Bulletin ID
DLB - 98 - 14
| PublicationDate: 4/1/98 BulletinID: DLB - 98 - 14 April 1998 DLB-98-14 Subject: Updated Information on Program Year Close-out for 1995-96 and 1996-97 Dear Colleague: This bulletin provides additional important information needed for schools to successfully close program years 1995-96 and 1996-97 and clarifies some of the information previously provided in DLB-98-05. Although a significant number of schools have already closed program years 1995-96 and 1996-97, all schools should read the information in this bulletin carefully. Waiver of Data Match Requirement Effective with this bulletin, the Department of Education has decided to waive the requirement for submitting monthly data match files (#L reconciliation files) to the Loan Origination Center (LOC) for the 1995-96 and 1996-97 program years. Therefore, there is no longer a requirement that cash and loan records be data matched by July 31, 1998. This requirement has been waived since a school is considered to have successfully closed the 1995-96 and 1996-97 Direct Loan program years by demonstrating that all drawdowns made for 1995-96 and 1996-97 loans have been accounted for by disbursements on booked loans and returns of excess cash. A significant number of schools have already met this criterion and have an ending cash balance of zero. The data match process does not provide schools with assurance of meeting this goal. Although it is no longer a requirement, schools who wish to continue submitting data match files to the LOC may continue to do so, and those files will continue to be processed by the LOC. Successfully Meeting the Processing Deadline To successfully meet the July 31, 1998, processing deadline, a school must have submitted all 1995-96 and 1996-97 loan origination records, promissory notes, and disbursement transactions to the LOC, and those transactions must have been accepted by the LOC, by July 31, 1998. The LOC will process all batches that are received by July 31, 1998, regardless of the batch date. While the LOC will return acknowledgments for all batches received on July 31, 1998, schools will not be able to correct any rejected records after the processing deadline. In order to help ensure that all loan records have been accepted by the processing deadline, schools should plan to have all records submitted to the LOC several weeks prior to the deadline. This will allow the school sufficient time to resolve any rejected records and submit corrected records to the LOC. New 732-LOS File DLB-98-05 notified schools about the 732A and 732B reports as tools to assist schools in closing the 1995-96 and 1996-97 program years. As a result of schools working with the data on the 732A/B reports, and, as instructed in DLB 98-05, notifying the LOC of discrepancies between school data and data on the 732A/B reports, we have determined that the 732A/B reports include some duplicated records and omits other records. We have also learned that some loan and cash transactions which occurred during the February 14, 1997, through February 28, 1997, transition period between loan origination systems may not have been included on the 732A/B reports. To correct these situations, a new file will be created, which will be derived directly from the Loan Origination database. This file, the 732-LOS, will be sent to all schools at the end of April. The ending cash balance that will be reflected on the 732-LOS will be the Departments official ending cash balance for each school, as of the date the file is produced (Year 1 Schools: see Special Note below in the section entitled Departments Analysis of Final Cash Balances). No other cash balances will be considered the official cash balance for a school, including cash balances reflected on various data match (reconciliation) reports, such as the #L Reconciliation acknowledgment and the 736 report. Schools must reconcile the information on the 732-LOS to their internal records (refer to attached Close-Out Steps for additional information). The 732-LOS will be sent as two ASCII text files: a summary file and a detail file at the loan level (not disbursement level). Data is being provided at the loan level in order to reduce the size of the file and to make the comparison process easier for schools. If, in comparing at the loan level, schools find discrepancies with total loan amounts, schools can contact their LOC Customer Service Representative at 800/848-0978 for detailed disbursement information. The message class for the 732-LOS Summary File is DIS497OP and the message class for the 732-LOS Detail File is DIS597OP. Schools needing assistance with importing these message classes, should contact CPS Direct Loan Customer Service at 800/330-5947, option 3. The file layouts for the 732-LOS Summary and Detail Files are attached to this bulletin. New 732-LOS-C Weekly Files After the 732-LOS is sent by the LOC, schools will begin receiving a weekly 732-LOS-C file which will reflect cash and loan activity subsequent to the 732-LOS. Schools will only receive this file if they have had any activity during a week. The file will only include cash and disbursement transactions for that week and will provide the updated ending cash balance created as a result of new activity. Each 732-LOS-C will include a listing of all remaining unbooked loan detail activity on the LO database at the time the 732-LOS-C is produced. The 732-LOS-C will contain both summary and detail information in one ASCII text file. The message class for this file is DIS697OP; schools should follow the same directions as above for assistance in importing this file. The file format for the 732-LOS-C is attached to this bulletin. Schools should review each 732-LOS-C they receive in order to ensure that transactions and corrections submitted to the LOC during the previous week are included in the file. Schools should continue to work with the LOC to ensure that all corrections and transactions have been submitted and processed in order to reduce the schools ending cash balance. Final 732-LOS File- After July 31, 1998 Deadline After July 31, 1998, the LOC will no longer accept any 1995-96 and 1996-97 loan records. Once the LOC completes the processing of 1995-96 and 1996-97 loan records, a final 732-LOS will be produced from the LO database and sent to all schools. This final 732-LOS will contain all 1995-96 and 1996-97 cash and loan transactions for a school and will provide a school with the official ending cash balance for the 1995-96 and 1996-97 program years. The format and message class will be the same as the initial 732-LOS, DIS497OP. Departments Analysis of Final Cash Balances After the final 732-LOS is sent to schools, the Departments Accounting and Financial Management Service (AFMS) will begin analyzing all ending cash balances to ensure that all drawdowns have been accounted for by disbursements and returns of excess cash. AFMS will contact those schools with outstanding balances and will request supporting documentation as necessary. After AFMS has completed its analysis of the ending cash balances and the information provided by schools, any loan records that remain incomplete or are inaccurate may result in institutional responsibility for all or a portion of the loan. Also, the Department may request that drawdowns not accounted for by disbursements be returned to the Department. Special Note to Year 1 Schools (schools that participated in the Direct Loan Program during the 1994-95 program year): Since the 1994-95 program year has already closed, data for that year is not included in the 732-LOS. The 732- LOS will include any drawdowns and excess cash transactions that are dated July 1, 1995 and later. If a Year 1 school had a drawdown or excess cash transaction dated July 1, 1995 or later that relates to a 1994-95 loan, the cash balance on the 732-LOS will include that drawdown and/or excess cash transaction but not the related disbursement data. The Department will take this into consideration when analyzing the ending cash balances for Year 1 schools. If schools have any questions regarding the information in this bulletin or concerns about a schools responsibility for closing out the 1995-96 and 1996-97, please contact the Accounting and Financial Management Service at 202/205-6466. Thank you for your continued support of the Direct Loan program. Sincerely, Linda L. Paulsen Joe L. McCormick Director Chair Accounting and Financial Direct Loan Task Force Management Service Schools are required to make sure that all loans that should be booked, have been booked by the July 31, 1998 deadline. This means that all loan origination records, promissory notes, and disbursement transactions must have been submitted and accepted by the LOC by July 31, 1998. The Department is providing the following recommendations to schools to assist them in closing the 1995-96 and 1996-97 program years: · Review 30 Day Warning Report Þ Determine whether loans on the report are still valid; Þ Submit missing promissory notes or disbursements records; Þ Cancel any loans that will not be disbursed. · Query internal system Þ for batches not sent to the LOC; Þ for batches sent to the LOC but not acknowledged; Þ for acknowledgment received from the LOC but not imported into the schools system; Þ records rejected by the LOC that have not been corrected and re-transmitted by the school; Þ for unbooked loans: > loans with origination records and promissory notes, but no first disbursement record; > loans with origination records and first disbursement records but no promissory note; Þ Any other queries as necessary to determine whether there are unbooked loans on your system. · 732A/B Reports Þ Although these reports do not include the official ending cash balances, the 732A/B reports can still be used by schools as a tool in closing out the 1995-96 and 1996-97 program years. The detail data can be compared to the schools data to ensure that all records have been submitted and accepted by the LOC. Schools should notify the LOC of discrepancies between school data and LOC data. Remember, some loan and cash transactions which occurred during the February 14, 1997 through February 28, 1997 transition period between loan origination systems may not have been included on the 732A/B reports. · 732-LOS File Þ Import the 732-LOS Summary file. Þ Compare total balances for cash receipts, returns of excess cash, booked disbursements and unbooked disbursements to total balances on the schools internal system. Þ If balances do not agree, import the 732-LOS detail; Þ Compare loan and cash records to the records on school internal systems: > Cash: if drawdowns/returns of excess cash are missing, call the LOC to determine whether those drawdowns/returns of excess cash were allocated to another program year instead of 1995-96 and 1996-97. Have the LOC reallocate the drawdowns/returns of excess cash to the correct program year. Refer to DLB 97-30 for additional information on how to allocate drawdowns and returns of cash to appropriate program years. > Loans: if loan amounts do not agree, determine whether all disbursement transactions for the loan have been sent to the LOC. Transmit any outstanding disbursements to the LOC. If all disbursements have been submitted, contact the LOC to determine why loan amounts do not agree. > In any other situations where cash or loan discrepancies exist, call the LOC for assistance in getting the records corrected. The LOC will provide guidance as to what information will be needed to correct the 732-LOS. · 732-LOS-C File Þ Review each 732-LOS-C to ensure that any new loan or cash transaction and/or corrections have been processed. Þ Continue to determine what other discrepancies exist if the 732-LOS-C has an ending cash balance other than zero (Year 1 schools-see note above). Schools should contact their Regional Direct Loan Client Account Manager for additional information regarding any of the above steps. Attachment |