| AwardYear: 1998-1999 ChapterNumber: 8 ChapterTitle: Reconciliation PageNumbers: 1-3 Essential Questions * What is reconciliation and why is it done? * What is the reconciliation process? * How often must I reconcile? Reconciliation Reconciliation is the process by which the school reviews and compares on a monthly basis the Direct Loan cash balance reported by the Loan Origination Center with the schools internal records. Beginning with the 1998-99 academic year and for all future years, the Loan Origination Center will initiate the reconciliation process by sending the Direct Loan School Account Statement (DLSAS) to the school on a monthly basis. The Direct Loan School Account Statement (DLSAS) Each month the Loan Origination Center will send schools in the Direct Loan Program an electronic file called the Direct Loan School Account Statement (DLSAS). This electronic file may be imported and formatted for printing a report that will look similar to a bank statement. Note: A separate DLSAS will be sent for each academic year that the school participates in the Direct Student Loan Program, until that academic year is closed out as directed by the Department. Since there is the possibility that up to three academic years may be open at one time, a school may receive up to three statements for each month. * The DLSAS is generated for each Direct Loan School at the end of each month (schools will receive the DLSAS on approximately the same date each month). * Schools must review and compare each DLSAS to their internal records to ensure the accuracy of the data on both the schools system and the Loan Origination Centers system. * The ending cash balance on the monthly statement represents the Department of Educations cash balance for the school. The school must verify that balance with the schools internal records and correct any discrepancies. At the conclusion of a schools processing for an academic year, the ending cash balance for a school should be zero; school drawdowns should equal disbursements and returns of excess cash for the year. Schools should regularly monitor their cash balance during the year to ensure they are within the excess cash tolerance levels. When schools import the DLSAS, the following reports are created: 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 should be zero. The cash summary summarizes all drawdowns received by the school during the month as reported to the Loan Origination Center by the Department of Education Grants Administration and Payment System (GAPS). Drawdowns will be included in the statement for the months in which the school received the drawdowns. Return of cash transactions will also be included on the statement for the month in which the unused funds were received by the Loan Origination Center. It also summarizes unused funds returned by the school and received by the Loan Origination Center during the month. The cash summary summarizes all disbursement transactions (actual disbursements, adjustments and cancellations) acknowledged by the Loan Origination Center during the month for booked loans only. Disbursement transactions are included on the statement for the month in which the transaction was acknowledged by the Loan Origination Center, regardless of the date of the transaction. For example, a disbursement that has a disbursement date of September 30 that is received and acknowledged by the Loan Origination Center on October 2 will be included in the October DLSAS. The ending cash balance indicates the cash balance at the end of each month for all cash transactions and disbursement transactions for booked loans. The cash summary also summarizes all accepted disbursement transactions reported by the school to the Loan Origination Center for loans that are not booked by the end of the month. As mentioned in Chapter 7, a loan is booked when-- * the Loan Origination Center has received and accepted a loan origination record; * the borrower has signed a promissory note, and the Loan Origination Center has accepted the note; and * a first disbursement has been made to the borrower and the disbursement record has been transmitted to, and accepted by, the Loan Origination Center. The Cash Detail Record The cash detail record provides a detailed listing of all drawdowns and unused funds returned and is always included with the DLSAS. Information in the cash detail section should be compared with the schools internal records and bank statements. The Loan Origination Center obtains this information directly from GAPS for drawdowns and the Loan Origination Centers own records for unused funds that have been returned. The Loan Detail Record (optional) Schools have the option of receiving only the cash summary and cash detail portions of the DLSAS (i.e., without the loan detail records). If the school decides not to receive the loan detail on a regular basis, the school can request loan detail for any previous monthly statement if needed. For schools that choose to receive loan detail, the DLSAS file will include booked disbursement transactions acknowledged during the month, sorted by Loan ID. |