Finance division says security systems blocked nearly $9.8 million in counterfeit checks; Vantage payroll go‑live slated for March

The Division of Finance told the Government Operations Committee it detected a recent fraud event in which about $9.8 million in counterfeit checks containing state routing and account numbers were cashed at banks nationwide; internal verification stopped the state from funding any of those transactions.

Unidentified Department presenter described the incident and the department’s controls: "we had just literally in the last 2 weeks, dollars 9,800,000.0 worth of checks hit banks across the country" and said those checks "had our routing number and account number across the bottom" and that the department "didn't pay on a single 1 of them because security systems we have in place." The department said it has involved the Department of Public Safety to begin an investigation.

The department stressed that although most payments are now electronic, some paper checks remain (for a small number of employees and for some agency processes). Van Christensen, director of the division of finance, said only about 40 of 25,000 employees still receive paper paychecks and described an approach to convert payees to electronic payments using bank-validation software that pings financial-institution data to confirm account ownership before establishing direct deposit.

On payroll modernization, the department said it has completed extensive testing and dual payroll runs ahead of a March go-live for the Vantage enterprise system that will consolidate payroll, HR and financial transactions. The department emphasized testing to ensure employees continue to be paid on time after the transition.

Committee members asked about processing-frequency savings if the state moved to twice-monthly or monthly pay, and the department said it would provide cost estimates; the department also noted that moving to electronic vendor self-service and bank validation will reduce paper-check exposure but introduces other operational safeguards and recovery trade-offs.

The committee requested follow-up cost estimates on changing payroll frequency and additional details on bank-validation rollout.