session 68 lars review session martha shine angela baker

Session 68

LaRS Review Session

Martha Shine

Angela Baker

LaRS Process Overview

• Invoice Submission – quarterly submission of lender

portfolio activity

• Validation – edit routine to ensure data reliability &

accuracy

• Notification – alerts to lenders & servicers

• Payment/Collections – process for issuing payments

and collecting debts

• Reports – management information tools

LaRS Process Flow

Lender/ServicerInvoice

SubmissionValidation

Accounts PayableModule

AccountsReceivable

Module

Alerts

Collections

Payments

Lender

• Origination Fees• Lender Fees• Interest Subsidy• Loan Activity• Loan Portfolio Status• E-Mail Alert FTP Users (SAIG – receipt of file)

• Check data (e.g. valid combinations)• E-Mail Alert (FTP users)• Reasonability

• Origination & Lender Fees• Consolidation Loan Rebate Fee• Review Findings• Check or ACH acceptable• http://www.fp.ed.gov/PORTALSWebApp/fp/Manuals.jsp

• Automated Clearinghouse (ACH)• U.S. Treasury Offsets

• E-Mails• Payments• Receivables

• Lender Search Report

LaRS – Validation (Is your data correct?)

• Origination and Lender Fees

– Loan type, fee percent & interest rate validation

• Interest Benefits

– Loan type & interest rate validation

• Special Allowance Subsidy

– Loan type, SAP category, & interest rate validation

• Loan Activity & Portfolio Status

– Completeness and accuracy

LaRS - Notifications

• E-Mail Alerts

– File transfer acceptance

• Single versus multiple invoice submission

– Payment notification

• Invoice Detail

– Receivable notification

• Invoice Detail

• Weekly

– Reasonability

LaRS - Notifications

• Technology Challenges

– Returned mail

– Spam & pop-up blockers

LaRS – Notifications

• Payments

– Disbursements made within 7-10 business days

– Notifications issued 12-24 hours prior to

payment

– U.S. Treasury Offsets

• Incoming ACH – ‘TCS TREAS 449’

– call (800) 304-3107

LaRS – Notifications

• Receivables

– Payable to FSA

– Due upon receipt

– Lender billed weekly

– Funds Remittance Guide

http://www.fp.ed.gov/PORTALSWebApp/fp/M

anuals.jsp

LaRS Lender Search Report

• On-line users

– Available prior/post submission

• File transfer

– Available post submission

LaRS Lender Search Report

• Access

– FMS with appropriate user id/password

• Uses

– Reconciliation

– Compliance audit

– FSA lender reviews

LaRS Review Objectives

• To verify the procedures are adequate

• To confirm the accuracy to book and records

• To verify accurate billing/payment of each LaRS

invoice

• To verify timely filing

Core elements of a LaRS review

• Disbursement & other procedures

• Reconciliation of LaRS invoice to the general

ledger

• Test Interest Rate Changes

• Test LaRS data elements

• Validate timeliness of LaRS submission

• Test Reporting NSLDS Data to GA

Review process

• Selection of entity type and scope period

• Pre-planning,(notification of documents needed,

sampling, identify data formats, and summary data

analysis)

• Test data accuracy of LaRS quarterly invoice(s)

(sample calculations)

Review Techniques

• Compare origination & lender fees to effective

dates

• Compare interest rates to effective dates

• Compare special allowance codes to effective

dates

• LaRS part comparison (e.g. sales)

Review Techniques cont’d

• Design your sampling spreadsheet to cover

specific scope period requirements, in lieu of

general requirements.

• Gear pre-plan to review LaRS for specific entities,

such as, lender, school lender, exceptional

performer or common review initiative.

Review Techniques cont’d

• Remember, LaRS data is at the summary level. Your sample should look at loan level detail.

• Utilize Data Mart during pre-planning for lender and servicer identity, lender scorecards, access to historical lender data (pre 2002) and monthly data loads for PEPS, NSLDS, LaRS

• Utilize PEPS to determine previous review periods, deficiencies and any liabilities paid

Review Techniques cont’d

• Utilize NSLDS to verify repayment conversion

date, last date of attendance, borrower status, loan

type, disbursement date, lender and servicing

history.

LaRS Review Techniques cont’d

• Verify the accuracy of ending and average daily

balances reported in Part IV, LARS by reviewing

sampled loans using payment history.

• Verify that variable interest rate changes are

updated timely and accurately.

LaRS Review Techniques cont’d

• Lender/Servicer Eligibility

• Part Comparison (e.g. accurately reporting

disbursements in Parts I & IV)

• Fee calculation

Timely Filing

• Utilize Data Mart to check for LaRS submission

gaps

• Invoice must be submitted within 90 days of the

end of the quarter

Challenges

• Consolidation Loan Rebate Fee

– Work with your lender/servicer to ensure timely payments to ED.

• ACSI – Customer Satisfaction

– On-line form navigation & correction

• Informed Lenders

– Servicers improve communication with clients.

– Lenders - notify FSA of personnel changes

Resources

• FP Portal (www.fp.ed.gov)

– Rates, Forms & User Guides for guarantors &

lenders

– http://www.fp.ed.gov/PORTALSWebApp/fp/

Manuals.jsp

• IFAP (www.ifap.ed.gov)

– Policy updates

• Lender Reporting Team @ fsa_lr@ed.gov

Technical Slide

We appreciate your feedback and comments.

We can be reached at:

Martha Shine, 312-886-8760

Email: martha.shine@ed.gov

Angela Roca-Baker, 202-377-3322

Email: angela.roca-baker@ed.gov