APPENDIX I Banking Manual 2015

Transcription

1 APPENDIX I Banking Manual 2015 Nominal Insurer And <<CoName>>

2 Contents Overview... 4 Introduction Scheme Banker And Banking Requirements Verifying Officers And Cheque Signatories Operational Requirements Account Switching Advice From Westpac Payments Daily Payment Limit All Payments To Be Made Electronically Payment Processing Service To Be Used Urgent Payments To Injured Workers International Payments Cheque Fraud Stopping A Cheque Unpresented Cheques Claims Or Policies Transferred To/From Another Scheme Agent Remittance Advices (Refer Claims And Underwriting Sections) Information To Be Shown On All Remittance Advices Additional Information On Particular Remittance Advice Types Receipts Cheques Electronic Funds Transfers (EFT) BPAY Credit Cards Direct Debit Remittance Processing Services Unidentified Deposits Westpac Corporate Online System COL Security Requirements Banking Services Costs Met by the Nominal Insurer (Attachment 1) Transactional Banking Receivable Products Payment Services Page: 2 of 30 Trim File: D14/119688

3 6.4 Payment Processing Services (PPS) Return Of PPS Cheques To The Scheme Agent Bulk-Stop Payments Corporate Online Branch Services Domestic And International Quick Terminal References Page: 3 of 30 Trim File: D14/119688

4 Overview This Banking Manual outlines the banking arrangements provided for the Scheme Agent and how they are required to operate these facilities. Reference to Other Related Documents Banking and Finance Management Schedule Underwriting Guide for the Scheme Agent This Document Is Relevant To: (d) The Scheme Agent Personnel involved in receiving or making payments from Nominal Insurer bank accounts operated by the Scheme Agent or the governance/reporting of these items; Personnel employed by the Scheme Agent who manage debt collection; Premium writing IT Personnel involved in maintaining payment/receipt files produced by Claims/Policy systems; and Personnel involved with Premium notices. Page: 4 of 30 Trim File: D14/119688

5 Introduction The fundamental requirements of Banking and Financial Management Services are outlined in the Banking and Financial Management Schedule of the Deed. If there is any conflict or inconsistency between this Manual and the Deed then the Deed prevails. The following items are highlighted: (d) (e) (f) (g) Use the bank and bank accounts established by the Nominal Insurer and interact electronically with the bank regarding receipts, payments and reconciliation files. Use separate bank accounts for receipt and payment of funds. Do not withdraw or transfer funds from the receipts account. Be responsible for the bank reconciliation process on all payments/ receipts accounts. Ensure that all receipts are banked to the receipts account in a timely manner as specified in the Deed and offer electronic services for Employers to pay amounts owing, such as BPAY or electronic funds transfers (EFT), as well as more conventional means, such as cheque. Ensure that payments including Premium refunds are only for approved purposes and are in the form of EFT except if a Worker requests payment by cheque or the Scheme s Director, Treasury & Financial Reporting directs otherwise in a specific circumstance. Ensure there are effective Internal Controls over receipts and payments to ensure potential errors and Fraud are eliminated. Page: 5 of 30 Trim File: D14/119688

6 1. Scheme Banker And Banking Requirements Westpac has been appointed as the exclusive banker to the Nominal Insurer and the WCIF until at least the end of 2014 and will provide Services to all scheme agents. The Nominal Insurer is responsible for all transactional banking facilities such as the opening of all bank accounts and for arranging additional banking product modules such as payment processing service, BPAY and direct debit services. All requests for banking services are to be lodged with the Scheme s Director, Treasury & Financial Reporting who will arrange for Westpac to assist with the implementation of new banking products. The arrangement between the Nominal Insurer and Westpac specifies what services will be provided. Details of these services are available from the Scheme s Director, Treasury & Financial Reporting. Banking services where the costs are met by the Scheme are detailed in the Deed All other Services are to be paid by the Scheme Agent from their own funds. The Nominal Insurer will issue an invoice for these Services monthly. If the Scheme Agent wishes to use Services outside these arrangements, the Nominal Insurer s prior Approval is required and the Scheme Agent will meet the cost of these Services direct from its own funds. 1.1 Verifying Officers And Cheque Signatories WorkCover Personnel are the only verifying officers on all Nominal Insurer/WCIF bank accounts. Consequently WorkCover Personnel are responsible for the appointment of manual and corporate cheque signatories based on the written request of the Scheme Agent Principal. All requests for signatories are to be made to the Scheme s Director, Treasury & Financial Reporting. 1.2 Operational Requirements The Scheme Agent must ensure the following: Systems are set up to meet the banking needs outlined in the Deed and Manuals, including establishing and being able to operate receipts and payments accounts of the WCIF with the banker (Westpac) to the Nominal Insurer. If payment files are to be transmitted to Westpac using any mechanism other than Westpac s Corporate Online system (COL), a fully tested, point-to-point link must be implemented between the Scheme Agent s data centre, where the Workers Compensation IT system is located, and Westpac, which complies with the security needs of both Westpac and the Nominal Insurer regarding the functions for which the system will be used. This connection may be used for: Page: 6 of 30 Trim File: D14/119688

7 (i) (ii) Transmitting files to the Westpac payment processing service (PPS) system; and Receiving transaction files from the Payments and Receipts Accounts (including EFT Premium payments from Employers). (d) (e) (f) (g) An un-encoded internet transmission of files does not meet this requirement. Should the Scheme Agent determine to use the Westpac WIBS system for the point to-point link, the Approval of the Nominal Insurer must also be sought on the design/specification of the system to ensure that the security options selected meet the Nominal Insurer s requirements. As the COL system is already available for file transfers and is funded by the Nominal Insurer, any costs of implementing or using the WIBS system are to be met by the Scheme Agent from its own funds. Test the ability of the claims, policy and financial systems to produce a file in the format required by the PPS for the production of EFTs, bank cheques and related remittance advices. Apart from emergency payments to injured Workers (refer section 2.4) all payments and remittance advices must be made via PPS system. Establish appropriate policies for the reconciliation of bank accounts, including EFTs of Premiums made by Employers to the Scheme Agent s account. (The above requirements refer to the banking arrangements only. Internal Control requirements are set out in the Deed). 1.3 Account Switching Advice From Westpac As part of changes to make it easier for personal bank account customers to change banks the Federal Government requires Australian Payments Clearing Association (APCA) members including Westpac to provide a centralised portal to facilitate the transfer of direct entry debits (Premium payments) and direct credits (EFT payments) from a person s former bank to their new bank. To facilitate this Westpac will be providing to a nominated group account in each Scheme Agent details of changes it has received from all other banks relating to direct debits and credits that have in the past, been made by the Scheme Agent. As banks normally do not distinguish between business and personal accounts, it is likely that Employers and Service providers will also make use of this free facility. Under the agreement with ACPA which scheme agents are required to comply with in order to allow access to the EFT payments/receipts clearing system, any requests for a change in bank accounts are required to be processed within 5 Business Days of the from Westpac. Page: 7 of 30 Trim File: D14/119688

8 Processing can include sending a request to the provider, Worker or Employer to complete a form to validate that the request is genuine and appropriately authorised. To minimise the chance of fraudulent advice and to maintain existing controls, the Scheme Agent is encouraged to always request confirmation of the change using the processes that they currently have in place when a request for a change in bank accounts are made direct with them, as opposed to via APCA request. Page: 8 of 30 Trim File: D14/119688

9 2. Payments 2.1 Daily Payment Limit The total of payments made by the Scheme Agent from all of their WCIF payments accounts are not to exceed $10 million per day, unless the Scheme s Director, Treasury & Financial Reporting, who after liaison with Westpac, advises that for a particular day a higher limit will apply. Where a higher limit is required, at least 24 hours notice is to be provided to the Scheme s Director, Treasury & Financial Reporting. Westpac will reject files that exceed this limit. Accordingly the Scheme Agent is required to closely monitor payment levels especially in high payment periods such as when BAS payments are due, to ensure the limit is not exceeded. 2.2 All Payments To Be Made Electronically All payments are to be made by EFT except: Urgent payments to injured Workers (refer section 2.4); or Where an injured Worker has under section 83(6) of the Workers Compensation Act 1987 requested to be paid by cheque; or Where the Scheme s Director, Treasury & Financial Reporting Approves of cheques being issued as a transitional process until Scheme Agent systems are modernised, or where a government agency requires a payment to accompany an application for information (e.g. police reports) or in other one off situations approved by the Scheme s Director, Treasury & Financial Reporting. 2.3 Payment Processing Service To Be Used Except for urgent payments to injured Workers (refer section 2.4) and payments to persons in a foreign currency (refer section 2.5), all payments are to be made by PPS. For security reasons, PPS system cheques are only to be mailed and are not to be sent via document exchange facilities. Manual/corporate cheques are only to be used for urgent payments to injured Workers. It is the responsibility of the Scheme Agent to ensure that there are sufficient cheque signatories to make any urgent manual cheque payments. Page: 9 of 30 Trim File: D14/119688

10 2.4 Urgent Payments To Injured Workers The preferred method of making urgent payments to injured Workers is to use the Westpac COL system to directly transfer funds to the injured Workers bank account. If this is not possible then the Scheme Agent may be provided with a manual cheque book. These cheques will need to be pre-stamped to indicate that they are for a maximum of $3,000 only. If requested the Nominal Insurer can arrange for these cheques to be able to be cashed at a Westpac branch near the Scheme Agent s main premises in Sydney and if required regional locations. Nominated Scheme Agent Personnel will need to attend the branch with the Worker for the cheque to be cashed. 2.5 International Payments The Westpac COL system is to be used for all international payments. Bank drafts are not to be used. The Scheme Agent is to ensure that if the Benefits to be paid to the injured Worker are set by legislation in Australian dollars that this is the currency that the payment is made in. Where Services are provided to injured Workers overseas and the provider requests payment in their local currency or a widely negotiable currency (such as Euros or US dollars), payments can be made in that currency using COL. The Scheme Agent is to ensure that appropriate controls are in place for any overseas payment. Any payment in foreign currency of more than $AUD 10,000 is to be advised in advance to the Nominal Insurer so that rates can be negotiated with Westpac. 2.6 Cheque Fraud While PPS system cheques use high security inks and paper there have been cases of cheques being fraudulently amended. Frauds on manual cheques are much easier to perform. Where a Fraud on the Westpac PPS system is detected the Scheme Agent is to report the matter to the Police and obtain a Police Report Event Number and the name/telephone number of the officer the report was made to. In addition as soon as practicable, lodge a claim on company letterhead with Westpac containing the following details: (d) Requesting that a full refund be made; Details of any alterations to the cheque; The full name of the original beneficiary (if it has been altered); The address the cheque was mailed to; Page: 10 of 30 Trim File: D14/119688

11 (e) (f) (g) (h) Confirmation that the original beneficiary did not receive the cheque; A Police Report Event Number; Details of the name and telephone number of the police officer who took the report; and Signed by the Scheme Agent Principal or a senior authorised representative of the Scheme Agent. A copy of each letter is to be forwarded to the Scheme Agent mailbox at WorkCover. Any replacement payment must be made by EFT. Under the banking contract should any Fraud occur after a cheque is returned to the Scheme Agent (including for the adding of additional documentation), Westpac will not recompense the Nominal Insurer for the misappropriated funds. Accordingly, responsibility for restitution of any losses due to such frauds becomes the responsibility of the Scheme Agent. If any Fraud is detected on manual cheques then they are subject to the same reporting requirements as the PPS system. However, the funds defrauded cannot be claimed back from Westpac. A full report on how the Fraud occurred must be sent to the Scheme s Director, Treasury & Financial Reporting who is accountable for reporting this to WorkCover s Fraud and Internal Audit areas. 2.7 Stopping A Cheque Stop payments of PPS system cheques are to be performed via the COL system. To ensure faster processing and reduce fees this is the preferred method of advising Westpac as opposed to faxed advices. WorkCover Personnel will monitor fees to ensure the most cost effective methods are used. 2.8 Unpresented Cheques Under the Cheques Act 1986 (Commonwealth), a cheque is deemed to be stale if it has not been presented within 15 months of it being issued. However, a bank is able to honour the cheque unless the issuing body directs otherwise. Westpac will only reject a cheque if the drawer has made a stop payment direction. When a stop payment is issued for a bank cheque, funds previously sent to the bank for that cheque to be drawn are provided back to the same WCIF payments account from which the funds were provided. If the Scheme Agent becomes aware that a cheque has been lost, stolen or destroyed, a stop-payment advice should be issued to Westpac as soon as possible. Scheme agents are required to: Page: 11 of 30 Trim File: D14/119688

12 Regularly review cheques, including bank cheques that have been unpresented for more than 90 days to ascertain why the cheques may not have been presented. Contact payees where a cheque with a value of more than $1,000 has been unpresented for more than 90 days, to advise them that the cheque is unpresented, and request that they promptly bank the cheque. If the payee advises that the cheque has been lost, stolen or destroyed, the Scheme Agent is to complete a stop-payment advice to Westpac and provide a replacement payment to the payee by electronic funds transfer (EFT) unless the Worker has requested payment by cheque. Review all unpresented cheques that are more than 15 Months old at least every 3 Months and issue stop-payment advices to Westpac, as it is then to be assumed that the cheques are lost, stolen or destroyed. Where cheques to be stopped number more than 500 a bulk stop-payment advice should be used, as it is more cost-effective than individual stop-payment advices. (Details of this facility can be obtained from the Scheme s Director, Treasury & Financial Reporting). Whenever a stop-payment advice is issued and a replacement cheque/eft is not made, the payment is to be taken to other income. Any amounts taken to other income need to be recorded in a register by the Scheme Agent to ensure that amounts can be easily identified if any future claims are made on the payment, thus minimising potential disputes. If, subsequently a replacement payment is issued this amount is to be recorded as an offset to other income. Both of the above entries will result in reconciling items in the Scheme Agents cash receipts and cash payments returns required in the Financial Reporting Manual. 2.9 Claims Or Policies Transferred To/From Another Scheme Agent Where Claims or Policies are transferred to another Scheme Agent, the following guidelines are to be adopted for unpresented cheque/s in respect of the Claim or Policy originating prior to transfer: The Exiting Scheme Agent continues to be responsible for managing unpresented cheques relating to transferred Claims and Policies until the cheques are either presented or a stop-payment advice is issued to the bank. The Receiving Scheme Agent may use a cancelled cheque notification form to advise the Exiting Scheme Agent of the need for cancellation and/or reissue of the cheque. Replacement payment of equal value if the party that the cheque was issued to advises that the cheque was lost, stolen or destroyed, the cheque is to be Page: 12 of 30 Trim File: D14/119688

13 stopped by the Exiting Scheme Agent, who then issues a replacement payment from their WCIF payments account. As the payments in respect of the Claim do not change, the Receiving Scheme Agent is not required to undertake any actions. (d) (e) (f) Replacement payment of higher value where the initial payment was less than it should have been (e.g. the Worker was not paid their full entitlement), the Exiting Scheme Agent must encourage the payee to bank the cheque and advise the Receiving Scheme Agent that an additional payment is required. The Receiving Scheme Agent, after appropriate checking and consultation with the payee, must make the top-up payment from their WCIF payments account and record it in their claims or policy system. Replacement payment of lesser value where the amount paid was higher than it should have been (e.g. there was an overpayment) and the cheque is unpresented, the Exiting Scheme Agent must stop the cheque, issue a cheque to the original payee for the correct amount, and forward a separate cheque to the Receiving Scheme Agent for the difference between the original amount and the replacement amount. The Receiving Scheme Agent must treat this cheque as a recovery and record the receipt accordingly in their claims or policy system. Stale cheque where the cheque is stale, the Exiting Scheme Agent must stop the cheque and issue a replacement cheque to the Receiving Scheme Agent, who then records the receipt in their claims or policy system as a reversal of the original payment. These practices ensure that the Exiting Scheme Agent is not required to amend Claims or Policy information after transfer and all changes to the financial information are performed by the Receiving Scheme Agent. Page: 13 of 30 Trim File: D14/119688

14 3. Remittance Advices (Refer Claims And Underwriting Sections) Clear comprehensive information on a remittance advice ensures the party receiving the payment is aware of the reason for the payment and has no need to contact the Scheme Agent for clarity. It also helps prevent disputes over the payment. Remittance advices are produced by the Westpac PPS system and attached to the bank cheque or ed /mailed / faxed separately when an EFT payment is made. If changes to existing remittance advices are required it is essential that the Scheme Agent work with Westpac to ensure the minimum information requirements are met. Costs of any changes to remittance are to be met by the Scheme Agent from their own funds unless the Nominal Insurer advises in writing to the contrary. In exceptional circumstances where the Scheme Agent issues a manual cheque to an injured Worker, a remittance advice must be prepared and issued by the Scheme Agent that contains at least the information outlined in this Manual. The format of the remittance advice is the responsibility of the Scheme Agent, subject to it meeting the minimum information requirements detailed below. 3.1 Information To Be Shown On All Remittance Advices The following information must be shown on all remittance advices: (d) Scheme Agent name (including tagline: Agent for the NSW WorkCover Scheme); Branch ABN (as agent for the NSW WorkCover Scheme); Scheme Agent contact details. At a minimum postal address and phone number. and fax may also be shown; If payment is by: (i) (ii) Cheque: show Cheque number; or EFT: show Bank / BSB / Account payment was made to. (e) Date of payment. 3.2 Additional Information On Particular Remittance Advice Types For each of the remittance advice types listed below, the following additional information must be shown. Where a remittance advice is not listed, it is the Scheme Agent s responsibility to ensure that sufficient information is included on the remittance advice to enable the party receiving the payment to clearly understand the reasons for the payment. Page: 14 of 30 Trim File: D14/119688

15 3.2.1 Payments to Employer Who Paid A Claimant s Weekly Benefits Direct (Recoupments) Where the remittance advice covers Benefit payments to a number of injured Workers, the following details in respect to each Worker must be shown: (d) (e) (f) (g) (h) Policy number; Claimant's name; Claim number; Date payment covers From: dd/mm/yyyy To: dd/mm/yyyy; Hours lost; Weekly rate; Deductions (amount and description e.g. Claim excess); and Net amount Payments Of Benefits Direct To Injured Workers Where the remittance advice covers payments to an injured Worker, the following details must be shown: (d) (e) (f) (g) (h) Claimant's name; Claimant's postal / street address; Claim number; Date payment covers From: dd/mm/yyyy To: dd/mm/yyyy; Hours lost; Weekly rate; Gross amount; Tax deduction; (i) Other deductions (name and amount e.g. Centrelink $200); (j) (k) Net amount; and Free text field (to provide further explanation for the payment e.g. permanent impairment as detailed in our letter dated dd/mm/yyyy). Page: 15 of 30 Trim File: D14/119688

16 3.2.3 Payments To Third Party Service Providers This remittance advice format is also used when the Employer or Worker paid a Third Party Service Provider direct and then claims reimbursement from the Scheme Agent. In these cases, the Employer s or Worker s name and address are also shown on the remittance advice. Where the remittance advice covers a number of invoices or services provided to multiple injured Workers, details in respect of each of these invoices or services must be included on the remittance advice. The following information must be shown: (d) (e) (f) (g) (h) (i) (j) (k) (l) Service entity s name; Service entity s postal / street address; Provider s name (if different to service entity); Invoice number; Invoice date; Billed amount; Deductions (amount and explanation); Net amount; Claim number; Claimant's name; Policyholder's name; and Free text field (to provide further explanation for the payment) Premium Refund To Employer Where the remittance advice covers a Premium refund to an Employer, the following details must be shown: (d) (e) (f) Policyholder's name; Policyholder's postal / street address; Policy year; Policy number; Amount; and Rationale for Premium refund. Page: 16 of 30 Trim File: D14/119688

17 4. Receipts Employers and other persons paying monies to the Scheme may make payments using cheques or EFT. BPAY, credit cards and direct debit may also be used if the Scheme Agent has them in place subject to the conditions outlined below and any limits outlined in the Underwriting Guide for the Scheme Agent. 4.1 Cheques The Scheme Agent is required to be able to accept cheques for payments of any amounts owing to the Scheme without charge. 4.2 Electronic Funds Transfers (EFT) Any person with a bank account which has electronic payments activated can make an electronic payment to any other account. Accordingly the Scheme Agent must have facilities in place to accept and process EFT payments made to receipts accounts they manage on behalf of the Scheme that complies with the Nominal Insurers Internal Control requirements. 4.3 BPAY The Scheme Agent may utilise BPAY to accept payments from Employers. The Scheme s Director, Treasury & Financial Reporting will establish the BPAY facility including creating a biller name and biller code with Westpac upon request by the Scheme Agent. The long biller name will be NSW WorkCover Scheme (Scheme Agent name). This will help reduce confusion with other Services operated by the Scheme Agent. The Scheme Agent is required to meet Westpac requirements for the details to be contained on Premium notices including the use of the BPAY logo, biller code and the production of a customer reference number that includes the required check digit facility. In view of the number and value of BPAY payments the Scheme Agent must be able to accept electronic files of BPAY transactions for direct upload to their policy system before BPAY will be made available. Details of the types and amount of payments that can be accepted via BPAY are in the Underwriting Guide for the Scheme Agent. Page: 17 of 30 Trim File: D14/119688

18 4.4 Credit Cards Credit cards may be accepted for payment of amounts owing to the Scheme provided this is done using either BPAY or the Westpac Quick terminal/quickstream facility. Details of the types and amount of payments that can be accepted via credit card are in the Underwriting Guide for the Scheme Agent. 4.5 Direct Debit Direct debit may be offered by the Scheme Agent to Employers for the payment of Premium instalments and hindsight adjustments subject to any constraints outlined in the Underwriting Guide for the Scheme Agent. Prior to a direct debit facility being established for the Scheme Agent a Direct Debit Request Service Agreement with Westpac must be established. The Nominal Insurer has negotiated a standard agreement with Westpac that is to be used. Details are available from the Scheme s Director, Treasury & Financial Reporting. The Scheme Agent is to strictly comply with the terms and conditions in this agreement and must immediately inform the Nominal Insurer of any non-compliance, or likely noncompliance with the agreement and any complaints, queries or requests received from Westpac or an Employer in relation to the agreement. Before a direct debit facility can be activated for a Scheme Agent, modifications are required to the Nominal Insurers corporate online system. Prior to activation, the Scheme Agents policy system must be able to electronically send a file of payments to Westpac and receive back a confirmation file for upload including details of rejected items Unauthorised Withdrawals Direct debits are effectively assumed by banks to have been authorised by the owner of the account unless the owner subsequently advises the bank that the withdrawal was in fact not authorised. Accordingly if an account owner disputes a withdrawal it is up to the Scheme Agent to prove that they did in fact have the authority to request the bank to withdraw the funds. Accordingly Westpac requires that where a dispute over a direct debit occurs the Nominal Insurer has 5 Business Days to lodge proof with Westpac that the withdrawal request was authorised or the receipt will be automatically reversed. Accordingly it is critical that direct debit authorities are correctly completed, authorised, correctly entered in the Scheme Agent system and the program that extracts/sends the file of the direct debits to the bank is accurate. If the Scheme Agent makes an unauthorised, incorrect or mistaken withdrawal from an Employer s bank account, the Scheme Agent is responsible for reimbursing all fees and charges incurred by the Employer, together with any fees levied by Page: 18 of 30 Trim File: D14/119688

19 Westpac on the Nominal Insurer, in reversing the transaction from their own funds, not those of the Nominal Insurer Disputes And Queries The Scheme Agent is responsible for any amount that is paid to or withdrawn by Westpac in connection with a dispute or query under clause 2 of the Debit User Agreement, and is to immediately reimburse the Nominal Insurer for any such amount that is paid to or withdrawn from the Nominal Insurer s funds Managing Information Provided By Employers The Scheme Agent is required to ensure that the Employer s bank account details are managed with due probity and security. The Scheme Agent must take all necessary care in ensuring the bank account and debit amount details provided by Employers are correct. The form authorising the withdrawal funds provided by an Employer are required to be held for 7 years from the last date that a withdrawal was made using that authority. The form is required to be able to be located and provided to the Nominal Insurer and Westpac within 3 Business Days of a request being made by the Nominal Insurer. 4.6 Remittance Processing Services Remittance processing services receive mail for a specific address (such as a locked mail bag), prepare an electronic file of amounts received/reference numbers & send this to the Scheme Agent, bank the cheques to a nominated account and send all mail attachments (or an image of these) to the Scheme Agent bulk listing of the documents. The Scheme Agent is remunerated as part of their Service Fee for processing receipts from Employers. Accordingly the Scheme Agent must pay the costs of remittance processing services from their own funds. Scheme agents are responsible for ensuring that the processor meets the Nominal Insurers banking and cash management procedures/controls. 4.7 Unidentified Deposits Refer to Underwriting Guide for the Scheme Agent. Page: 19 of 30 Trim File: D14/119688

20 5. Westpac Corporate Online System The corporate online system (COL) is to be used to interact with the Scheme s banker on a real time on line basis. The Scheme Agent is not to access the Nominal Insurer s banking facilities from a COL system controlled by the Scheme Agent. Rather each Scheme Agent has been established as a separate COL office of the Nominal Insurer. This has enabled the Nominal Insurer to apply the following minimum governance requirements to its accounts: (d) (e) A person can only be either an Administrator, Authoriser or Creator in the COL system. They cannot occupy more than one of these roles. 3 individuals are required for all administration tasks, 1 to prepare the task and 2 others to authorise the administration task. 1 of these authorisers can be primary administrator and the other person either a primary or a secondary administrator. 2 authorisers are required to approve all payments. 1 of these persons can be primary authoriser and the other person either a primary or a secondary authoriser. A user can be restricted to particular transaction types (payments, receipts, account balances) and particular bank accounts. As COL is an internet based system a person with a COL role can be based in any of the Scheme Agent s Australian office. If a user is to be located in an overseas office a rational for this is to be provided to the Scheme s Director, Treasury & Financial Reporting. The Scheme Agent Principal is required to approve of all persons who they wish to be creators or authorisers in the COL system and the functions (COL facilities) they can access. A completed Westpac Certified Customer Identification Document, including certified supporting documents is to accompany all requests for new users. Additionally in the case of authorisers the Scheme Agent Principal is to also advise if the person is to be a primary or secondary authoriser and the financial limits that are to apply to that person including: Payment daily limit (The maximum total value of on line payments that can be made in a day). Payment transaction limit for an on line payment. (The maximum amount of a payment that can be made). Import daily limit (The total amount of PPS/EFT files for a day that can be authorised). Page: 20 of 30 Trim File: D14/119688

21 (d) Import individual transaction limit (The maximum amount that can be included for a particular transaction in a PPS/EFT file). On an annual basis the Nominal Insurer will provide a listing of users of the COL system and their access rights and require the Scheme Agent to confirm that the user is still in the Scheme Agent s employ and the access rights continue to be appropriate. Where the COL system is unavailable due to system issues the Nominal Insurer is to be advised immediately so that acceptable alternate file transmission procedures can be implemented. 5.1 COL Security Requirements The Nominal Insurer has determined that the governance principles applied to NSW government agencies are a good governance framework and accordingly have been adopted by the Nominal Insurer. These principles are: (d) (e) Enforce strict separation of duties between COL creators and approvers of payments. The Nominal Insurer will incorporate this in its COL set up. Users should have time limits placed on their access. User access for holidays/other leave should also be suspended. All persons will only be allowed to access COL between 7:00am to 7:00pm Monday to Friday. If the Scheme Agent considers access is needed outside of these hours Approval of the Nominal Insurer is to be obtained. Administrators will be required to suspend a user when they are on more than 5 days leave. Users should not access COL from offices other than those Approved by NSW Government. The Scheme Agent premises including offices of related companies are considered Approved sites to access the Nominal Insurer s COL system. As part of the Scheme Agent s regular communication to Personnel, users are to be advised that they cannot access the Nominal Insurer COL functionality from other premises including from home. Enforce payment templating so that payment creators can only create payments to authorised vendors. The Scheme Agent s controls over who payments can be made to is primarily controlled through their claims and policy systems that record vendors/injured Workers BSB and account number for electronic payments and name/address details for payments made by cheque. The Scheme Agent Deed requires that appropriate Internal Controls be in place over payments and this includes ensuring that appropriate controls are in place over these payment details. The Scheme Agent s external auditors will as part of their audit, be ensuring that appropriate Internal Controls are in place over payments. Mandatory use of token security within COL for payment authorisation. All authorisers of payments are under the Nominal Insurer s COL setup required to use a token. Page: 21 of 30 Trim File: D14/119688

22 (f) (g) (h) (i) (j) (k) Create and enforce token management policy. The Scheme Agent is required to ensure that: (i) (ii) (iii) Tokens are stored by administrators/authorisers in a locked desk drawer when not in use. Passwords that are used in conjunction with the token are not to be written down. Tokens are not to be taken outside of the Scheme Agent s offices. Create and enforce policy on the payment authorisation process, with emphasis on payment and payment file validation. This should be multi-level and linked to segregation of duties. The Scheme Agent will be required to have a person prepare a payment and 2 other persons authorise it. For payment files imported into the COL system the Scheme Agent is required to implement appropriate procedures and cross checks to ensure that the payment files have not been inappropriately amended since the file was created in the Scheme Agent s claims and/or policy system. Maintain payment limits within COL at the lowest practical level. The Scheme Agent s daily payment limit is currently set at $10 million. This amount meets normal needs with occasional need to adjust payment timing during payment peaks such as those arising from GST payments to the ATO, to ensure that the cap is not breached. In addition individual payment authorisation limits apply to each payment authoriser based on advice from the Scheme Agent Principal including: (i) (ii) (iii) (iv) Total daily payment limits. Payment transaction limit. Import file total daily limit. Import file individual transaction limit. Users to check COL website digital certificate before proceeding, ensuring validity of the COL website and the encrypted connection. As part of the Scheme Agent s regular communication to Personnel on IT matters, the Scheme Agent Principal is to ensure Personnel are advised of these requirements. Users to understand that all activity logging on COL is centralised, detailed and unmodifiable. As part of the Scheme Agent s regular communication to Personnel on IT matters, the Scheme Agent Principal is to ensure Personnel are advised of these requirements Other IT practices not specifically related to COL, that the Government guidelines consider should be introduced. These include: (i) Promulgate a PC use policy covering appropriate uses; password (i.e. no password sharing) and Internet download policy. Where practical, these should be enforced using technology and business practices (e.g. the use of a standard operating environment preventing normal users installing software). Page: 22 of 30 Trim File: D14/119688

23 (ii) (iii) (iv) (v) Appendix I Banking Manual Conduct training of COL users that included general PC security around phishing, recognising secure sites and PC use policy. Enforce prudent security standards around the currency of rule sets on border/perimeter internet and internal firewalls, intrusion prevention, anti-virus and anti-malware so as to minimise any attack surface to the Government from the outside. Inclusion of these controls and the threat model in subsequent security audits and maintenance of the currency of those threats/risks and mitigants. Appropriately published and sanctioned disciplinary actions for breach of these controls. The Scheme Agent is to ensure that these issues are appropriately addressed in their general IT controls. These controls will be audited on a regular basis. Page: 23 of 30 Trim File: D14/119688

24 6. Banking Services Costs Met By The Nominal Insurer (Attachment 1) (Only the cost of banking services provided by Westpac under the contract with the Nominal Insurer will be met) 6.1 Transactional Banking Transactional Banking Bank generated transactions Electronic credits to accounts Electronic debits to accounts Cheques deposited Cheques written Depositor identified branch deposits Paper withdrawals done at branches Paper deposits lodged at branches Account maintenance fee (per account) 6.2 Receivable Products Receivables Products BPAY Debit account payment Westpac and other banks Credit card payments - Westpac and other bank Merchant service fee Westpac and other bank BPAY establishment Electronic tracing fee Participation fee Direct Entry Receivables Direct entry returns Direct entry debit transactions Direct entry debit establishment new facilities Inward Cheque Dishonours Page: 24 of 30 Trim File: D14/119688

25 6.3 Payment Services Payment Services Direct entry payments - to Westpac account or other Bank Direct entry credit establishment Direct entry transmission Direct entry credit transactions (payroll) Direct entry credit transactions Recall items Late processing Direct entry exceeded limit Direct entry returns Incomplete items/file (reasonable use only) Recall files Rejected direct entry item Extend payment cut-off (reasonable use only) Extend file cut-off (reasonable use only) 6.4 Payment Processing Services (PPS) Payment Processing Services (PPS) Establishment Establishment fees Setup artwork / layouts etc Additional remittance format layouts Service Cheques Next day mail Next day mail overseas postal address Return to customer cheques (next day) Additional remittance pages Service Description Cheque with single page remittance advice File received between 8:30 am and 5:00 pm the day prior Cheque with single page remittance advice File received between 8:30 am and 5:00 pm the day prior Cheque with single page remittance advice File received between 8:30 am and 5:00 pm the day prior Per page Page: 25 of 30 Trim File: D14/119688

26 Direct Credits Electronic payments Mail, fax or (text or PDF) remittance (including payments) Ancillary No remittance Single or multiple pages Stopped cheque Unpresented cheque report Per transaction 6.5 Return Of PPS Cheques To The Scheme Agent Cheques may be returned to the Scheme Agent only where the cheque is to an organisation that requires the cheque to be attached to an application form, such as the NSW Police or Centrelink. To ensure appropriate Internal Control, these cheques must be returned, processed and dispatched by a department within the Scheme Agent s organisation that is not the department that initially processed and/or approved the payment. Where a Fraud occurs on a PPS cheque, once a cheque is returned to the Scheme Agent including for the adding of additional documentation, then responsibility for restitution of any losses due to Fraud on that cheque is the responsibility of the Scheme Agent. If the Scheme Agent requires cheques to be couriered back to them, they are responsible to pay the fees involved. The Nominal Insurer will be invoiced monthly for these fees by Westpac and will in turn invoice the Scheme Agent monthly to recoup these costs. To avoid the courier costs the Scheme Agent can have the PPS cheque addressed to the department of the Scheme Agent referred to in the first paragraph above. Page: 26 of 30 Trim File: D14/119688

27 6.6 Bulk-Stop Payments A batch can contain anywhere from 500 to 5,000 stops, Bulk stops must be supplied in a spreadsheet containing the following details. (d) (e) (f) (g) BSB. Account number. Amount. Serial/cheque number. Payee name. Issue date. Reason for stop i.e. lost, stolen or destroyed. The spreadsheet must not contain any presented cheques, as this will complicate the process Normal service levels do not apply to bulk stops service levels will be judged on a case-bycase basis. Special bulk-stop pricing only applies for requests containing more than 500 stops. 6.7 Corporate Online Corporate online Establishment Fees Access fee per user fee (standard user and authenticating user) Account transaction information Current data updates automatic and manual On-demand export schedules Data retrieval per search Image retrieval request (view breakdown of transaction details and view/print image) Stop Payments via COL Secure ID Tokens (including reasonable level of replacements) Support maintenance agreement Reset Password by Westpac support service (tel ) Domestic and International EFT transfers/payments to Westpac account, other banks and tax payments Page: 27 of 30 Trim File: D14/119688

28 Corporate online (continued) RTGS payments via COL (emergency payments only) - immediate and same day Extend payment cut-off (reasonable use only) Extend file cut-off (reasonable use only) Recall items (reasonable use only) Late processing (reasonable use only) Direct entry returns (reasonable use only) Recall files (reasonable use only) Rejected direct entry item Duplicate report (reasonable use only) 6.8 Branch Services Domestic And International Branch services domestic and international Audit certificates - statement of balance and complex preparation Cheque encashment authorities establishment and annual fee Deposit books- ordinary, duplicate and triplicate. Serial encoded on application to Nominal Insurer Stop payments - minimal use only. Stops should be made via COL Tracings Voucher retrievals Negotiation of foreign currency cheques / bank drafts Deposit of bank draft to WCIF receipts account Telegraphic transfers overseas Outward overseas telegraphic transfers where COL is unable to be used Inward overseas telegraphic transfers credited to WCIF receipts account Page: 28 of 30 Trim File: D14/119688

29 6.9 Quick Terminal Appendix I Banking Manual Quick Terminal Establishment fee Transactions processed via credit card (offset by fees paid by employers on transactions) Participation fee Merchant service fee (offset by fees paid by employers on transactions) Page: 29 of 30 Trim File: D14/119688

30 7. References Banking Services Costs met by the Nominal Insurer (Attachment 1) Workers Compensation Act 1987 Cheques Act 1986 (Commonwealth) Banking and Finance Management Schedule Financial Reporting Manual Underwriting Guide for the Scheme Agent Page: 30 of 30 Trim File: D14/119688