1. Financial Aid Reconciliations The Fayetteville State University Process Fayetteville Fort Bragg

2. Financial Aid Reconciliations Background Financial aid reconciliations at Fayetteville State University were not being performed on a consistent basis nor were they following a prescribed format. As a former auditor, both of these were concerns. I was charged with reviewing what we were doing and with coming up with a consistent approach to the process. I will share with you this morning the process I followed to develop the template we use at Fayetteville State University and the obstacles we overcame in putting this template in place.

3. Financial Aid Reconciliations Caveat Note: I have not included any of the template documents or other outside documents in this PowerPoint presentation. Historically, I have seen where these do not always show up clearly, are often too small to be clearly read on the screen, and take up a lot of time and space in the presentation. The template and other documents relevant to this presentation were included on the website for the conference with the intention that you have them available for review as needed. Also note that the complete templates are available for your review and use, but I will only be using the month of June for the Pell and Perkins programs.

4. Financial Aid Reconciliations Goal/Objective What was the goal of the project? Our objective was to develop a consistent process for reconciling federal financial aid programs on a monthly basis. What did this entail? First I had to obtain an understanding of what the process should involve. Second I had to determine what we were trying to reconcile. Third I tried to determine the most comprehensive and effective means of performing the reconciliation.

5. Financial Aid Reconciliations Process What were we doing at Fayetteville State University and what should we be doing? As it turned out, our process was incomplete. After meetings with a number of folks at FSU and based on my experience as an auditor, I determined that the reconciliation should include several key points. First we need to reconcile federal drawdowns with the revenues recorded in the Banner general ledger. Second we need to reconcile the cash activity, starting with the month’s beginning cash on hand including the activity during the month to arrive at the cash on hand at the end of the month. Third we need to reconcile expenditures in the Banner general ledger with the awards recorded in our student accounts system.

6. Financial Aid Reconciliations Process What steps do we take to reconcile federal drawdowns with the revenues recorded in the Banner general ledger? Obtain prior year ending balance for each Fund from FGITBAL. These balances are entered in the June 30 column of the Trial Balance box in the July tab. Note that the prior month balances for the remaining months automatically feed from the prior month by cell reference. Extract general ledger balances and activity by account by month. Extract all transactions by month and sum by account. For the current month, use FGITBAL to obtain the balances for the aid program. Click Options and then Query General Ledger Activity Info (FGIGLAC). Click Rollback; enter the current month in the Period box (01-12); delete the account number shown; then click Next Block.

7. Financial Aid Reconciliations Process This will give you a list of all transactions for the current month. Under Help, click Extract Data No Key to create a download of the transactions. Sum the amounts by account to give you the current month’s activity. Add account transaction totals to prior month ending balances in the Trial Balance block. This will provide you with the month-end balances for the current month. List individual revenue transactions for comparison with G5 and COD. The individual transactions are listed in the Drawdowns area in the worksheet so they can be compared with the transactions on the G5 and COD. The Reconciliation block is used to make sure the amounts in Banner tie to the G5 and COD.

8. Financial Aid Reconciliations Process Obtain the U.S. Department of Education EDCAPS G5. Obtain the U.S. Department of Education Common Origination & Disbursement (COD). Match the disbursements shown in G5 and COD with those on the Banner general ledger and enter them on the same line as the Banner transactions. This works for all federal financial aid programs except Perkins. Perkins drawdowns no longer take place at FSU. We obtain a monthly trial balance from our service provider, ECSI.

9. Financial Aid Reconciliations Process The amounts in the Cash Reconciliation block under the Trial Balance block automatically feed from the Trial Balance block. The Difference in the Cash Reconciliation block should be zero. If not, you have one or more errors that need to be corrected.

10. Financial Aid Reconciliations Process The last step is to complete the Reconciliation of Banner Expenditures to the Amounts Posted to Student Accounts block. We have developed a WebFocus report to extract the detailed postings of each aid type from each student’s account on a monthly basis. The amount resulting from the extract of amounts awarded to students as shown on their student accounts is recorded in the block. The monthly total amount is then compared to the total monthly disbursements shown on the general ledger. We have a process in place for investigating any variances.

11. Financial Aid Reconciliations Problems What problems have we encountered? Reconciling items between G5/COD and the general ledger: Transactions that cross months Activity that crosses program years Refunds Corrections – rare Adjustments – rare Reconciling items between student accounts and the general ledger: Duplicate amounts Student with more than one Banner ID

12. Financial Aid Reconciliations Results What have we achieved? We now have a consistent and documented process for reconciling the financial activity of our federal financial aid programs. Our process ultimately provides a three-way and sometimes four-way match – something accountants and auditors love. We reconcile the general ledger to G5. We reconcile the general ledger to COD. For Perkins, we reconcile the general ledger to the ECSI trial balance. We reconcile the general ledger to student accounts. We have documented procedures describing exactly how to perform each of the steps in the process.

13. Financial Aid Reconciliations Questions?

14. Financial Aid Reconciliations My contact information: Jeff Henderson Fayetteville State University 910-672-1380 jhender7@uncfsu.edu