least six years, as required by Subsection 1.2.2.2, Proof of Completion of Audit. 2. Periodic Risk Assessments Finding: Skipping regular ACH Risk Assessments could leave your organization unaware of potential emerging risks. Solution: Perform an ACH Risk Assessment periodically to identify and mitigate potential risks in accordance with Subsection 1.2.4, Risk Assessments. We recommend you complete a risk assessment every 12-18 months. Develop a comprehensive risk management program that addresses the risks of your ACH activities — such as operational, credit and fraud risks — to ensure ongoing compliance. 3. Security Policies and Procedures Finding: Outdated or inadequate security policies may leave ACH data vulnerable to breaches or cyber threats. Solution: Develop and regularly update security policies in line with Section 1.6, Security Requirements. Stay ahead of emerging threats by adapting your policies to meet the latest industry standards and ensure the safety of ACH transactions. 4. Origination Agreements Finding: Missing or incomplete language in origination agreements can lead to compliance gaps or operational challenges. Solution: Review your origination agreements to ensure they include all necessary provisions required by Subsection 2.2.2.1, ODFI Must Enter Origination Agreement with Originator and Subsection 2.2.2.2, ODFI Must Enter Origination Agreement with Third-Party Sender. This includes risk management clauses, indemnification language and proper authorizations. Secure signed copies of these agreements for your records. 5. Training and Education Finding: The ACH Rules are complex! Without adequate training, employees may lack the necessary understanding of ACH operations and compliance obligations. Solution: Implement an ongoing ACH training program so your staff can receive regular updates on the latest ACH requirements. 6. Incoming NOCs and Correcting NOCs Finding: Improper handling of Notifications of Change (NOCs) can result in inaccurate data and compliance issues. Solution: Establish clear procedures for managing incoming NOCs and instructing Originators to make corrections in a timely manner, ensuring compliance with Section 2.12, Notifications of Change. Originators 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. 7. Exposure Limits Finding: Not setting or reviewing exposure limits can leave your organization vulnerable to financial risks. Solution: Define and regularly review exposure limits based on your organization’s risk profile, as required by Subsection 2.2.3, ODFI Risk Management. These limits help manage financial exposure and minimize the risk of significant losses. 8. Return Handling Finding: Improperly managed ACH returns can lead to delays and potential compliance issues. Solution: Develop efficient return handling procedures in accordance with Section 3.8, RDFI’s Right to Transmit Return Entries. Ensure your team processes returns promptly to minimize delays and stay compliant. 9. Record Retention Finding: Not retaining ACH-related records for the required duration can cause complications during audits or compliance reviews. Solution: Implement a record retention policy that aligns with Subsection 1.4.1, Retention Requirement for Records of Entries. Ensure ACH transaction records are securely stored for at least six years and can be easily accessed when necessary. 10. ODFI Due Diligence Finding: Inadequate due diligence on originators and third-party senders can expose your organization to unnecessary risks. Solution: Conduct thorough due diligence on all originators and third-party senders as outlined in Subsection 2.2.3, ODFI Risk Management. We recommend this include background checks, creditworthiness assessments and ongoing monitoring to manage potential risks. By tackling these common ACH audit findings with actionable solutions, you’ll not only ensure compliance with the ACH Rules but also help streamline your ACH operations and safeguard your organization from potential risks. 17 In Touch
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