Anthony (Tony) Laing | Dec. 2014

U.S. Department of Education

2014 FSA Training Conference for Financial Aid Professionals

Title IV Reconciliation: Agreement, Accountability, Action

Session 18

Agenda

• Agreement- Who needs to Agree?• Accountability- Why, What, When?• Action- How?

2

Who needs to Agree?Agreement

3

Title IV Reconciliation: Agreement

• Definition• Business/Bursar’s office and Financial Aid

• Don’t forget the aid recipient

• What needs to agree• Date, amount, adjustments to initial disbursement

• How often

4

Definitions

• (General) To bring into agreement or harmony; make compatible or consistent

• (Specific) The process by which Title IV aid (grants, loans, and campus-based aid) recorded on the Department of Education systems is reviewed and compared with a school’s internal records; AND• Discrepancies are identified and resolved• Reasons for remaining cash balances are identified

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6

Key Reconciliation Players: Pell/DL/TEACH

BusinessOffice

FinancialAid

Office

GG 5COD

Reconcile Internally

Reconcile with COD Reconcile with COD

(Resource)

6

7

Key Reconciliation Players: Campus-Based

BusinessOffice

FinancialAid

Office

GG 5

eCB (FISAP)

Reconcile Internally

Report/Reconcile Data on the FISAP

Drawdown/Reconcile Funds in G5Must be EqualMust be Equal

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Internal vs. External Reconciliation

• Internal Reconciliation• Between business/bursar/comptroller office records and financial aid system origination and disbursement records

• External Reconciliation• Between school records and the Department

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9

Key Internal Reconciliation Players: All Title IV Aid Programs

BusinessOffice

FinancialAid

Office

Reconcile Internally

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Internal Reconciliation

• Ensure that • What is posted to student accounts (i.e. amount and date) matches

exactly the data in the school’s financial aid software• Net Drawdowns (ND) = Net Accepted and Posted Disbursements

(NAPD)• Cash is not held beyond cash management requirements• Internal cash transactions (drawdowns, refunds of cash, and

adjustments) match school bank statements• Records transmitted electronically between offices within the school

environment match. Run a regular comparison to identify discrepancies

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Internal Reconciliation- key points• Don’t Forget

• The student/aid recipient• Return funds/update disbursements not wanted• Return funds/update disbursements not eligible to receive• Check prior award years for any changes that may have

taken place • Regular communication between the two offices and the

registrar supports agreement of records• Electronic comparison of records• Frequent touch point among offices

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12

Key External Reconciliation Players: Campus-Based/Pell/DL/TEACH

BusinessOffice

FinancialAid

Office

GG 5

Reconcile all others with COD

(Resource)

Reconcile Campus-Based via FISAP

12

External Reconciliation

• Disbursement transactions• Internal school disbursement records (both business office and

financial aid office) match exactly to disbursement records in FSA systems - COD and FISAP

• Cash transactions• Drawdowns, drawdown adjustments, and refunds of cash

transactions in school internal records match exactly with transactions in COD/FISAP and G5

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Why, What, WhenAccountability

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Accountability: Why? REQUIRED• Monthly reconciliation REQUIRED for Direct Loans,

TEACH, FWS, and SEOG• Regular reconciliation recommended for all programs

• Why?• Identifies issues with meeting other cash management and disbursement reporting

requirements• Demonstrates administrative capability

• What are the related regulatory requirements? • Direct Loan - 34 CFR 685.300(b) (5)• TEACH - 34 CFR 686.37• FWS - 34 CFR 675.19 (b)(2)(iv)• SEOG - 34 CFR 676.19 (b)(2)

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Accountability: What? Disbursements

Disbursement Reporting Deadlines:•Title IV Aid disbursement/adjustment reporting requirement published annually in the Federal Register

• 2014-15 Award Year reporting deadlines are included in Federal Register Notice dated July 11, 2014:

http://ifap.ed.gov/fregisters/FR071114.htmlDisbursements/adjustments must be reported within 15 days of the actual disbursement date or date adjustment occurred

• Notice also includes other critical deadline dates for each program• Disbursements for Campus-Based programs are reported annually

through the FISAP submission

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Accountability: When to draw/return $

• Cash Management Regulations:• 34 CFR 668.161-166• “The institution, as a trustee of Federal funds, may not use or hypothecate

(i.e., use as collateral) Title IV, HEA program funds for any other purpose.”

• Key Concepts:• Immediate need – three business days• Excess/Idle Cash – up to seven days

• Can I keep the funds while I am reconciling???

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NO

Other Requirements

• 34 CFR 668.24 – Record Retention… Includes• Financial records that reflect each HEA, Title IV program

transaction• Documentation that reflects each student/parent eligibility for

Title IV funds• Documentation that reflects the payment period/loan period, date,

amount of each Title IV program transaction• Any other program records that document administrative and

financial responsibility (i.e., reconciliation documentation)

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Congratulations!!!!

• Prior Year Grant data

    11/5/2012 6/17/2013 6/2/2014 10/14/2014Program Award Year # of Schools

with Balances

# of Schools with Balances

# of Schools with Balances

# of Schools with Balances

 Pell 2009/2010 548 364 61 32  2010/2011 645 174 33 27  2011/2012 2044 721 143 98  2012/2013 N/A N/A 373 275ACG 2009/2010 100 88 61 53  2010/2011 133 93 6 4SMART 2009/2010 23 22 16 15  2010/2011 21 14 0 0

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Congratulations!!!

• Direct Loan close out comparison as of July 31

  2011-2012 2012-2013

Total Schools 6,275 6,256

Schools Closed Out by 7/31

5,164 5,593

Schools Open 1,111 663

Schools with $0.00 Balance

503 288

Schools with a Positive Balance

41 205

Schools with a Negative Balance

22 170

% Closed out this year 82.29% 89.40%

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Tips and ToolsAction

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Tips for Internal Reconciliation

• Daily/weekly check-in between Business Office and Financial Aid Office• Do disbursements reported match disbursements posted?• Do draws and refunds of cash match disbursements?• Does the school banking information match G5 data?

• Refund funds appropriately to the correct program and year• Refunds of Cash should be made electronically• Drawdown Adjustments should only be used to correct errors

(and are disabled in G5 for Campus-Based programs)

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Tips for Internal Reconciliation

• Time frame for returning unclaimed funds (stale dated checks) no later than 240 days from the date check issued • 34 CFR 668.164(h)• FSA Blue Book Volume 5, Chapter 2, page 27• 2014-15 FSA Handbook Volume 4 page 19 and page 48

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Action: How to Refund Funds• All programs - ELECTRONICALLY via G5

• 2014-15 FSA Handbook, Volume 4 Chapter 4• Blue Book, Volume 5 Chapter 5

• Paper checks will no longer be accepted for Direct Loans after December 31, 2014• http://ifap.ed.gov/eannouncements/

022614DLProcessingInfoDiscontinPaperCheckProcessDLRefundsCashBeginJan12015.html

• If exceptional circumstances require your school to refund Grant funds via paper check• 2014-15 FSA Handbook Volume 4, page 82• Note the school’s DUNS # and G5 award number (i.e., P063P14####)

on the front of the check

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Refunding Funds

• Campus-Based Funds• FISAP change requests

• Adjustments back for 5 years, currently back to 2009-10

• Refund funds through G5• 2014-15 FSA Handbook Volume IV page 4-85

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Action: Refunding Funds• Refund of funds through G5 should be made electronically

• Set up a bank account through G5 for refunds (888-336-8930)• If funds are being refunded through G5 for regulatory reasons schools

MUST send downward disbursement adjustments for Grant/Direct Loan Programs• For Grant Programs, disbursement changes cannot be submitted after funding for the

award year has been canceled (five years after the end of the award year)

• Reminders:• If refunding funds from an audit or program review, follow repayment

instructions per the Final Audit or Program Review Determination letter• DL 120 day rule does not apply when refunding funds due to

regulatory/statutory requirements - 34 CFR 685.202 (c)(4)(i)

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Tips for External Reconciliation

• Keep current on daily/weekly processing and any edit code rejects

• Complete Internal Reconciliation first before regular External Reconciliation to identify and eliminate any internal discrepancies

• Pay attention to IFAP announcements and COD updates regarding processing issues and any funding reductions

• What’s new?• Use COD and G5 reports and web screens

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Action: Edit Code Rejects/Warnings

• Warnings are there to alert you of a potential problem• Edit code rejects - do not build on the COD system• Monitor your batch import results or view rejects by batch

on the COD website• Set aside time to resolve edit code rejects daily/weekly• Rejected Direct Loan records can lead to unsubstantiated

cash for advance funded schools• Rejected Pell Grant, TEACH, and Direct Loan HCM1

school records will not increase available funds in G5• 25% of calls to customer service - Edit code rejects

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Action: New COD Tools• COD report readers for Pell Year To Date (YTD), Pell Reconciliation, and

Direct Loan School Account Statement (SAS) Disbursement Detail on Demand• Readers and instructions available on COD website/Cod resources• Request the files in flat file format• Reports/files still delivered via SAIG, import into reader to use with Excel

• File Share/Messages• Adhoc reports uploaded for school use• Available for limited time

• School Self-Help (Coming soon)• FAQ interactive• Check progress of tickets

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Action: Pell Reports

• Pell Reports for Reconciliation• Electronic Statement of Account (SAIG) - cash transactions

• Initial Obligation/Authorization, changes to obligation/authorization both by date and amount

• Number of unduplicated YTD recipients

• Reconciliation Report (SAIG) - summary disbursement• Summary Pell Grant received YTD by each student• Included verification and POP status as well as Life-Time Eligibility used (LEU)

• Year to Date (YTD) file (SAIG) - detail disbursement level• Contains complete year to date student/disbursement level data and can be

used to help rebuild lost school data either by student or school

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Request/Use reports at least monthly

COD Grant Data Requests

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vv

Electronic Statement of AccountMultiple Reporting RecordReconciliation FilePell POP ReportYear to Date RecordVerification Status Report

Action: DL and TEACH SASSchool Account Statement (SAS)•Provides the Department’s official monthly Ending Cash Balance and detailed cash and disbursements (SAIG only)•Generated the first full weekend of the month and reflects data up to the end of the previous month (YTD or month to date depending on your settings)•You MUST reconcile monthly to the balances reflected on the SAS and must document that you have done so•Composed of four Sections

• Cash summary• Cash detail• Disbursement Summary by loan type (DL SAS Only)• Loan detail, loan level, or detail disbursement activity level

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Setting Your SAS Options

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Fixed Length YTDworks best with mostschool software

YTD helpful for final endof year reconciliation

Lifetime University

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Reconciliation to the SASSchool

Receives SAS

Match?

Resolve Issues

Compare Cash Detail

Compare Loan Detail

NO

YESYES

Resolved?

Compare Cash

Summary

DONEDONE

NO

(Documentation)34

Action: Reports- Direct Loan

• Direct Loan School Account Statement Disbursement Detail on Demand (SAIG)• Request via COD batch menu• Year to date, month to date, date range• Can be in the same or different format than the School Account

Statement (SAS)

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COD Request: SAS Disbursement Detail on Demand

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vv

vv

Action: Reports - DL and TEACH

• Pending Disbursement Listing• Assists in identifying pending disbursements that should be actual

disbursements, or that should be reduced to $0• Provides list of pending disbursements 45 days in the future or any date

in the past

• Direct Loan Actual Disbursement List*DL only • Assists in monitoring if actual accepted disbursements and amounts

match what was posted to student accounts on a weekly basis• Provides actual disbursements posted in COD for reported week

(Saturday – Friday)

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Action: COD Web Screens

• Services/School (reports available on the COD web)• School menu/School Summary Information• School menu/School Funding Information• School menu/School Summary Financial Information• School menu/Cash Activity

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School’s Pell Newsbox

12345678-PL

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Direct Loan Newsbox

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12345678-DL

COD- School Summary Information

Life Long Learning College

BARB DAVIS (202)821-3953

BARB DAVIS (202)821-3953

BARB DAVIS (202)821-3953

Please keep contact information updated!

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COD- School Funding Info- Pell

Life Long Learning College

Pell CFL based on Disbursements and adjustments

Note Pell Unduplicated recipients And Total ACA paid

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COD- School Funding Info- DL

Life Long Learning College

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COD- School Summary Financial

Life Long Learning College

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COD – Cash Activity

Life Long Learning College

Draw fullySubstantiated?Draw= AcceptedAnd posted Disbursementsapplied

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Tools by Program• Campus-Based Programs

• https://cbfisap.ed.gov/ecb/CBSWebApp/• CB Call Center 1-877-801-7168• Email at CBFOB@ed.gov• Perkins Liquidation- questions or need to liquidate your portfolio?• PerkinsLiquid@ed.gov

• Training Recording- Completing the FISAP• http://ifap.ed.gov/dpcletters/ANN1418.html

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Action: All Programs - G5.gov

Read only access is available for financial aid administrators

Use G5 to draw and refund cash

Monitor draws and refunds

Does NOT contain disbursementlevel data

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G5 Award Numbers• G5 award numbers are school, program, and award year

specific• Example for 2014-15 award year• Funds are drawn or returned by program and year

• #### represents each school’s unique G5 (gaps) ID

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Program G5 Award Number Award Year

Direct Loan P268K15#### Trailing Year

TEACH Grant P379T15#### Trailing Year

Pell Grant P063P14#### Leading Year

IASG P408A14#### Leading Year

Campus-Based FWS: P033A14####SEOG: P007A14####

Leading Year

All Programs - G5 Reports

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External Award Activity Detail

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ACTION: Final Reconciliation and CloseoutTitle IV Reconciliation

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Action: Final Reconciliation and Closeout

Definition:

The process by which schools complete processing at the end of an award year. This process should:•Be an extension of regular reconciliation cycle (i.e., one final monthly reconciliation)•Result in a $0 ending cash balance (Net Drawdowns = Net Accepted and Posted Disbursements) in ALL systems•Occur shortly after final disbursements are made for a program and award year (or reported for CB Programs)•Ensure that all cash management and disbursement reporting requirements have been met

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Action – Closeout Deadlines*(system processing deadlines may impact the actual date final disbursements are accepted)

•Pell/Iraq Afghanistan Service Grant - September 30th of the award year

• http://ifap.ed.gov/eannouncements/090514PellGrantIraqAfghanServGrant1314AYProcDeadline.html

•TEACH Grant - September 30th of the award year• ifap.ed.gov/eannouncements/

090514AdditionalTEACHGrantCloseoutInformationfor20132014AY.html

• Direct Loan - July 31st of the year following the award year• The closeout deadline for Direct Loan 2012-2013 was July 31, 2014• http://ifap.ed.gov/eannouncements/

062614Additional1213DirectLoanProgramYearCloseoutInformation.html

• The close out deadline for Direct Loans 2013-14 will be July 31, 2015

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Action - Closeout Deadlines*(system processing deadlines may impact the actual date final disbursements are accepted)

•Campus-Based - FISAP filing deadline September 30th

• http://ifap.ed.gov/eannouncements/082714ReminderOct12014DeadlineforSubmittingFISAP.html

• FISAP reporting must correspond to G5 draws (i.e. what you report you paid must equal what you drew)

• Campus-Based – Closeout reduction occurs February following FISAP filing deadlines (February 2015 – reduce funding for 2013-14 awards)

• Unprocessed de-obligations (negative G5 balance) that have not been refunded (repaid) to G5 will result in an Accounts Receivable being set up to collect the amount due 

• Interest accumulates on the balance owed

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Action: Closeout Tips• Remember - A school must follow all existing regulations

for drawing funds and reporting expenditures/disbursements and disbursement adjustments timely

• Most schools should be able to reconcile and complete processing well before closeout deadlines

• DL- must have a $0 ending cash balance SAS to officially closeout, i.e., don’t wait until July to reconcile or you won’t be able to officially close out by the deadline

• You must monitor IFAP closely for announcements related to funding and reconciliation deadlines for all Title IV programs

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Action: Funding Cancellation• Pell Grant and Campus-Based

• Occurs five years after the end of the award year (Pell 2013-14 funding will cancel effective September 30, 2019)

• ACG and SMART• 2009-10 award year will cancel September 30, 2015 (five year

cycle)

• School MUST be fully reconciled to $0 cash balance• No further disbursement or adjustment data can be

reported to COD• No further funds are available to request from G5• Funds needing to be returned must be returned via G5 to

miscellaneous

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In a Nut ShellTitle IV Reconciliation

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Action: The Basics in a Nutshell

• Internal Reconciliation• Establish a regular schedule to compare Financial Aid and

Business office records to make sure they are identical• Use bank records to ensure funds are drawn and returned to the

correct program and year

• External Reconciliation• At least monthly make sure internal records match FSA system

records and update as needed• Review current and prior award years

• Use COD and G5 reports• Call for help

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Reconciliation Resources• FSA Handbook - Volume 4 • COD technical reference

• Implementation guide, edit code rejects, reports

• Blue Book - updated version published 2013• IFAP announcements - you must monitor IFAP to be

considered administratively capable• Detailed recorded training materials available

• COD reconciliation team - contact via the main school services number 800-848-0978 or 800-474-7268

• Federal Loan School Support Team (FLSST)• dlops@ed.gov

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QUESTIONS?

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Anthony.Laing@ed.gov202-377-3112

Allison.Richards@ed.gov303-844-3324