Municipal Software Inc. Vendor ACH Payments. Assembly, No (Quijano D-20/O Scanlon R-13)(Weinberg D- 38/Oroho R-24)

Transcription

1 Municipal Software Inc. Vendor ACH Payments Assembly, No (Quijano D-20/O Scanlon R-13)(Weinberg D- 38/Oroho R-24)

2 Overview Assembly, No (Quijano D-20/O Scanlon R-13)(Weinberg D- 38/Oroho R-24), authorizes governing bodies to pay their bills by using electronic fund technologies Requires Governing body approval by ordinance or resolution CFO is responsible for oversight and administration and must document and implement internal controls

3 Advantages Decreased cost of check stoke, envelope stock and toner Decreased time to generate checks No postage costs Vendors receive payments in a more timely manner Once the ACH payment gets to the bank it cannot be manipulated by the receiver or a third party

4 Disadvantages Internal Controls used for checks are inadequate for ACH payments ACH fraud is one of the fast growing crimes Very little time to stop payment in the event an error is detected after the fact Vendor Account information must be stored securely

5 ACH as Implemented in MSI (Version 2.55) Any vendor can be designated to be paid by ACH A valid routing number, account number, account type, and for the vendor are required

6 ACH as Implemented in MSI (Version 2.55) Access to the vendor routing/account number is a separate permission profile As an internal control, any user who can print checks/generate ACH file will *NOT* have access to edit the vendor routing/account number All edits to vendor ACH information is stored in an internal log with a user, date stamp and IP address.

7 Bills List All ACH payments will be marked on the list of bills

8 Printing Checks/ Generating ACH When printing checks, the system will indicate how many checks and ACH payments are in the run.

9 Printing Checks/ Generating ACH When checks are printed, a NACHA standard transaction file, or a CSV file is generated and stored in the database ready to be uploaded to the bank The date it is created, the user, and the IP address of the machine that created the ACH file are also stored in the internal log An is generated and sent to the vendor with information about the pending payment. (Payment amount, Invoice numbers, PO #)

10 Printing Checks/ Generating ACH Any users with transmit ACH permission will be able to initiate the ACH transmission. The detail of the transmission should be compared to the ACH Register report for verification. The method of transmission is determined by your bank. Upload file thru web interface. SFTP (Secure FTP). Must be configured by MSI and your IT department

11 Web upload via bank portal Uploading a NACHA or CSV payment file via an online portal is the simplest way to get started, but users need to be aware of some concerns for internal controls If the ACH file is uploaded via a web interface, it will exist in a plain text format on the users pc who is responsible for that upload. This is a potential area of concern as: The file could be edited before being sent to the bank. The NACHA file does have some rudimentary protection against edits, but freely distributed tools are available that can edit NACHA files, and generate new hash values that would make them valid A CSV file has no safeguards The file contains human readable account information, and the end user could keep it on the PC indefinitely

12 Internal Controls Multiple people must be involved with segregation of duties The employee generating payments should not have access to vendor ACH information, or have upload rights The employee uploading the ACH file should check the amounts and recipients against the ACH payment register (can be generated from the check register report) The employee reconciling the transactions should not be the employee processing or uploading the ACH transactions. Nor should they have edit rights to the Vendor ACH information Timely reconciliation is very important! MSI Software provides logs to track all changes to the vendor routing/account information as well as every ACH file created by the system Positive Pay for ACH. Some banks provide Positive Pay for ACH transactions We are considering adding optional ACH Edit Approval, where any changes to a vendor s ACH information would need to be approved by a 2 nd person

13 Other Notes: ACH payments can be voided like checks. But this does not cancel the transfer if it has already been sent to the bank! Voiding an ACH payment before it is transferred to the bank will invalidate the complete ACH file, and prevent it from being transferred. A new ACH file will need to be generated in its place Recalling of ACH payments via NACHA file will be available in the early spring of (Must be supported by bank)

14 Conversations to have with your bank Does the bank support ACH file processing, and in what formats? How much do they charge per transaction? Do they provide a web interface for file upload, and does it allow for initiation of a Void/Recall of a ACH payment? Will they cross reference an ACH payment file with a Positive Pay upload before processing? How do they want the ACH file transmitted? (SFTP, Web interface or some other method)

15 Municipal Software Inc. Capital Projects Module

16 Overview Optional Module to track bond sales and funded / unfunded balances Gives an overall picture of an ordinance and all it s funding sources Can be added to track ordinances already on your books

17 What fields does it require Introduced, Adopted & Effective date Total Debt Authorized Other Funding (State, etc..) Funding From Fund Balance Down Payment Useful life

18 What does it track Bonds Issued Other funding received Un-Issued Debt

19 Unfunded = Debt Authorized Down Payment Other Funding Received Funding from Fund Balance Bonds Sold

20 Spending into Unfunded Warnings are determined by taking your funded amount and subtracting paid/ordered from all linked Capital expense accounts.

21 Funded/Un-Funded Report

22 Planned Future Enhancements Automated Journal Entries Users will be able to setup macros to post journal entries when a bond/note is recorded or when recording receipts of other funding Blocking at the requisition level spending into unfunded by ordinance Blocking at the requisition level spending into ordinance beyond useful life

23 Municipal Software Inc. Bank Account Reconciliation

24 Overview Allows you to reconcile a bank statement back to the book balance Maintains outstanding check list Allows department users to see that a check has cleared Very easy to use Updated in version 2.4 to allow going back to previous months to view and/or edit results as of that month. Will no longer unclear all future months if it does not have to. Prior to version 2.4 once you reconciled a month, you could not go back to a month before, unless you wanted to start over from that month on.

25 1) Select Cash Account to reconcile 2) Set Date Range 3) Click the Load Button

26 Click the box for each check from the bank statement A Summary of Cleared Receipts, Checks and Other (GJ Adjustments) will be accumulated at the bottom All Receipts are marked as cleared automatically. Uncheck any that are in transit When finished The Reconciled balance should match the ending bank statement balance

27 Optionally you can import a CSV statement downloaded from your bank.

28 The first time you download a statement, open it in excel to see what columns contain your data On the import dialog, select the appropriate columns The system will then import your statement and clear all the checks that match An exception report will be generated with all entries in the bank statement the system could not reconcile

29 Examples of Exceptions Check amount on bank statement does not match amount in system Bank read error Fraudulent check Check on bank statement that is not in system Manual check not entered into the system Fraudulent check Misnumber (Check number does not match what was recorded) Receipts not matching up (Common) Often receipts are posted into the system in bulk, but might represent multiple deposits One deposit was posted as separate entries in the receipts journal.

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