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Guidance to institutions related to the upcoming temporary shutdown of the Department of Education's Grant Administration and Payment System (GAPS).

Publication Date: December 17, 2001

Author: General Manager: SFA School Channel

Summary: Guidance to institutions related to the upcoming temporary shutdown of the Department of Education's Grant Administration and Payment System (GAPS).

Posted on December 17, 2001

TO: All Destination Points

FROM: G. Kay Jacks, General Manager
Schools Channel
Student Financial Assistance

RE: Guidance to institutions related to the upcoming temporary shutdown of the Department of Education's Grant Administration and Payment System (GAPS).

As you are aware from information provided by the Department's Office of the Chief Financial Officer (OCFO), the Department will be converting the Financial Management System to a new platform in January. In order to accomplish the conversion, the GAPS system will be unavailable from Friday afternoon, January 11, 2002 until Tuesday morning, January 22, 2002. During this shutdown, institutions will not be able to request Federal funds from the Department. In addition, the GAPS Internet Web Site and Payee Hot Line will not be available.

We understand that for many of our Title IV participating institutions this downtime comes at a critical point in the preparation of student aid disbursements. Therefore, we are providing the following guidance in order to minimize the impact of the conversion and shutdown.

Guidance for Period of Temporary Shutdown of GAPS

Advance Payment Method: Because of the temporary shutdown of the GAPS system in mid-January, institutions that request and receive funds under the advance payment method should carefully calculate their cash needs for the Pell, Direct Loan, and campus-based programs for the period of the shutdown of GAPS. They should, no earlier than Wednesday, January 9, and no later than 2:00 PM (EST) on Friday, January 11 request through GAPS, funds needed for disbursement to students during this extended period.

For purposes of the SFA Cash Management regulations (34 CFR 668.166(a)), we will not consider funds received by an institution from requests made for this period to be cash that must be returned to the Department if such funds are disbursed to eligible students (or parents) by the end of the shutdown period. Institutions are reminded that all other cash management and other regulatory requirements remain in effect and compliance will be based upon the actual receipt of the funds by the institution. These requirements include, but are not limited to, the provisions of section 668.163 of the regulations that speaks to issues of funds maintenance, and section 668.166(c) regarding potential liability for interest on excess cash. Also, institutions that are covered by the Cash Management Improvement Act (CMIA) must also ensure that they are in compliance with the terms of CMIA as they related to the receipt of funds and certain interest liabilities.

Special Note for the Federal Pell Grant Program: The Recipient Financial Management System (RFMS) accepts a disbursement record 30 days before the disbursement date for schools receiving funds under the Advance Payment method. If you were planning to send disbursement records to RFMS during the shutdown period, you may want to send these records earlier to allow time for RFMS to process the records, for GAPS to reflect increased authorization amounts and your fiscal officer to draw the funds before the shutdown begins. We recommend that you send RFMS records by January 4th.

Special Note for the Federal Direct Loan Program (Option 1 and Standard Origination): The Direct Loan Origination Center (LOC) is prepared to make advance drawdowns to cover all anticipated disbursements for Option 1 and Standard Origination schools. Loan Origination Records must be received and accepted by the LOC by January 4th, 2002, in order for them to be included in the advance drawdown prior to the shutdown of GAPS. Loan Origination Records accepted after January 4th will be funded after GAPS comes back up on January 22.

Reimbursement Payment Method: Institutions that receive Title IV funds under the reimbursement payment method must notify their reimbursement analyst of the amount of disbursements that it expects to make during the temporary shutdown period. If, in the view of the reimbursement analyst, the requested amount is reasonable, we will provide those funds to the institution prior to the shutdown of GAPS and in advance of receiving the formal reimbursement requests. In order to ensure that funds are available to schools when needed, the notification must be submitted on or before January 4th.

In addition, prior to the shutdown of GAPS, we will advance to institutions program funds from pending reimbursement requests.

We appreciate your cooperation and understanding during the conversion of GAPS. If you need additional information, please call -

For information on GAPS - 1 888-336-8930

For information of Direct Loan Funding - 1 800 848-0978

For information on Pell Grant Funding - 1 800 474-7268

For information on Campus Based Funding - 1 877 801-7168

For information on the reimbursement payment method - Contact your reimbursement analyst.

As always, you may call SFA's Customer Service Call Center 1-800 433-7327 for additional information.

Last Modified: 12/16/2001