TASFAA 2013 Conference CASH MANAGEMENT: START TO FINISH

1. TASFAA 2013 ConferenceCASH MANAGEMENT:START TO FINISH Dana Mingo Director of Student Financial Services, Dallas Christian College DeCha Reid District Director of Awards Management, Dallas County Community College District

2. TOPICS FOR DISCUSSION • Purpose of Cash Management • G5 System • Common Origination & Disbursement • Communication & Cooperation • Financial Aid Office Functions • Business (Bursars) Office Functions • Internal Controls • Disbursement of Title IV Funds • Allowable Charges • Required Authorizations • Title IV Credit Balances • Reconciliation Requirements & Tools

3. 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

4. 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

5. 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

6. 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

7. 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

8. Communication & Cooperation TIP: Joint Operations Calendar for the Registrar/Business/Financial Aid/Finance Departments

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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)

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. Questions & Open Discussion

24. 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/