PublicationDate: 7/1/95 ChapterNumber: 5 ChapterTitle: Accounting Procedures for Title IV Programs SectionNumber: 2 SectionTitle: Bookkeeping and Recordkeeping Activities PageNumbers: 142-146 ((Cooperation among offices)) An effective institutional financial aid program requires a cooperative effort among all school offices involved in delivering financial aid to students. Separate reporting and recordkeeping responsibilities required of each office are described in Chapter 2. The business office is responsible for all financially oriented accounting and recordkeeping activities, except for some detailed records and files on individual students that must be kept in the financial aid office. The remainder of this chapter is designed to help the business office satisfy its accounting responsibilities efficiently and with a minimum of effort. ((Financial aid office records and activities)) The following flowchart gives an overview of recordkeeping activities within an institution's financial aid office from initial documents through final reports. [[The chart entitled, "Overview of Recordkeeping Activities in a Financial Aid Office," on page 143 is currently unavailable for viewing. Please reference your paper document for additional information.]] Records to be maintained include: - a student's application for aid (Free Application for Federal Student Aid [FAFSA]); - a student's or parent's application for a Federal Family Education Loan or a Federal Direct Loan; - the school's award notification to the student; - an award acceptance letter, signed by the student (optional); - an "authorization to disburse" record from the financial aid office to the business office;*18* - the record of financial aid received by a student to date; - the student's eligible noncitizen documentation (if applicable); - the student's financial aid transcript (if applicable); - the school's Fiscal Operations Report and Application to Participate (FISAP); - the school's Federal Direct Loan reconciliation reports; - the student's Student Aid Report (SAR) or Institutional Student Information Record (ISIR); - the student's verification data (if applicable); and - certifications signed by the student--Statement of Educational Purpose, Certification on Refunds and Defaults, Selective Service Statement (if applicable), and other required certifications. ((Designing a record-keeping system)) Bookkeeping and recordkeeping activities should be designed to enable timely internal and external financial reporting, proper filing of applications, and accurate final reports, as well as to meet documentation requirements for various financial aid programs. When designing an accounting system, the chart of accounts, books of original entry, billing, reporting requirements, and the like should all be taken into consideration. For example, the numerous ledger accounts set up for an institution's Federal Perkins Loan fund are created to assist the school in preparing year-end reports that must be filed with ED. The institution can simply copy the information from its ledgers to the Electronic FISAP format supplied by ED just before closing entries at the end of the award year. This procedure does not allow for destroying original documentation, but it does permit quick and accurate reference to needed information. ((Business office activities )) [[The chart entitled "Overview of Accounting Activities in a Business Office," on page 145 is currently unavailable for viewing. Please reference your paper document for additional information.]] The flowchart on this page gives the reader an overview of the accounting activities within an institution's business office, from initial documents through final reports. (The business office may also maintain the Federal Direct Loan reconciliation reports.) With this system in mind, staff can see how the entire system fits together and how the journal entries fit into the system. Examples of initial documents maintained in the business office and posted to ledger accounts include: - cash receipts, - checks, and - original journals. An important general ledger account is Student Accounts Receivable; each individual student account is a subsidiary of this account. A sample student account is shown below. [[The chart entitled "Sample Student Account Receivable Card: Tom Sawyer, Fall 1995," on page 146 is currently unavailable for viewing. Please reference your paper document for additional information.]] *18* This part of the checks and balances process is normally built into automated financial aid systems. As a result, a paper document or memo is not required to be kept on file. |