Title IV Aid Disbursement Reporting, Excess Cash, and Reconciliation Requirements

FSA provided a reaffirmation of longstanding guidance related to cash management after a number of schools reviewed by ED were not able to adequately document they were meeting all of the regulatory requirements. The guidance belos summarizes the general disbursement reporting, excess cash, and reconciliation requirements for all Title IV programs.  Because these requirements apply to disbursement and financial data, both the Financial Aid Office and Business Office should review the information.

Disbursement Reporting Requirementsa school must submit disbursement records no later than 15 days after making the disbursement or becoming aware of the need to adjust a student’s previously reported disbursement.

Excess Cash Requirements – Excess cash is any amount of Title IV funds that a school does not disburse to students or parents by the end of the third business day after the date the school (1) received the funds from the Department, or (2) deposited or transferred to its federal account previously disbursed Title IV funds received from the Department.  In some circumstances, cash may be held for up to an additional 7 calendar days if a school meets the excess cash tolerance and can disburse the aid to students within that time frame.  In no circumstance should cash balances remain beyond the additional 7-day period.

Reconciliation – Reconciliation is the process by which a school reviews and compares Title IV aid (grants, loans, and campus-based aid) recorded on the Department’s systems with the information in the school’s internal records.  Schools should reconcile both internally (between Business Office and Financial Aid Office data) and externally (between school data and the COD System/G5).  Through reconciliation, disbursement and cash discrepancies are identified and resolved in a timely manner to ensure the school meets all regulatory requirements.  Schools must document their reconciliation efforts and retain this documentation for auditing purposes.

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