| DCLPublicationDate: 3/1/98 DCLID: GEN-98-9 AwardYear: Summary: Announcement of Rescheduled Transition from PMS to EDCAPS/GAPS March 1998 GEN-98-9 SUMMARY: Announcement of Rescheduled Transition from PMS to EDCAPS/GAPS Dear Colleague: In a March 4, 1998 "Dear Colleague Announcement" posted to the Departments Bulletin Board Service (BBS) and on its Information for Financial Aid Professionals (IFAP) website, we announced a temporary suspension of the conversion of the system institutions use to request and receive Title IV funds from the Payment Management System (PMS) to the Education Central Automated Processing System (EDCAPS), Grants Administration and Payment System (GAPS). The decision to postpone the transition was based upon our commitment to ensure that the conversion would not result in payment delays to institutions. Since early March, we have made the necessary system improvements to ensure a smooth transition from PMS to EDCAPS/GAPS and are confident that, other than the actual period of time when the systems transition will take place, there will be no disruption or delay in our ability to provide adequate funding. NEW TRANSITION SCHEDULE We have now established April 24, 1998 as the new date on which we will begin the transition from PMS to EDCAPS/GAPS. The completion of the transition is scheduled for May 11, 1998 for institutions east of the Mississippi river and May 13, 1998 for institutions west of the Mississippi river. Institutions will not be able to receive funding during the transition period. Institutions should request all the Title IV (Federal Direct Loan, Federal Pell Grant, and Campus-Based Program) funds they reasonably expect to disburse or deliver to eligible students or parent borrowers during the transition period. Any funds the Department advances to the institution during the transition period must be maintained in the institutions Federal account, as required by 34 CFR 668.163 of the Cash Management regulations, until the funds are needed to make disbursements to eligible students and parents. REGULATORY PROVISIONS Because of the conditions of the transition period, the Department will allow the above requests for funds, despite the regulatory provision that requires institutions to disburse Title IV funds within three business days after receiving those funds [34 CFR 668.162(b)(3)]. Similarly, the Department will not require institutions to count any interest that is earned on funds drawn down for the transition period in determining its compliance with 34 CFR 668.163 (c)(3)(ii). Page 2 - Dear Colleague: Transition from PMS to EDCAPS/GAPS Further, the Department will not count these funds for purposes of determining an institutions compliance with the excess cash provisions in 34 CFR 668.166. All other Cash Management and program regulations apply during the transition period. On May 14, 1998, the day after the transition period, institutions must consider any funds that they received for the transition, but did not disburse, to have been received on that date. For example, an institution received $100,000 for the transition; but as of May 14, 1998, it has not disbursed $8,000. Under the three-day rule, the institution has until the close of business on May 19, 1998, to disburse the remaining funds before those funds are considered excess cash. ADVANCE PAYMENT METHOD An institution that receives Title IV funds under the advanced system of payment should follow normal procedures to obtain those funds. Institutions may make such requests as early as April 15, 1998, but not later than the dates specified below. April 22, 1998 - For institutions that receive funds through the ACH/EFT system, all final requests must be placed with the Departments Service Bureau (NCS) no later than 3:00 P.M. Eastern Time (ET) on April 22, 1998, in order for the payment to be processed prior to conversion to GAPS. NCS will not accept ACH payment requests from 3:00 P.M. ET, April 22, 1998, through 8 A.M. ET, May 11, 1998. April 23, 1998 - FEDWIRE institutions requesting next day payments must place their final payment request by 6:00 P.M. on April 23, 1998. No additional FEDWIRE payments will be processed from 6 P.M. ET, April 23, 1998, through 8 A.M. ET, May 11, 1998. REIMBURSEMENT PAYMENT METHOD Institutions that receive Title IV funds under the reimbursement system of payment must notify the appropriate reimbursement analyst of the amount of disbursements that it expects to make to students during the transition period. This notification must be submitted to the appropriate reimbursement analyst on or before April 15, 1998. The Department will provide the requested amount of funds in advance of receiving a reimbursement request for those funds, if the Department determines that the requested amount is reasonable. The Department will make that determination on the basis of the institutions previous reimbursement requests. The Department will also advance Federal Direct Loan, Federal Pell Grant, and Campus-Based Program funds for pending reimbursement requests. Page 3 - Dear Colleague: Transition from PMS to EDCAPS/GAPS REPORTING On May 15, 1998, a recipient Reconciliation Statement will be mailed to institutions listing all activity for open awards as of May 1, 1998. This report should be compared to institutional internal records of awards and expenditures to ensure all grant awards and expenditures were converted to GAPS properly. With the implementation of GAPS, recipient reporting using 272s, Monthly Electronic Expenditure Reporting System (MEERS), and other forms is being replaced. Instead, recipients will report by ensuring the information contained in the GAPS system, relative to draw downs by award, is accurate expenditure data. Information in GAPS is maintained by award number. Draw downs should be determined based on the anticipated expenditures to be made for a three day or regulatory period. Draw downs should be adjusted periodically to reflect actual expenditures by award. Recipients are responsible for maintaining accurate information in GAPS. ADDITIONAL QUESTIONS The Department has established a hotline which will provide technical assistance, answer questions, process payments, and provide any other support for recipients. The phone number is 1-888-336-8930. Additional information is available on the Departments home page at http://www.ed.gov/offices/OCFO. We appreciate your continued cooperation and support as the Department makes this important transition. Sincerely, Diane E. Rogers Acting Deputy Secretary Student Financial Assistance Programs |