Loan Interest Invoice - PowerPoint

							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
                                                                       Payments

                                                                  • Automated Clearinghouse (ACH)
                                                                  • U.S. Treasury Of f sets


                                                   Accounts
                                                    Payable
Lender/Servicer                                     Module
   Invoice                       Validation                             Alerts                Lender
  Submission



•   Origination Fees            • Check data
                                                   Accounts
                                                  Receivable                                        • Lender Search Report
•   Lender Fees                  (e.g. valid                          • E-Mails
•   Interest Subsidy             combinations)      Module            • Payments
•   Loan Activity               • E-Mail Alert                        • Receivables
•   Loan Portf olio Status       (FTP users)
•   E-Mail Alert FTP Users      • Reasonability
    (SAIG – receipt of f ile)

                                                                  Collections

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