FSA has released additional guidance for when and how financial aid offices should reconcile their institution’s federal Pell Grant funding each year; including the the process for internal as well as external reconciliations. The full announcement also contains instructions for data submission, funding cancellation, and answers to 13 commonly asked questions related to Pell reconciliation that can be found here.
POSTED DATE: February 06, 2024
AUTHOR: Federal Student Aid
ELECTRONIC ANNOUNCEMENT ID: GRANTS-24-01
SUBJECT: Federal Pell Grant Program Reconciliation
In a Nov. 21, 2023 Electronic Announcement we published general information regarding Title IV Aid Disbursement Reporting, Excess Cash, and Reconciliation Requirements. In addition, updated disbursement reporting and data submission timelines for all programs were published in a recent Federal Register Notice see Federal Register Volume 88, Number 120 (Wednesday, June 21, 2023) for the 2023–2024 deadlines.
In this announcement, we provide specific information to assist your school in reconciling the Federal Pell Grant (Pell Grant) Program. The information provided below is for both the financial aid office and business office.
Pell Grant Reconciliation Defined
Pell Grant Reconciliation is the process by which a school reviews and compares Pell Grant data recorded on the U.S. Department of Education’s (the Department’s) systems with the information in the school’s internal records and resolves any discrepancies. This process should be performed on a regular basis and is recommended at least monthly.
Note: Conducting reconciliation frequently can help ensure that your school is properly exercising its fiduciary responsibilities to safeguard federal funds and ensure that they are used as intended.
There are two types of reconciliation, which can be performed separately or simultaneously during the month, including:
- Internal Reconciliation: This is the process where the business and financial aid offices compare disbursement transactions (actual disbursements and adjustments) and related cash transactions (Drawdowns, Drawdown Adjustments, Refunds of Cash, and Returns). If discrepancies are found, the school must document and resolve them in a timely manner.
- External Reconciliation: The school compares its reconciled internal records to the Department’s records of funds received and returned, student disbursements and adjustments, and cash balances recorded in the Common Origination and Disbursement (COD) System. At a minimum, this reconciliation must be completed at least monthly to ensure that data is correct in all systems and that cash management and disbursement reporting timelines are being met. The Department offers various tools to assist you with external reconciliation. For more information, see the questions and answers below.
Schools may perform internal and external reconciliation in either order. However, if you have completed internal reconciliation first, there will be fewer discrepancies to resolve when you perform the external reconciliation.
It is very important for schools to maintain good communication between the Business Office and the Financial Aid Office to successfully reconcile both internally and externally. Reconciliation is a shared responsibility. It requires joint action by the Financial Aid and Business Office to identify discrepancies and any missing data, and to correct these in a timely manner.
Schools should document their reconciliation process and the resolution of any identified discrepancies.
Final Reconciliation of a Pell Grant Award Year
In addition to regular monthly reconciliation of Pell Grant data, a final reconciliation should be performed as soon as possible after final scheduled disbursements have been made for the award year. This final reconciliation should ensure that all data is correct, and the Total Net Drawdowns equals the Net Accepted and Posted Disbursements (NAPD), in the COD System (Cash >NAPD balance should equal $0.00). This process must be performed within the applicable data submission (closeout) deadline (defined below), as well as immediately following processing of any additional data by the school (for example, eligible late disbursements or disbursement adjustments made within regulatory timeframes, but which occur after the data submission deadline). There are two deadlines which impact this process:
Data Submission (Closeout) Deadline – The data submission (closeout) deadline is published annually in a Federal Register Notice. It is generally the end of September following the end of the award year. For example, the 2023–24 award year will close on Sept. 30, 2024. After this date, the COD System will not accept new or increased awards or new or increased disbursement amounts without prior approval for an extension to the established data submission (closeout) deadline. Downward adjustments will continue to be accepted without an extension. If your school needs to request an extension to the data submission deadline, this request must be submitted via the COD website at https://cod.ed.gov. For more information on Extended Processing, see question #10 in the questions and answers below.
Funding Cancellation Deadline – Pell Grant funding availability is canceled five years after the data submission (closeout) deadline for the award year. For example, for the 2018–19 Federal Pell Grant award year (July 1, 2018 – June 30, 2019), the funding cancellation date is Sept. 30, 2024 [2019 + 5 = 2024]. After the funding cancellation deadline, schools will be unable to report any further award or disbursement changes to the COD System for that award year. In addition, schools will be unable to draw down or adjust funds via the G6 website, and any refunds of cash must be made to the Pell miscellaneous account (contact the G6 help desk for instructions). As such, schools must complete all final reconciliation activities well before this final deadline and in accordance with disbursement reporting timelines and the data submission (closeout) deadline defined above.
Note: Schools should confirm closeout via the School Balance Confirmation page on the COD website once your school has completed its final reconciliation and reached a $0.00 Cash>NAPD.
Contact Information
For additional information on Pell Grant Program Reconciliation, refer to the Questions and Answers below. If you have questions about this announcement or its attachment, contact the FSA Partner and School Relations Center at 1-800-848-0978. You may also email CODSupport@ed.gov.
SOURCE: (GRANTS-24-01) Federal Pell Grant Program Reconciliation