Bulletin ID
DLB - 97 - 49
| PublicationDate: 12/1/97 BulletinID: DLB - 97 - 49 December 1997 DLB-97-49 Subject: Direct Loan Reconciliation Redesign -- Academic Year 1998-99 Dear Colleague: For the 1998-99 academic year, the Direct Loan reconciliation process has been completely redesigned to better ensure a school's proper management of its Direct Loan funds and to make the process less burdensome for schools. THE MOST IMPORTANT CHANGE FOR SCHOOLS IS THAT THE LOAN ORIGINATION CENTER (LOC) WILL INITIATE THE RECONCILIATION PROCESS FOR THE 1998-99 ACADEMIC YEAR AND ALL FUTURE YEARS. THE CURRENT DATA MATCH PROCESS WILL CONTINUE FOR ALL PRIOR YEARS. Each month, the LOC will send each school in the Direct Loan Program an electronic file called the Direct Loan School Account Statement (DLSAS). THE DLSAS WILL BE SENT USING THE NEW MESSAGE CLASS DSAS99OP AND NEW BATCH TYPE AS. THE RECORD LAYOUT FOR THE DLSAS IS IN THE CUSTOM LAYOUT SECTION OF THE 199899 DIRECT LOAN TECHNICAL REFERENCE. This electronic file may be imported and formatted for printing a report that will look similar to a bank statement. The DLSAS will include: - Cash Summary: a summary of transactions for the month - Cash Detail: detail of drawdowns (cash receipts) and excess cash returned - Loan Detail (OPTIONAL): detail of disbursements, adjustments and cancellations DISBURSEMENT ACTIVITY WILL BE INCLUDED IN THE DLSAS FOR THE MONTH IN WHICH THE TRANSACTION WAS ACKNOWLEDGED BY THE LOC; SIMILARLY, DRAWDOWNS WILL BE INCLUDED IN THE MONTH THE SCHOOL RECEIVED THE DRAWDOWN AND RETURN OF EXCESS CASH TRANSACTIONS WILL BE INCLUDED IN THE MONTH THE CASH WAS RECEIVED BY THE LOC. FOR EXAMPLE, A DISBURSEMENT THAT HAS A DISBURSEMENT DATE OF SEPTEMBER 30 THAT IS RECEIVED AND ACKNOWLEDGED BY THE LOC ON OCTOBER 2 WILL BE INCLUDED IN THE OCTOBER DLSAS. A DLSAS will be generated for each Direct Loan school at the end of each calendar month. Each school will be notified of the approximate date during the following month that the school will receive its DLSAS. Schools will then receive the DLSAS on approximately the same date each month. Beginning with the 1998-99 academic year, a separate DLSAS will be sent for each academic year the school participates in the Direct Student Loan Program. Each academic year will be closed on July 31st of the year following the academic year. FOR EXAMPLE, for the 1998-99 academic year, disbursement activity can start as early as January 1, 1998, and will close on July 31, 2000. Accordingly, each school will receive a DLSAS for the 1998-99 academic year from January 31, 1998, through July 31, 2000. Therefore, each month schools will receive the DLSAS for more than one academic year. When applicable, a cash summary reflecting no activity will be sent to the school. Each institution will be responsible for reviewing and comparing the monthly DLSAS to its internal records to ensure the accuracy of the data on both the school's system and the LOC's system. See RECONCILING THE DLSAS AND RESOLVING DISCREPANCIES below. ELEMENTS OF THE DLSAS CASH SUMMARY The Cash Summary for each month begins with the ending cash balance from the previous month. At the beginning of each academic year, the beginning cash balance will be zero. The Cash Summary summarizes all disbursements, adjustments and cancellations acknowledged by the LOC during the month for BOOKED LOANS only. As noted above, transactions are included in the month acknowledged by the LOC, regardless of the disbursement date of the transaction. In addition, the Cash Summary summarizes all drawdowns received by the school during the month as reported to the LOC by the Department of Education's Payment Management System. It also summarizes excess cash returned by the school and received by the LOC during the month. The ending cash balance indicates the cash balance at the end of each month for all cash transactions and loan transactions for BOOKED loans. THIS BALANCE REPRESENTS THE DEPARTMENT'S OFFICIAL CASH BALANCE FOR THE SCHOOL AND, THEREFORE, SCHOOLS WILL NEED TO MAKE SURE THAT THE CASH BALANCE REFLECTED ON THE DLSAS IS ACCURATE. The Cash Summary also summarizes all accepted loan transactions reported by the school to the LOC for loans that have NOT YET BOOKED at the end of the month. This amount is also reported on the Cash Summary. Transactions for unbooked loans as of the end of the previous month are also summarized in the Cash Summary. CASH DETAIL The Cash Detail provides a detailed listing of all drawdowns and excess cash returned and is always included with the DLSAS. Information in the Cash Detail section should be compared with the school's internal records and bank statements. The LOC obtains this information directly from the Department's Payment Management System for drawdowns and the LOC's own records for excess cash returned. LOAN DETAIL (OPTIONAL) Schools have the option of receiving only the Cash Summary and Cash Detail portions of the DLSAS (i.e., without loan detail records). IF A SCHOOL DECIDES TO RECEIVE THE DLSAS WITHOUT THE LOAN DETAIL RECORDS, THE SCHOOL NEEDS TO CONTACT ITS CUSTOMER SERVICE REPRESENTATIVE (CSR) AT THE LOC. - The DLSAS file will include the following information for schools who choose to receive loan detail: - BOOKED disbursements, adjustments, and cancellations ACKNOWLEDGED THAT MONTH, SORTED BY LOAN ID. - ACCEPTED BUT UNBOOKED disbursements, adjustments, and cancellations for the ACADEMIC YEAR TO DATE, GROUPED BY LOAN ID. - A school's decision to NOT RECEIVE loan detail information with the DLSAS can be changed at any time. - Schools can request loan detail for any month(s) regardless of their decision to receive, or not receive, loan detail on the DLSAS. Schools can make this request at any time during the program year for all active program years. RECONCILING THE DLSAS AND RESOLVING DISCREPANCIES Each month, all schools must reconcile the ending cash balance reflected in the DLSAS Cash Summary with the cash balance reflected in the school's internal records. The school should compare the DLSAS Cash Summary totals for cash receipts, excess cash, booked disbursements, adjustments and cancellations with the school's totals for these transactions. Schools should take into account any timing differences when analyzing discrepancies. When discrepancies arise, schools should first make sure that all loan origination, promissory note and disbursement information has been submitted to the LOC. IT IS NOT NECESSARY TO CHANGE DRAWDOWN, EXCESS CASH OR DISBURSEMENT TRANSACTIONS THAT RESULT FROM ITEMS THAT WERE IN TRANSIT AT THE END OF THE MONTH . To assist schools in determining which loans have not yet booked, there are a number of tools available to them to help identify and resolve discrepancies. Schools using EDExpress can produce Measurement Tool Reports including the Booked Status Report and the Cash Summary List. Custom (mainframe) schools and software vendors may develop similar reports. These reports will help schools identify those loans on the school's system which have not yet booked and will indicate which booking component, either the promissory note or disbursement record, remains outstanding in order to book the loan. Some things to remember: - The DLSAS cash balance includes only BOOKED loan detail through the end of the month. A booked status on the school's system can only be updated by the school importing the promissory note acknowledgment and the disbursement acknowledgment. - Be sure to export all pending data batches for loan origination records, promissory notes, and disbursements prior to the end of the month. - Be sure to import all pending data batches in order to update the accepted status and booked status flags on the school's system. LOAN DETAIL MATCHING (OPTIONAL PROCESS): An optional process is available to schools to assist them when comparing school data to LOC data. This optional process is called LOAN DETAIL MATCHING. This process provides a school with the option of sending the LOC an electronic loan detail file(s) to be "matched" with the LOC's records. The school can send a file containing all BOOKED transactions for a specified month. In addition, the school can send a separate file containing UNBOOKED transactions for the entire year to date. When the LOC receives the file(s), the LOC will compare the loan detail records sent by the school with the records on file at the LOC. After comparing the records, an exception report will be created and electronically sent back to the school. This exception report will display all differences between the school's Loan Detail Matching file and the records on the LOC's database and will assist schools in resolving discrepancies found while reviewing the monthly DLSAS. If a school's file does not conform to the guidelines for file submission, the exception report will contain a message describing why the file rejected and was not processed. The Exception Reports will be returned with the following message classes: EDM199OP - Data Matching Exception Report for Booked Loans EDM299OP - Data Matching Exception Report for Unbooked Loans If you have any questions regarding the reconciliation redesign, please contact a member of the Accountability and Reconciliation Team at (202) 205-6466. Sincerely, Joe L. McCormick Chair Direct Loan Task Force |