Check Payment Processing
The IT Division services include the electronic retrieval of warranted check disbursement files that feed a high speed customized check printing process for the Comptroller's General Accounting Division, Revenue Administration Division, and Retirement as well as for DHR's Child Support & CARES. The IT Division provides for a unique agency check design, signature, MICR encoding and the delivery of an electronic positive pay file to the State disbursement bank.
The State Treasurer's Office's main processing system is an IBM i5 eServer midrange computer, which uses advanced function printing to create each printed document. Therefore, the Office has developed a payment processing system that is flexible enough to allow the Treasurer to make payments for any agency in the State using MICR encoding, signatures and agency or bank logos on secure paper check stock. The use of secure paper stock precludes the need to maintain preprinted checks for each account. The system also is protected with several security features to eliminate or detect forgery or fraud.
The checks are printed in presorted zip code order to comply with the State's presort vendor requirements that lower postage expense. Control transfer reporting is in place with the General Accounting Division's mailroom service group, who cut and insert the checks into envelopes prior to pickup by the State's presort vendor.
Electronic Funds Transfer (EFT)
The State Treasurer's office, like many agencies in the State, has recognized the need to support, where possible, movement away from paper checks over to electronic funds transfer (EFT). The State Treasurer, however, is ultimately responsible for all disbursements made by the State and must transmit these EFT's in a standard format. Electronic payments and direct deposits are run through a conversion program that transforms the agency's payment information into a CCD+, CTX or Electronic Data Interchange format (EDI). Payments are sent in these formats to the State disbursement bank, which then forwards them to the Federal Reserve's Automated Clearing House. The payment can then be deposited to any payee's bank account in the country. The IT Division, along with the Banking Services Division, encourages the use of the more detailed Electronic Data Interchange, or EDI, payment method and has supported the growth of this method of payment.
The Office's receipt processing system complements the payment processing system by allowing any State agency to receive electronic payments from taxpayers, credit card processors and federal programs. Currently, most of the taxes collected by the State, all credit card receipts, lockbox (used for high-volume, mail-in collections) and all federal funds come in through the "Depository Plus" process.
The IT Division continually works with the Banking Services Division to enhance the Deposit Match process. The process makes use of variable logic to match the incoming deposit to the appropriate Financial or Batch Agency as specified by an agency. The resulting matched deposits are summarized on a report for each agency and automatically faxed to that agency. All of the deposits are transmitted from STO to FMIS each night for processing and posting to the agency's account. The automated fax report from STO gives the agency a one day advance notice of the incoming deposit.
The Information Technology Division continually strives to enhance the banking reconciliation system. Programming has focused upon streamlining the ACH processing, wires, charge backs and data quality controls on vendor, tax and the State's general ledger source files. The IT Division also supports the reporting and processing of Unpresented Checks, Data Validation and Issued/Reissued Payroll Checks.
The IT Division continued its partnership with both the Banking Services Division and the State's depository bank to accommodate improved transaction processing at a more sophisticated level and accurate settlement date reporting of ACH Deposits. The efforts made by the Office's Banking Services Division in coordination with the IT Division provide the State of Maryland with an even more timely and accurate balance of State funds held at the bank.