Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Campus-Based Programs: Common Elements - Fiscal Procedures and Record Requirements

AwardYear: 1997-1998
EnterChapterNo: 5
EnterChapterTitle: Campus-Based Programs: Common Elements
SectionNumber: 3
SectionTitle: Fiscal Procedures and Record Requirements
PageNumbers: 19-25

For information on general fiscal procedures and records
requirements for all Student Financial Assistance (SFA) programs,
refer to Section 2 of Chapter 3, the current edition of the Blue Book,
and 34 CFR 668. Additional fiscal procedures required for each
campus-based program are discussed in the handbook chapter
covering that program.


[[FISAP requirement--34 CFR 673.3]]
As discussed in the introduction to this chapter, a school must submit
an application (Fiscal Operations Report and Application to
Participate [FISAP]) for each award year to receive federal funds
under the campus-based programs. The school uses the Fiscal
Operations Report portion of the FISAP to report its expenditures
under the campus-based programs in the previous award year. All
schools are required to file the FISAP data through the electronic
FISAP process (that is, by mailing diskettes, transmitting data by
modem, or mailing a magnetic tape).

Each July, the U.S. Department of Education distributes the
electronic FISAP packages and instructions for schools to use in
applying for funds for the subsequent award year and in reporting
expenditures for the previous award year. Materials essential for the
preparation and submission of the 1995-96 Fiscal Operations Report
and 1997-98 Application to Participate were distributed to schools in
"Dear Colleague" Letter CB-96-13, dated July 1996. Schools that
sent the FISAP to the Department by the October 1, 1996 deadline
received their tentative 1997-98 funding notifications in "Dear
Colleague" Letter SYS-97-1, dated January 1997. Final 1997-98
funding notifications were sent to schools in March 1997.

[[Questions about the FISAP]]
The Department will distribute electronic FISAP packages to schools
in July 1997 to be completed by schools applying for funds for the
1998-99 award year. Proposed new data collection requirements for
the 1998-99 Application to Participate were discussed in "Dear
Colleague" Letter CB-97-1, dated February 1997. Questions
concerning the preparation of the FISAP should be referred to the
appropriate campus-based state representative under the
Department's Student Financial Assistance Programs, Accounting
and Financial Management Service, Institutional Financial
Management Division. The representatives and their telephone
numbers are listed in Chapter 1, Section 2, of this handbook.
Questions about the data entry or submission of a FISAP should be
referred to an Electronic FISAP Administrator on 301/565-0032 or


[[Cash management regulations]]
Requirements for maintaining and accounting for SFA program
funds are included in regulations published in the Federal Register
November 29, 1996 and become effective July 1, 1997. The new
provisions that apply to all SFA programs are discussed in detail in
Chapter 3, Section 3. The new cash management requirements that
apply specifically to the campus-based programs are discussed here:

[[Interest-bearing account for Perkins Fund]]
- A school must maintain its Perkins Loan Program Fund in an
interest-bearing bank account or investment account consisting
predominately of low-risk, income-producing securities, such as
obligations issued or guaranteed by the United States, under the
provisions of 34 CFR 668.163(c); interest or income earned on
Fund proceeds are retained by the school as part of the Fund.

[[Payment period exception for FWS]]
- 34 CFR 668.164(b) requires schools to disburse SFA program
funds on a payment period basis, with the exception of FWS
payments to students. FWS payment provisions remain in 34 CFR
675.16, discussed in Chapter 7, Section 3.

[[Late disbursement of a Perkins Loan or FSEOG--34 CFR
- Regulations regarding late disbursements of Federal Perkins
Loans and FSEOGs were removed from 34 CFR 674.16 (g) and
34 CFR 676.16(e), respectively, and revised regulations are now
in 34 CFR 668.164(g). A school may make a late disbursement of
a Perkins Loan and/or FSEOG to an ineligible student if the
student became ineligible solely because the student is no longer
enrolled at the school for the award year. Before the student
dropped out, the school must have received a Student Aid Report
(SAR) or Institutional Student Information Record (ISIR) for the
student with an official EFC and have awarded the student the
Perkins Loan or FSEOG. The school may make that late
disbursement only if the funds are used to pay for educational
costs that the school determines the student incurred for the period
in which the student was enrolled and eligible, and the school must
make the late disbursement no later than 90 days after the date the
student became ineligible because he or she was no longer

- If a school credits a student's account at the school with Perkins
Loan funds, the school must notify the student of the date and
amount of the disbursement, the student's right to cancel all or a
portion of that loan and his or her right to have the funds returned
to the school's Perkins fund, under the provisions of 34 CFR

[[Requirement to send notice within 30 days]]
- The school must send the above notice, either in writing or
electronically, within 30 days of the date the school credits the
student's account at the school. If the school sends the notice
electronically, the school must require the student to confirm
receipt of the notice, and must keep a copy of the confirmation.

[[Procedures if student requests loan cancellation]]
- The school must return the Perkins Loan proceeds, cancel the
loan, or do both

- if the school receives a loan cancellation request within 14 days
after the school sends the notice to the student, or,

- if the school sends the notice more than 14 days before the first
day of the payment period, and the school receives a loan
cancellation request by the first day of the payment period.

[[Procedures if school fails to receive request in 30 days]]
- If the school does not receive the cancellation request within the
time period described above, the school may return the loan
proceeds, cancel the loan, or do both, but is not required to do so.
The school must notify the student in writing or electronically of
the school's decision. Additional notification requirements that
apply to the disbursement of all SFA program funds are discussed
in detail in Chapter 3, Section 3.


A school must keep financial records that reflect all campus-based
program transactions and must keep all records supporting the
school's application for campus-based funds. This documentation
includes the applications and records of all students who applied for
campus-based assistance for a specific award year and were included
on the school's FISAP for that award year. The school must also
retain applications and records of students who applied for but did
not receive aid either because the school had no more funds to award
or because the school determined that the student did not need funds.
The school must keep general ledger control accounts and related
accounts that identify each program transaction and must separate
those transactions from all other institutional financial activity. Fiscal
records must be reconciled at least monthly.

New recordkeeping requirements for all SFA programs were
published in the Federal Register November 27, 1996 and become
effective July 1, 1997. These regulations specify the length of time
records must be kept and the formats in which they must be kept.
These new requirements as they apply in general to all SFA
programs are discussed in Chapter 3, Section 7. In addition to
following meeting those requirements, a school must meet certain
campus-based program recordkeeping requirements.

[[Types of records the school must keep]]
The campus-based records a school must maintain include but are
not limited to

- the SAR or ISIR used to determine a student's eligibility for
campus-based program funds;

- application data submitted to the Department or the school on
behalf of the student;

- documentation of each student's eligibility for campus-based
program funds;

- documentation of the amount of a Perkins Loan, FSEOG or FWS
award, its payment period, and the calculations used to determine
the amount of the loan, grant, or FWS award;

- documentation of each disbursement of FSEOG or Perkins Loan
funds, and the date and amount of each payment of FWS wages;

- documentation of the school's calculation of any refunds or
overpayments due to or on behalf of the student and the amount,
date, and basis of the school's calculation;

- documentation of the payment of any refund or overpayment to
the SFA program fund or the Department;

- information collected at initial and exit loan counseling required
by Perkins Loan regulations; and

- reports and forms used by the school in its participation in a
campus-based program, and any records needed to verify data that
appear in those reports and forms.

A school must continue to follow the procedures previously
established in 34 CFR 674.19 for documentation of a student's
Perkins Loan repayment history. The school must maintain a
repayment history for each borrower that shows

- the date and amount of each repayment during the life of the loan;

- the amount of each repayment credited to principal, interest,
collection costs, and either penalty or late charges;

- the date, nature, and result of each contact with the borrower (or
endorser for loans made prior to July 23, 1992) in the collection of
an overdue loan; and

- copies of all correspondence to or from the borrower (and
endorser for loans made prior to July 23, 1992), except for bills,
routine overdue notices, and routine form letters (demand letters,
notices of intent to accelerate, and the like are not considered to be
routine form letters).

Schools must also continue to follow the procedures previously
established in 34 CFR 675.19 for documenting a student's FWS
work, earnings, and payroll transactions. These procedures are
discussed in Chapter 7, Section 3.

Generally, a school must keep records relating to the school's
administration of a campus-based program or the Pell Grant Program
for three years after the end of an award year for which the aid was
awarded and disbursed under that program, except that

- The school must keep the FISAP in the Perkins Loan, Federal
Supplemental Educational Opportunity Grant (FSEOG), and FWS
Programs and any records necessary to support the data contained
in the FISAP, including "income grid information," for three years
after the end of the award year in which the FISAP is submitted.

[[Perkins Loan repayment records--34 CFR 674.19(e)(3)]]
- The school must keep repayment records for Perkins Loans,
including records relating to cancellation and deferment requests
for at least three years from the date a loan is assigned to the
Department, canceled, or repaid.

[[Records under question--34 CFR 668.24(e)(3)]]
- Records questioned in an audit or program review must be kept
until the questions are resolved or until the end of the retention
period applicable to the records, whichever is later.

[[Format of records-- 34 CFR 668.24(d)]]
A school must keep its campus-based program records in one of the
following formats:

[[Records necessary to enforce loan collection--34 CFR
- Original signed promissory notes and signed repayment schedules
for Perkins Loans, National Direct Student Loans (NDSLs), or
National Defense Student Loans (Defense Loans) must be kept in
a locked fireproof container until the loan is repaid or until the
school needs the originals in order to enforce collection of the
loan. If a loan is assigned to the Department, the school must send
the original promissory note or a certified copy of the note, as well
as a copy of the original deferment or cancellation form(s). The
school may not send computer-generated form(s) or microform(s).
(Refer to Chapter 6, Section 3.)

- A school may keep other required records in hard copy or in
microform, computer file, optical disk, CD-ROM, or other media
formats, but all record information must be retrievable in a
coherent hard copy format or in other media formats acceptable to
the Department except that

- a student's SAR or ISIR used to determine eligibility for SFA
program funds must be kept in the format in which the school
received it, except that the SAR may be kept in an "imaged
media format;" and

- any document that contains a signature, seal, certification, or any
other image or mark required to validate the authenticity of its
information must be kept in its original hard copy or in an
imaged media format.

- Any "imaged media format" used to keep required records must
be capable of reproducing an accurate, legible, and complete copy
of the original document, and, when printed, this copy must be
approximately the same size as the original document.


A school participating in the campus-based programs is entitled to an
allowance to help offset administrative costs, such as salaries,
furniture, travel, supplies, and equipment. The allowance can also be
used for service fees that banks charge for maintaining accounts.
Computer costs associated with Perkins Loan billing may also be
paid from this allowance. Schools may use the allowance to help pay
the costs of administering not only the campus-based programs but
the Federal Pell Grant Program as well. Administrative costs also
cover expenses for carrying out the student consumer information
services requirements.

A school may use up to 10% of the administrative cost allowance
attributable to the school's FWS Program expenditures to offset
expenses incurred for its community service program.

Each school's administrative cost allowance is based on its
expenditures for all three programs, EXCLUDING the amount of
Perkins Loans assigned to the Department. The school calculates the
total administrative cost allowance for the campus-based programs in
Part VI of the FISAP by adding the following:

5% of the first $2,750,000 of a schoolÂ’s
expenditures under the campus-based programs


4% of expenditures greater than $2,750,000
but less than $5,500,000 under the campus-based programs


3% of expenditures greater than $5,500,000
under the campus-based programs

When a school calculates its administrative cost allowance for the
1997-98 award year, the school is to include in its calculation the full
amount of its FSEOG awards--both the 75% federal share and the
required 25% nonfederal share. However, a school that chooses to
provide more than a 25% institutional share to FSEOG recipients
may not include an FSEOG institutional share in excess of 25% in its
FISAP or in the calculation of its administrative cost allowance. If
the Department has granted a school a waiver of its required
institutional share for the FSEOG Program or the FWS Program, that
school's administrative cost allowance may be calculated only on the
full federal portion of its awards for those programs.

The school takes the administrative cost allowance out of the annual
authorizations the school receives for the FSEOG and FWS programs
and from the available cash on hand in its Perkins Loan fund. It is
not a separate allowance sent to the school. A school may draw its
allowance from any combination of campus-based programs, or it
may take the total allowance from only one program provided there
are sufficient funds in that program. However, a school may not
draw any part of its allowance from a campus-based program unless
the school has disbursed funds to students from that program during
the award year.

If a school charges any administrative cost allowance against its
Perkins Loan fund, it must charge these costs during the same award
year in which the expenditures for these costs were made.

Last Modified: 07/01/1998