Account Validation Services (“AVS”)
To protect state electronic fund payments and collections against fraud and error, the General Assembly amended the Pennsylvania Fiscal Code in July 2022 (Act 54 of 2022; 72 P.S. §301.5).
Act 54 directs all Commonwealth departments, agencies, boards and commissions for which the Pennsylvania Treasurer makes payment disbursements to obtain electronic payment security services, otherwise known as “account validation services” (AVS). The law tasks the Treasurer with developing a list of qualified AVS providers from which each Commonwealth department, agency, board and commission is directed to procure such services.
AVS is a standard banking process through which prepayment information involving banking account status and validation of account ownership information is completed. Since 2021, AVS has been used by the Pennsylvania Treasury Department, the Pennsylvania Department of Revenue and the Governor’s Budget Office for payment inquires. In addition, the Federal Bureau of the Fiscal Service within the U.S. Department of Treasury has approved AVS as an official program to evaluate prepayment information regarding account status and validation of account owner information for payments. AVS is already operational within the IRS, FEMA, and the U.S. Department of Treasury for certain payments.
The Pennsylvania Treasury Department completed an open request for qualifications (RFQ) process to identify vendors capable of working with public agencies to implement and maintain AVS payment security procedures consistent with national financial industry standards. Each qualified vendor has documented their experience providing passive verification and validation of payee bank account ownership on behalf of entities with payment volume and processes comparable to most Commonwealth agencies.
