Title IV Reconciliation: Agreement, Accountability, Action

1. Session 18 Title IV Reconciliation: Agreement, Accountability, Action Anthony (Tony) Laing | Dec. 2014 U.S. Department of Education 2014 FSA Training Conference for Financial Aid Professionals

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

3. Agreement Who needs to Agree? 3

4. 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

5. 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

6. Key Reconciliation Players: Pell/DL/TEACH Financial Aid Office Business Office Reconcile Internally Reconcile with COD Reconcile with COD G 5 COD (Resource) 6

7. Key Reconciliation Players: Campus-Based Financial Aid Office Business Office Reconcile Internally Report/Reconcile Data on the FISAP Must be Equal Drawdown/Reconcile Funds in G5 G 5 eCB (FISAP) 7

8. 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

9. Key Internal Reconciliation Players: All Title IV Aid Programs Financial Aid Office Business Office Reconcile Internally 9

10. 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

11. 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

12. Key External Reconciliation Players: Campus-Based/Pell/DL/TEACH Financial Aid Office Business Office (Resource) G 5 Reconcile Campus-Based via FISAP Reconcile all others with COD 12

13. 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

14. Accountability Why, What, When 14

15. 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)

16. 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.html Disbursements/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

17. 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??? NO

18. 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)

19. Congratulations!!!! • Prior Year Grant data

20. Congratulations!!! • Direct Loan close out comparison as of July 31

21. Action Tips and Tools 21

22. 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)

23. 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

24. 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

25. Refunding Funds • Campus-Based Funds • FISAP change requests • Adjustments back for 5 years, currently back to 2009-10 • Refund funds through G5 • 2014-15FSA Handbook Volume IV page 4-85

26. 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)

27. 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

28. 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

29. 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

30. 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 Request/Use reports at least monthly

31. COD Grant Data Requests Electronic Statement of Account Multiple Reporting Record Reconciliation File Pell POP Report Year to Date Record Verification Status Report v

32. Action: DL and TEACH SAS School 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

33. Setting Your SAS Options Lifetime University Fixed Length YTD works best with most school software YTD helpful for final end of year reconciliation

34. School Receives SAS Compare Cash Detail NO NO Compare Cash Summary Resolve Issues Resolved ? Match ? Compare Loan Detail YES YES DONE DONE Reconciliation to the SAS (Documentation) 34

35. 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)

36. COD Request: SAS Disbursement Detail on Demand v v

37. 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)

38. 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

39. School’s Pell Newsbox 12345678-PL

40. Direct Loan Newsbox 12345678-DL

41. 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!

42. COD- School Funding Info- Pell Life Long Learning College Pell CFL based on Disbursements and adjustments Note Pell Unduplicated recipients And Total ACA paid

43. COD- School Funding Info- DL Life Long Learning College

44. COD- School Summary Financial Life Long Learning College

45. COD – Cash Activity Life Long Learning College Draw fully Substantiated? Draw= Accepted And posted Disbursements applied

46. 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

47. 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 disbursement level data

48. 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

49. All Programs - G5 Reports

50. External Award Activity Detail