This policy relates to electronic funds transfer (EFT) which is defined to be the transmission of an electronic message to a financial institution instructing it to make an electronic entry reflecting the transfer of ownership of funds from one depositor to another. The Loyola University of Chicago (LUC) Treasurer’s Office – Cash Management Services (CMS) is responsible for the daily management of University bank balances and the general oversight of EFT activity and should be consulted to provide assistance in determining when an EFT is the most cost effective and appropriate payment mechanism.  The Chief Financial Officer, Chief Business Officer, and Treasurer for LUC are responsible for the security and administration of EFTs and will provide EFT facilities for all appropriate banking institutions approved by the Board of Trustees. Subject to the system security and other procedures outlined in this document, the Director, Cash Management, Associate Director Treasury Operations, Sr. Treasury Analyst, Sr. Treasury Analyst, e-Commerce, or other individuals designated by the Chief Financial Officer, Chief Business Officer, and Treasurer are authorized to initiate EFTs.

EFT payment method is used when a payment request meets one or more of the following conditions:

 

1. Legal or contractual requirements
2. Expedited payment required
3. Standard industry practice
4. Guaranteed payment delivery requested
5. Most cost-effective payment procedure

1. Pre-populated account templates
2. Dual account reconciliation

There are two methods of payment for Repetitive EFTs.  The first method is ACH (Automated Clearing House), and the second method is wire transfer.  The effective difference in methods is that an ACH payment takes LUC’s bank one business day to transfer funds from LUC to the vendor, and a wire transfer is processed on the same business day from LUC to the vendor. An ACH is the preferred method of payment, but in case of an emergency or required business need, a wire transfer will be processed.

The procedure to initiate a repetitive ACH to an unrelated party is subject to the same financial policies, procedures, and controls that govern disbursement by check:

The vendor must complete the Electronic W8/W9 form in order to be set up as a vendor in Lawson. The department providing signature approval of the ACH payment should complete the Electronic Payment Requisition form and attach supporting documentation. Once the Budget Administrator has approved the form it will be sent to Accounts Payable (AP) for approval and processing. If the ACH payment exceeds $5,000 a secondary Budget Administrator will need to sign off on the payment.

AP will set-up, change or delete the ACH payment information on the Lawson System. The ACH payment information will remain active unless the same process is completed to delete or change. If a change of ACH payment information is requested, verification of the updated crediting instructions via phone, using the vendor phone number on file in the Lawson system, is required.

AP will send the ACH vendor file to the bank when there are any ACH vendor payments that need to be processed. AP will electronically send forms EFT Database Requisition (EFT03B), AP265, and UI160 to CMS confirming the total amount of the vendor ACH file. CMS will compare and review the reports showing the ACH payments with the bank’s ACH File receipt. Once CMS has reviewed these reports, CMS will approve the ACH vendor file for processing at the bank.

General Accounting will reconcile the transaction to the General Ledger in a timely basis.

If the Lawson ACH system is unable to process a vendor ACH payment due to required addendum information that exceeds 40 characters, like Federal and State Tax Payments, etc. CMS will process the ACH payment.

The procedure to set up and initiate a repetitive ACH or wire transfer to an unrelated party is subject to the same financial policies, procedures, and controls that govern disbursement by check:

All requests to set-up or revise a repetitive ACH or wire require a completed EFT Authorization Form (Form EFT01) by an authorized Budget Administrator and forwarded to CMS for approval at least fourteen business days prior to the first payment request.

The department providing signature approval of the payment should complete form EFT01, which includes a description of the purpose of the transfer, the maximum dollar amount and the approximate frequency. Attached to the form will be a copy of the electronic funds transfer instructions received from the vendor-. A current W-9 (domestic vendors) or W-8BEN/W-8BEN-E (foreign vendors) must be on file for the EFT request to be processed. The EFT01 form will be sent to the Budget Administrator for approval; if the maximum dollar amount exceeds $5,000 a secondary Budget Administrator has to approve the form. Once the Budget Administrator(s) have approved the form it will be emailed to CMS for review and approval. CMS will route the request to AP, General Accounting and/or SPA for additional approval. Once the required departments have approved the EFT01 form, CMS will send it for final approval by the Treasurer.*

*Note: EFT payments to foreign vendors must also be reviewed by Tax & Financial Compliance for any tax implications or additional required documentation.

If any information on the EFT Authorization form changes the requesting Department is responsible for completing a new EFT01 form at least fourteen business days prior to the next repetitive transfer being initiated.

The EFT Repetitive Authorizations will be reviewed and renewed every three years from the prior approval date.

Once a Repetitive EFT payment has been authorized by all parties, the department will submit the EFT Requisition (Form EFT02A) for each payment request. Each request is required to be completed by the requestor and sent to the Budget Administrator for approval; if the maximum dollar amount exceeds $5,000 a secondary Budget Administrator has to approve the form. Upon Budget Administrator(s) approval, the completed EFT form and documentation supporting the requested dollar amount is emailed to CMS for processing. CMS must receive the EFT Requisition form prior to noon the day BEFORE the transfer is required.

AP or General Accounting will record the transaction in Lawson. General Accounting will reconcile the transaction to the General Ledger in a timely basis.

The procedure to initiate a non-repetitive funds transfer to an unrelated party should follow a similar process but include additional controls to protect against unauthorized or unapproved use:

 

When a non-repetitive funds transfer is required, the requesting department will email the Non-Repetitive Wire Transfer form (EFT02B) to CMS for review. The EFT02B form must have attached supporting documentation including support for the wire transfer amount and a copy of the electronic funds transfer instructions received from the vendor. Banking instructions should include the beneficiary bank name, address, and routing/SWIFT code as well as the beneficiary account number, name, and address. A current W-9 (domestic vendors) or W-8BEN/W-8BEN-E (foreign vendors) must be on file for the EFT request to be processed. Each request is required to be completed by the requestor and sent to the Budget Administrator for approval; if the maximum dollar amount exceeds $5,000 a secondary Budget Administrator has to approve the form. Upon Budget Administrator(s) approval, the completed EFT form and documentation supporting the requested dollar amount is emailed to CMS for processing. CMS will review the request to confirm the EFT02B form is completed in full and that appropriate supporting documentation is present. CMS will route the request via DocFinity to AP, Tax & Financial Compliance and/or SPA for additional approval. Department approvals are stamped on the EFT form as each department approves the request. Upon completion of required department approvals, the EFT02B form will route to CMS for final review and payment processing.

The transfer must be initiated via computer system by the Director, Cash Management, Associate Director, Treasury Operations, Sr. Treasury Analyst, Sr. Treasury Analyst, e-Commerce or other designee of the Chief Financial Officer, Chief Business Officer or Treasurer. The transfer must be confirmed (released) via computer based system by a second person from the aforementioned list. The person who initiates the wire transfer CANNOT confirm or release the wire transfer; a second party must approve the transfer.

AP will record the transaction in Lawson. General Accounting will reconcile the transaction to the General Ledger in a timely basis.

Non-repetitive EFTs to unrelated parties present the highest security risk to LUC and should be used only when absolutely necessary. Repetitive EFTs should be established in circumstances where a transfer routing is likely to be used more than once.

The procedure to establish a database of repetitive electronic credit or debit EFTs is subject to the same financial policies, procedures, and controls that govern collections and disbursements by check. An electronic credit is defined as an authorized electronic transfer from LUC’s bank account to a consumer’s bank account. An electronic debit is defined as an authorized electronic payment from the consumer’s bank account to LUC’s bank account.

The EFT Database Authorization (EFT03) will be emailed by the Budget Administrator to CMS for approval. CMS will route the request to AP and General Accounting for additional approval. Once the required departments have approved the EFT03 form, CMS will send it for final approval by the Treasurer. This request for approval must be sent at least fourteen business days prior to the first payment. EFT03 form should include a description regarding the purpose of the transfer, the database name, the names of the persons in the department authorized to approve the transfer, the maximum dollar amount, the approximate frequency, and the GL Account Number and Account Code. If any information on the EFT Database Authorization form changes the requesting Department is responsible for completing a new EFT03 form at least fourteen business days prior to the next transfer being initiated. The Database Authorization EFT03 will stay active for a period of three years. Form EFT03 should be completed to renew or delete the database authorization.

The LUC department authorized to process an electronic credit or debit against a consumer’s account will be required to maintain the file of authorizations signed by the consumers authorizing the electronic credit or debit.

The LUC department will establish the proper internal security procedures and controls to verify that only authorized electronic credits or debits are processed. If the LUC department needs assistance in establishing these procedures CMS will assist.

The EFT Database Requisition (EFT03B) will be emailed to CMS for processing. The requesting department who is processing the EFT03B will attach supporting documentation for the dollar amount. CMS will compare and review the EFT form and supporting documentation with the banks ACH File receipt or bank generated report. Once CMS has reviewed these reports, CMS will approve the file for processing at the bank.

General Accounting will reconcile the transaction to the General Ledger in a timely basis.

The procedure for a department other than the Treasurer’s Office to initiate a repetitive EFT between LUC bank accounts is subject to a similar authorization review process as payments to outside vendors.

 

All requests to set-up or revise a repetitive LUC Bank Account to LUC Bank Account electronic funds transfer (Form LUtoLU.1) should be completed by an authorized Budget Administrator and emailed to CMS for approval at least fourteen business days prior to the first payment request.

The department providing signature approval of the payment should complete form LUtoLU.1 which includes a description regarding the purpose of the transfer, all crediting instructions, the maximum dollar amount, the names of the persons in the department authorized to approve the transfer, and the approximate frequency.Once the Budget Administrator has approved the form it will be emailed to CMS for approval. CMS will route the request to General Accounting for additional approval. Once the required departments have approved the LUtoLU.1 form, CMS will send it for final approval by the Treasurer.

If any information on the LUC Bank Account to LUC Bank Account EFT Authorization form changes, the requesting Department is responsible for completing a new (LUtoLU.1) form at least fourteen business days prior to the next repetitive transfer being initiated.

The Database Authorization LUtoLU.1 will remain active for a period of three years. Form LUtoLU.1 should be completed to renew or delete the EFT authorization.

The EFT Requisition for LUC Bank Account to LUC Bank Account (LUtoLU.2) and documentation supporting the dollar amount requested will be completed by the requestor and emailed to CMS for processing. Form LUtoLU.2 must be received by CMS by noon on the day the transfer is required.

General Accounting will reconcile the transaction to the General Ledger in a timely basis.

 

The procedure to establish an authorized ACH Auto Debit from a designated Loyola University Chicago bank account is subject to the same financial policies, procedures, and controls that govern collections and disbursements by check. The Auto Debit payment option is only used to save the University money on credit card convenience fees for vendors who do not have other payment options. A department must contact CMS to request an Auto Debit. ACH Auto Debits are approved on an individual department/vendor basis. The EFT forms associated with the setup and processing of an ACH Auto Debit are not published on the Financial Services website due to the individual department basis approval for such transactions.

 

All requests to set-up or revise an ACH Auto Debit requires a completed EFT Setup ACH Auto Debit Form (Form EFT04) by an authorized Budget Administrator and emailed to CMS for approval at least fourteen business days prior to the first payment request.

The department providing signature approval of the payment should complete form EFT04, which includes a description of the purpose of the auto debit, the maximum dollar amount and the approximate frequency, Beneficiary or Vendor Account Name and address, Company ACH ID Number, and the GL Accounting Unit and Account Code. Attached to the form will be a copy of the electronic funds transfer instructions received from the vendor and any forms related to the ACH Debit. The EFT04 form will be sent to the Budget Administrator for approval; if the maximum dollar amount exceeds $5,000 a secondary Budget Administrator has to approve the form; once the Budget Administrator(s) have approved the form it will be emailed to CMS for review and approval. CMS will route the request to AP, General Accounting and/or SPA for additional approval. Upon required department approvals, the EFT04 form will route to CMS for final approval by the Treasurer.

If any information changes on the ACH Auto Debit Setup form the requesting Department is responsible for completing a new EFT04 form at least fourteen business days prior to the next ACH Auto Debit being initiated.

The ACH Auto Debit Setup’s will be reviewed and renewed every three years from prior approval date.

Upon approved set up of the ACH Auto Debit, to initiate a debit, the ACH Auto Debit (Form EFT04B) is required to be completed by the requestor and sent to the Budget Administrator for approval; if the maximum dollar amount exceeds $5,000 a secondary Budget Administrator has to approve the form. Upon Budget Administrator(s) approval, the completed EFT form and documentation supporting the requested dollar amount is emailed to CMS for processing. CMS must receive EFT04B form prior to noon the day BEFORE the ACH Debit is required.

AP or General Accounting will record the transaction in Lawson. General Accounting will reconcile the transaction to the General Ledger in a timely basis.

1. All persons using the EFT system must be assigned individual user IDs by the Security Administrator. No department IDs will be assigned. The department head must request all IDs.  Under no circumstances should IDs be shared.  
2. All persons using the EFT system will be required to use passwords to gain access to EFT systems.  Under no circumstances should passwords be shared.
3. Personnel outside of Financial Services must receive specific written authorization from the Chief Financial Officer, Chief Business Officer, and Treasurer to initiate or confirm electronic funds transfers.  This authorization should be requested by the department head and directed to the Chief Financial Officer or Chief Business Officer.
4. CMS personnel will be authorized to initiate or confirm a wire. The person who initiates the wire transfer CANNOT confirm or release the non-repetitive wire transfer, a second party must approve the transfer. 
5. All EFTs should be initiated by computer-based systems.  Phone transfers should be used only as a backup if the computer systems are unavailable.  
6. Departments initiating EFTs will be responsible for the timely review and reconciling of all EFTs.  Departments needing guidance on appropriate reconciling procedures should seek the advice of Financial Services.

All EFT forms and instructions can be found on the Financial Services website under Resources > Online Forms > Treasurer’s Office here.