NYS Comptroller Seal


Bureau of State Payroll Services


  Date:  July 24, 2003 Bulletin No. 422

Subject Direct Deposit Stop Payments and Reversals
Purpose To notify agencies of the procedures and a new form (AC 3197) to be used when requesting a stop payment or reversal of a direct deposit transaction.
Affected Employees Direct Deposit enrollees who would be overpaid if a direct deposit transaction is not stopped or reversed.
Background Generally, the State payroll is processed one week before payday. This allows sufficient time for the checks and direct deposit advices to be printed, delivered to agencies and distributed to employees.

When an employee is enrolled in the Direct Deposit program, the funds are automatically deposited to the employee's checking or savings account. Agencies cannot use form AC-230 (Check Returned for refund or Exchange) to process a check exchange for employees in direct deposit until the funds are recovered by OSC from the employee's financial institution.

After paychecks and direct deposit advices are produced, agencies must use the stop/reversal process, rather than online transactions, to stop or reverse the direct deposit transaction and to prevent an overpayment to an employee.

By enrolling in the direct deposit program, the employee and each joint tenant, if any, consent to allow the State, through the financial institution, to debit the account in order to recover any salary to which the employee was not entitled which was deposited to the account in error or by mistake. Refer to the instructions on the back of the direct deposit enrollment form http://www.osc.state.ny.us/agencies/2003_2004/ac2772.pdf for further information.
Agency Actions
1. Call the OSC Deduction Section at (518) 474-1248 or (518) 474-4775 to initiate a request for a direct deposit stop or reversal. If the request is approved, fax the new Request for Direct Deposit Stop/Reversal (AC 3197) form to the OSC Deduction Section at (518) 486-3099. Use the following link for copies of the new form. http://www.osc.state.ny.us/paysr/agencies/2003_2004/422att.pdf
2. Submit one Report of Check Returned for Refund or Exchange (AC-230) for each pay period that a direct deposit stop/reversal has been requested. If requesting the return of more than one direct deposit transaction in a given pay period, submit only one AC-230. Previously, OSC requested a separate AC-230 for each individual direct deposit account.
3. Notify the employee of actions taken and cancel the employee's direct deposit if necessary.
OSC Actions
1. Upon receipt of the fax request, OSC will process the stop payment or reversal and advise the agency of the status of the request.
2. OSC will produce a check and upon receipt of the AC230 will process the salary refund.
Questions Questions concerning direct deposit transaction stops and reversals may be directed to the Payroll Deductions mailbox. Contact your payroll auditor to discuss overpayment recovery.
  Direct Deposit Enrollment Form
  Fax Request for Direct Deposit Stop/Reversal (AC 3197)