1. Anthony (Tony) Laing| Dec. 2014 U.S. Department of Education 2014 FSA Training Conference for Financial Aid Professionals Managing Title IV Funds: Follow the Money Session #14

2. Agenda (mileposts on our journey) Guides/resources G5 Annual Funding Drawing Funds Refunding Funds Adjusting Funds Completing Annual Reconciliation 2

3. Guides/Resources Blue Book http://ifap.ed.gov/ifap/BlueBook.jsp FSA Handbook - Volume IV http://ifap.ed.gov/fsahandbook/1415FSAHbkVol4.html 3

4. Guides/Resources G5 Help Desk Phone: 888-336-8930 / 8:00 a.m. - 6:00 p.m. (ET) E-mail: edcaps.user@ed.gov edcaps.user@ed.gov eCampus Based Help Desk Phone: 877-801-7168 /8:00 a.m. - 8:00 p.m. (ET) E-mail: CBFOB@ed.gov CBFOB@ed.gov COD Help Desk / 8:00 a.m. - 8:00 p.m. (ET) Grant Programs: 800-474-7268/ Direct Loan Program: 800-848-0978 Foreign Schools: 571-392-3737 E-mail:CODSupport@ed.govCODSupport@ed.gov 4

5. Follow the Money 5 Payment Data Disbursement Records / FISAP Payment COD eCB G5

6. Iron Triangle of Funds Management 6 USED G5 & FSA Financial Aid Office School Business Office

7. www.g5.gov 7

8. G5 To access G5 Your school must have a DUNS number The Data Universal Numbering System (or D-U-N-S Number) is a unique nine-digit identification code that is assigned to a school. G5 grantees and payees must register their D-U-N-S number and TIN with the System for Award Management (SAM) 8

9. G5, continued Establish a user ID Each user establishes their own access Click on “Not Registered?” Sign up Read only available for FAAs Establish a bank account for deposit of funds May be one or multiple federal funds bank accounts If one bank account must be able to identify different types of Title IV funds Maintaining and accounting for Funds 34 CFR 668.163 Blue Book, Volume 5 page 22 Designate a bank account for the return of funds May be the same as the one used for deposit of funds 9

10. G5, continued Funds transmitted to school’s bank account ACH Direct Deposit Sign Up Form (SF1199a) Request prior to 3 p.m. (ET) deposited next business day FEDWIRE A Bank fee may be charged Requests prior to 2 p.m. (ET) deposited same day Instructions can be found on G5 website under FAQ’s/banking 10

11. 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 11 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

12. Title IV Processing Systems COD (Common Origination & Disbursement) Direct Loans TEACH Grants Pell Grants IASG (Iraq Afghanistan Service Grants) eCB (electronic Campus Based) SEOG (Supplemental Economic Opportunity Grants) FWS (Federal Work-Study) 12

13. Pell, CB, and IASG Annual Funding Each award year a new current funding level (CFL) or authorization is established Campus-Based funding is based on data reported on the FISAP Tentative allocations published January Final notice of allocations published April PELL and TEACH funding is initiated by the reporting of accepted actual disbursements Records first- i.e., submit the records and the funds will be available to draw in G5 either later that day or the following day Iraq Afghanistan Service Grant (IASG) funding case by case manual increase based on anticipated disbursements 13

14. 14 Pell Grant Admin Cost Allowance Three times during an award year cycle For 2014-15: March 2015 August 2015 August 2016 NO DRAWDOWNS Payments sent directly to bank accounts by G5 for ACA only

15. Direct Loan Annual Funding Advance Funding o Initial authorization - Spring o Subsequent increase late November and additionally as needed Foreign Schools/HCM1 o No initial authorization o Records First - Accepted actual disbursements increase funding HCM2/Reimbursement o Records First - Funds requested by FSA 15

16. DL Advance Funded Initial CFL is approximately 60-65% of the amount of the disbursement records on file from the previous year Increase in mid-year Need additional funds? o Send in actual disbursements up to seven days in advance o Call COD Customer Service to request an increase (must not have any unsubstantiated funds) 16

17. Annual DL Funding Approaches Draw Funds from G5 School Disburse Funds School Disburse Funds School Disburse Funds COD Report Disbs COD Report Disbs COD Report Disbs 3 Business Days 15 Days 3 Business Days Advanced funding approach Records First – self reimbursing approach Many schools choose this method to facilitate reconciliation Records First – future-dated disbursement approach 17

18. DL Funding Information Funding can be at the location level A main campus can fund for itself and its additional locations but a location cannot fund for other locations Example: Gcode or Ecode Award in G5 is specific to the Direct Loan school code that originated the loan If both a main campus (Gcode) and additional location (Ecode) are originating their own loans, then each will have their own award in G5 identified by a unique 4-digit G5 (gaps) ID at the end of the award ID 18

19. COD Daily Funding Process Disbursement Records drive Current Funding Level (CFL) DAILY DEADLINES 10:00 a.m. ET in COD – Same day in G5 10:00 p.m. ET in COD – Next day in G5 19

20. Fiduciary Responsibility Schools have a responsibility to: o Safeguard FSA funds o Ensure FSA funds are used for intended purposes o Maintain records of the eligibility of each Title IV aid recipient and the amount and date of each posting or return of aid o Return funds on student’s behalf to loan programs o Return to ED funds that cannot be used as intended 20

21. Drawing Funds Authorization/CFL vs. Available funds Authorization refers to the total amount of aid made available to date for the entire award year for that award- may include funds already drawn Available funds refer to the authorization minus funds already drawn Funds may only be drawn based on immediate need, i.e. what will be disbursed or has already been disbursed 21

22. Drawing, Adjusting, and Refunding Funds via G5 Training on G5 functionality is available from the Main page after log in 22

23. Cash Management 15 day reporting requirement for disbursements and disbursement adjustments Federal Register published July 11, 2014 An institution must submit Pell Grant, Iraq and Afghanistan Service Grant, Direct Loan, and TEACH Grant disbursement records, as applicable, no later than 15 days after making the disbursement or becoming aware of the need to adjust a student's previously reported disbursement 34 CFR 668.164(a), “Title IV funds are disbursed on the date that the institution: (a) Credits those funds to a student's account in the institution's general ledger or any sub ledger of the general ledger, or (b) pays those funds to a student directly. Title IV funds are disbursed even if an institution uses its own funds in advance of receiving program funds from the Secretary” 23

24. Title IV Excess Cash Schools must disburse Title IV funds to a student within 3 business days of receiving the funds in its federal funds bank account Title IV funds that are not disbursed before this deadline are Title IV excess cash and must be returned immediately In some cases, funds may be held additional 7 calendar days Blue Book volume 5 page 24 Schools may NOT hold additional funds while reconciling accounts 24

25. Adjusting Funds Adjusting of funds not allowed in G5 for Campus-Based Adjust via the FISAP Adjustments and corrections can be made for up to 5 years Contact the eCB help desk for assistance G5 adjustment of funds for Pell, Direct Loans, or TEACH Only allowed to correct either a draw or return of funds to the incorrect award year or program Should be made as soon as possible NEVER allowed for reconciliation 25

26. FSA Initiated Reductions Campus-Based Reduction of funds to expenditures reported 2012-13 FISAP reduction will occur February 2015 Pell Unresolved POPs (Potential Overaward Process) Verification W not updated For both, COD will generate an Negative Disbursement (ND) record Results in an Unprocessed Deobligation (UD) 26

27. FSA Initiated Reductions TEACH Grants Program year closeout- funds reduced to Net Draws (ND) Direct Loans Placement on Heightened Cash Monitoring 1 status (HCM1) Program year closeout Both result in funds reduced to the greater of Net Accepted and Posted Disbursements (NAPD) or Net Draws (ND) 27

28. Returning Funds What are some reasons a school must return funds? Unable to disburse all that was drawn (excess cash) Funds drawn by mistake from the wrong award or award year Returning unclaimed funds R2T4 calculations which require a return of funds in addition to a disbursement adjustment COD automated negative disbursements (Pell- Verification W and POP) Owing funds based on a program review or audit Student no longer wants/needs funds (Direct Loans 120 day rule) Within 120 days school returns funds to G5 account and processes disbursement adjust Greater than 120 days BORROWER returns funds via his/her servicer 28

29. Recovery of Unclaimed Funds Student credit balance check mailed and comes back or EFT rejected o School has 45 days to either return funds to ED or to try to disburse again o May continue trying so long as unclaimed funds are returned to ED within 240 days of when check or EFT was issued Student credit balance check mailed but is never cashed o School has 240 days to return funds to ED 2014-15 FSA Handbook Volume 4 page 48 29

30. Returning Funds Two more reminders : o If returning funds as the result of an audit or Program Review liability follow the directions in the final audit or Program Review Determination Letter o The 120-day rule is not applicable if you are returning Direct Loan Program funds due to regulatory or statutory requirements 30

31. 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/022614DLProcessingInfoDiscontinPaperCheck ProcessDLRefundsCashBeginJan12015.html If exceptional circumstances require your school to refund Grant funds via paper check Make check payable to U.S. Department of Education Use a separate check for each award/year Note the school’s DUNS # and award number (i.e., P063P14####) on the front of the check U. S. Department of Education, PO Box 979053, St. Louis, Missouri, 63197-9000 31

32. Setting Up a Refund Bank Account via G5 32

33. Creating a Refund via G5 33

34. Electronic Refunds Posts to G5 within three business days Updates in COD within 5-7 days Schools control the process Schools direct from which bank account the money is refunded Multiple refunds on one screen and at one time Electronic processing reduces human error and delays 34

35. Reconciliation Requirements 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) 35

36. Reconciliation Resources eCB help desk for Campus-Based questions COD CSRs and Reconciliation Specialists for Grants and Direct Loans G5 help Desk G5 reports- external award activity report 36

37. Reconciliation - G5 external award activity Note one Payee for two Grantees User defined Recipient Reference Number Exported to Excel Note availability of funds For Campus based 13-14 Note last date To draw funds 37

38. External Award Activity Detail 38

39. COD Reports and Web Screens COD reports School Account Statement (SAS) - contains both cash and disbursement data - Direct Loan and TEACH Grant Pell Year to Date or Reconciliation File (disbursements only) Electronic Statement of Account (summary cash and disbursement) COD web screens School Summary Funding Information Summary Financial Information Cash Activity 39

40. COD- School Summary Information 40

41. COD- School Funding Info- Pell Life Long Learning College Pell CFL based on Disbursements and adjustments Note Pell Unduplicated recipients And Total ACA paid 41

42. COD- School Funding Info- DL Life Long Learning College 42

43. COD- School Summary Financial Life Long Learning College Direct Loans Mirrors the SAS Cash Summary Updated Daily 43

44. COD – Cash Activity Life Long Learning College Draw fully Substantiated? Draw= Accepted And posted Disbursements applied 44

45. Completing Reconciliation Deadlines for closeout Grants, TEACH, and Campus-Based - September 30 annually Direct Loans – Last business day of July the year following award year processed, i.e. 2013-14 must be closed out by July 31, 2015 Closeout may be completed as soon as processing is completed Direct Loans must have a School account statement with a $0 Ending Cash balance and have received a Zero Balance letter Adjustments to FISAP for reconciliation may be requested until December 15th as long as a FISAP was filed timely Extended processing Requested via COD website for Grants and Loans Required for any Direct Loan processing after the close out deadline Required for Pell for disbursement increases only 45

46. Post Deadline/Extending Processing Life Long Learning College 46

47. Help Desk Information G5 Help Desk Phone: 888-336-8930 (no cost per call) TDD: 866-697-2696 (no cost per call) E-mail: edcaps.user@ed.gov Website: https://www.g5.gov Office Hours: 8:00 a.m. - 6:00 p.m. (ET), Monday through Friday edcaps.user@ed.govhttps://www.g5.gov eCampus-Based Help Desk Phone: 877-801-7168 (no cost per call) E-mail: CBFOB@ed.gov Website: https://cbfisap.ed.gov Office Hours: 8:00 a.m. - 8:00 p.m. (ET), Monday through FridayCBFOB@ed.govhttps://cbfisap.ed.gov 47

48. Help Desk Information, continued COD School Relations Center For questions related to Common Origination and Disbursement (COD), ACG, Iraq and Afghanistan Service Grant, National SMART Grant, Pell Grant, TEACH Grant, and Direct Loan processing. Grant Programs: 800-474-7268 Direct Loan Program: 800-848-0978 Foreign Schools: 571-392-3737 FAX: 877-623-5082 E-mail:CODSupport@ed.govCODSupport@ed.gov Website: https://cod.ed.gov/cod/LoginPagehttps://cod.ed.gov/cod/LoginPage Office Hours: 8:00 a.m. - 8:00 p.m. (ET), Monday-Friday 48

49. Related FSA Conference Sessions Session #Session Title 6Basics of Campus-Based Programs 12FSA Information Systems: The Big Picture 18 Title IV Reconciliation: Agreement, Accountability, Action 19Direct Loan Processing: Making COD Work for You 33 Program Review Essentials and Top 10 Compliance Findings 45FISAP/Campus-Based Update 48Hands-on COD 53Foreign Schools: Reconciliation 49

50. Contact Information 50 Anthony (Tony) Laing Director, Internal Controls Division (ICD) anthony.laing@ed.gov 202-377-3112

51. QUESTIONS? 51