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Transcript of description: tags: review-cash%20management
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8/14/2019 description: tags: review-cash%20management
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1 We Help Put America Through School
U.S. Department of Education
A Review of CashA Review of Cash
Management IssuesManagement Issues
NASFAA Conference 2000Washington, DC
July 9-12, 2000
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A Review of CashA Review of CashManagement IssuesManagement Issues
Presented by
Mark WashingtonMark Washington
Office of Student Financial Assistance
Program Development Division
July 9-12, 2000
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3 We Help Put America Through School
Cash Management EssentialsHCash Management
101 (The Basics)
HCash Managementin a World ofTechnology
HThe Challenges ofReturning Funds
HThe Future of CashManagement
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4 We Help Put America Through School
Cash Management 101HWhat IS Cash Management?
H
Show Me The MoneyHThe Truth About Disbursements
HNotices and Authorizations
H
Excess Cash: Its Not the LottoHFFEL Program Funds
HTimelines
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What IS Cash Management?
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True or False?Cash Management IS:
HIdentifying the resources necessary tofund your award packages.
HJuggling carryforwards and carrybacksbetween FWS and FSEOG.
HThe body of regulations found in 34
CFR, Subpart K.HDetermining what to do with the Lotto
money you just won.
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7 We Help Put America Through School
3 Major Objectives ofCash Management
HTo promote the use of sound cashmanagement techniques inadministering the Title IV programs
HTo minimize administrative costs spentby the Federal Government in making
Title IV funds available to studentsHTo minimize the costs absorbed by
students using Title IV loan programs
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Show Me The Money...
HRequesting
FundsHMaintaining and
Accounting forFunds
HHandling InterestIncome Earned
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Methods for Obtaining
Title IV FundsHAdvance Payment
Method
HReimbursementMethod
H Just-in-Time Method
HCash MonitoringMethod
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Advance MethodHSchool requests funds needed to pay
eligible students.
HApprovals are followed by funds sentdirectly to schools account, via EFT.
HSchool must disburse the funds
received ASAP, but not later than threebusiness days after receipt.
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11 We Help Put America Through School
Reimbursement Method
HSchool must make disbursement toeligible students before beingreimbursed for those program
expenses.HBoth cash payments and crediting a
students account count asdisbursements.
HMust document actual payments andstudent eligibility per student or parent.
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12 We Help Put America Through School
Just-in-Time Method
HSchool transmits payment requests foreach eligible student or parent.
HED sends funds EFT on per transactionbasis, on or before a schools intendeddisbursement date.
HSchool may disburse funds based on
eligibility determined at time it maderequest for funds. Must report anyadjustments to previously acceptedrecords.
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Cash Monitoring MethodHSchools must make disbursements to
students or parents before requestingadvance payment method orreimbursement payment method.
HRequest for funds may not exceed
actual disbursements made.HWe may modify the documentation
requirements and review procedures.
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14 We Help Put America Through School
Show Me The Money...HRequesting Funds
HMaintainingand
Accounting
for FundsHHandling Interest
Income Earned
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15 We Help Put America Through School
Maintaining & Accounting for
FundsHTitle IV funds must
be kept in Federallyinsured bank or
investment accountsH Identify Fed Funds
HNotify bank aboutTitle IV funds andfile a UCC-1statement (exceptpublic institutions)
HSeparate a/c fornoncompliance
H Interest-bearing a/c
HAccounting andinternal controls
HMaintain financials in
accordance with 34CFR 668.24
HDue diligence andfiduciary care
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16 We Help Put America Through School
Show Me The Money...HRequesting Funds
HMaintaining and
Accounting forFunds
HHandling
InterestIncomeEarned
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Handling Interest IncomeHCannot retain more
than $250 in interest
income earned onTitle IV funds.
HMust identifyearnings on Title IV
funds maintained inbank or investmentaccounts.
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The Truth About
Disbursements
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disdis--brsmntbrsmntHA disbursement occurs by crediting a
students account or paying the student
or parent directly with--
funds received from ED;
funds received from a lender under
the FFEL Programs; or institutional funds used in advance ofreceiving Title IV program funds.
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More Truth...HThe 10-day Rule (Early Disbursement)
HThe 30-day Prohibition
HThe Cohort Default Rate Exception
HPayment Period Requirement
HLate Disbursement
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Making Direct PaymentsHReleasing FFEL proceeds from a lender
HIssuing checks
HInitiating an EFT transaction
HDispensing cash (signed receiptrequired)
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22 We Help Put America Through School
Crediting A Students AccountHSchool may credit
account to satisfy
charges withoutauthorization for--
HTuition and fees;
HRoom, if contracted
with school; and
HBoard, if contractedwith school
HSchool must haveauthorization to
credit account for--HAdditional current
charges incurred foreducationally related
activitiesHMinor prior year
charges < $100
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Credit BalancesHMust pay ASAP but
no later than 14
days after theoccurrence, if after1st day of classes or
HNo later than 14
days after 1st day ofclasses in pmt. per.if occurred before1st day of classes.
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Notices and Authorizations
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Award NotificationHSchool must notify
student of amount
of funds to expectbefore disbursement
HDetail how andwhen funds will be
paidHSpecify types of
loans
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26 We Help Put America Through School
If School Credits Loan FundsHIndicate date and amount of payment
HInform of right to cancel all or portion
HSpecify procedures for cancellation
HSchool must send no earlier than 30days before and no later than 30 day
after crediting the account
HNotice may be written or electronic
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To Cancel a LoanH Student or parent must
inform school of intentto cancel
H If notice of cancellationis received from studentor parent, school mustreturn proceeds within
14 days after it sendsnotice or by the 1st dayof the payment periodand confirm outcome
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Student/Parent AuthorizationsHFor direct payment
to bank account
HFor payment ofcertain current andminor prior yearcharges
HFor holding excessstudent funds
HCannot coerce toobtain
HCan be modified orcanceled at any time
HMust clearly explainhow wishes will beimplemented
H Limited duration
HExcess funds due tostudent/parent aftercancellation
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Excess CashHDefinition
HTolerances
HConsequences
HProcedural
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FFEL Program Funds &
TimelinesHRequesting Funds
HInitial Period
HConditional Period
HReturn Period
HOther Factors
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The Challenges of Returning
FundsHExcess Cash
HClosed Awards
HAudits & ProgramReviews
H Interest Earned
H
Idle Cash (DL)HRefunds (DL)
HUnidentifiable CreditBalances
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Cash Management in a World
of Technology
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The Future of Cash
Management
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Footnotes1 - If an electronic notice is sent, the school must
require the recipient of the notice to confirm receiptof that notice, and must maintain a copy of thatconfirmation.
2 - If a the school disburses DL funds by crediting astudents account, it must credit those funds tocurrent and authorized charges first.
3 - Prior year charges may exceed the threshold, butcurrent charges must be paid first, and other chargesshould still be minor in scope and amount.
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ResourcesH34 CFR, Subpart K
HThe Blue Book
HFiscal OfficersTraining Guide
HGAPS Payee Guide
H
SFAAudit Guide
forSchools
H IFAP/SFA Coach