In a Nov. 18, 2020 Electronic Announcement we published general information regarding Title IV Aid Disbursement Reporting, Excess Cash, and Reconciliation Requirements. In addition, updated disbursement reporting and data submission timelines for all programs were published in a recent Federal Register Notice (see Federal Register Volume 85, Number 135 (Tuesday, July 14, 2020) for the 2020–2021 deadlines).
In this announcement, we provide specific information to assist your school in reconciling the Federal Pell Grant (Pell Grant) Program. Both the Financial Aid Office and Business Office should review the information provided below.
Pell Grant Reconciliation Defined
Pell Grant Reconciliation is the process by which a school reviews and compares Pell Grant data recorded on the Department of Education’s (the Department’s) systems with the information in the school’s internal records. This process should be performed on a regular basis and is recommended at least monthly.
There are two types of reconciliation, Internal and External.
- Internal Reconciliation
This is the reconciliation of disbursement transactions (actual disbursements and adjustments) and related cash transactions (Drawdowns, Drawdown Adjustments, Refunds of Cash, and Returns) between your Business Office records and Financial Aid system. If discrepancies are found, your school should document these and resolve them in a timely manner.
- External Reconciliation
This is the reconciliation of internal disbursements and cash balances from the Business Office and Financial Aid Office with disbursements and cash balances from the Common Origination and Disbursement (COD) System. At a minimum, this reconciliation should be completed at least monthly to ensure that data is correct in all systems and that cash management and disbursement reporting timelines are being met. The Department offers various tools to assist you with external reconciliation, as outlined in Question 10 in the attached Pell Grant Program Reconciliation Questions and Answers.
Schools may perform Internal and External Reconciliation in either order. However, if your school has completed internal reconciliation first, you will have fewer discrepancies to resolve when you perform the external reconciliation.
It is very important for schools to maintain good communication between the Business Office and the Financial Aid Office to successfully reconcile both internally and externally. Reconciliation is a shared responsibility. It requires joint action by the Financial Aid and Business Office to identify discrepancies and any missing data, and to correct these in a timely manner.
Schools should document their reconciliation process and the resolution of any identified discrepancies.
Final Reconciliation of a Pell Grant Award Year
In addition to regular monthly reconciliation of Pell Grant data, a final reconciliation should be performed as soon as possible after final scheduled disbursements have been made for the award year. This final reconciliation should ensure that all data is correct, and that Total Net Drawdowns equals Net Accepted and Posted Disbursements in the COD System (Cash > NAPD balances should equal $0.00). This process must be performed within the applicable data submission deadline (defined below), as well as immediately following processing of any additional data by the school (for example, eligible late disbursements or disbursement adjustments made within regulatory timeframes, but which occur after the data submission deadline). There are two deadlines which impact this process:
- Data Submission Deadline – The data submission deadline is published annually in a Federal Register Notice. It is generally the last business day of September following the end of the award year. For example, the 2020–21 Award Year will close on Sept. 30, 2021. After this date, the COD System will not accept upward award or upward disbursement adjustments without prior approval for an extension to the established data submission deadlines (downward adjustments will continue to be accepted without an extension). If your school needs to request an extension to the data submission deadline, this request must be submitted via the COD website, as outlined in Question 9 in the attached Pell Grant Program Reconciliation Questions and Answers.
- Funding Cancellation Deadline – Pell Grant funding availability is canceled five years after the data submission deadline for the award year. For example, for the 2015–16 Federal Pell Grant Award Year (July 1, 2015 – June 30, 2016), the funding cancellation date is Sept. 30, 2021 [2016 + 5 = 2021]. After that time, schools will be unable to draw down or adjust further funds via the G5 website (although refunds of cash will still be accepted), and the COD System will be completely closed to any further award or disbursement processing for that award year. As such, schools must complete all final reconciliation activities well before this final deadline and in accordance with disbursement reporting timelines and the data submission deadline defined above.
Note: For the Pell 2016–17 award year and forward your school can confirm closeout via the School Balance Confirmation page on the COD website once your school has completed its final reconciliation and reached a $0.00 Cash>Net Accepted and Posted Disbursement balance.
For additional information on Pell Grant Program Reconciliation, refer to the attached Questions and Answers document. If you have questions about this announcement or its attachment, contact the COD School Relations Center at 1-800-848-0978. You may also email CODSupport@ed.gov.