Administrative Procedures

 

Third Party Contracts - Sponsored Students

1. Purpose

To provide guidance and procedure for third party contracts between KCTCS colleges and outside agencies.

2. Scope

This procedure applies to all KCTCS colleges and employees in all operating areas.

3. General

3.1

Third party contracts are credit agreements between KCTCS colleges and corporate or governmental agencies who agree to sponsor one or more students, paying all or part of tuition, fees, and expenses.

1. The organization or agency determines what portion of expenses will be paid.
2. Terms and conditions of the sponsorship must be defined in a contract or written agreement.

3.2

Third party sponsorships are considered assistance for the purposes of calculating a student’s financial aid needs based on assessment.

3.3

College business and financial aid offices should work closely to ensure appropriate management of funds.

4. Request Approval

4.1

Third Party Sponsors

1. KCTCS colleges work directly with many third-party sponsors on the student’s behalf to collect sponsor assistance payments which are credited to the student’s account receivable. 

2. Sponsors can be categorized into three distinct groups:

   1. Kentucky Higher Education Assistance Authority (KHEAA) which includes:
      1. Kentucky National Guard Tuition Award Program
      2. KHEAA Early Childhood Development Scholarship
      3. KHEAA Teacher Scholarship Program
   2. Robinson Scholars Program
   3. All other third-party agreements outside of KHEAA and Robinson Scholars which includes:
      1. Kentucky Department of Vocation Rehabilitation
      2. Kentucky Department for the Blind
      3. Office of Veterans Affairs
      4. Workforce Investment Act (WIA) – Formerly JTPA
3. Additional information regarding third party assistance programs and sponsors can be found in the KCTCS Student Catalog within the Financial Aid section.

4.2 

KHEAA Third Party Agreements

1. All funds received from KHEAA are transferred via electronic funds transfer (EFT) and deposited into the KCTCS Central Depository Bank. 
2. The System Office Student Financials Department records the deposit in the PeopleSoft General Ledger to the following college specific chartfields:

   Business Unit	Fund	Account	Department	Program	Class	Debit Amount	Credit Amount
   XXXXX	01	10005	9999999999	99999	00	$XXX.XX
   XXXXX	01	16050	9999999999	99999	00		$XXX.XX

3. When funds are received, it is the responsibility of the college financial aid office to credit the student’s account by processing a disbursement through the PeopleSoft Student Administration Financial Aid Module.
   1. This results in payment to the student account and the following General Ledger entry that balances the clearing account:

      Business Unit	Fund	Account	Department	Program	Class	Debit Amount	Credit Amount
      XXXXX	01	16050	9999999999	99999	00	$XXX.XX
      XXXXX	01	12100	9999999999	99999	00		$XXX.XX

4.3

Return of KHEAA Third Party Payments

1. When necessary to return funds, KHEAA requires return via electronic fund transfer.
2. When determined as necessary (ex. student withdraws after payment has been received), the college will notify the KCTCS Office of Treasury Services via email, providing information on the type of payment (National Guard, Teachers, etc.), the amount, and the college for which payment was originally accepted.
3. The KCTCS Office of Treasury Services will transmit funds back to KHEAA and post the following General Ledger entries:
   
   
   

   Business Unit	Fund	Account	Department	Program	Class	Debit Amount	Credit Amount
   XXXXX	01	16050	9999999999	99999	00	$XXX.XX
   XXXXX	01	10005	9999999999	99999	00		$XXX.XX

4. If funds have been disbursed to the student’s account, they should be reversed through the PeopleSoft Student Administration Financial Aid Module.
5. The college financial aid office is responsible for appropriate notification to KHEAA of the return.

4.4

Robinson Scholars Third Party Agreement

1. All funds received are deposited into the KCTCS Central Depository Bank.
2. The System Office Treasury Department records the deposit in the PeopleSoft General Ledger to the following college specific chartfield:

   Business Unit	Fund	Account	Department	Program	Class	Debit Amount	Credit Amount
   XXXXX	01	10005	9999999999	99999	00	$XXX.XX
   XXXXX	01	16020	9999999999	99999	00		$XXX.XX

3. Upon notification, it is the responsibility of the college financial aid office to credit the student’s account by processing a disbursement through the PeopleSoft Student Administration Financial Aid module. 
   1. This results in payment to the student account and the following General Ledger entry that balances the clearing account:

      Business Unit	Fund	Account	Department	Program	Class	Debit Amount	Credit Amount
      XXXXX	01	16020	9999999999	99999	00	$XXX.XX
      XXXXX	01	12100	9999999999	99999	00		$XXX.XX

4.5

Return of Robinson Scholars Third Party Payments

1. When necessary to return funds, the college financial aid office should not process a disbursement for the student through the PeopleSoft Student Administration System (if the disbursement was processed, it should be reversed through the PeopleSoft Financial Aid Module). 
   1. This will allow the funds to remain in the clearing account.
2. A check request should be prepared and submitted by the college, payable to the Robinson Scholars Program, and charged to the following General Ledger chartfield:

   Business Unit	Fund	Account	Department	Program	Class	Amount
   XXXXX	01	16020	9999999999	99999	00	$XXX.XX

3. The college financial aid office is responsible for appropriate notification of the return to the Robinson Scholars Program.

4.6

All Other Third Party Agreements

1. Third party agreements exclusive of the KHEAA and Robinson Scholars sponsored third party programs are processed entirely at the college level.
2. Colleges are responsible for all facets of management, to include ensuring there are proper agreements on file, students identified with correct contract, invoices sent, and payments received in a timely fashion per terms of agreement, and appropriate cash handling procedures are followed.
3. These payments benefiting students are included when calculating the student’s financial aid need based assessment.
4. These third-party agreements shall be established and administered in accordance with the processes and procedures as outlined in the Third Party Contract chapter of the Peoplesoft Student Financials User Guide.
5. Questions should be referred to the KCTCS Administration Help Desk by email.

4.7

Return of All Other Third Party Payments

1. When necessary to return payments of other third-party receipts to the sponsoring agency, the entire payment received should be posted to the third party account, which will place the account into an “Excess Pay” status.
2. For refunds of a credit card payment, the college should prepare and submit a check request to the System Office Student Financials Department payable to the third party sponsor for the refund amount. The following chartfield should be used:

   Business Unit	Fund	Account	Department	Program	Class	Amount
   26000	01	16035	9999999999	99999	00	$XXX.XX

   1. The college must also provide the PeopleSoft third party org ID, contract term, student ID, original payment date, and reference number from the Review Transaction Log in the description section of the check request.
   2. The System Office Student Financials Department will process all necessary entries in PeopleSoft Student Financials Module to record the refund using item type 122600000001.
   3. The amount will be refunded back to the sponsor’s credit card.
3. For refunds or “excess pay” from all other forms of payment, the college should prepare and submit a check request to the KCTCS Office Procurement to Payment - Accounts Payable Department, payable to the third-party sponsor for the refund amount.
4. The following chartfield should be used:

   Business Unit	Fund	Account	Department	Program	Class	Amount
   XXXXX	01	12100	9999999999	99999	00	$XXX.XX

   1. The college must also provide the PeopleSoft third party org ID, contract number, term, and student ID in the description section of the check request.
   2. The KCTCS Office Procurement to Payment - Accounts Payable Department will forward to System Office Student Financials, who will then approve and process all necessary entries in PeopleSoft Student Financials Module to record the refund.

4.8

Local College Discretion for Special Needs

1. An instance may occur where it is in the interest of the college to defer the billing of a third party for student(s) until the term has ended and grades are posted.
2. The college president/CEO shall have the discretion to bill the third party as deemed appropriate for the college.
   1. Example: A particular organization (third party payer) is to pay for its employees provided they receive a grade of “C” or better for the course taken. 
      1. Third party org has requested not to be billed until the term has ended and grades are posted.
      2. Students receiving a grade lower than “C” will be removed from the third-party billing and billed personally.
      3. Upon notification by the third party that they are no longer paying for a student, the student’s account becomes an individual student receivable with an invoice immediately sent to the student following normal collection procedures as outlined in Business Procedure 5.7.4-P.

5. Request Exemptions

5.1

An instance may occur where it is in the interest of the college to defer the billing of a third party for student(s) until the term has ended and grades are posted.

5.2

The college president/CEO shall have the discretion to bill the third party as deemed appropriate for the college.

1. Example: A particular organization (third party payer) is to pay for its employees provided they receive a grade of “C” or better for the course taken. 
2. Third party org has requested not to be billed until the term has ended and grades are posted.
3. Students receiving a grade lower than “C” will be removed from the third party billing and billed personally.
4. Upon notification by the third party that they are no longer paying for a student, the student’s account becomes an individual student receivable with an invoice immediately sent to the student following normal collection procedures as outlined in Business Procedure 5.7.4-P.