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AwardYear: 1998-1999 EnterChapterNo: 5 EnterChapterTitle: Campus-based Programs (Common Elements) SectionNumber: 3 SectionTitle: Fiscal Procedures and Record Requirements PageNumbers: 15-21 For information on general fiscal procedures and records requirements for all Student Financial Assistance (SFA) programs, refer to Section 2 of Chapter 3, the current edition of the Blue Book, and 34 CFR 668. Additional fiscal procedures required for each campus-based program are discussed in the handbook chapter covering that program. FISCAL OPERATIONS REPORT ---------------------------- [[FISAP requirement--34 CFR 673.3]] As discussed in the introduction to this chapter, a school must submit an application (Fiscal Operations Report and Application to Participate [FISAP]) for each award year to receive federal funds under the campus-based programs. The school uses the Fiscal Operations Report portion of the FISAP to report its expenditures under the campus-based programs in the previous award year. All schools are required to file the FISAP data through the Title IV Wide Area Network (TIV-WAN) electronic FISAP process using EDExpress Windows software. The Department no longer provides or accepts paper, diskette, or magnetic tape FISAP forms. Each July, the U.S. Department of Education makes available through the TIV-WAN the electronic FISAP for schools to use in applying for funds for the subsequent award year and in reporting expenditures for the previous award year. Materials essential for the preparation and submission of the 1996-97 Fiscal Operations Report and 1998-99 Application to Participate were distributed to schools in July 1997. Schools that sent the FISAP to the Department by the October 1, 1997 deadline will receive their tentative 1998-99 funding notifications in a Dear Colleague letter in early 1998. Final 1998-99 funding notifications will be sent to schools in March 1998. [[Questions about the FISAP]] In July 1998, the Department will make available through the TIV- WAN the FISAP packages schools must complete to apply for funds for the 1999-2000 award year. Proposed new data collection requirements for the 1999-2000 Application to Participate will be discussed in a Dear Colleague Letter in February 1998. Questions concerning the preparation of the FISAP should be referred to the appropriate campus-based state representative under the Department's Student Financial Assistance Programs, Accounting and Financial Management Service, Institutional Financial Management Division. The representatives and their telephone numbers are listed in Chapter 1, Section 2, of this handbook. Questions about the data entry or EDExpress software should be referred to Central Processing System (CPS) Customer Service on 800/330-5947. Questions about the electronic transmission process should be referred to TIV-WAN Customer Service on 800/615-1189. Questions about prior-year data listed on a FISAP should be referred to a FISAP Administrator on 301/565-0032 or 202/708-6726. FISCAL PROCEDURES -------------------- [[Cash management regulations]] Cash management requirements that apply to all SFA programs are discussed in detail in Chapter 3, Section 3. The cash management requirements that apply specifically to the campus-based programs follow: [[Interest bearing account for Perkins Fund]] - A school must maintain its Perkins Loan Program Fund in an interest-bearing bank account or investment account consisting predominately of low-risk, income-producing securities, such as obligations issued or guaranteed by the United States, under the provisions of 34 CFR 668.163(c); interest or income earned on Fund proceeds are retained by the school as part of the Fund. [[Payment period exception for FWS]] - 34 CFR 668.164(b) requires schools to disburse SFA program funds on a payment period basis, with the exception of FWS payments to students. FWS payment provisions are in 34 CFR 675.16, discussed in Chapter 7, Section 3. [[Late disbursement of a Perkins Loan or FSEOG--34 CFR 668.164(g)]] - A school may make a late disbursement of a Perkins Loan and/or FSEOG to an ineligible student if the student became ineligible solely because the student is no longer enrolled at the school for the award year. Before the student dropped out, the school must have received a Student Aid Report (SAR) or Institutional Student Information Record (ISIR) for the student with an official EFC and have awarded the student the Perkins Loan or FSEOG. The school may make that late disbursement only if the funds are used to pay for educational costs that the school determines the student incurred for the period in which the student was enrolled and eligible, and the school must make the late disbursement no later than 90 days after the date the student became ineligible because he or she was no longer enrolled. - If a school credits a student's account at the school with Perkins Loan funds, the school must notify the student of the date and amount of the disbursement, the student's right to cancel all or a portion of that loan and his or her right to have the funds returned to the school's Perkins fund, under the provisions of 34 CFR 668.165(a). [[Requirement to send notice within 30 days]] - The school must send the above notice, either in writing or electronically, within 30 days of the date the school credits the student's account at the school. If the school sends the notice electronically, the school must require the student to confirm receipt of the notice, and must keep a copy of the confirmation. [[Procedures if student requests loan cancellation]] - The school must return the Perkins Loan proceeds, cancel the loan, or do both - if the school receives a loan cancellation request within 14 days after the school sends the notice to the student, or, - if the school sends the notice more than 14 days before the first day of the payment period and the school receives a cancellation request by the first day of the payment period. [[Procedures if school does not receive request within the time period]] - If the school does not receive the cancellation request within the time period described above, the school may return the loan proceeds, cancel the loan, or do both, but is not required to do so. The school must notify the student in writing or electronically of the school's decision. Additional notification requirements that apply to the disbursement of all SFA program funds are discussed in detail in Chapter 3, Section 3. CAMPUS-BASED PROGRAM RECORDS -------------------------------- A school must keep financial records that reflect all campus-based program transactions and must keep all records supporting the school's application for campus-based funds. This documentation includes the applications and records of all students who applied for campus-based assistance for a specific award year and were included on the school's FISAP for that award year. The school must also retain applications and records of students who applied for but did not receive aid either because the school had no more funds to award or because the school determined that the student did not need funds. The school must keep general ledger control accounts and related accounts that identify each program transaction and must separate those transactions from all other institutional financial activity. Fiscal records must be reconciled at least monthly. Recordkeeping requirements as they apply in general to all SFA programs are discussed in Chapter 3, Section 7. In addition to meeting those requirements, a school must meet certain campus- based program recordkeeping requirements. [[Types of records the school must keep]] The campus-based records a school must maintain include but are not limited to - the SAR or ISIR used to determine a student's eligibility for campus-based program funds; - application data submitted to the Department or the school on behalf of the student; - documentation of each student's eligibility for campus-based program funds; - documentation of the amount of a Perkins Loan, FSEOG or FWS award, its payment period, and the calculations used to determine the amount of the loan, grant, or FWS award; - documentation of each disbursement of FSEOG or Perkins Loan funds, and the date and amount of each payment of FWS wages; - documentation of the school's calculation of any refunds or overpayments due to or on behalf of the student and the amount, date, and basis of the school's calculation; - documentation of the payment of any refund or overpayment to the SFA program fund or the Department; - information collected at initial and exit loan counseling required by Perkins Loan regulations; and - reports and forms used by the school in its participation in a campus-based program, and any records needed to verify data that appear in those reports and forms. For each Perkins Loan borrower, a school must maintain a repayment history that shows - the date and amount of each payment during the life of the loan; - the amount of each payment credited to principal, interest, collection costs, and either penalty or late charges; - the date, nature, and result of each contact with the borrower (or endorser for loans made prior to July 23, 1992) in the collection of an overdue loan; and - copies of all correspondence to or from the borrower (and endorser for loans made prior to July 23, 1992), except for bills, routine overdue notices, and routine form letters (demand letters, notices of intent to accelerate, and the like are not considered to be routine form letters). Schools must also follow the procedures established in 34 CFR 675.19 for documenting a student's FWS work, earnings, and payroll transactions. These procedures are discussed in Chapter 7, Section 3. Generally, a school must keep records relating to the school's administration of a campus-based program or the Pell Grant Program for three years after the end of an award year for which the aid was awarded and disbursed under that program, with the following exceptions: - The school must keep the FISAP in the Perkins Loan, Federal Supplemental Educational Opportunity Grant (FSEOG), and FWS Programs and any records necessary to support the data contained in the FISAP, including "income grid information," for three years after the end of the award year in which the FISAP is submitted. [[Perkins Loan repayment records--34 CFR 674.19(e)(3)]] - The school must keep repayment records for Perkins Loans, including records relating to cancellation and deferment requests for at least three years from the date a loan is assigned to the Department, canceled, or repaid. [[Records under question--34 CFR 668.24(e)(3)]] - Records questioned in an audit or program review must be kept until the questions are resolved or until the end of the retention period applicable to the records, whichever is later. A school must keep its campus-based program records in one of the following formats: [[Format of records--34 CFR 668.24(d)]] [[Records necessary to enforce loan collection - 34 CFR 674.19(e)(4)]] - Original signed promissory notes and signed repayment schedules for Perkins Loans, National Direct Student Loans (NDSLs), or National Defense Student Loans (Defense Loans) must be kept in a locked fireproof container until the loan is repaid or until the school needs the originals in order to enforce collection of the loan. If a loan is assigned to the Department, the school must send the original promissory note or a certified copy of the note, as well as a copy of the original deferment or cancellation form(s). The school may not send computer-generated form(s) or microform(s). (Refer to Chapter 6, Section 3.) - A school may keep other required records in hard copy or in microform, computer file, optical disk, CD-ROM, or other media formats, but all record information must be retrievable in a coherent hard copy format or in other media formats acceptable to the Department except that - a student's SAR or ISIR used to determine eligibility for SFA program funds must be kept in the format in which the school received it, except that the SAR may be kept in an "imaged media format;" and - any document that contains a signature, seal, certification, or any other image or mark required to validate the authenticity of its information must be kept in its original hard copy or in an imaged media format. - Any "imaged media format" used to keep required records must be capable of reproducing an accurate, legible, and complete copy of the original document, and, when printed, this copy must be approximately the same size as the original. ADMINISTRATIVE COST ALLOWANCE ---------------------------------- A school participating in the campus-based programs is entitled to an allowance to help offset administrative costs, such as salaries, furniture, travel, supplies, and equipment. The allowance can also be used for service fees that banks charge for maintaining accounts. Computer costs associated with Perkins Loan billing may also be paid from this allowance. Schools may use the allowance to help pay the costs of administering not only the campus-based programs but the Federal Pell Grant Program as well. Administrative costs also cover expenses for carrying out the student consumer information services requirements. A school may use up to 10% of the administrative cost allowance attributable to the school's FWS Program expenditures to offset expenses incurred for its community service program. Each school's administrative cost allowance is based on its expenditures for all three programs, excluding the amount of Perkins Loans assigned to the Department. The school calculates the total administrative cost allowance for the campus-based programs in Part VI of the FISAP by adding: 5% of the first $2,750,000 of a school's expenditures under the campus-based programs + 4% of expenditures greater than $2,750,000 but less than $5,500,000 under the campus-based programs + 3% of expenditures greater than $5,500,000 under the campus-based programs When a school calculates its administrative cost allowance for the 1998-99 award year, the school is to include in its calculation the full amount of its FSEOG awards--both the 75% federal share and the required 25% nonfederal share. However, a school that chooses to provide more than a 25% institutional share to FSEOG recipients may not include an FSEOG institutional share in excess of 25% in its FISAP or in the calculation of its administrative cost allowance. If the Department has granted a school a waiver of its required institutional share for the FSEOG Program or the FWS Program, that school's administrative cost allowance may be calculated only on the full federal portion of its awards for those programs. The school takes the administrative cost allowance out of the annual authorizations the school receives for the FSEOG and FWS programs and from the available cash on hand in its Perkins Loan fund. It is not a separate allowance sent to the school. A school may draw its allowance from any combination of campus-based programs, or it may take the total allowance from only one program provided there are sufficient funds in that program. However, a school may not draw any part of its allowance from a campus-based program unless the school has disbursed funds to students from that program during the award year. If a school charges any administrative cost allowance against its Perkins Loan fund, it must charge these costs during the same award year in which the expenditures for these costs were made.

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