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Notification of Correction ACH Rules

The Office of the State Treasurer has notified OFM of a renewed focus in the Automated Clearing House (ACH) network on compliance with Notification of Change (NOC) rules. Receiving financial institutions have been submitting violation notices more frequently than in the past. ACH Rules require an originator make changes specified in a NOC within six banking days of receipt of the NOC or prior to initiating another entry to the Receiver’s account, whichever is later. Agencies are encouraged to review internal NOC procedures and ensure compliance with the rule:

ACH Rules Text:

Subsection 2.11.1 ODFI and Originator Action on Notification of Change (NOC).

…Except as noted below, the Originator must make the changes specified in the NOC or corrected NOC within six Banking Days of receipt of the NOC information or prior to initiating another entry to the Receiver’s account, whichever is later.

Receiving a Notification of Correction

The State of Washington receives NOCs two ways:

• HRMS -  A financial institution can send a NOC directly to HRMS against payroll deposits. When a financial institution reports a NOC to HRMS, the information is reported to agencies through the Corrections and Returns Report (ZHR_RPTPY151). Agencies are strongly encouraged to run the Corrections and Returns Report daily to monitor for any NOCs.
• AFRS - A financial institution can report a NOC through AFRS against a smaller payment such as a travel reimbursement. Notifications that come through AFRS are not always reported through HRMS via the Corrections and Returns Report. A notification through AFRS is equally as important to remedy immediately, even when no notification has been made through the HRMS Corrections and Returns report. If a NOC is received through AFRS, OFM will email the employee and the payroll team identified in the HR & Payroll Contact List.

Important reminder: OFM will not share any bank account information as this information is Category 3 (Confidential Information) data and should never be transmitted through e-mail. Sending this information via e-mail creates a public record and without encrypted e-mail there is a potential for the information to be illegally obtained for misuse. For questions on how to correctly transmit PII data, please consult with your agency Public Disclosure, Privacy, or Security Officer.     

Agency Action Required

It is important that agencies act as soon as possible to avoid a violation or penalty. When receiving NOCs

1. The employee should immediately work with their financial institution to identify incorrect banking information.
2. The agency should gather and update any direct deposit form(s) as needed per your internal agency policy.
3. If necessary, payroll processors should use the Bank Details – Copy and Update Record user procedure to update an employee’s Bank Details (0009) infotype information.

Once information is updated in HRMS, the updated banking information will automatically transfer into AFRS. There is no further action required on the AFRS side.  

Questions?