The Positive Pay Story—
Making Lemonade out of Lemons?

by Ruth Johnston

Student Fiscal Services (SFS) was faced with some fraudulent checks last spring! Some clever people fabricated checks that looked like the UW’s and made them payable to individuals who wanted some quick cash, often several thousand dollars apiece. This presented some serious financial concerns, of course, so we worked with the UW Police, Internal Audit and others to identify ways to stop this from happening.

Enter the idea of “Positive Pay.” Financial Accounting was looking into this process to secure checks being issued by other areas in Financial Management. The concept is simple: alert the bank that a check has been written before the check can be presented for cash at the bank. This means mailing a check instead of the long standing SFS practice of issuing checks to students upon demand. One issue was concern for students’ emergency needs since we wouldn’t be able to give them a check the same day as requested because the bank wouldn’t be able to tell it was valid until the next day. This need has always been paramount to SFS and Financial Aid.

We made the decision to move to positive pay in September and implemented it on December 1. This gave us ample opportunity to help students understand the coming change and get them signed up for direct deposit. Direct deposit was already popular; over 65% of the students receiving financial aid were signed up. The change for those not wanting to use direct deposit meant they’d have to request a check to be sent to their home address, thus delaying delivery for a day so the bank would know it was valid. The check request could come to us via an in-person visit to Schmitz, through a web request form, by email or by phone. We worked with Financial Aid to identify a process to deal with emergencies, got the authority to change student addresses, and then discussed the new process with our staff, Financial Aid staff, UW advisers, and our SFS Advisory Board.

The program is a success! Students had no trouble with the transition and many are thrilled that we are finally willing to send checks instead of them having to come in and pick them up. We’ve had only a few emergencies and bad addresses. The percent of students receiving aid who now use direct deposit has jumped to 85% and we reduced printing from 8,889 checks Winter Quarter 02 to 3,520 checks Winter Quarter 03.

Many people worked on this process improvement. SFS leaders and staff, process partners, and the UW students made it work.

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