MASFAA June 13-15, 2018 Philadelphia, MS

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2 Direct Loan Reconciliation Direct Loan Reconciliation 2

3 Direct Loan Reconciliation Fundamentals What is Reconciliation? Reconciling your Direct Loan data internally Reconciling your D/L data with FSA systems Cash Tools of the trade Program Year Closeout 3

4 Direct Loan Reconciliation Kumbaya Fundamentals of Reconciliation 4

5 Direct Loan Reconciliation Reconciliation is a catch-all phrase referring to the task of comparing the financial aid data residing in your Financial Aid/Business Office system(s) to the financial aid data residing in U.S. Department of Education/Federal Student Aid systems Ensure that the data matches EXACTLY Date and Dollar Net Drawdowns (ND) from G5 equals Net Accepted & Posted Disbursements (NAPD) in COD Discrepancies MUST be identified and resolved 5

6 Direct Loan Reconciliation Reconciliation is a two-part process Internal reconciliation is comparing Financial Aid Office data to Business Office/Bursar s Office/Comptroller s Office data and ensuring the data matches EXACTLY dollar & date External reconciliation is comparing RECONCILED SCHOOL DATA to U.S. Department of Education/FSA systems and ensuring the data matches EXACTLY dollar & date 6

7 Internal Reconciliation Who is responsible for reconciliation at your school? Anyone that touches the money! 7

8 Internal Reconciliation Financial Aid Office Business Office Reconcile Internally 8

9 Internal Reconciliation Monthly reconciliation is a REQUIRED task for the William D. Ford Federal Direct Loan (D/L) Program As described under 34 CFR (b)(5) Monthly reconciliation demonstrates Administrative Capability as described under 34 CFR Best of all it helps you identify developing issues with cash management and disbursement reporting requirements 9

Internal Reconciliation Other regulations associated with D/L monthly reconciliation and Program Year Closeout (PYCO) Cash Management 34 CFR 668.161-167 (Subpart K) Record Retention 34 CFR 668.

10 Internal Reconciliation Other regulations associated with D/L monthly reconciliation and Program Year Closeout (PYCO) Cash Management 34 CFR (Subpart K) Record Retention 34 CFR Retention of any TIV Program record that documents administrative/financial responsibility that reflect each HEA/TIV Program transaction For three (3) years after the end of the Award Year for which the aid was awarded and disbursed 10

account at the institution or pays the student, or parent, directly with funds received

11 Internal Reconciliation Speaking of disbursements Disbursement is a defined event 34 CFR (a) A disbursement occurs on the date that the Institution credits a student s account at the institution or pays the student, or parent, directly with funds received from the Secretary or Institutional funds used in advance of receiving Title IV or HEA program funds 11

12 Disbursements There are two types of disbursements A Pending Disbursement is one that is expected to take place on a future date and in an expected amount A Pending Disbursement reflects a Disbursement Release Indicator (DRI) = FALSE A Pending Disbursement does NOT impact funding Will NOT increase your COD Current Funding Level (CFL) 12

13 Disbursements An Actual Disbursement drives funding Increases your COD CFL which will ultimately increase your available balance in G5 Substantiates funds drawn from G5 Reflects a DRI = TRUE Can be submitted seven (7) days prior to the date of disbursement Actual Disbursement data, or adjustments to Actual Disbursement data, MUST be submitted to COD within 15 days of the event 13

14 Disbursements COD validates your submitted actual disbursement data against COD AND Program edits A COD Warning Edit is meant to bring your attention to, and double check, the submitted data Warning Edits DO NOT preclude the data from being accepted and processed by COD A COD Reject Edit indicates the data did NOT pass COD or Program edits and you must review the data and correct errors and resubmit Rejected disbursement data will NOT increase your CFL/G5 available balance and can mean unsubstantiated cash 14

15 Disbursements Though an actual disbursement of a D/L will increase your CFL, and ultimately your G5 available balance, reporting a downward adjustment to a Direct Loan award will NOT decrease your COD CFL and available balance in G5 Your available balance will increase after returning D/L funds to G5 Schools can request their G5 available balance to be reduced to the lower of their ND or NAPD 15

16 Internal Reconciliation Internal reconciliation between the Financial Aid Office and the Business Office ensures Financial aid data posted to a student s account in the Business Office matches EXACTLY that found in the Financial Aid Office ND = NAPD Internal cash transactions match school bank statements Drawdowns, refunds of cash, disbursement adjustments Cash Management requirements/regulations have been met 16

17 Internal Reconciliation Tips for successful internal reconciliation Frequent check-in between the Financial Aid/Business Office Disbursements reported to COD match date & dollar disbursements posted to the student account Drawdowns and returns of cash match disbursement data School banking data matches G5 data Regularly run a report to identify rejected data Resolve ALL rejected data and re-submit to COD promptly Rejected D/L disbursement data means unsubstantiated cash 17

18 Internal Reconciliation Don t forget the student/recipient Ensure the Business Office and Financial Aid Office data agrees with what the student wants and is eligible to receive Your student doesn t want all, or any, of the disbursement Your student doesn t return for the next term Your student loses his or her eligibility Return funds to the appropriate program/award year D/L refunds of cash should be made electronically 18

19 External Reconciliation 19 une 13-15, 2018

20 External Reconciliation Internally Reconciled Financial Aid Office Business Office G 5 (Resource) Reconcile with COD 20

21 External Reconciliation Tips for external reconciliation Make sure you are reconciled internally BEFORE you attempt to reconcile to COD/G5 Ensure that reconciled disbursement data at your school matches EXACTLY date & dollar the disbursement data reflected on the COD Website Cash transactions recorded at your school match EXACTLY cash transactions reflected on COD and G5 21

22 Cash Management Tips for Cash Management 34 CFR (Subpart K) 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 of Cash Management include Immediate Need is three (3) business days If cash drawn from G5 can t be disbursed within three (3) business days, remaining funds MUST be returned to G5 You can t keep unsubstantiated cash while reconciling 22

23 Reconciliation Tools School Account Statement (SAS) Generated the first full weekend of each month Delivered to your Student Aid Internet Gateway (SAIG) Mailbox Comma Delimited w/headers (CSV) or Fixed Length format Displays both cash and disbursement activity Option to receive Month-To-Month or Year-To-Date data Displays the U.S. Department of Education s official Ending cash Balance (ECB) You MUST reconcile monthly to the balances reflected on the D/L SAS and you MUST document that you have done so 23

24 Reconciliation Tools School Account Statement (SAS) Generated the first full weekend of each month Delivered to your Student Aid Internet Gateway (SAIG) Mailbox Comma Delimited w/headers (CSV) or Fixed Length format Displays both cash and disbursement activity Option to receive Month-To-Month or Year-To-Date data Displays the U.S. Department of Education s official Ending cash Balance (ECB) You MUST reconcile monthly to the balances reflected on the D/L SAS and you MUST document that you have done so 24

25 Reconciliation Tools School Account Statement (SAS) Generated the first full weekend of each month Delivered to your Student Aid Internet Gateway (SAIG) Mailbox Comma Delimited w/headers (CSV) or Fixed Length format Displays both cash and disbursement activity Option to receive Month-To-Month or Year-To-Date data Displays the U.S. Department of Education s official Ending cash Balance (ECB) You MUST reconcile monthly to the balances reflected on the D/L SAS and you MUST document that you have done so 25

26 Reconciliation Tools D/L SAS Disbursement Detail On Demand Report Requested via the COD Web Batch Menu CSV or Fixed-Length format Time frame is entered by the user Year-To Date Month-To-Month Date Range A Report Reader for the D/L SAS Disbursement Detail On Demand Report is available via the COD Web 26

27 Reconciliation Tools Direct Loan Actual Disbursement List Weekly report displaying actual disbursement activity from the previous Saturday to Friday Sent to your SAIG mailbox in Comma-Delimited (CSV) format Posted to the COD Web via the COD Web Reporting Portal in Comma-Delimited (CSV) format 27

28 Reconciliation Tools D/L Pending Disbursement Listing Report 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 in Comma-Delimited (CSV) format Posted to the COD Web via the COD Web Reporting Portal in Comma-Delimited (CSV) format 28

29 Reconciliation Tools 29

30 Reconciliation Tools 30

31 Reconciliation Tools 31

32 Reconciliation Tools 32

33 Program Year Closeout (PYCO) PYCO is the completion of processing for a given Award Year PYCO deadline is the last business day of the month of July in the year following the second year of the Award Year pair D/L PYCO closeout deadline for Award Year is Tuesday, July 31, 2018 You should be able to complete PYCO SHORTLY after the final disbursements for that Award Year are processed and accepted by COD Remember the 15-day reporting window 33

34 Program Year Closeout (PYCO) A successful PYCO will result in Your ND = NAPD Unbooked disbursements = $0 Your ECB = $0 Your PYCO will ensure that ALL cash management and reporting requirements have been met 34

35 Program Year Closeout (PYCO) 35

36 Program Year Closeout (PYCO) Complete your PYCO as soon as you have completed processing for the Award Year You can request Extended Processing should you need to open the Award Year after PYCO if necessary You ll need FSA authorization to re-open an Award Year for Extended Processing if the closeout deadline has passed Any change to your ECB after you ve engaged in Extended Processing will result in your school no longer being confirmed closed out for the Award Year 36

37 Program Year Closeout (PYCO) 37

38 Resources Resources FSA Handbook Volume IV 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) 38

39 Resources Resources COD Help Desk Reconciliation Team Telephone Hours...8AM-11PM (ET) 39

40 Direct Loan Reconciliation Wood Mason U.S. Department of Education Federal Student Aid Atlanta, GA 40

Direct Loan Life Cycle

Fall 2017 Conference November 6 8, 2017 Direct Loan Reconciliation Direct Loan Life Cycle 1 1 Fall Conference November 66 - November 8, 2017 8, 2017 NC Direct Loan Reconciliation 2 Wood Mason U.S. Department