ACH Compliance Audits

An annual audit of a credit union’s ACH operations is required by December 31. The National Automated Clearinghouse Association (NACHA) mandates this annual audit, which demonstrate to regulators that the credit union has put in place controls and checks and balances for automated clearing house (ACH) payments.

Below are a few of the more frequent problems we come across in ACH audits and are only a few of many checks we incorporate into our assessments.

Financial Institution ACH Policy

When a credit union has a clear ACH policy updated and in writing, it helps to ensure an easier ACH audit process.

Without a policy outlined for employees, ACH staff won’t have available guidance, and mistakes and confusion will take time and effort away from processing transactions.

Quite often, credit unions will copy ACH policies from other institutions or use the NACHA ACH manual for a policy. These are great places to start when creating a policy from scratch. However, CUs must be sure to edit those copied policies for their own institution if they are going to be truly useful.

Multiple Regulations Applicable to ACH Transactions

ACH transactions are largely regulated by NACHA rules, but there are other federal regulations that must be applied, such as:

- - - - E-Sign Act
      - Funds Availability (Reg. CC)
      - Electronic Funds Transfer Act (EFTA)
      - Bank Secrecy Act (BSA).

There can be significant consequences to these additional federal regulations and should be reflected in the credit union’s ACH policy.

Unauthorized ACH Debits

Quite often we find confusion between stop payment returns and unauthorized debits. We find this through the review of disclosures, forms and timeframes given to credit union members.

With an ACH compliance audit, the auditor can find these errors and can use these as opportunities to inform and to educate staff and to make recommendations for policy updates. Cleaner internal guidelines and updated processes for staff can support less confusion and less errors for future transactions.

ACH Audit Looks at Manual Processes Too

ACH transactions involve both manual processes and automated processes. The manual processes performed by the credit union personnel for ACH set up, input, and maintenance are all subject to error and need to be reviewed regularly. Some of the manual processing could include:

- - - - Processing returns
      - Posting to accounts
      - Transmitting to the ACH Operator
      - Ensuring that agreements are obtained
      - Monitoring origination files prior to transmission

Annual ACH Audits for Credit Unions

At Griffin & Furman, our ACH compliance audit services contribute to the quality of your credit union’s ACH services. We test against the most updated regulations, identify potential risks, review internal controls, and make recommendations for process improvements.

If you would like to talk about your credit union ACH audit, please give us a call.

(985) 727-9924