Top 3 ACH Audit Findings of 2025—and How to Get Ahead in 2026
Published on January 9, 2025
AUTHOR
Jamie Herbert, AAP, APRP, NCP
Senior Director of Compliance Services
As the ACH Network continues to evolve, the expectations placed on financial institutions evolve with it. The 2025 audit cycle revealed several recurring compliance gaps. These issues are common, yet they can create operational and regulatory risk if they are not addressed. Understanding these top findings is not only about looking back. It is also about preparing for what comes next.
With 2026 underway, organizations have a fresh opportunity to strengthen their ACH programs, refine internal controls, and resolve weaknesses before they appear in an audit report. This is an ideal time to reassess your processes and ensure your compliance framework is ready for the year ahead.
In this blog, we will highlight three of the most common ACH audit findings from 2025, explain why they continue to surface, and offer practical insights to help you stay ahead in 2026.
The Most Common ACH Audit Findings for Financial Institutions
1. Non-Response to Notifications of Change (NOCs)
Year after year, failure to act on Notifications of Change remains the most frequently cited rules violation in the ACH Network. Although the requirement is straightforward, many financial institutions still struggle with timely updates or with ensuring that Originators understand their responsibilities.
Under Section 2.12 of the Nacha Operating Rules, “the Originator must make the changes specified in the NOC or corrected NOC within six Banking Days of receipt of the NOC information or prior to initiating another Entry to the Receiver’s account, whichever is later.” While certain exceptions exist, including NOCs issued in response to Single Entries, the expectation is clear: make the changes specified in the NOC in a timely manner. When NOCs are ignored or repeatedly unaddressed, financial institutions risk accumulating rules violations that may lead to fines.
For many institutions, the root cause is not a lack of awareness but a breakdown in communication or workflow. Common challenges include Originators who do not understand the importance of NOCs, outdated internal processes, or insufficient monitoring of recurring exceptions. Strengthening education, improving reporting tools, and reinforcing Originator responsibilities can significantly reduce repeat findings in this area.
2. Use of Incorrect Standard Entry Class (SEC) Codes
Another frequent audit finding involves the improper use of SEC Codes. Many institutions have fielded questions from clients about why the correct SEC Code matters or whether business and consumer payments can be combined. The answer is simple: The Nacha Operating Rules require the use of the proper SEC Code, as outlined in Subsection 2.4.1.2, and the correct code plays a critical role in managing risk.
Using the appropriate SEC Code helps ensure that the authorization method aligns with the type of Entry being originated. This is especially important for consumer transactions, where the method of authorization often carries specific requirements. While PPD and CCD remain commonly used SEC Codes, they are not interchangeable, and the decision is not based solely on whether the Receiver is a consumer or a business. The way the authorization is obtained is equally important when determining the proper SEC Code for consumer transactions.
Section 2.5 of the Nacha Operating Rules provides detailed guidance on the proper use of many SEC Codes. A periodic review of these provisions can help financial institutions reduce errors, potentially avoid some Extended Return Entries, and support Originators in maintaining compliance.
3. Issues with Written Statements of Unauthorized Debit (WSUDs) and ACH Disputes
Although ACH disputes are never pleasant, they remain a routine part of payments processing. Unfortunately, they also continue to be a common source of audit findings. Many issues stem from incomplete or improperly executed WSUDs. Missing signatures, lack of signature dates, or incomplete Receiver information are all frequent problems. Another recurring issue involves untimely returns that fall outside the extended return timeframe.
Although Regulation E compliance may be reviewed separately from the ACH audit, it is important to remember that a consumer’s right to be recredited for an alleged error is not dependent on the RDFI’s ability to return the Entry. Even when a return is not possible, the institution may still have obligations under Regulation E to investigate and resolve the claim.
Institutions that invest in staff training, clear dispute procedures, and consistent documentation practices tend to see fewer repeat findings in this area. For those seeking deeper guidance, UMACHA’s on‑demand webinar, Liability and Reg E: Understanding Your Obligations (Two‑Part Webinar Series), offers additional insight into managing disputes and recovering funds when a return cannot be made.
UMACHA is Here to Help
Whether your financial institution has partnered with UMACHA for an ACH audit in the past or you are completely new to our services, we would welcome the opportunity to work with you on your 2026 ACH audit. Membership status does not determine your eligibility to engage with us. Our goal is to support the entire payments community, and we are committed to meeting you where you are.
When UMACHA conducts an audit, our approach is collaborative. We are not there to point fingers or assign blame. Instead, we see ourselves as an extension of your team. Our role is to help you understand what the Nacha Operating Rules require, to offer clarity where questions arise, and to provide practical, actionable steps you can take to address compliance issues before they become more challenging.
If you are preparing for your next audit cycle or simply want to strengthen your ACH compliance program, we invite you to explore the full range of compliance services UMACHA offers. You can also request to schedule your 2026 ACH audit and begin planning for a smoother, more confident year ahead.
Stay connected with Jamie Herbert and UMACHA on LinkedIn!