-negotiable item

If the check is not cancelled in the PPMS system, the income will still be recorded on the employees W-2 at year end

Not canceling the check produces an outstanding item on the bank reconciliation

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If you don’t cancel the check within 12 months after the stop payment has been processed, another stop payment must be made in order for the check to remain non-negotiable. Stop payments are only good for 12 months and then expire, releasing the check as a negotiable item. Canceling the check in the PPMS system produces a “cancel check” on the tape US Bank receives every processed payroll, telling them that this check is no longer a valid, negotiable instrument.

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Once a check has been cancelled, a system payroll report is produced listing all the cancellations (advices and checks) and sent to the SBCTC. These cancelled checks are entered into the access database. If all the steps have been completed in the correct order listed above, this is the final process that finishes the stop payment transaction. If not everything in the process has been completed, the item remains on your monthly Incomplete Stop Payment Report sent out by SBCTC.

Hand Drawn Checks

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Hand Drawn Checks

Calculate Net Pay Request Hand drawn check Input Hand drawn into PPMS Give Employee Hand drawn check Pay associated taxes

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Hand Drawn Checks

Calculate Net PayUse same amount of check that Stop

Payment was placedRun test payroll with all associated

deductions, reductions & contributionsCreate spreadsheet to calculate net pay

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Hand Drawn Checks

Request Hand drawn check from Business Office Input Hand drawn into PPMS on the next available

payroll Use screens PS1006 and PS1007 (covered next) First 2 digits of check # in PPMS needs to be your district

number Check # needs to be 8 digits long Do not use alpha characters, only numeric characters

Give Employee Hand drawn check, documenting release date in file

Pay associated taxes based on your tax deposit schedule (monthly or semi-weekly)

PPMS ScreensPS1005, PS1006 & PS1007

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PS1005 – Automatic Check Cancellation Screen

PS1006 – Cancellation/Overpayment/Hand drawn Header Screen

PS1007 – Cancellation/Overpayment/Hand drawn Distribution Screen

PPMS Screens – PS1005, PS1006 & PS1007

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PPMS Screens – PS1005Function: (A)dd Screen: PS1005

Key 1: BlankKey 2: BlankKey 3: Payroll Schedule

Check Date: Date ck was issuedEmployee ID: SSN:C/A: C if Check, A if AdviceCheck/Advice #: 8-digit check or advice number

Once you press enter it is gone - only to be seen again on PS1006 and PS1007.

This screen allows the user to cancel many checks at the same time, sending the data to fill in screens PS1006 and PS1007.

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PPMS Screens –PS1006Important fields to ALWAYS check:

“C/O/H”: Cancel/Overpayment/Handdrawn(the “C” never means “check” – always CANCEL)

“REVERSE?”: do you want to process the opposite of what is in the C/O/H field?

“QTR/YR”: especially important when crossing calendar years

“QTR/YR for deductions”: always match the QTR/YR with the income – always

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PPMS Screens –PS1006

What is wrong with the following statement?

STATEMENT: “I’m going to cancel Joe Smith’s Handdrawn check issued on 2/9/07 in the amount of $72.56 that was sent through the wash.”

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PPMS Screens – PS1007

This screen documents the budget/account code the earnings is being charged to or reversed from.

If posted from PS1005, you should have no changes to make. Otherwise, input according to original check or calculations for handdrawn.

Questions??

ppms 101 corrections presented by lynn melton. 2 part 5 - corrections ach return & notification...

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