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Direct Loan Reconciliation

Direct Loan Reconciliation. Agenda. Reconciliation Definition & Requirement ECB Equation Advantages & Disadvantages of Reconciliation Tools and Resources School Account Statement Reconciliation Demonstration Year End Closeout Best Practices Wrap up. Session Objective.

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Direct Loan Reconciliation

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  1. Direct Loan Reconciliation

  2. Agenda • Reconciliation Definition & Requirement • ECB Equation • Advantages & Disadvantages of Reconciliation • Tools and Resources • School Account Statement • Reconciliation Demonstration • Year End Closeout • Best Practices • Wrap up

  3. Session Objective To understand basic Direct Loan Reconciliation concepts and to gain the analytical skills necessary to reconcile your school’s Direct Loan records with the Department of Education.

  4. Direct Loan Reconciliation Definition The process by which the Direct Loan Cash Balance recorded on the Department of Education COD system is reviewed and compared with the school’s internal records on a monthly basis. The school must: identify and resolve discrepancies document reasons for their Ending Cash Balance

  5. Reconciliation Requirement • Schools must reconcile each month 34 CFR 685.102(b) origination options • School reconciles internally, FAO and Business Offices • School reconciles externally with COD • Like balancing the checkbook, but at the school level

  6. EndingCash Balance Equation (ECB) Disburse-ments Draw-downs Return ofExcess Cash Beginning Cash Balance - - + Upward Adjust-ments Downward Adjust-ments Ending CashBalance - + =

  7. 5 Types of Actions and Effect on School’s Ending Cash Balance Drawdown Disbursement Downward Adjustment Return of Excess Cash Upward Adjustment

  8. Ending Cash Balance (ECB) • Total Net Drawdowns • – Total Net Booked Disbursements • = Ending Cash Balance

  9. Reconciliation Tools and Resources • School Account Statement (SAS) • COD Website • DL Tools Software (SFAdownload.ed.gov) • Student Files • Financial Aid Office Reports • Business Office Reports

  10. Reconciliation Tools and Resources • COD Customer Service • Customer Service Representative • Reconciliation Team • Weekly monitoring e-mails

  11. School Account Statement (SAS) • Generated by COD on 1st weekend of the month • The SAS is a monthly statement listing the school’s DL processing activity as reported to (and accepted by) COD • Two Types of SAS files (DSLF or DSDF) • Separate SAS for each open award year

  12. School Account Statement (SAS) • Different SAS Report Options • Format (Fixed Length,Pipe or Comma Delimited) • Content Depends on Options Selected • Four Primary SAS Components • Cash Summary (YTD and Monthly) • Disbursement Summary by Loan Type (YTD & Monthly) • Cash Detail (YTD or Monthly) • Loan Detail (Loan or Disbursement Activity Level) (YTD or Monthly)

  13. SAS Options Screen

  14. SAS Options Screen Euclid University

  15. SAS Cash Summary -YTD

  16. SAS Cash Summary - Monthly

  17. SAS YTD Disbursement Summary By Loan Type

  18. SAS Monthly Disbursement Summary By Loan Type

  19. SAS Cash Detail

  20. SAS Disbursement Detail

  21. Reconciliation Demonstration

  22. School Receives SAS Compare Cash Detail NO NO Compare Cash Summary Resolve Issues Resolved ? Match ? Compare Loan Detail YES YES DONE DONE Reconciliation: A Process Flow (Documentation)

  23. Monthly Reconciliation Is the SAS’s reported Ending Cash Balance (ECB) different from what my school records show? Net Drawdowns – Net Booked Disbursements = ECB Hmm…

  24. School Account StatementCash Summary - YTD Do the totals match my school records? Can you explain the ECB And Unbooked Loans?

  25. School Account StatementCash Summary - Monthly

  26. Issues – ECB and Unbooked Loans • SAS Shows: • Ending Cash Balance (ECB) = $7253 • Total Net Unbooked = $3264 • Why?

  27. Cash Summary from School Records Internal Ending Cash Balance Report - Summary Booked + Unbooked

  28. Compare School Records to SAS Cash Summary Month Ending 4/30/2010

  29. What Did You Find? • Discrepancies: • Difference in Refund of Cash = ($725) • Difference in Booked Adj = $1250 • Difference in Unbooked Disbs = $862 • Why?

  30. Cash Discrepancies: Common Causes Timing Issues Cash Transactions in wrong year or split between years Funds sent as refunds of cash that should have been a payment (or reverse) Funds recycled for disbursement in a different award year

  31. Cash Discrepancies: Research Tools Cash Detail Comparison Report SAS Cash Detail Cash Management Tool COD Website Business Office Cash Report Bank Statements Cancelled Checks

  32. Cash Detail Comparison Refund 4/29/2010 $725 Unmatched School

  33. FAO Cash Report Refund 04/29/2010 $725

  34. COD Website Review ELECTRONIC UNIVERSITY 04/15/2010 $1000 0909 SF215 04/18/2010 $350 0909 SF215 05/01/2010 $725 0909 SF215 ‘09-’10 Processed 05/01/2010

  35. Cash Activity

  36. Explaining Discrepancies Sent Refund of Cash on 4/29/10 for $725 to G5. Processed on COD 5/1/10.

  37. Documenting Discrepancies • 1 discrepancy – school sent refund of cash to G5 on 4/29/10 for $725. COD Received and Processed on 5/1/10 • Action Item List: • Track refund of cash timing difference for May SAS Reconciliation

  38. Disbursement Analysis

  39. Compare School Records to SAS Cash Summary Month Ending 4/30/2010

  40. Disbursement Discrepancies: Common Causes Unsent/unacknowledged disbursement batches Rejected disbursements Disbursements recorded in Business Office – not in Financial Aid system Unbooked records School data loss

  41. Disbursement Discrepancies: Research Tools Disbursement Detail Comparison Report Financial Aid Office Disbursement Report Business Office Disbursement Report SAS Disbursement Detail COD Website – Award/Disbursement Detail Student Account Files Business Office Ledgers/Statements of Account

  42. Disbursement Detail Comparison BOOKED RECORDS THAT ARE MATCHED

  43. Disbursement Detail Comparison BOOKED RECORDS THAT ARE UNMATCHED ?? = ($1250)

  44. Disbursement Detail Comparison UNBOOKED RECORDS THAT ARE MATCHED = $3264

  45. Disbursement Detail Comparison SCHOOL RECORDS THAT ARE NOT ON SAS OR MISMATCHED SAS UNBOOKED RECORDS = $862

  46. School Disbursement Report $862 Not at COD

  47. School Disbursement Report $1632 Future Dated Disbs

  48. School Disbursement Report +$1632 Future Dated Disbs = $3264

  49. Explaining Discrepancies

  50. Documenting Discrepancies • 2 discrepancies • ($1250) in booked adjustments entered via COD web • $862 disbursement batched, not sent to COD (unbooked) • Additional $3264 Unbooked on SAS future dated • Add to Action Item List: • Record ($1250) Adjustments at school • Send $862 Disbs for Jesse James to COD • Document booked $3264 amount in new month

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