January 08, 2020

Missing Appendix 8? What You Need to Know


Michael W. Kahn

Michael W. Kahn


Like 8-track tapes and white disco suits, Appendix 8 of the Nacha Operating Rules has faded into history. Many were using it as a guide for ACH audits, which Nacha acknowledged in the title of its recent webinar, “Curing the Appendicitis After Removing Appendix 8.” But as the webinar showed, there’s plenty of audit guidance still available.

Why did Appendix 8 get the hook? Cari Conahan, Nacha Senior Director and Group Manager, ACH Network Rules and Enforcement, said one problem was that Appendix 8 required constant updating and expansion.

“To help improve the ability to make it more user-friendly and to react to changes, we felt the best option would be to take it out of the Rules and to make it more of a living document in the Guidelines,” said Conahan. The change allows Nacha “to be able to be more reactive to changes, so that we could modify the language on an as-needed basis.”

The core ACH audit requirements from Appendix 8 are now in a new chapter of the Nacha Operating Guidelines, where Conahan said Nacha “expanded on it to make it more user-friendly.” 

There was also the issue of people treating Appendix 8 like an audit checklist or workbook, believing you only audited for what was in Appendix 8. 

“We really wanted to get away from that perception, because the obligation is to ensure full compliance with the Nacha Rules, regardless of whether everything was enumerated there or not.”

There’s plenty of audit help available. Pamela T. Rodriguez, President and CEO of ePayAdvisors, said “the No. 1 cure for appendicitis after the removal of Appendix 8 is the Center for Payments.”

“This is a collaboration of all the Payments Associations,” said Rodriguez, adding that of the 11 Payments Associations that are Nacha Direct Members “most do offer ACH audit services as well as risk assessment.”

The complete 90-minute “Curing the Appendicitis After Removing Appendix 8” webinar has in-depth details, including ACH audit requirements, what an audit should include beyond what’s in the Rules, the history of Appendix 8 and some cures for the “appendicitis.” The webinar is worth 1.8 continuing education credits for AAPs and APRPs.