PublicationDate: 7/1/95 ChapterNumber: 4 ChapterTitle: Obtaining, Managing, and Returning Title IV Funds SectionNumber: 2 SectionTitle: Requesting Funds PageNumbers: 87-89 ((FFEL funds)) Schools request funds for all Title IV program expenditures directly from the federal government, with the exception of the Federal Family Education Loan (FFEL) Program. FFEL Program funds are obtained by schools from banks, savings and loan organizations, credit unions, and other financial institutions that serve as FFEL Program lenders. (See section 4.6.) ((ED/PMS)) Schools request federal funds via the Department of Education Payment Management System (ED/PMS). (ED/PMS is discussed in detail in sections 4.2.1- 4.2.2, 4.4.1-4.4.4, and 6.3 of this book.) ED/PMS pays funds to schools using one of two electronic systems: ((ACH/EFT)) - Automated Clearinghouse/Electronic Funds Transfer (ACH/EFT)--A school contacts the ED/PMS service bureau and the bureau sends the request to ED/PMS for validation (approval). If approved, ED/PMS electronically transfers a school's payments through the Federal Reserve Bank (FRB) network to the school's depositor account at a designated financial institution. ACH/EFT also is referred to as direct deposit. ((FEDWIRE) - FEDWIRE--A school contacts the Financial Payments Group (FPG) in ED to request funds. The funds are then transferred directly from ED through the FRB network to the school's depositor account at a designated financial institution. FEDWIRE is generally used to transfer funds to states and some large postsecondary institutions. ED/PMS may pay schools in advance (BEFORE Title IV program funds are disbursed to students), or a school may be paid by reimbursement (AFTER institutional funds have been disbursed to students). NOTE: No school chooses to be paid by reimbursement. 4.2.1 Advance Payment Method ED/PMS pays most schools in advance. Under the advance payment method, ED/PMS accepts a school's request for cash and electronically transfers the amount requested to the school's bank account via ACH/EFT or FEDWIRE. ((Request may not exceed need)) A school's advance request for cash may not exceed the amount of funds the school needs within two to three business days to make disbursements to students. A school must make the disbursements as soon as administratively feasible but no later than three business days following the date the school receives the funds. More information about the advance payment method can be found in Chapter 3 of the ED/PMS Recipient's Guide. 4.2.2 Reimbursement Payment Method ((Placing schools on reimbursement)) A school may be placed on reimbursement if ED determines that there is a need to monitor the school's use of federal funds or if a school has monetary liabilities that need to be recovered by administrative offset (for example, owing funds to ED as a result of an audit or program review finding). The Regional Office of ED that had ED/PMS place the school under the reimbursement payment method will tell the school how to request payment. The procedure begins with the school filling out a Request for Advance or Reimbursement Form (SF-270) and sending it to the Regional Office for approval. After approving the request, the Regional Office sends it to the Compliance and Enforcement Division in the Central Office for approval. After approving the request, that division authorizes the Financial Payments Group (FPG) of ED/PMS to send an ACH/EFT payment to the school. FPG must have written authorization from the Compliance and Enforcement Division before an ACH/EFT payment can be sent. Under the reimbursement payment method, a school must make disbursements to eligible students before it may submit a request to ED/PMS for cash. The amount of the school's request may not exceed the amount of actual disbursements the school made to students included in the request. ((Documentation required to support request)) ED/PMS may require a school to submit documentation that each student included in a request was eligible to receive and did receive payment for Title IV program funds for which the school is requesting reimbursement. ED/PMS approves a school's request for reimbursement and electronically transfers the requested amount to the school's bank account if: ((Requirements for approving requests)) - the school properly determined each student's eligibility for Title IV program funds; - the school made payments to students for the correct amounts of Title IV program funds; - the school submitted any required documentation to support its request for reimbursement; and - sufficient funds are available to the school in the ED/PMS payment system. More information about the reimbursement payment method can be found in Chapter 3 of the ED/PMS Recipient's Guide. |