March 26, 1998 in Nation/World

Glitch Delays WSU Checks To Employees 7,000 Fail To Receive Direct Deposit

By The Spokesman-Review
 

If the birthday check Sandra Shallbetter sent to her son’s new wife bounces, she’ll be one red-faced mother-in-law.

Shallbetter was one of 7,000 Washington State University employees statewide who didn’t receive their paychecks via direct deposit Wednesday because of a computer glitch.

“You aren’t supposed to postdate checks, but this has never happened before,” said Shallbetter, counseling center program coordinator. “It’s their first year of marriage, so I hope it clears.”

The paychecks, worth about $7 million, should have been deposited electronically at banks and credit unions just after midnight, but the mistake wasn’t caught until later Wednesday morning.

Payroll Services Director Barry Johnston and his staff scrambled to alert employees to ease anxiety over bounced checks and overdraft fees.

Armed with a list of direct-deposit employees, their banks and deposit amounts, Johnston hastily negotiated with bank officials in Moscow and Pullman.

They agreed to do business for one day as if the money was there. The actual deposits should be posted today.

Aside from cracking some “WSU’s broke” jokes, most employees took the news in stride.

The mistake happened in the U.S. Bank department that transfers direct deposit information to the National Automatic Clearinghouse Network. With its 35 regional centers, the clearinghouse works with 13,000 financial institutions to coordinate electronic banking.

The error occurred when a computer in Portland deleted a deposit routing number. Fixing it required “human intervention” that didn’t happen in time, a U.S. Bank employee said.

The next morning, an employee at the Washington State Employees Credit Union noticed that WSU’s direct deposits hadn’t arrived and called Johnston.

A growing number of WSU employees - now 70 percent - have opted for direct deposit, mirroring a national trend. More than half of all workers now use direct deposit - an increase of 15.8 percent, for a total deposit of $4.5 billion, in 1997.

As employees become more comfortable with technology, they’re more willing to try new banking methods, said WSU finance professor David Whidbee.

But like all new computer technology, it’s not foolproof.

“Fortunately, with direct deposit there are checks and balances built into the system,” Whidbee said.

It’s estimated that direct deposit can save an employee eight to 24 hours a year, and trim business and government paper and processing costs.

“Technology has made it easier for consumers,” Whidbee said. “If you need cash and are 500 miles away from your bank, it’s not a problem.”

But increased efficiency also means checks clear faster, Whidbee added, so gambling on “float time” for checks is riskier now.

U.S. Bank pledges to reimburse university employees for any insufficient fund charges caused by the glitch.

“We really regret the inconvenience to WSU employees and appreciate their understanding as we deal with this,” said Cindy Duryee, U.S. Bank’s vice president of public relations.

Johnston called the glitch an “anomaly” and pleaded with WSU employees to stick with direct deposit. “While at first this is what seems like an absolute tragedy, there’s been a lot of work going on to work it all out,” he said.

, DataTimes


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