Â鶹´«Ã½

Policy Name: Audit Monitoring for Direct Loan Reconciliations
Policy Number: 07-01-001
Accountable Senior Administrator: Vice President of Enrollment Management and Student Success
Issued: September 7, 2021
Last Updated: September 7, 2021

Policy Statement
In accordance with federal regulations (34 CFR 685.300(b)(5)), New Â鶹´«Ã½ City University reconciles direct loan programs monthly. Reconciliation ensures that funds are disbursed accurately to students and that the University is meeting the objectives of the Direct Loan Program. To ensure compliance, this policy outlines relevant procedures and accountabilities.

Reason for the Policy
In accordance with provisions of the Direct Loan Program, Â鶹´«Ã½ is required to document its quality assurance processes related to monthly reconciliation. Reconciliation compares the loan amounts reflected on the federal government’s records with the figures posted on the University’s Peoplesoft system. This policy documents the business process and steps involved in direct loan reconciliation, review, documentation, and audit.

Stakeholders Affected by Policy
The stakeholders affected by this policy include:

• Students receiving financial aid
• Staff in the Financial Aid Department
• Vice President of Enrollment Management and Student Success
• Chief Financial Officer and Controller
• Internal Auditor

Definitions
COD stands for the US Department of Education’s Common Origination and Disbursement.

• G5 is the Department of Education’s Grants Management System. The G5 is used for the administration of Federal Student Aid.
• Reconciliation is the student record by student record matching of the loan and dollar amount of COD vs. PeopleSoft.

Policy Text
In accordance with federal regulations (34 CFR 685.300(b)(5)), New Â鶹´«Ã½ City University reconciles direct loan programs on a monthly basis. Reconciliation ensures that funds are disbursed accurately and that the University is meeting the objectives of the Direct Loan Program.

This policy requires the Vice President of Enrollment Management and Student Success (VPEMSS) to review and sign off on all monthly loan reconciliation processes conducted by and reports created by the Financial Aid Department. The VPEMSS is responsible for review and approval of the results of the monthly draw-down processes. Upon conclusion of the review and approval by the VPEMSS, all relevant documentation is provided to the CFO, Controller, and Internal Auditor.

Procedures
The Federal Government provides information on . This section summarizes the Â鶹´«Ã½ business process; details and screenshots are contained in Technical References and Report Paths for Direct Loan Reconciliations document, available in the Financial Aid Office.

• The Financial Aid Department reconciles the Direct Loan (DL) program monthly. The reconciliation is between the Cash Receipt records on COD vs. the Cash Receipt records (amount Â鶹´«Ã½ has drawn down from G5) and the booked disbursements on COD vs. the actual disbursements recorded in PeopleSoft. Reconciliation is the student record by student record matching of the loan and dollar amount of COD vs. PeopleSoft.
• After monthly reconciliation is completed, the VPEMSS reviews and signs off on the reports.
• Finalized monthly reports are maintained in a folder on the Financial Aid Office network drive.
• The Director of Financial Aid forwards a copy of approved monthly reports to the CFO, the Controller, and the Internal Auditor.
• The Financial Aid Office also performs a final reconciliation and year-end closing of the program on COD. This is due before July 1.

Violations
Failure to comply with the federal requirements pertaining to direct loan reconciliations and maintenance of corresponding supporting documentation may result adverse actions for the University including audit exceptions and/or penalties assessed by the Department of Education.

Failure of accountable staff to comply with this policy may result in review and action by the individual’s supervisor.

Related Policies and Documents

• Agreements between an eligible school and the Secretary for participation in the Direct Loan Program,
  
•  Technical References and Report Paths for Direct Loan Reconciliations

Responsibility

Contact for Questions
Financial Aid Department
201-200-3173

Office of the Controller
201-200-3041