Anthony (Tony) Laing | Dec. 2013U.S. Department of Education

2013 FSA Training Conference for Financial Aid Professionals

Title IV Loan and Grant Funding Process

Session 2

2

Agenda

• Title IV Funding Commonalities• Title IV ProgramsoDirect Loan oPell GrantoTEACH Granto Iraq and Afghanistan Service Grant (IASG) oCampus-Based Programs

• G5

Title IV Funding Commonalities

• Cash requested and returned through G5o Bankingo Funds associated with school’s DUNs number

• Funds are award year and program specific• Managing FSA funds

o 3-day ruleo 15-day reporting requirement (NEW)o Reconciliation requirements

3

Follow the Money

4

Payment Data

DisbursementRecords / FISAP

Payment

CODeCB

G5

• Department of Education’s payment system• Provides location for all school payment processes

o Drawdownso Drawdown adjustments - only to correct mistakeso Refunds - submit electronicallyo G5 funding reports

• Recommend Read Only Access for FAAs

G5 – Obtain Title IV Funds

5

Bank Accounts

• G5 must have a designated bank account to which it can send Title IV cash

• Schools may establish one or multiple federal funds bank accounts o Must be able to identify different types of Title IV funds

• Designate a bank account for processing refunds

6

Grantee vs. Payee DUNS

Typically Grantee and Payee DUNS numbers are the same

Variance occurs when a Grantee selects another DUNS to manage their payment/refund/adjustment requests

7

Grantee DUNS Number

• DUNS number of the recipient who applied for and was awarded Title IV aid

Payee DUNS Number

• DUNS number used to process payments• Linked to bank account(s) • Users register with their Payee DUNS when

requesting access to process payments/refunds/adjustments via G5

Duns Registration• System for Award Management (SAM)

o https://www.sam.gov• Must renew within 12 months of your previous

registrationo Registration reminder emails are sent to user 60, 30, and

15 days prior to expiration• Need help? Check out the SAM FAQs

o How do I confirm my information is accurate and up to date?

o How do I view my registration status?o What is a DUNs number and how do I obtain one?

8

G5 Award Numbers• G5 award numbers are program and award year

specific• Example for 2013/2014 award year

9

Program G5 Award Number Award Year

Direct Loan P268K14#### Trailing Year

TEACH Grant P379T14#### Trailing Year

Pell Grant P063P13#### Leading Year

IASG P408A13#### Leading Year

Campus-Based FWS: P033A13####SEOG: P007A13####

Leading Year

Managing Title IV Funds

10

Fiduciary Responsibility

• Schools have a responsibility to:o Safeguard FSA fundso Ensure FSA funds are used for intended purposeso Return funds on student’s behalf to loan programso Return to ED funds that cannot be used as intended

11

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

12

Cash Management• NEW 15 day reporting requirement

o Used to be 30 days• Federal Register published July 8, 2013

o Applies to ALL Title IV programso Notice of 2013-2014 Deadline Dates for Reports and

Other Records • 3 day cash rule

o CFR 668.162 (b)• Monthly reconciliation

o CFR 685.102(b) Direct Loan

13

Recovery of Unclaimed Funds• Student credit balance check mailed and comes back or

EFT rejectedo School has 45 days to either return funds to ED or to try to

disburse againo 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 cashedo School has 240 days to return funds to ED

2013-2014 FSA Handbook Volume 5 page 20

14

COD Daily Funding Process

Disbursement records drive Current Funding Level (CFL)

Deadlines10:00 a.m. ET in COD – Same day in G510:00 p.m. ET in COD – Next day in G5

15

16

DL Funding Lifecycle

DL Funding Methods• Advance Funding

o Initial authorization - Springo Subsequent increase late November and additionally as

needed• Foreign Schools/HCM1

o No initial authorizationo Accepted actual disbursements increase funding

• HCM2/Reimbursemento Funds requested by FSA

17

DL Funding Example 2013-2014• Initial authorization

o March/April 2013 for advance funded schools with early disbursements

o Late June 2013 for all advance funded schools• Daily processing

o Once COD accepts Direct Loan records for 2013-14• Monthly reconciliation• Closeout - July 31, 2015

o Remaining available funds reduced to net drawdowns

18

DL Advance Funded• 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)

19

DL Funding Information

• Funding can be at the location levelo Example: Gcode or Ecode

• Award in G5 is specific to the Direct Loan school code that originated the loan

• Actual disbursements will only be accepted if origination record is linked to an active Promissory note

20

Funding ApproachesDraw Funds

from G5

Draw Funds

from G5

Draw Funds

from G5

SchoolDisburse

Funds

SchoolDisburse

Funds

SchoolDisburse

Funds

CODReport Disbs

CODReport Disbs

CODReport Disbs

3 Business Days 15 Days

15 Days

3 Business Days

Advanced funding approach

Records First – self reimbursing approach

Records First – future-dated disbursement approach

21

DL Reconciliation • Monthly reconciliation required

o Documentation of efforts o School Account Statement

YTD, monthly or both via SAIG Cash, loan, and disbursement detail by award year

• School monitoring e-mail from COD

22

DL Reconciliation vs. Closeout• Monthly reconciliation required

o Compare your records with the Department’s to identify and account for discrepancies

o Ending Cash Balance (ECB) allowable at $0• DL Year End Closeout

o Ensure that all records are processed and all cash is accounted for and reconciled

o ECB must = $0o Occurs end of July the year following

award year, i.e. 2012-2013 will be closed July 31, 2014

23

COD Initiated Activity for DL

24

What When HowInitial AuthorizationsAll schools Spring prior to award year

start dateCOD funding information screenIFAP AnnouncementG5

Funding Adjustments• The schools submit disbursement

information throughout the award year• FSA initiated second increase

• With funded disbursement activity

• Late November

COD funding information screenG5

Closeout Global reduction to the greater of G5 drawdown amount or Net Accepted & Posted Disbursements (NAPD)

Award year closeout date(July 31, 2014) for 2012-2013 Award Year

COD funding information screenIFAP AnnouncementG5

Unsubstantiated Cash E-MailCash funds that are drawn in G5 but student-level records supporting the drawdown are not received within 30 days

Daily COD customer service calls and E-mails

Reconciliation Report - SASCash and loan/disbursement level summary, monthly, YTD or both disbursement by award year

Sent to schools on a monthly basis via SAIG

Message Classes: Fixed-length Flat File Disbursement Level- DSDF14OPComma-Delimited Disbursement Level- DSDD14OPPipe-Delimited Disbursement level- DSDD14OP

25

Pell Grant Funding Lifecycle

26

Pell Grant Processing• Funding is through the main campus only• Accepted actual disbursements drive funding

o i.e. “records first”o Submit actual disbursements up to seven days in

advance• Must resolve rejected records to increase funding• Reconciliation will be an ongoing process

Pell Lifetime Eligibility Used (LEU)

• LEU requirements have created a de facto reconciliation process

• If Net Accepted and Posted Disbursements (NAPD) and G5 Drawdowns are not equal submit decreases to (NAPD) for prior years

27

28

Pell Grant Admin Cost Allowance

• Three times during an award year cycleFor 2013-2014:

March 2014August 2014August 2015

• NO DRAWDOWNSo Payments sent directly to bank accounts by G5 for ACA

only

29

Pell Individual School Reduction• Potential Overaward Process (POP)

o Occurs when more than one attended school reports disbursements for a student

o COD system checks to make sure that the student has not received more than 100% of his/her eligibility

• COD generates MRR to schools involved• Schools have 30 days to resolve

o If not resolved, all Pell Grant funds for that student reduced at both schools for the entire award year

30

Pell Grant “W” Verification Reduction • Students selected for verification and reported

with a status of ‘W’ must be updated to either ‘S’ (selected but not verified) or ‘V’ (verified)o Warning of reductiono Reduction if code is not updated

• Why should you care?o Negative Disbursement (ND) sent to schoolo Reduces available balance in G5 (unprocessed

deobligation/excess cash)o Pell LEU problem

31

Pell Grant “W” Verification Reduction

Schedule for 2013-2014 Award Year

Date Operational Task

April 2014 2013-2014 Pell First Verification W Warning and Update

August 2014 2013-2014 Pell Second Verification W Warning and Update

October 2014 2013-2014 Pell Third Verification W Warning and Update

Global Job Messages

32

33

Unprocessed Deobligation• Excess cash • Created when a school submits or COD creates

a decrease CFL transaction below the amount already drawn

34

Unprocessed DeobligationExample for School ABC:

1.School submits a $1,000 decrease = a $1,000 UD

2.School must refund $1,000 to G5, or submit a correction record in COD

CFL $1,000,000

Drawdown $1,000,000

Available Balance in G5 $0

Available Balance in G5 $0

School Submits Decrease -$1,000

Available Balance/Unprocessed Deobligation (UD)

-$1,000

School Funding Information

35

This is for a program year that should have been reconciled to zero

36

Reduction to Net

Drawdown

School Funding Information

G5 Award Balance

37

G5 displays $0 current available

balance.

G5 External Award Activity

38

Notice the reduction to

authorization for this 0809

award made on 3/16/2011

39

Post-Deadline Processing• Post-deadline processing is provided for

extended processing, audit adjustment, and resolution of POP situationso By September 30, data must be submitted following

the end of the award year in which the Pell Grant is processed

o Schools request on the COD website - School menuo Request only when you are ready to submit

TEACH Funding Lifecycle

40

TEACH Funding Lifecycle• No initial authorization - Records first• Recipient must complete TEACH Grant entrance counseling

and new agreement to serve each year before disbursements will accept

• Reconciliation similar to Direct Loanso SAS produced monthlyo Year end close out July 31o Available balance reduced to net draws

41

IASG Funding Lifecycle

• Iraq & Afghanistan Service Grant• School submits disbursement as anticipated on COD

Website (DRI = ‘false’)• FSA generates award in G5• Manual SOA generated• School creates payment request in G5• Reconcile SOA with G5• No COD initiated activity

42

Campus-Based Lifecycle

43

eCampus-Based Homepage

https://cbfisap.ed.gov/ecb/CBSWebApp

Provides information on Perkins, FSEOG, and

FWS

eCampus-Based System

44

FISAP

• FISAP = Fiscal Operations Report and Application to Participate

• Complete an online FISAP to:o Apply for campus-based funds for the coming award year o Report campus-based expenditures for the prior award year

• FISAP deadline October 1

45

Campus-Based Deadlines

46

Submission and Funding Schedule Deadline

FISAP on the Web available to schools August 1, 2013

FISAP Reallocation Submission to ED August 16, 2013

FISAP Submission to ED October 1, 2013

The Work Colleges Program Report to ED October 1 2013

FISAP Edit Corrections Due to ED December 13, 2013

Tentative Awards Posted on the Web February 1, 2014

Underuse of Funds Waiver Request Deadline February 7, 2014

Work Colleges Application and Agreement to ED March 7, 2014

Final Awards Posted on the Web April 1, 2014

FWS Community Service Waiver Request to Ed April 25, 2014

Allocation of Funds• Based on statutory formulas and program funding• Tentative allocation posted in eCB by February 1• Final allocation information by April 1st

• Unexpended funds must be refunded back to G5• Federal share/non-federal Share (school funds)

o FWS= 75% federal/25% non-federalo FSEOG= 75% federal/25% non-federalo Perkins= $0 Federal Capital Contribution (FCC)

47

Transfer of Funds• Up to 25% of the school’s FWS allotment to the school’s

Perkins or FSEOG allotment• Up to 25% of the school’s FSEOG allotment to the

school’s FWS allotment• Any FWS or SEOG funds transferred must be drawdown

from G5 from the original program but no further adjustment is needed in G5

48

Carry Forward/Carry Back

FSA CB Initiated Global Jobs• FISAP reduction to G5 net drawdown for award year

2012-2013 o April 2014

• Supplementalo September 2014o Deobligations for 2013-2014 and reallocations for 2014-

2015

50

NOTE: Check available balances in G5

G5 – Obtain Title IV Funds

G5 Homepagewww.G5.gov

51

All Programs – G5 Reports

G5-External Award History Report

Notice the Current Available Balance for a 2008-09 award is set to cancel 9/30/2014.

53

Campus Based Funding Reminders

• G5 does not allow Campus-based Drawdown adjustments

• Perkins – school should not hold onto excess liquid capital

• Refund to Treasury if > $100,000• Refund to one of two accounts in G5 if under < $100,000 – “Federal Perkins (NDSL) Liquidation” or– “Excess cash” if not liquidating

54

Additional G5 Training• G5 online training

o Click on “Main”o Click on “Online Training”

• Recorded G5 training moduleo http://ifap.ed.gov/dpcletters/ANN1032.html o Choose link for “Participation and Funding”

55

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

56

Set Up Refund Bank Account

57

Wrong Year Drawdowns• COD and the Internal Controls Division (ICD) are

seeing numerous multiple years out of balance• Make sure you draw from the year in G5 that you

are disbursing to• When students return funds or withdraw and

R2T4 funds are refundedo Either return them to the year they were drawn fromo Or re-disburse them to another borrower –

but for that same program and program year

58

Refunds• When to return Direct Loan return funds to G5

1. You drew down too much – Borrower not eligible within 3 business days

2. Borrower’s absolute right to cancel3. Borrower returns funds to you within 120 days

– If you choose to accept

4. R2T4 calculations5. You’ve drawn from the wrong year6. You’ve drawn from the wrong program

• When to send DL funds to the loan servicer…Never

59

If a borrower brings funds back to you after 120 days of the disbursement,

direct them to their loan servicer instead

Returning FundsTwo more reminders:

o If returning funds as the result of an audit of 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

60

Paper Refund Checks• Are a problem!• Schools too often mail them to the wrong place• They are far slower than electronic G5 refunds• If $100,000 and over cash management

regulations require funds be returned electronically – some schools are not doing so

• Guidance in a 4/2/13 electronic announcement

61

Any good reasons for paper refund

checks?

What’s Ahead?

• NO Direct Loan initial authorization for HCM1 schools beginning with the 2013-2014 award year

• Move to all-electronic refunds of cash by end of 2014• 30 day reporting requirement changed to 15 days• Drawdown adjustment feature in G5 disabled for

Campus- based programs• Direct Loans Initial Authorization for advance funded

schools will continue

62

Related FSA Conference Sessions

Session # Session Title3 Pell Grant Duration of Eligibility Limitation4 Loan Counseling Tools6 COD Hands-On 8 Title IV Reconciliation: What You Need to Know9 PLUS Processing A to Z

11 Direct Loan Processing Tips & Troubleshooting20 Cash Management

28 What FAAs Must Know About 150% Direct Subsidized Loan Limits

63

Need Funding Help?COD School Relations CenterGrants Phone Number: 1-800-474-7268 Direct Loans Phone Number: 1-800-848-0978Applicant Services Phone Number: 1- 800-557-7394Foreign Schools Phone Number: 571-392-3737E-mail: CODSupport@ed.gov

Campus Based Call CenterURL: http://cbfisap.ed.gov E-mail: cbfob@ed.gov Phone: 1-877-801-7168

G5 Help DeskURL: http://g5.gov E-mail: edcaps.user@ed.gov Phone: 1-888-336-8930

64

Contact Information

65

Anthony (Tony) LaingDirector, Internal Controls Division (ICD) anthony.laing@ed.gov202-377-3112

QUESTIONS?

66