Download - Session #8
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Session #8
Direct Loan Reconciliation
Allison RichardsRon Ackermann
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Agenda
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Reconciliation – A General Definition
The process by which records from one system are compared to records from another, and any discrepancies are identified and resolved.
ExampleExample: Balancing a checkbook
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Direct Loan ReconciliationThe process by which the Direct Loan Cash Balance recorded on the Department of Education system is reviewed and compared with a school’s internal records on a monthly basis. The school must:• identify and resolve discrepancies, and• document reasons for their Ending Cash Balance
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The process by which schools complete final processing at the end of a Direct Loan award year. •Extension of the monthly reconciliation process•$0 Ending Cash Balance
(DL funds received = DL funds disbursed)•Final deadline: July 31st of the year following end of the award year (7/31/2010 for 2008-2009).
Program Year Closeout
Note: 30 Day reporting requirement supersedes both reconciliation and
closeout requirements 5
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Total Net Drawdowns – Total Net Booked
Disbursements
= Ending Cash Balance
Ending Cash Balance (ECB)
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Reconciliation: Three Key Systems
BusinessOffice
FinancialAid
Office
COD
G5
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Reconciliation Tools and Resources
School Account StatementCOD WebsiteDL ToolsStudent FilesFinancial Aid Office ReportsBusiness Office Reports
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• COD Customer Service–Customer Service Representative
–Reconciliation Team–Weekly monitoring e-mails
Reconciliation Tools and Resources
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School Account Statement (SAS)
• Generated by COD on 1st weekend of the month
• Contains data through the end of the previous month
• Separate SAS for each open award year
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School Account Statement (SAS)• Four Primary SAS Components
‒Cash Summary‒Disbursement Summary by Loan Type‒Cash Detail‒Loan Detail (Loan or Disbursement
Activity Level)• Different Report Options
‒Format‒Content
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SAS Options Screen
Euclid University
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School Account StatementCash Summary - YTD
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School Account StatementCash Summary - Monthly
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Disbursement Summary by Loan Type
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Cash Detail
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Loan and Disbursement Detail
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COD Web School Summary
$13,074.00($2,075.00)
$10,999.00
$5,721.00($1,250.00)
$4,471.00
$6,528.00
$3,264.00$0.00
$3,264.00
$3,264.00
Electronic University
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What Did You Find?• SAS Shows:
– Ending Cash Balance (ECB) = $7253– Total Net Unbooked = $3264
• Why?
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School Receives
SAS
Match?
Resolve Issues
Compare Cash Detail
Compare Loan Detail
NO
YESYES
Resolved?
Compare Cash
Summary
DONEDONE
Reconciliation: A Process Flow
NO
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(Documentation)
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Cash Summary Comparison
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Cash Summary from School Records
Booked + Unbooked
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Compare School Records to SAS Cash Summary
Month Ending 4/30/2010
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What Did You Find?• Discrepancies:
–Difference in Refund of Cash = ($725)
–Difference in Booked Adj = $1250
–Difference in Unbooked Disbs = $862
• Why?
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Cash Detail Comparison
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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
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Cash Discrepancies: Research Tools
• Cash Detail Comparison Report• SAS Cash Detail• Cash Management Tool• COD Website• Business Office Cash Report• Bank Statements• Cancelled Checks
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Cash Detail Comparison
Refund 4/29/2010 $725 Unmatched School
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FAO Cash Report
Refund 04/29/2010 $725
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04/15/2010 $1000 0909 SF215
04/18/2010 $350 0909 SF215
05/01/2010 $725 0909 SF215
ELECTRONIC UNIVERSITY
‘09-’10
COD Website Review
Processed05/01/2010
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Cash Activity
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Explaining DiscrepanciesSent Refund of Cash on 4/29/10 for $725 to COD. Processed on COD 5/1/10.
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Documenting Discrepancies• 1 discrepancy – school sent refund of cash
to COD on 4/29/10 for $725
• COD Received and Processed on 5/1/10
• Add to Action Item List:– Track refund of cash timing difference
for May SAS Reconciliation
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Disbursement Detail Comparison
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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
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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
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Disbursement Detail Comparison
BOOKED RECORDS THAT ARE MATCHED
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Disbursement Detail Comparison
= ($1250)
??
BOOKED RECORDS THAT ARE UNMATCHED
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Disbursement Detail Comparison
= $3264
UNBOOKED RECORDS THAT ARE MATCHED
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Disbursement Detail Comparison
SCHOOL RECORDS THAT ARE NOT ON SAS OR MISMATCHED SAS UNBOOKED RECORDS
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= $862
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School Disbursement Report
$862 Not at COD41
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School Disbursement Report
$1632 Future Dated Disbs
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School Disbursement Report
= $3264
+$1632 Future Dated Disbs
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Explaining Discrepancies
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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• 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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Ending Cash Balance
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Documenting Reasons
SAS ECB $7253
-$725 RF Timing Diff
-$3264 Future Dated
-$862 Send Disb
$2402
What is the cause of remaining balance?
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Perform Internal Reconciliation
• Develop procedures/schedule for internal reconciliation and assign responsibilities
• Compare based on overall cash/disbursement totals and/or student detail
• Troubleshoot discrepancies
Compare Business Office and Financial Aid Office Records
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Business Office ReportBusiness Office Report
Direct Loan Cash at School - YTDSchool Year 2009-2010
Report End Date: 4/30/2010
Drawdowns $13,074.00Returns ($2,075.00)Net Cash (Credit) $10,999.00
Disbursements $12,249.00Refunds ($1,250.00)Total Disbursed (Debit)
$10,999.00
DL Cash at School $0.00 49
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ECB: Compare Business Office to Financial Aid Cash Summary
Internal Reconciliation at SchoolAs of 4/30/2010
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Business Office Disbursement Detail
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Compare School Disbursements
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Explaining Reasons
ECB $7253 =-$725 RF Timing Diff
-$862 Send Disb
-$3264 Future Dated Disb
-$2402 Disb not in DL System and not at COD
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Documentation
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Documenting Differences and Reasons for ECB
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Documenting Differences and ReasonsExplain Differences &/or Reasons for ECB
ECB Differences Financial Aid Office to SAS of ($1975):
• Entered Refund of Cash on 4/29/10 for ($725) on G5. Processed on COD 5/1/10
• ($1250) in adjustments done via COD web, not entered in school database.
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Documenting Differences and ReasonsExplain Differences &/or Reasons for ECB
Reasons for SAS ECB of $7253:• $725 RF timing issue• $862 Disb not sent to COD• $3264 Future Dated Disbursements• $2402 Disbs credited in the Business Office,
but not entered in FAO or sent to COD.
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Documenting Differences and Reasons Explain Differences &/or Reasons for
Unbooked
Unbooked Differences FAO to SAS of $862:• $862 Disb not sent to COD• Additional $3264 Future Dated
Disbursements on both systems
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Monthly Reconciliation Action Items
Month Ending: 4/30/2010 Program Year: 2009-2010
Reconciliation: Action Item List
No.
Action Item Date Due Date Completed
1. Track refund of cash timing difference of $725 for May SAS Recon. Refund made on 4/29/2010, processed 5/1/2010.
6/05/2010
2. Record ($1250) Adjustments on EDExpress for Bradshaw PLUS Loan.
5/06/2010
3. Send $862 Disbs for Jesse James to COD. Ensure disbursements are accepted and booked.
5/06/2010
4. Verify $3264 future-dated disbursements book on COD.
5/11/2010
5. Post 5/5 Disbursements totaling $2402 in EDExpress. Batch and Send to COD.
5/11/2010
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How Do I Know I Am Finished?
• All discrepancies have been identified and resolved
• Timing issues are tracked for reconciliation in next month’s SAS
• Reasons for any Ending Cash Balance have been identified
• All monthly reconciliation efforts have been documented
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DONEDONE
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Additional Information
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Monthly Reconciliation: Other Reports and Tools
• 30 day Warning Report (COD)• Booked Status Report (EDExpress or custom)• Pending Disbursement List
(EDExpress List – Anticipated Disbursements, Pending Actual Disbursements)
• Actual Disbursement List(EDExpress List – Actual Disbursements, Booked
and Unbooked)• Disbursement Measurement Tool Report (DL
Tools)• Cash Summary Report (DL Tools – optional)• Ledgers, Bank Statements, Cancelled Checks• Other Internal School Reports
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Monthly Reconciliation:Other Reports and Tools
• COD Resources and Tools– COD Customer Service:
1-800-848-0978•Issue identification and resolution•Outreach emails•Adhoc Reports
‒COD website, https://cod.ed.gov
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Contact InformationWe appreciate your feedback and comments. We can be reached at:
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Questions?
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