DANA MINGODIRECTOR OF STUDENT FINANCIAL

SERVICES, DALLAS CHRISTIAN COLLEGE

DECHA REIDDISTRICT DIRECTOR OF AWARDS MANAGEMENT, DALLAS COUNTY COMMUNITY COLLEGE DISTRICT

TASFAA 2013 ConferenceCASH MANAGEMENT:START TO FINISH

TOPICS FOR DISCUSSIONPurpose of Cash

ManagementG5 SystemCommon Origination

& DisbursementCommunication &

CooperationFinancial Aid Office

FunctionsBusiness (Bursars)

Office Functions

Internal ControlsDisbursement of

Title IV FundsAllowable ChargesRequired

AuthorizationsTitle IV Credit

BalancesReconciliation

Requirements & Tools

Purpose of Cash Management

Ensure schools have a solid foundation for administering Federal Student Aid funds

Minimize costs related to operating FSA program for schools and students who receive federal aid funds

Practices are governed by: Generally Accepted Accounting Principles (GAAP) Office of Management & Budget (OMB) U. S. Department of Treasury U.S. Department of Education (ED)

34CFR 668.161

What is the G5 System?

An electronic delivery system supporting the awarding and payment administration of federal aid funds

Part of the Education Central Automated Processing System (EDCAPS), however G5 is the only module in which schools have access

Schools use G5 to request payments, adjust drawdowns, return unused funds, review cash balances, and payment history for reconciling awards

Access is granted through www.G5.gov , as part of a schools Title IV participation

FSA HB 2013-2014

What is the G5 System?

Requires schools to set up banking information separate from the general cash fund

Schools must also obtain a Data Universal Numbering System (DUNS), Taxpayer Identification Number (TIN) and grant number from ED

Cash may be requested for the following programs: Federal Pell Grant Federal TEACH Grant Federal Supplemental Educational Opportunity Grant Federal Work Study Federal Perkins Loan Federal Direct Loans

Common Origination & Disbursement (COD)

The COD system is an electronic solution established to accommodate the processing of specific Federal Aid Programs (Pell grants, TEACH grants, Perkins & Direct Loans)

The COD process is an integrated system to support the origination, disbursement and reporting of the above listed aid programs

Communication & Cooperation

Why is communication and cooperation important when setting up a school’s cash management process?

Prevent processes contraire to ED’s regulations Eliminate fiscal errors in awarding, disbursing and

reconciling of awards Maintains integrity institutions FSA program Required to continue FSA program participation

Communication & CooperationTIP: Joint Operations Calendar for the

Registrar/Business/Financial Aid/Finance Departments

Financial Aid Office Functions

Must confirm student eligibility for said federal aid programs prior to disbursement

Must maintain access to the Common Origination and Disbursement System (COD) with ED

User will submit Pell Grant, TEACH Grant, and/or Direct Loan origination and data

Users have the option to batch records over the Student Aid Gateway (SAIG) or process individually via the COD website

Depending approval, schools may draw down of funds from G5, 10 days before the start of the term

Financial Aid Office Functions

Ensure student eligibility and meets Satisfactory Academic Progress (SAP) for returning students

Create comprehensive aid package on behalf of student (generally tracked via Financial Aid Management System {FAMS: Banner, Datatel, PeopleSoft, etc})

Notify student of anticipated financial aid awards & anticipated disbursements to their account via email or snail mail (TIP: important to know audience for appropriate delivery method)

Submit federal aid disbursement records within 15 days via COD for Pell, Iraq & Afghanistan Service Grant Programs, for awards processed on or after April 1, 2013 http://ifap.ed.gov/fsahandbook/attachments/1314FSAHbkVol4Ch2.pdf

Business and/or BursarOffice Functions

Maintains accounting records to reflect all G5 processing (draw) activities for accurate reconciliation processes

Segregate federal funds from the institution’s general fund bank accounts

Ensures the federal fund bank account is set up and named specifically as a federal fund account:

ex. Chase Institution XX Federal Fund Account

Business and/or BursarOffice Functions

G5 draw down of funds, no earlier than 10 days before the start of the academic term

Disburse federal funds to the respective student account

Refund credit balances in excess of tuition, fees and other educational allowances within required timeframe

Returns any unused funds not disbursed to student accounts via G5

Internal Control Functions

Designate an FSA Coordinating Official to monitor & address data exceptions and/or inconsistencies: Develop internal reporting processes Establish internal reconciliation procedures TIP: Don’t disburse funds on last day of month to have ‘clean’ month end fund

reconciliation processes

Internal Control Recommendations from ED: Define key roles for departmental functions Keep documentation of all activity Maintain collaboration, communication and most importantly cooperation between

offices Balance all accounts and ledgers Ensure all G5 drawdowns and refunds have been accounted for If using an import system for drawdowns reconcile all funds between draw down and

import Create exception reports to monitor data between the financial aid and business

(bursar) offices

Disbursement of Title IV Funds & Excess Cash

Schools must disburse funds within three business days of receipt of funds under the advanced payment method

Some circumstances that may prohibit the disbursement of federal aid funds: Change in a student’s enrollment status

TIP: Have “packaging reconciliation process prior to aid disbursement;” prevents potential Title IV Overpayment)

Failure of student to attend class TIP: Develop census process to confirm enrollment for

disbursement Change in award eligibility (ie: result of verification process)

Allowable Charges

Current term/aid year charges for tuition, fees, room, board and books (If the school contracts with a third party servicer)

Written authorization from the student for any other education related charges incurred at the school other than the above listed is required

Prior year charges not exceeding $200

TIP: Develop standard authorization form for student to sign where circumstances warrant posting of funds to term outside current aid year, http://ifap.ed.gov/fsahandbook/attachments/1314FSAHbkVol4Ch2.pdf

Title IV Credit Balances

Must be paid to the student and/or parent (PLUS) within 14 days of disbursement (includes holidays) to the student’s account

May be issued via check, EFT, or cash; schools may not charge fees when resolving credit balances

Not required to issue a refund if the credit balance is less than $1

May not hold past 14 days unless a signed authorization to hold is on file All aid must be released by the end of the loan period for all FSA grant & loan programs

If issued via check, and the check is not cashed within 240 days, the school must return the funds to the designated program fund and update respective student’s record on COD to reflect resulting reduction in the aid award TIP: Develop process inside the 120 day time from where the student is

responsible for the loan fees; benefiting the student and exceeding the federal requirement

Required Authorizations

The use of FSA funds to pay charges other than tuition, fees, and room & board (& books)

Credit of FWS wages to the student’s account

Disbursement of FWS wages via Electronic Funds Transfer (EFT)

Hold FSA credit balances beyond the 14 day requirement

REMEMBER: Disbursement of current FSA funds to prior year charges are not to exceed $200, http://ifap.ed.gov/fsahandbook/attachments/1314FSAHbkVol4Ch2.pdf

Reconciliation Requirements

Reconciliation is a joint process where financial aid records are reviewed to ensure federal funds have been disbursed appropriately and discrepancies are resolved.

Schools are required to ensure procedures are in place

Failure to do so may result in questioning of administrative capability & impact institution eligibility to participate with FSA programs

Two types of reconciliation requirements Internal: the school reconciles its record of funds awarded by the Financial

Aid Office to those funds requested, received, disbursed, and returned by the Business (Bursars) Office

External: the school reconciles the internal institutional records to that of grants and loans originated ED via COD

Reconciliation Requirements

Documented reconciliation procedures required Ledgers of G5 account draw activity Disbursement logs Direct Loan program requires monthly reconciliation ED requires all FSA records to be reconciled monthly

Discrepancy Examples & Required Resolution A student’s disbursement data on COD and the school’s

record differs; action required for resolution A student’s data appears in your school records, however

not reported on COD; action required for resolution

Reconciliation Requirements

Pell Grant Reconciliation Report from COD: Summary of records processed for ongoing and year-end reporting

Pell Grant Electronic Statement of Account (ESOA): Summary school’s CFL versus net draw down for the year; including the sum of initiated draw downs, direct payments, adjustments, less refunds and returns

Pending Disbursement List Report: Report of disbursements not yet funded per COD (anticipated disbursements received or accepted)

Pell Grant Year-to Date Record (YTD): Detailed award and disbursement data on a individual basis or for all students for the institution

REMEMBER: The cash & reporting of Federal Pell, Iraq and Afghanistan Service Grant disbursements & adjustment deadline is September 30th.

FSA HB 2013-2014 ,Chap 5 Reconciliation, 4-95-96

Tools for Reconciliation:Direct Loans

School Account Statement (SAS): Generated monthly via COD delivered via SAIG (contains ending cash balance); includes the following information: Cash Summary Disbursement Summary by Loan Type Cash Detail Disbursement Detail

Pending Disbursement List: Report details all pending and/or anticipated disbursements (45 day window into future)

Actual Disbursement List: Report details actual disbursements from the prior week (Saturday through Friday)

Institutional reconciliation reports and procedures (including disbursement information and student identifying information)

REMEMBER: Final program close-out deadline for 2012-2013 AY is July 31, 2014 and for the 2013-2014 AY is July 31, 2015

FSA HB 2013-2014, Chap 5 Reconciliation, 4-97-100

Tools for Reconciliation:Campus-Based

ED Award Letter for SFA Funds Federal Perkins Loans Federal Supplemental Educational Opportunity Grant

(FSEOG) Federal Work Study

Institutional Disbursement & Reconciliation Reports Federal Perkins & FSEOG Grants

Institutional Payroll & Reconciliation Reports Federal Work Study

Questions & Open Discussion

Resources

2013-2014 Federal Student Aid Handbook, Volume 4, Processing Aid & Managing FSA Funds , available via the iLibrary: http://ifap.ed.gov/fsahandbook/attachments/1314FSAHbkVol4MASTER.pdf

NASFAA Resources: Compliance Toolkit; available online via: http://www.nasfaa.org/compliance/