AwardYear: 1998-1999 EnterChapterNo: 8 EnterChapterTitle: Federal Supplemental Educational Opportunity Grant Program SectionNumber: 3 SectionTitle: Program Funds PageNumbers: 11-15 [[Allocation of funds--34 CFR 673.4]] The Higher Education Act of 1965 (HEA), as amended, describes the Federal Supplemental Educational Opportunity Grant (FSEOG) Program allocation process in detail; those procedures are not repeated in the regulations. Funds are allocated directly to schools according to the statutory formulas in section 413D of the Act. Schools receive their disbursements in periodic installments either in advance or as reimbursements. The U.S. Department of Education reallocates funds to a school in a manner that best carries out the purposes of the FSEOG Program. [[Cash management]] A school must maintain funds received for its administration of the FSEOG Program in accordance with the cash management provisions of 34 CFR 668.163. The provisions are discussed in Chapter 3, Section 3. [[Allocation reduction for returned funds in previous award year]] As discussed in the Introduction to Chapter 5, if a school returns more than 10% of its allocation for a given award year, the Department will reduce the school's allocation for the second succeeding award year by the dollar amount returned. The Department may waive this provision for a specific school if it finds that enforcement would be contrary to the interest of the program. The Department considers enforcement to be contrary to the interest of the program only if the school returned more than 10% of its allocation due to circumstances that are beyond the school's control and that are not expected to recur. The information a school provided on its Fiscal Operations Report and Application to Participate (FISAP) for the 1996-97 award year will determine the amount of reduction, if any, of the school's allocation for the 1998-99 award year. FEDERAL SHARE AND NONFEDERAL SHARE --------------------------------------- [[Waiver of 25% requirement]] The federal share of FSEOGs made by a school may not exceed 75% of the total FSEOGs. The school must contribute a nonfederal share (also called "institutional share") of 25%. However, the Department may waive the nonfederal share requirement and may authorize for an award year a federal share of 100% to a school that 1) is designated as an eligible institution under the Strengthening Institutions Program or the Strengthening Historically Black Colleges and Universities Program and 2) requests the waiver on the FISAP for that award year. [[Sources of nonfederal share]] The nonfederal share of FSEOGs must be made from the school's own resources. These resources may include - institutional scholarships and grants, - waivers of tuition or fees, - state scholarships and grants, and - funds from foundations or other charitable organizations. [[Including state scholarships]] The Department has determined that all state scholarships and grants, except for State Student Incentive Grants (SSIGs), are eligible funds that may be used to meet the nonfederal share requirement of FSEOGs. SSIGs, for this purpose, are defined as the federal SSIG allocation plus the minimum required state matching amount. The remaining state grants are not considered SSIGs. [[Percent of state scholarships that may be used as nonfederal share-- Dear Colleague letter CB-96-16, August 1996]] Dear Colleague Letter CB-97-14, issued in August 1997, provided a chart indicating what percentage of each state's scholarships could be used to provide the nonfederal share of FSEOG awards for the 1997- 98 award year. The Department computed the percentages in the chart on the basis of information furnished by the respective states regarding expected expenditures for state scholarships and grants for the 1997-98 award year, and by using the 1997-98 SSIG allocation data and required matching information. A similar chart for the 1998-99 award year will be issued in a Dear Colleague Letter in August 1998. Each school can apply the appropriate state percentage to the state scholarships and grants its students receive to determine the total amount of state scholarships and grants that may be used to meet the FSEOG nonfederal share requirement. For example, a student receives a grant of $600 from a state with a percentage of 92.35. The school multiplies 92.35% by $600, resulting in $554, which is the portion of the grant that may be used to meet the nonfederal share requirement for a $2,300 FSEOG award ($1,746 is the federal share of the FSEOG award). As a variance from use of the percentages indicated in the chart, if a school has specific knowledge that a state scholarship or grant-- irrespective of its name--is considered to be the required state matching portion of an SSIG, that scholarship or grant may not be used to meet the FSEOG nonfederal share. Also, if a school has documented knowledge that a state scholarship or grant is not comprised of SSIG monies (federal or state), 100% of the scholarship or grant may be used as the FSEOG nonfederal share. [[Definition of FSEOG recipient]] The 1998-99 nonfederal share requirement of 25% (unless the school qualifies for a waiver) may be met by one of three methods. In the following discussion of these methods, you should note that for a student to meet the definition of an FSEOG recipient, some portion of the grant awarded the student must have come from the FSEOG federal dollars. Also, by the time the FSEOGs are disbursed (regardless of what point in the award period the disbursements are made), the required match must have been accomplished; that is, the school's own resources must have been disbursed before or at the time the federal dollars are disbursed. However, it is important to note that outside resources1 can be used to match FSEOGs even if the funds are received at a later date, provided that the school has written information about funds that the noninstitutional agency or organization is awarding to the student involved. The written information must be kept on file at the school. 1 For example, state scholarships and foundation or other charitable organization funds. [[Three methods of meeting institutional share]] The three methods a school may use to meet its nonfederal share follow: 1. Individual FSEOG recipient basis--the school provides its share to an individual FSEOG recipient together with the federal share; that is, each student's total FSEOG would consist of 25% nonfederal resources and 75% federal dollars for the 1998-99 award year. 2. Aggregate basis--the school ensures that the sum of all funds awarded to FSEOG recipients in the 1998-99 award year comprises 75% FSEOG federal funds and 25% nonfederal resources. For example, if a school awards a total of $60,000 to FSEOG recipients in 1998-99, it has to ensure that $45,000 comes from FSEOG federal funds and $15,000 comes from nonfederal resources; if there are 100 FSEOG recipients, the entire $15,000 nonfederal resource requirement can be met by awarding a total of $15,000 in nonfederal resources to four FSEOG recipients. However, each FSEOG recipient must receive some FSEOG federal funds. 3. Fund-specific basis--the school establishes an "FSEOG fund" into which it deposits FSEOG federal funds and the required 25% nonfederal share. Awards to FSEOG recipients then are made from the fund. ADMINISTRATIVE COST ALLOWANCE --------------------------------- When a school calculates its administrative cost allowance for the 1998-99 award year, the school must include in its calculation the full amount of its FSEOGs--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 nonfederal share, that school may calculate its administrative cost allowance only on the full federal portion. For additional information about the administrative cost allowance, refer to Chapter 5, Section 3. TRANSFER OF FUNDS FROM FSEOG PROHIBITED --------------------------------------------- [[Transferring funds to FSEOG]] The HEA prohibits the transfer of FSEOG Program funds to any other program. Since the 1993-94 award year, schools have been prohibited from transferring FSEOG funds to the Federal Work- Study (FWS) Program. However, a school may transfer up to 25% of its FWS allocation and 25% of its Federal Perkins Federal Capital Contribution (FCC) allocation to the FSEOG Program. A school that transfers funds to the FSEOG Program from FWS during an award year must transfer any unexpended funds BACK to the FWS Program at the end of the award year. The same requirement exists for Perkins Loan FCC funds transferred to the FSEOG Program. FISCAL PROCEDURES AND RECORDS --------------------------------- [[Cash management--34 CFR 668.163]] Requirements for maintaining and accounting for Student Financial Assistance (SFA) program funds are included in 34 CFR 668.163. The cash management requirements that apply in general to SFA programs (those in the General Provisions) are discussed in Chapter 3, Section 3. The cash management requirements specific to the campus-based programs (those in the FWS, FSEOG, and Perkins Loan regulations) are discussed in Chapter 5, Section 3. [[Recordkeeping requirements--34 CFR 668.24 & 676.19]] A school must follow the recordkeeping requirements in the General Provisions and those in the FSEOG regulations. The recordkeeping requirements that apply in general to SFA programs (those in the General Provisions) are discussed in Chapter 3, Section 7. The recordkeeping requirements specific to the campus-based programs (those in the FWS, FSEOG, and Perkins Loan regulations) are discussed in Chapter 5, Section 3. Information on FWS payroll records is provided in Section 3 of this chapter. [[Fiscal procedures and records requirements--34 CFR 676.19]] In addition to following the fiscal procedures and records requirements mentioned in Chapter 3, Sections 3 and 7, in Chapter 5, Section 3, and in Section 3 of this chapter, a school must meet the following requirements, which are included in the FSEOG regulations: - A school must establish and maintain an internal control system of checks and balances that insures that no office can both authorize FSEOG payments and disburse FSEOG funds to students. - A school must establish and maintain program and fiscal records that are reconciled at least monthly. - Each year a school must submit a Fiscal Operations Report and other information the Department requires. The information must be accurate and must be provided on the form and at the time specified by the Department. |
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