# Presentation: 663338

## <date/time>

## Session 41

***Monitoring Pell Grants and Direct Loan Funds***

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## Session Outline

- COD Overview
- Cash Management Requirements
- Common Origination and Disbursement
- What changes
- What stays the same
- Funds Delivery
- Cash Management Tools

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## Session Outline - (continued)

- Substantiating drawdowns
- Track draws using FIFO
- Current Funding Level
- Unsubstantiated cash balance
- Available balance
- Customer Service Solution

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## Common Origination and Disbursement (COD)

- Replaces the Recipient Financial Management System (RFMS) and the Direct Loan Origination System (DLOS) with an integrated common system in 2002-2003
- Redefines aid origination and disbursement processes for Pell Grants and Direct Loan

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## Common Origination and Disbursement (COD)

- Integrates a common process with a system designed to support origination, disbursement, and reporting of Pell Grants and Direct Loans
- Increases accountability and program integrity by providing tools to schools and SFA for funds management

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## Cash Management Requirements

- 30-Day Reporting Requirement
- 685.30(d) Direct Loan
- 690.83 Pell (and annual deadline
- notice.)
- 3-Day rule
- 668.162(b)
- Monthly Reconciliation
- 685.102(b) Direct Loan

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## What’s New for COD Funding 

- Customer Service Solution
- Web based reports/ monitoring tools.
- Option to have COD initiate drawdowns on behalf of schools based on actual disbursement records.
- Tracking of drawdowns

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## What’s staying the same?

- Funds are drawn or received via GAPS
- Schools will request/receive cash like they do now.
- Pell Just-in-Time Pilot
- Funds are separated by program and award year.

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## One COD Funding Process

- Direct Loan

- Pell

-   COD process

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## Current Funding Process:  Direct Loans

- Schools or the LOC draw down.
- Disbursement records sent to LOC.
- Monthly reconciliation reports sent to schools.
- Cumbersome program year closeout

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## Current Funding Process:  Pell Grant

- Schools draw funds in GAPS not to exceed authorization level.
- Disbursement records sent to RFMS to increase authorization levels
- Year-to-Date and/or Reconciliation reports sent to schools upon request.

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## New Common Process (applies to both Pell Grants and Direct Loans)

- Option to have COD initiate drawdowns on behalf of schools based on actual disbursement records.
- Web-based reports/tools that allow schools to monitor themselves

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## New Common Process (applies to both Pell Grants and Direct Loans)

- Proactive customer service staff to assist schools in reporting timely.
- Funds tracking that promotes  reconciliation and simple closeout.

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## Why the new process will be better for you and your students

- More timely and easily accessible Web-based funding information.
- Monthly reconciliation and simple closeout.
- Knowledgeable and proactive customer service staff.
- More control and timely funding information.
- More timely loan booking. (DL only)

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## Funding in COD

- Funds Delivery
- Schools can draw down in GAPS
- the funds  they will need to disburse
- within the next 3 business days.
- Schools can choose to have COD ‘push’ funds to schools based on accepted actual disbursement records.

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## Substantiation of  Drawdowns

- To substantiate a draw means to submit and have COD accept actual disbursement records that equal the amount of the draw.
- All draws must be substantiated timely. (30 day reporting requirement)

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## Substantiation of Drawdowns

- COD will match actual disbursements to drawdowns on a first- in/first-out basis.
- Each drawdown will be aged to see how long it takes a school to “substantiate” the draw.

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## Substantiation of Drawdowns

- Example:
- You draw $1 million on 7/1/01.
- You draw an additional $2 million on 7/6/01.
- You submit $500,000 in actual records which are accepted on 7/25/01.
- The $500,000 would be applied against the $1 million draw. That draw would be 50% substantiated.

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## Substantiating draws using FIFO

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## The Current Funding Level (CFL)

- The CFL is the funding available to schools prior to submitting actual disbursement records.
- The CFL is akin to the authorization or obligation level for Pell Grants and the Cash Control Amount in Direct Loans.

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## Unsubstantiated Cash Balance

- The unsubstantiated cash balance is the difference between cash at school and substantiated draws.
- It lets a school know at any point how much funds haven’t been substantiated.

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## Available Balance

- The difference between the CFL and drawdowns (cash at school).
- The available balance is the amount a school can request at any point prior to substantiating more draws.

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## School ExamplePart I

- Initial CFL = $5M
- School draws $3M  on 7/1/02
- Available balance = $2M.  (5M-3M)
- Amt. Of Substantiated cash = $0
- Amt. Of Unsubstantiated cash = $3M

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## COD funding screen 7/2/02

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## School ExamplePart II

- 		School reports $2M in disburse-
- 		ment records on 7/10/02
- 		School’s CFL increased to $7M (5+2)
- 		School’s available balance = $4M.  (7M-3M)
- Amt. Of Substantiated cash = $2M
- Amt. Of Unsubstantiated cash = $1M

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## COD Funding screen  7/11/02

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## School ExamplePart III

- School reports $1M in disburse-
- ment records on 7/20/02
- 		**Sc**hool’s CFL increased to $8M (5+3)
- 		School’s available balance = $5M.  (8M-3M)
- Amt. Of Substantiated cash = $3M
- Amt. Of Unsubstantiated cash = $0M

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## COD Funding screen 7/22/02

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## New COD Web Site With School Centered View

- SAMPLE

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## Customer Service Teams

**School Services Team**
- Primary representative for each School/Servicer
- A secondary representative and a team of representatives will be assigned as back-up
- Teams assigned by like processes, i.e. software provider
**Reconciliation Specialist on each team**
- Assist with Transaction Balancing
- Provide Funds Management Support to Schools
- Provide onsite support to schools as needed
- Support GAPS & FMS exception research issues

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## Customer Service Solution

- Systematic tracking of schools progress towards 30 day requirement.
- Outreach calls to schools prior to the 30 day requirement.
- Outreach calls for schools with unsubstantiated cash.
- Ability to run specialized ad hoc reports to help isolate problem records in a specific status or condition.

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## Customer Service “Where to go for answers?”

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## More Information on COD

- Other EAC Sessions
- Session 29 – Pell: 2002-03 Processing Changes
- Session 32 – Direct Loans: 2002-03 Processing Changes
- Session 33 – Customer Service: The New Integrated Customer Service Center for Pell, Direct Loans & Campus Based
- Session 35 – COD: What is the Common Record?
- Session 39 – COD: The Big Picture
- Session 41 – Tools for Monitoring Pell and Direct Loan Funds
- IFAP Website (www.IFAP.ed.gov)
- Common Origination and Disbursement section
- Technical Reference – DLOS, RFMS and COD
- Updates and Frequently Asked Questions
- COD On-Line Training – Spring 2002

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## QUESTIONS ABOUT COD

- IFAP: Current Publications
- Send your questions  to the Customer Service Call Center using IFAP's "Feedback" button, found in the upper right hand corner of the IFAP pages
- Call Customer Service Call Center 1-800-433-7327, between 9 AM and 5 PM ET or leave a message after hours.

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## Questions??

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