Cash Management and Business Officers
Hal Deuser
Assistant Bursar
Webster University
Cash Management – The Definition
Cash management regulations govern a school’s
management of Federal Student Financial Aid
program funds. These regulations establish the
rules and procedures that a school must follow
in requesting, maintaining, disbursing, and
otherwise managing FSA funds under the Pell
Grant, FSEOG, Perkins Loan, FWS, Direct Loan,
and the FFEL Programs.
The Purpose of SFA
Cash Management Regulations
• Promote sound cash management of FSA program
funds by schools.
• Minimize the costs to the government of making FSA
program funds available to students and schools.
• Minimize the costs to students who receive FSA
loans.
• Guarantee that FSA program funds received by a
school are intended and used solely for the use of
eligible students.
Cash Management Responsibilities
Common to Business Offices
• Coordinate and cooperate with the Financial Aid
Office in:
– Projecting Cash needs for FSA disbursement
– Processing FSA cancellations of student and school
refunds
– Obtaining authorizations to pay FSA funds
– Being aware and in compliance of FSA laws and
regulations
– Submitting accurate and timely informational and
fiscal reports
– FSA disbursement and adjustments are properly and
consistently recorded and reported
• Maintain a system of internal controls that
ensures adequate FSA checks and balances
• Ensure that the functions of authorizing and
disbursing FSA funds remain separate
• Maintain FSA records that are consistent with
GAAP and government auditing standards
• Accurate and auditable draw down and return of
FSA funds
• Disburse and adjust FSA funds to eligible students
• Maintain a system of student accounts that
records charges, credits, and amounts due
• Collect Federal Perkins Loans and ensure that all related laws
and regulations are followed
• Establish and implement the school’s refund policy (may be
done by the FAO)
• Process return of TIV funds per FSA laws and regulations
• Report FSA expenditures and reconcile cash between school
records, bank statements, and federally reported balances
• Maintain and provide general stewardship of federal funds
and a cash management system that meets FSA disbursement
requirements, laws, and regulations
• Establish and monitor Federal Work-Study (FWS) payroll and
time sheets (responsible office varies per school) and
monitors the school’s nonfederal share of FWS matching
funds
• Prepare for and participate in FSA program reviews and audits
FSA Policies and Procedures’ Manual Topics
• Organizational structure of the FAO and Business
offices and how the school determines the
number of qualified staff to administer TIV
Programs
• Defined checks and balances in the school’s
financial management system(s)
• Who is in charge of what and kept informed of
students’ aid eligibility
• Annual calendar of Financial Aid related activities
• A list of all Student Account charges
• Defined payment periods and loan periods
• Defined FSA procedures for the disbursement crediting of funds to student accounts
• Procedures for requesting and drawing down FSA
funds
• Defined fiscal recordkeeping and fiscal reporting
policies and procedures
• Defined policies and procedures for handling FSA
credit balances
• Defined polices and procedures for evaluating
and improving the school’s operations of the
Business and Financial Aid Offices
Business Office Common TIV Requirements
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Notify borrower of right to cancel and/or adjust prior to federal loan
disbursement and the defined related procedures
No later than the 7th day of each payment period, school must provide a way
for federal Pell eligible students to obtain books/supplies for a payment period
If a standard credit-hour program, no FSA disbursements before 10 calendar
days before the first day of each payment period
Maximum of $200 of current TIV award year funds may be used for prior AY
unpaid balances
TIV Credit balances must be refunded no later than 14 days after credit
balance occurs (varies if disburse 10 days before payment period, then on first
day of payment period). NOTE: School determines which funds created the
credit balance
Parent PLUS credit balances refunded to parent unless parent authorizes
payment to student in writing
• Any credit balance TIV funds authorized to remain on student account
must be refunded by the end of the loan period for Direct Loan funds
• If Credit balance TIV funds authorized to remain on student account must
be held in designated subsidiary ledger account and maintained at all
times, cash in a school’s bank account must have an amount at least equal
to amount of these FSA funds being held on account
• Prior to Disbursement of Direct Loans notify borrower of right to cancel
and/or adjust
• By 7th day of each payment period, school must provide way for Federal
Pell eligible students to obtain books/supplies assuming the student would
have a credit balance
• If standard credit-hour program, no disbursements before10 calendar days
before the first day of each payment period
• Maximum of $200 of current TIV award year funds may be used for prior
AY unpaid balance
• TIV Credit balances must refund no later than 14 days after credit balance
occurs (varies if disburse 10 days before payment period, then on first day
of payment period). NOTE: School determines which funds created the
credit balance.
• Parent PLUS credit balances to parent unless parent
authorizes payment to student in writing
• Credit balance TIV funds authorized to remain on student
account must be refunded by the end of loan period for
Direct Loan funds
• If credit balance TIV funds authorized to remain on student
account must be held in designated subsidiary ledger
account and maintained at all times, cash in a school’s bank
account must have an amount at least equal to the amount
of SFA funds being held on account
• Undeliverable refunded TIV funds must be returned to the
funding TIV program no later than 240 days after the date
of non-deliverable notice. Additional attempts may be
made to deliver, but they must be made within 45 days
after funds are returned or rejected, if not successful,
regardless, then no later than 240 days funds are returned
to funding SFA program
Cash Management Authorizations
• Payment, cancellations, and adjustment notifications must be given in
writing, unless considered an “affected Individual”
• Separate written authorizations must be obtained from the student and
from the parent, as applicable, and must be freely given
• Authorization must explain each provision for the activities the school
seeks to perform on behalf of the student or parent and how that activity
will be performed
• Written in plain, understandable language that details the
student’s/parents’ rights under the authorization
• A single form may be used to collect multiple authorizations detailing the
related services and clearly states that the student/parent may refuse
• Must clearly state the procedures for cancelling or modifying
authorizations
• An authorization may not be incorporated into any other document that
must be signed unless some sort of check off is clearly provided
• Details the period covered by the authorization, a specific period of time
or the entire period the student is enrolled
• If FSA funds, it must clearly state the maximum time the school will hold
the student’s or parent’s TIV funds
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