Bulletin ID
DLB - 98 - 45
| PublicationDate: 12/1/98 BulletinID: DLB - 98 - 45 December 1998 DLB 98-45 Subject: Program Year Close Out Steps and Tools Dear Colleague: Direct Loan Bulletin 98-44 provided schools with the 1997-98 Direct Loan program year processing deadline as well as information on the release and use of the 732-LOS files for 1997-98. With the release of the 732-LOS for 1997-98, your institution should now be in the process of closing out your 1997-98 Direct Loan records. You should be comparing the loan and cash data on the 732-LOS files with your internal bank account and student account records and reconciling the ending cash balance shown on the 732-LOS to your internal records. In order to successfully close the 1997-98 Direct Loan program year, your institution should be able to demonstrate to the Department that all 1997-98 drawdowns have resulted in either 1997-98 booked loans or returns of excess cash. If your ending cash balance on the 732-LOS is other than zero, than you should be analyzing the 732-LOS to determine what loan information has not yet been transmitted to, and accepted by, the Loan Origination Center (LOC). Additionally, you should be reviewing the drawdown and excess cash information on the 732-LOS to verify the completeness of the cash data. In order to provide you with additional guidance on using the 732-LOS files and assistance on how to close out the 1997-98 Direct Loan program year, we are providing the following steps and recommendations: 1. 732-LOS File - Import the 732-LOS Summary file (DIS498OP). - Compare total balances for cash receipts, returns of excess cash, booked disbursements and unbooked disbursements to total balances on the school's internal system. - If balances do not agree, import the 732-LOS Detail file (DIS598OP). - Compare cash records (drawdowns and returns of excess cash) to institutional bank records. - Compare loan records to the records on school internal systems. - Resolve discrepancies: · Cash Discrepancies: As a result of the conversion to the Grants, Administration and Payment System (GAPS) for schools to draw down Direct Loan funds, there are many instances where drawdowns and excess cash have been recorded in the incorrect program year at the Loan Origination System. If you have determined that drawdowns/returns of excess cash are missing from the 732-LOS, call the LOC to determine whether those drawdowns/returns of excess cash were allocated to another program year instead of 1997-98. Have the LOC reallocate the drawdowns/returns of excess cash to the correct program year. · Loan Discrepancies: 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. · In addition, the Direct Loan Client Account Managers have developed a Microsoft Access application to assist schools in the comparison of school data with the 732- LOS data provided by the LOC. The specific data to be compared include disbursements, cash receipts, and return of excess cash. Schools that are interested in using this program as a tool for reconciling their 732-LOS data to their internal records should contact their Regional Direct Loan Client Account Manager for information and assistance on utilizing this application. 2. Review 30 Day Warning Report - Determine whether loans on the report are still valid. - Submit missing promissory notes or disbursements records. - Cancel any loans that will not be disbursed. 3. Query internal system - for batches not sent to the LOC; - for batches sent to the LOC but not acknowledged; - for acknowledgment received from the LOC but not imported into the school's system; - records rejected by the LOC that have not been corrected and re-transmitted by the school; - 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; - Any other queries as necessary to determine whether there are unbooked loans on your system. 4. 732-LOS-C File - Review each 732-LOS-C to ensure that any new loan or cash transaction and/or corrections have been processed. - Continue to determine what discrepancies exist on the 732-LOS-C. Schools should contact their Regional Direct Loan Client Account Manager for additional information regarding any of the above steps. We appreciate your participation in the Direct Loan Program and thank you for your continued support. Sincerely, Joe L. McCormick Chair Direct Loan Task Force |