FIACCT 05-25_00 Payments – Payment – Electronic Funds Transfer (EFT) – Overview

Effective: July 1, 1994
Revised: January 1, 2015
Reviewed: January 1, 2015

Purpose

This policy defines the policies and procedures for disbursements made through an Electronic Funds Transfer (EFT).

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Policy

A. An EFT is available for agency disbursements and must be approved in advance by the Division of Finance before the agency begins requesting the transfers.

B. Information for EFTs that are rejected by the bank will be returned to the agency processing the EFT. An EFT processed through the FINDER System will be returned to the FINDER Program. The agency may either correct the information and resubmit the EFT or process the transaction as a warrant.

C. If money is transferred through the EFT process and deposited into an incorrect account, the Division of Finance will attempt to recover the monies. If the Division of Finance is unable to recover the monies, the agency is responsible for taking the appropriate steps to make payment to the appropriate account and recover the monies. The Division of Finance will notify the agency if it is unable to recover the monies.

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Background

An EFT has become an efficient way of making disbursements. Many vendors prefer direct deposits to their bank account. There is a cost savings for the state using this option of payment. The process helps the State Treasurer better manage the State’s cash by giving him advance notice of pending payments so that he can adjust his investments to ensure that adequate cash is available. It also meets the requirements of some federal agencies that require an EFT.

There are three ways of processing an EFT:
1. Directly entering an EFT payment transaction through the FINET System
2. Interfacing with the Payment Tracking System (PTS), or
3. Processing EFTs through the State Treasurer’s Office.