A Guide to Federal Government ACH Payments 3-1

3 Non-Receipt Claims 

Overview

In this chapter...

A: General Information on ACH Non-Receipt Claims ......................................................................... 3-2

RDFI of a Direct Deposit Federal Payment ....................................................................................................... 3-2 

B: Initiating a Formal Claim of ACH Non-Receipt ................................................................................ 3-3

C: Non-Receipt Process ................................................................................................................................ 3-3

Legal References Supporting Treasury Non-Receipt Investigation ........................................................ 3-4 

ACH Non-Receipt Claims Process ......................................................................................................................... 3-4 

Payment Trace Requests: Manual Non-Receipt Claims Process .............................................................. 3-5 

This chapter describes the role(s) of the financial institution in resolving a claim of non-receipt for a 

federal payment. 
3-2 A Guide to Federal Government ACH Payments

3. Non-Receipt Claims Green Book

A: General Information on ACH Non-Receipt Claims

It is imperative that Receiving Depository Financial Institutions (RDFI) review procedures for 

posting payments and funds availability to ensure compliance with 31 CFR part 210 and Nacha 

Operating Rules (See Chapter 2, Availability of Funds, for specific information about federal ACH 

funds availability). Any RDFI can be held liable for ACH payments not processed timely or correctly. 

If the federal government sustains a loss as a result of the financial institution’s improper handling 

of an entry, the financial institution is liable to the federal government for the loss, up to the amount 

of the entry. 

It is extremely important that all RDFI personnel, especially branch, teller, and customer service 

representatives are properly trained to locate payments, specifically those which are “memo 

posted” or post prior to the settlement date. Close to 75 percent of “missing” federal payments are 

at the RDFI when the recipient calls to inquire. Thorough research will limit misinformation and 

subsequent unnecessary non-receipt claims and simultaneously increase confidence in Direct 

Deposit as a payment method. 

If the RDFI determines that it did not receive a payment, the benefit recipient may contact the 

issuing agency to open a claim of non-receipt. The issuing agency in turn notifies the Fiscal Service. 

Fiscal Service will initiate contact with the RDFI in an attempt to locate or resolve a claim of nonreceipt. 

Note: Some federal payments may be reduced, in whole or in part, to pay a delinquent debt owed by 

the payee to a federal or state agency. For more information about the Treasury Offset Program, visit 

https://www.fiscal.treasury.gov/top/.

RDFI of a Direct Deposit Federal Payment

Role in response to customer inquiry on the status 

The RDFI should make every reasonable attempt to locate a payment prior to redirecting a 

recipient to the authorizing federal agency. RDFI employees should have an understanding of the 

various posting techniques utilized to assist customers who are concerned with the status of their 

direct deposit. RDFIs should be aware of the following situations that often result in unnecessary 

non-receipt claims: 

1. Determine if the payment was posted late, 

x RDFI should be able to explain why there was a delay. 

2. Determine if the payment was memo posted, 

x RDFI customer service personnel may sometimes be unaware of, or do not check for 

“memo posted” items. “Memo-posting” is a temporary credit applied to a payee’s 

account during the day. Memo-posted transactions are finalized in the RDFIs end of day 

processing. 

3. Determine if the payment was posted early, 

x Due to volume and processing considerations the RDFI may receive ACH payment files a 

few days prior to their settlement dates. “Early posting” occurs when an RDFI posts a 

payment to a recipient’s account prior to the settlement date. 

4. Determine if a third-party processor is used and confirm funds availability through 

the processor, 
Green Book 3. Non-Receipt Claims

A Guide to Federal Government ACH Payments 3-3

x RDFI should confirm if the funds were made available to the recipient. 

5. Determine if the payment was an exception item, 

x The RDFI should be aware that a payment may have been posted incorrectly, manually 

posted, or returned due to incorrect account information. 

6. In some instances, the RDFI may never receive a payment for the recipient. 

Determine if the recipient has: 

x Changed financial institutions, 

x Revoked the Direct Deposit authorization, 

x Verified entitlement with the authorizing federal agency, and 

x A delinquent debt owed to a federal or state agency, which may have been submitted to 

Fiscal Service for collection. 

Note: The RDFI should process a NOC entry if they are responsible for the change information. The 

RDFI may request the benefit recipient to update their information with the issuing agency if the 

customer has a closed account, new account, etc. 

Title 31 CFR 210.8(b)(2) specifically addresses the liability placed on RDFIs for the correct 

preparation of ENRs and NOCs. 

B: Initiating a Formal Claim of ACH Non-Receipt

If all efforts to locate the payment(s) have failed, the RDFI should instruct the recipient to file a nonreceipt claim directly with the authorizing federal agency. The table below lists federal agencies by 

types of payments. 

Type of Payment Action

Federal Salary and allotments (including 

military and civilian pay) 

Military Active Duty allotments 

Advise recipient to contact their payroll office. 

Note: Coast Guard Active Duty and Allotments (785) 339-3506. 

Military Retirement/Annuity/Allotments Advise recipient to contact the appropriate military branch. 

Refer to Contacts, Chapter 7. 

Travel Payments 

TreasuryDirect 

Advise recipient to contact their finance/ travel office 

Refer to Contacts, Chapter 7 

Vendor, Miscellaneous, and All Other 

Payment Types 

Advise recipient to contact the federal agency that authorized 

the payment. Refer to Contacts, Chapter 7. 

C: Non-Receipt Process

Upon notification from the recipient that a payment has not been received, the authorizing federal 

agency will notify the Fiscal Service. Fiscal Service will research the claim by either the ACH NonReceipt claim process, or by using the traditional FS Form 150.1, Trace Request Form, to determine 

the status of the claim. 
3. Non-Receipt Claims Green Book

3-4 A Guide to Federal Government ACH Payments

Legal References Supporting Treasury Non-Receipt Investigation

1. 12 USC 3413(k)(2): Disclosure Necessary for Proper Administration of Programs of 

Certain Government Authorities 

12 USC 3413 (k)(2) of the Right to Financial Privacy Act provides: “Nothing in this title shall apply 

to the disclosure by the financial institution of information contained in the financial records of any 

customer to any government authority that certifies, disburses, or collects payments, where the 

disclosure of such information is necessary and such information is used solely for the purpose of 

... the investigation or recovery of an improper federal payment...” 

2. Title 31 CFR part 210.3(c): Federal Government Participation in the Automated Clearing 

House (ACH) 

Specifically, Title 31 CFR part 210.3(c) provides: “Any person or entity that originates or receives a 

government entry agrees to be bound by this part and to comply with all instructions and 

procedures issued by the Service under this part including the Treasury Financial Manual and the 

Green Book.” This regulatory provision also points out that the Green Book is available on the Fiscal 

Service website. 

3. Green Book, Chapter 4 Returns 

The Green Book chapter on Returns states that: Unpostable payments must be returned so that 

they are received by the government disbursing office ODFI no later than the opening of business 

on the second banking day following the settlement date of the original entry. Under no 

circumstances should a financial institution hold payments indefinitely in a suspense account, or by 

any other means, nor should payments otherwise be held if any of the conditions apply on when to 

return a payment. Holding payments may constitute a breach of the financial institution’s warranty 

for the handling of federal government ACH payments under regulations codified in 31 CFR part 

210. 

ACH Non-Receipt Claims Process

Fiscal Service has partnered with several federal agencies to research Direct Deposit ACH nonreceipt claims. Fiscal Service representatives will contact the RDFI directly by telephone, email, or 

facsimile to resolve claims of non-receipt. Fiscal Service has access to all the payment information 

and will seek assistance in identifying the following checklist of items: 

1. Verification of payment status (posted, funds held, returned, etc.), 

Question: Did the item in question post to the account number provided on the date of 

payment? 

2. Verification that the intended payee received the payment, 

Question: Does the payee’s name appear on the account? 

3. Situations where the recipient’s name is not on the account (If it is determined that an item 

has posted to an improper account Fiscal Service will make a request for the return of those 

funds subject to availability), 

Question: Can you provide the date the funds were returned, and the reason code used? Do you 

require an R06 (Returned per ODFI Request) letter from Treasury to return these funds? 

4. Situations where the recipient did not receive the payment on settlement date, and 

Question: Were the funds posted early or late, can the RDFI provide a reasonable explanation as 

to why? 
Green Book 3. Non-Receipt Claims

A Guide to Federal Government ACH Payments 3-5

5. Payments posted manually, due to account closure or invalid account information. 

RDFIs should originate a Notification of Change (NOC) entry if corrections are needed for future 

payments. See Chapter 6, Notification of Change, and the Nacha Operating Rules & Guidelines for 

detailed instructions. 

Note: Fiscal Service may also request the name, mailing address and telephone number of the 

improper recipient under the authority of 12 USC 3413(k) (Right to Financial Privacy Act of 1978). 

When the reason for non-receipt has been determined, Fiscal Service will mail the recipient a letter 

informing him/her of the resolution. 

Keep in mind that RDFIs can be held liable for ACH payments not processed timely or correctly. If 

the federal government sustains a loss because of a financial institution’s improper handling of an 

entry, the financial institution is liable to the federal government for the loss, up to the amount of 

the entry. 

Payment Trace Requests: Manual Non-Receipt Claims Process

A sample FS Form 150.1, Payment Trace Request Form, is available in Chapter 9, Forms. 

The FS Form 150.1 is used to trace all payments other than benefit payments. Upon receipt of a FS 

Form 150.1, the RDFI should follow these steps: 

1. Verify the status of the payment in question, by making all attempts to locate the payment at 

the RDFI, 

2. Credit the payment immediately if the payment was not previously credited or returned, 

3. Return the payment by ACH if it cannot be credited for any reason, 

4. Complete the FINANCIAL INSTITUTION ACTION section within three (3) business days of 

receipt of the form by the RDFI, 

5. Return the DISBURSING OFFICE COPY to the government disbursing office identified on the 

form, and 

The RDFI must respond to Fiscal Service within three business days by completing and returning 

the FS Form 150.1 to Fiscal Service as indicated on the form. Fiscal Service will verify acceptance of 

the return. 

x If no reply is received, Fiscal Service will contact the financial institution and will pursue the 

case until it is resolved. If Fiscal Service still receives no reply, a letter will be sent to the 

President of the RDFI. 

x The authorizing federal agency may also contact the RDFI to resolve payment problems. 

Keep in mind that the RDFIs can be held liable for ACH payments not processed timely or correctly. 

If the federal government sustains a loss as a result of a financial institution’s improper handling of 

an entry, the financial institution is liable to the federal government for the loss, up to the amount of 

the entry.