20-05-2025
Never mind ‘extra' paycheck that state employees got
PIERRE, S.D. (KELO) — There's an old saying that you shouldn't spend unexpected money in one place. For thousands of South Dakota state government employees, they better not spend it all.
That's because a test run by a vendor for the bank that electronically transfers paychecks to South Dakota state government employees went haywire last week. The result: Erroneous payments showed up in thousands of their personal accounts.
First PREMIER Bank, which currently has the contract for state government's account, planned to recall the unplanned payments on Monday afternoon, according to Jim Terwilliger. He is commissioner for the state Bureau of Finance and Management.
First PREMIER Bank performs the payment service, known as an ACH or Automated Clearing House transaction, for the South Dakota Office of Treasurer.
The federal Consumer Protection Benefit Bureau on its website describes an ACH transaction as an electronic money transfer made between banks and credit unions for all kinds of purposes, including direct deposit of paychecks.
State Treasurer Josh Haeder explained to KELOLAND News why state government employees wound up being mistakenly paid twice for the same pay period.
'A vendor who processes ACH transactions for First PREMIER Bank performed a backup and recovery test, which resulted in a duplicate file posting. This impacted many banks across the country. First PREMIER is working with the vendor, who expects the transaction errors to be reversed later today,' Haeder said Monday morning.
Terwilliger outlined the payroll process that state government uses. He said employees enter timesheets, then the supervisors approve them. From there the timesheets go to the state Bureau of Human Resources and Administration or the agency's human resources staff be be processed. After those time records are authorized, they're submitted to the State Auditor's office, where the payroll is run.
State Auditor Rich Sattgast explained the next steps. 'Once we run payroll, which includes verifying and correcting all payroll data sent to OSA (Office of State Auditor) by BHRA, we send the bank file to First PREMIER, who then sends it to their vendor for payment,' he said.
According to Sattgast, the vendor that services the payment process through the state bank performed a test on Thursday, May 15, to ensure that their backup system was working properly. He said the test caused a glitch that resulted in the erroneous duplicate payment.
'It affected 9,238 employees, which affected 12,136 deposits as many employees have their pay going to more than one bank account,' Sattgast said. He gave the example of two married state government employees having their pay going to one joint account, as well as to a separate account for personal use.
Sattgast said that neither he nor his staff could recall such an event in the past stretching back at least 39 years — that's how long the most senior-member of his payroll staff has been with the office.
Terwilliger said that First PREMIER had notified the Office of the State Treasurer and the expectation was that the duplicate transactions would be reversed late Monday afternoon.
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