| PublicationDate: 7/1/95 ChapterNumber: 6 ChapterTitle: Title IV Reporting Requirements SectionNumber: 3 SectionTitle: Department of Education Payment Management System (ED/PMS) PageNumbers: 246-250 *28* ED/PMS is an acronym for the Department of Education Payment Management System. ED/PMS is the central repository for payment transactions for schools receiving funds from ED through Financial Services (FS). ED/PMS is a system; FS is the office within ED that administers the system. ((Award authorizations)) Schools participating in the Federal Pell Grant and campus-based programs and Level 1 schools in the Federal Direct Loan Program must request funds through ED/PMS. (Schools do NOT request FFEL funds through ED/PMS, and Level 2 and Alternative Origination [Level 3] Federal Direct Loan Schools do not request funds through ED/PMS.) Each school has an account with ED/PMS for its Title IV campus-based and Federal Pell Grant funds and a separate account for its Federal Direct Loan Program funds. Once a school receives an official award authorization, the authorization amount is recorded in the school's ED/PMS account and the school may request payments against the funds available in its account.*29* The amount of funds available is equal to the advance payment sum of all funds authorized by program offices within ED MINUS the funds the school has already received. A school may receive funds through ED/PMS in advance or by reimbursement. Schools also use ED/PMS to report Title IV program expenditures, with the exceptions of expenditures of FFEL and Federal Direct Loan funds. ( For information about reporting Title IV expenditures through ED/PMS see section 6.3.2.) 6.3.1 Requesting Payments ((Advance payment)) ED/PMS pays most schools in advance. Schools receive funds from ED/PMS through the Automated Clearinghouse/Electronic Funds Transfer (ACH/EFT) system or FEDWIRE. ((ACH/EFT)) ACH/EFT is also referred to as direct deposit. Under ACH/EFT, 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. ((FEDWIRE)) Under FEDWIRE, funds are transferred directly from ED through the FRB network to the school's depositor account at a designated financial institution. FEDWIRE generally is used to transfer funds to states and some large postsecondary institutions. A bank is allowed to charge a school a fee for processing FEDWIRE transactions. ((Reimbursement payment)) ED/PMS pays some schools by reimbursement. A school may be required to go to the reimbursement payment method at the request of an ED program office. Generally, reimbursement occurs if, in the past: - a school did not comply with ED's regulations; OR - a school did not meet program requirements; OR - an ED program office identified other problems with a school's award authorization. A school's ED/PMS account may also be changed to reimbursement at the request of FS if: - the school has defaulted on an agreement to repay a debt due ED OR - the school has abused advance payment privileges. Detailed instructions for enrolling in and using ACH/EFT and FEDWIRE and for obtaining payments by reimbursement can be found in Chapter 3 of the ED/PMS Recipient's Guide. More information about advance payment, reimbursement, reimbursement payment, ACH/EFT, and FEDWIRE is contained in Chapter 4 of this book. 6.3.2 Reporting Expenditures ((ED/PMS 272 Report)) The ED/PMS 272 Report is an electronic or paper financial report that schools use to report on cash disbursements. ED uses the information from a school's ED/PMS Report to determine if federal funds financed through ED/PMS are disbursed in accordance with federal cash management requirements. A school receives an ED/PMS 272 Report monthly or quarterly from ED (this is determined by the amount of funds received)*30* for each general account that it has in ED/PMS. A general account is one for which a school receives funds and for which it is required to report disbursements. A school retrieves the monthly report electronically (see section 6.4.); the quarterly report is mailed to a school's business office. Regardless of whether a school reports monthly or quarterly, a hard copy of the ED/PMS Report contains six documents. (A seventh document, the Error Correction Document [ED/PMS 272C], was discontinued as of March 31, 1993.) A sample ED/PMS 272 Report can be found on pages 281-285. 6.3.2.1 Transmittal Letter ((Documents contained in ED/PMS 272 Report)) Each ED/PMS 272 Report contains a transmittal letter. School fiscal officers should read the letter carefully, as it contains important information and notices about federal financial reporting requirements, such as the deadline for filing the quarterly ED/PMS Report. 6.3.2.2 Federal Cash Transactions Report: Status of Federal Cash This report, referred to as the ED/PMS 272 page 1, summarizes a school's cash status and fund activity through the end of the reporting period. This summary report must be completed last, after the school has completed ED/PMS 272A. 6.3.2.3 ED/PMS 272A: Federal Cash Transaction Report ED/PMS 272A contains a list of awards that are open and active-- that is, those for which a school is receiving funds and reporting disbursements. This report must be completed before the ED/PMS 272 page 1 is completed. A school is required to report cumulative cash disbursements (federal cash transactions) through the end of the reporting period. ED/PMS 272A lists the cumulative amount of each award authorization, along with prior cumulative disbursements that the school reported for each award. The report also lists any resolutions of previous problems with awards. Specific instructions for completing ED/PMS 272A can be found in Appendix L of the ED/PMS Recipient's Guide. 6.3.2.4 ED/PMS 272B: Statement of Cash Accountability This part of the ED/PMS report is similar to a bank statement. It provides detailed information on disbursements, adjustments, and itemized payments in a school's ED/PMS account and shows the amount of cash for which a school is held accountable. The ED/PMS 272B is used to identify problems with payments received through ED/PMS. Appendix M of the ED/PMS Recipient's Guide contains more information about this document. 6.3.2.5 ED/PMS 272F: Authorizations for Future Periods The ED/PMS 272F lists award authorizations that will be available to a school at a later date. These awards are not included in the school's available funds balance, instead they are maintained within ED/PMS until the start-date of the award. This report is provided for information only; it does not require any action on the part of the school. A complete description of ED/PMS 272F can be found in Appendix O of the ED/PMS Recipient's Guide. 6.3.2.6 ED/PMS 272G: Inactive Documents Report A school uses ED/PMS 272G to identify expired awards, the amount of any unused funds left on the expired award, and the date the award will close in ED/PMS. ((Automated suspension process)) An automated suspension process is used to close expired awards. This process identifies awards to be closed and suspends or deobligates unused funds from them on a quarterly basis. Unused funds are suspended in the quarter preceding the closing date listed on the ED/PMS Report. Funds are suspended when reported disbursements (expenditures) are less than the authorized award amount. When an award is suspended, the authorized amount is reduced to the amount of disbursements a school reported. This reduces the amount of funds available to the school. Suspended awards are closed in the next ED/PMS reporting period and are noted on the ED/PMS 272G Report. Automated suspension does not replace the current award close-out process, nor does it replace any function that falls under the responsibility of an ED grant or program office that issues awards. Appendix P of the ED/PMS Recipient's Guide gives detailed information about using the ED/PMS 272G. *28* NOTE: Two Dear Colleague Letters were anticipated at the time this edition was written that provide new procedures for handling Pell, ACA, and Perkins Loan cancellations through ED/PMS. *29* There is no official award authorization amount for the William D. Ford Federal Direct Loan Program. Direct Loan funds are requested on the basis of a school's immediate need. (See Chapter 4.) *30* Note: This monthly or quarterly process does not fluctuate month-to-month or quarter-to-quarter. Once a grantee is reporting monthly, it continues to report monthly. |