Cash Management Procedures: Are Your Bases Covered?

Melissa Maichle .

You may not have even started processing for the upcoming academic year, so managing the actual disbursements may seem as far away as the World Series. Just like a baseball team making sure to win those early season games to be in a better position come pennant race time, administrators should review and update any relevant procedures ahead of actual processing. Moreover, if you have new staff members involved, you want them to be properly trained.

The disbursement process is made up of eight distinct steps and it’s likely that multiple offices are involved. The steps are as follows:

  • Award
  • Originate (COD)
  • Disburse
  • Notify (students/parents)
  • Draw down funds (G5) (Some schools draw down funds before disbursement to students)
  • Refund (if applicable)
  • Update (Actual disbursement date – COD)
  • Reconcile

Completing these steps for students that stay enrolled and maintain satisfactory academic progress is a walk in the (ball) park. For students who change enrollment status (multiple times) or withdraw and return (multiple times), the disbursement process is not so easy. This is where your Policy and Procedures Manual can save the day. In addition to the critical policies like SAP, Pell Recalculation and Awarding philosophy, it should also include the following information:

  • Which department or role is responsible for each of the steps listed above
  • Whether your institution uses affirmative confirmation or not (it affects the timetables for various notifications)
  • The timing of disbursements relative to the beginning of the loan period under ordinary conditions
  • What conditions must be true in order to disburse funds to students/parents and whether your institution is willing to make interim disbursements when not all the conditions are met
  • Whether your institution is required to fund disbursements and Title IV refunds and then be reimbursed (Heightened Cash Monitoring status)
  • When to use late, retroactive or post-withdrawal disbursement rules and the process
  • In which situations proration should be used and how to do it
  • In what order your institution disburses and refunds different types of financial aid

If it’s been a while and you need a refresher or if you have new staff members that need to be trained, Federal Student Aid (FSA) presented a session on this topic in January. You can access the recording and the handouts on the FSA Training website.

Not sure whether your Policy and Procedure Manual is hitting it out of the park? The Higher Education Assistance Group can pinch hit to validate what you have or create what you don’t have. Contact us at to speak with one of our compliance experts.