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

Accounting Procedures for Title IV Programs

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.

Last Modified: 06/30/1995