Direct Loan Life Cycle

Transcription

1 Fall 2017 Conference November 6 8, 2017 Direct Loan Reconciliation Direct Loan Life Cycle 1 1 Fall Conference November 66 - November 8, , 2017 NC

2 Direct Loan Reconciliation 2

3 Wood Mason U.S. Department of Education Federal Student Aid (FSA) Federal Loan School Support Team Atlanta, GA

4 Agenda Fundamentals Internal Reconciliation External Reconciliation Returns of Cash Tools of the trade Program Year Closeout (PYCO) 4

5 Fundamentals Of Reconciliation 5

6 Generally, reconciliation means to bring into agreement or harmony to make compatible or consistent Kumbaya 6

7 Reconciliation from a Title IV (TIV) perspective means that the financial aid data residing at your school (Financial Aid Office and Business Office) matches exactly the financial aid data residing in U.S. Department of Education/FSA systems Date and dollar Your Program Year Closeout (PYCO) reflects your drawdowns equal Net Accepted and Posted Disbursements (NAPD) Your PYCO Ending Cash Balance (ECB) equals $0 7

8 Rules & Regulations 8

9 Monthly reconciliation is a REQUIRED task for the William D. Ford Federal Direct Loan Program 34 CFR (b)(5) Displays Administrative Capability Helps to identify developing issues with cash management and disbursement reporting requirements 9

10 Cash Management Regulations 34 CFR 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 (3) Business days Idle Cash up to seven (7) days 10

11 34 CFR Record Retention Includes: Financial records that reflect each HEA, Title IV program transaction Documentation that reflects each student s eligibility for Title IV funds Documentation that reflects the payment period/loan period, date, and amount of each Title IV program transaction Any other program records that document administrative and financial responsibility (i.e., reconciliation documentation) 11

12 What is a Disbursement anyway? 12

13 Paraphrasing Webster s Dictionary, Disbursement is defined as a verb to payout, especially money, for expenses Derived from a Middle French word, desbourser, and an Old French word, desborser, which is a derivative of borse or purse, from the Late Latin bursa, or bag Dates to There will be a test after this presentation 13

14 For TIV purposes, a disbursement occurs on the date that the institution credits a student s account at the institution or pays a student, or parent, directly Defined term 34 CFR (a) Must be reported to COD within 15 days of the disbursement occurring Must report any adjustment to a disbursement within 15 days of the adjustment occurring 14

15 Authorization/CFL vs. available funds Authorization/CFL refers to the total amount of TIV aid made available to date for the entire award for that award May include funds ALREADY drawn Available funds refers to the authorization and increases MINUS funds already drawn Direct Loan schools under Heightened Cash Management (HCM) do NOT receive an initial authorization 15

16 While reporting of positive disbursements increases Your COD Current Funding Level (CFL) and increases your available funds in G5, reporting of downward adjustments does NOT decrease CFL and available funds G5 available balance can increase due to refunds FSA reduces available funding in excess of accepted disbursements quarterly Only draw funds from G5 based on actual disbursements accepted by COD and your immediate need 16

17 Rules of Play 17

18 Who is responsible for reconciliation? Anyone that touches the money! 18

19 The secret to successful reconciliation? Know where the money is! 19

20 Reconciliation is a two-part process Internal Reconciliation Financial Aid Office data and Business Office/Bursar s Office/Comptroller s Office data are compared and matched External Reconciliation Reconciled school data is compared and matched to data in Department of Education systems 20

21 Internal Reconciliation 21

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23 Ensure that What is posted to a student s account in the Business Office (amount and date) matches EXACTLY that found on the school s Financial Aid Office software Net Drawdowns (ND) = Net Accepted and Posted Disbursements (NAPD) Cash management requirements are met Internal cash transactions (drawdowns, refunds of cash, and adjustments) match school bank statements Data transmitted electronically between school offices match Run a regular comparison to identify any discrepancies Include the Registrar s Office 23

24 Tips for internal reconciliation Frequent check-in between the Business and Financial Aid Offices Disbursements reported match disbursements posted Drawdowns and returns of cash match disbursement data School banking data matches G5 data Regularly run a report to identify rejected data Weekly/Bi-weekly Resolve ALL rejected data and re-submit to COD promptly Return funds to the correct program and year Refunds of cash should be made electronically 24

25 And don t forget the student/recipient Return funds/update disbursements not made and award amounts Student doesn t want the disbursement Student doesn t return for the next term Student is no longer eligible 25

26 Ensure the Business Office and Financial Aid Office data agrees with what the STUDENT wants and is eligible to receive Good idea to grant Read Only access to COD for Business Office staff Return funds appropriately to the correct Program and Award Year Direct Loan Program cash refunds should be made electronically Adjustments should ONLY be made to correct the error of drawing funds from the wrong Award Year 26

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28 External Reconciliation 28

29 Financial Aid Office Internally Reconciled Business Office G 5 (Resource) Reconcile with COD 29

30 Ensure that Reconciled disbursement data at the school matches EXACTLY that disbursement data reflected on COD Cash transactions recorded at the school match EXACTLY cash transactions reflected in COD and G5 Drawdowns Drawdown adjustments Refunds of cash 30

31 Tips for external reconciliation Make sure your internal data is reconciled Begin regular external reconciliation with U.S. Department of Education systems COD G5 Daily/weekly monitoring of edit code rejects Rejected D/L data equals unsubstantiated cash Rejected Pell Grant/TEACH Grant data equals no funding 31

32 Reconciliation Tools 32 32

33 COD validates all incoming data against COD and Program edits A COD warning edit is meant to bring your attention to the data you send and double check Warning Edits DO NOT preclude the data from being accepted and processed by COD A COD hard reject edit indicates the data did NOT past COD or Program edits and you must review the data and correct errors and resubmit Rejected disbursement data will NOT increase your CFL and as a result not increase your G5 available balance Rejected disbursement data can mean unsubstantiated cash 33

34 The Direct Loan School Account Statement (SAS) is delivered to your Student Aid Internet Gateway (SAIG) mailbox Generated the first Saturday of each month Option to receive Month To Month data Option to receive Year To Date data Fixed-Length or Comma Delimited w/headers format Provides the Department s official monthly Ending Cash Balance and detailed cash and disbursement data You MUST reconcile monthly to the balances reflected on the D/L SAS and you MUST document that you have done so 34

35 School Receives SAS Compare Cash Summary Match? NO Compare Cash Detail Resolve Issues Resolved? NO YES Compare Loan Detail YES DONE (Documentation)

36 The Direct Loan SAS Disbursement Detail On Demand Report Time frame entered by user Year To Date Month To Month Date Range Request via the COD Web Batch Menu A Report Reader for the SAS Disbursement Detail On Demand Report is available via the COD Website File is requested via the COD Web Request the file in flat-file format 36

37 Direct Loan Reports for Reconciliation Pending Disbursement List Weekly report that identifies disbursements with DRI=FALSE up to 45 days in the future or any date preceding the date of the report Sent to your SAIG mailbox Posted to the COD Web via the COD Web Reporting Portal Direct Loan Actual Disbursement List Weekly report that displays actual disbursement activity from the previous Saturday to Friday Sent to your SAIG mailbox Posted to the COD Web via the COD Web Reporting Portal 37

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48 Individual users must register Read-only access is available 48

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52 Reconciliation Program Year Closeout (PYCO) 52

53 PYCO is the completion of processing for a given Award Year Should occur SHORTLY after the final disbursements for that Award Year are processed and accepted by COD Remember the 15-day reporting window You can open the Award Year if necessary PYCO results in your Unbooked Disbursements = $0 PYCO results in your Net Drawdowns = NAPD PYCO results in your ECB = $0 Ensure that ALL cash management and reporting requirements have been met 53

54 Request to re-open the Award Year Request Extended Processing via the COD Web if you ve confirmed you ve closed out prior to the deadline Deadline is July 31 of the calendar year following the Award Year pair Monday, July 31, 2017 was the closeout deadline for Award Year Approval is necessary to re-open for extended processing after data submission deadline Any change in your ECB will result in your school no longer being confirmed closed out for that Award Year 54

55 Any change to Disbursement data for and prior, once the data submission deadline has passed. Automatic reopen if school closed but data submission deadline has NOT passed. 55

56 Remember...REGULATIONS TO RECONCILE SUPERSEDE CLOSEOUT PROCESSES You should be able to reconcile and complete processing for the Award Year BEFORE the closeout deadline Remember you MUST have an ECB = $0 on your last SAS to officially closeout for the Award Year Deadline is July 31 of the calendar year following the Award Year pair Don t wait until July to reconcile your last month or you won t be able to officially closeout by the deadline 56

57 57 Good Resources! FSA Handbook Volume IV Processing Aid and Managing FSA Funds Monitor ifap.ed.gov regularly for announcements related to funding and reconciliation Monitor the COD Daily Updates G5 Help Desk Telephone Hours...8AM-8PM (ET) COD Help Desk Reconciliation Team Telephone Hours...8AM-11PM (ET)

58 Wood Mason U.S. Department of Education Federal Student Aid Atlanta, GA