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

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

3. Who needs to Agree? Agreement 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 4

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 5

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

7. 7 Key Reconciliation Players: Campus-Based Business Office Financial Aid Office G G 5 eCB (FISAP) Reconcile Internally Report/Reconcile Data on the FISAP Drawdown/Reconcile Funds in G5 Must be Equal 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 8

9. 9 Key Internal Reconciliation Players: All Title IV Aid Programs Business Office Financial Aid 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 10

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 11

12. 12 Key External Reconciliation Players: Campus-Based/Pell/DL/TEACH Business Office Financial Aid Office G G 5 Reconcile all others with COD (Resource) Reconcile Campus-Based via FISAP 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 13

14. Why, What, When Accountability 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) 15

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 16

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??? 17 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) 18

19. Congratulations!!!! Prior Year Grant data 11/5/20126/17/20136/2/201410/14/2014 ProgramAward Year # of Schools with Balances Pell2009/20105483646132 2010/20116451743327 2011/2012204472114398 2012/2013N/A 373275 ACG2009/2010100886153 2010/20111339364 SMART2009/201023221615 2010/2011211400 19

20. Congratulations!!! Direct Loan close out comparison as of July 31 2011-20122012-2013 Total Schools6,2756,256 Schools Closed Out by 7/31 5,1645,593 Schools Open1,111663 Schools with $0.00 Balance 503288 Schools with a Positive Balance 41205 Schools with a Negative Balance 22170 % Closed out this year82.29%89.40% 20

21. Tips and Tools Action 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) 22

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 23

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/022614DLProcessingInfoDiscontinPape rCheckProcessDLRefundsCashBeginJan12015.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 24

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

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) 26

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 27

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 28

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 29

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 30 Request/Use reports at least monthly

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

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 32

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

34. 34 Reconciliation to the SAS School Receives SAS Match ? Resolve Issues Compare Cash Detail Compare Loan Detail NO YES Resolved ? Compare Cash Summary DONE NO (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) 35

36. COD Request: SAS Disbursement Detail on Demand 36 v v 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) 37

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 38

39. School’s Pell Newsbox 12345678-PL 39

40. Direct Loan Newsbox 40 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! 41

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 42

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

44. COD- School Summary Financial Life Long Learning College 44

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

46. Tools by Program Campus-Based Programs https://cbfisap.ed.gov/ecb/CBSWebApp/ CB Call Center 1-877-801-7168 Email at CBFOB@ed.govCBFOB@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 46

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 47

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 48 ProgramG5 Award NumberAward Year Direct LoanP268K15####Trailing Year TEACH GrantP379T15####Trailing Year Pell GrantP063P14####Leading Year IASGP408A14####Leading Year Campus-BasedFWS: P033A14#### SEOG: P007A14#### Leading Year

49. All Programs - G5 Reports 49

50. External Award Activity Detail 50

51. ACTION: Final Reconciliation and Closeout Title IV Reconciliation 51

52. Action: Final Reconciliation and Closeout Definition: The process by which schools complete processing at the end of an award year. This process should: Be an extension of regular reconciliation cycle (i.e., one final monthly reconciliation) Result in a $0 ending cash balance (Net Drawdowns = Net Accepted and Posted Disbursements) in ALL systems Occur shortly after final disbursements are made for a program and award year (or reported for CB Programs) Ensure that all cash management and disbursement reporting requirements have been met 52

53. Action – Closeout Deadlines *(system processing deadlines may impact the actual date final disbursements are accepted) Pell/Iraq Afghanistan Service Grant - September 30th of the award year http://ifap.ed.gov/eannouncements/090514PellGrantIraqAfghanServGrant1314AYProcDea dline.html http://ifap.ed.gov/eannouncements/090514PellGrantIraqAfghanServGrant1314AYProcDea dline.html TEACH Grant - September 30 th of the award year ifap.ed.gov/eannouncements/090514AdditionalTEACHGrantCloseoutInformationfor20132 014AY.html ifap.ed.gov/eannouncements/090514AdditionalTEACHGrantCloseoutInformationfor20132 014AY.html Direct Loan - July 31st of the year following the award year The closeout deadline for Direct Loan 2012-2013 was July 31, 2014 http://ifap.ed.gov/eannouncements/062614Additional1213DirectLoanProgramYearCloseou tInformation.html http://ifap.ed.gov/eannouncements/062614Additional1213DirectLoanProgramYearCloseou tInformation.html The close out deadline for Direct Loans 2013-14 will be July 31, 2015 53

54. Action - Closeout Deadlines *(system processing deadlines may impact the actual date final disbursements are accepted) Campus-Based - FISAP filing deadline September 30 th http://ifap.ed.gov/eannouncements/082714ReminderOct12014DeadlineforSubmittingFISAP.html FISAP reporting must correspond to G5 draws (i.e. what you report you paid must equal what you drew) Campus-Based – Closeout reduction occurs February following FISAP filing deadlines (February 2015 – reduce funding for 2013-14 awards) Unprocessed de-obligations (negative G5 balance) that have not been refunded (repaid) to G5 will result in an Accounts Receivable being set up to collect the amount due Interest accumulates on the balance owed 54

55. Action: Closeout Tips Remember - A school must follow all existing regulations for drawing funds and reporting expenditures/disbursements and disbursement adjustments timely Most schools should be able to reconcile and complete processing well before closeout deadlines DL- must have a $0 ending cash balance SAS to officially closeout, i.e., don’t wait until July to reconcile or you won’t be able to officially close out by the deadline You must monitor IFAP closely for announcements related to funding and reconciliation deadlines for all Title IV programs 55

56. Action: Funding Cancellation Pell Grant and Campus-Based Occurs five years after the end of the award year (Pell 2013-14 funding will cancel effective September 30, 2019) ACG and SMART 2009-10 award year will cancel September 30, 2015 (five year cycle) School MUST be fully reconciled to $0 cash balance No further disbursement or adjustment data can be reported to COD No further funds are available to request from G5 Funds needing to be returned must be returned via G5 to miscellaneous 56

57. In a Nut Shell Title IV Reconciliation 57

58. Action: The Basics in a Nutshell Internal Reconciliation Establish a regular schedule to compare Financial Aid and Business office records to make sure they are identical Use bank records to ensure funds are drawn and returned to the correct program and year External Reconciliation At least monthly make sure internal records match FSA system records and update as needed Review current and prior award years Use COD and G5 reports Call for help 58

59. Reconciliation Resources FSA Handbook - Volume 4 COD technical reference Implementation guide, edit code rejects, reports Blue Book - updated version published 2013 IFAP announcements - you must monitor IFAP to be considered administratively capable Detailed recorded training materials available COD reconciliation team - contact via the main school services number 800-848-0978 or 800-474-7268 Federal Loan School Support Team (FLSST) dlops@ed.gov 59

60. QUESTIONS? 60 Anthony.Laing@ed.gov 202-377-3112 Allison.Richards@ed.gov 303-844-3324