Session 68

1. Session 68 LaRS Review Session Martha Shine Angela Baker

2. 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

3. LaRS Process Flow Payments • Automated Clearinghouse (ACH) • U.S. Treasury Offsets Accounts Payable Module Validation Lender/Servicer Invoice Submission Alerts Lender Accounts Receivable Module • 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 • Lender Search Report • E-Mails • Payments • Receivables Collections • Origination & Lender Fees • Consolidation Loan Rebate Fee • Review Findings • Check or ACH acceptable • http://www.fp.ed.gov/PORTALSWebApp/fp/Manuals.jsp

4. 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

5. LaRS - Notifications • E-Mail Alerts • File transfer acceptance • Single versus multiple invoice submission • Payment notification • Invoice Detail • Receivable notification • Invoice Detail • Weekly • Reasonability

6. LaRS - Notifications • Technology Challenges • Returned mail • Spam & pop-up blockers

7. 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

8. LaRS – Notifications • Receivables • Payable to FSA • Due upon receipt • Lender billed weekly • Funds Remittance Guide http://www.fp.ed.gov/PORTALSWebApp/fp/Manuals.jsp

9. LaRS Lender Search Report • On-line users • Available prior/post submission • File transfer • Available post submission

10. LaRS Lender Search Report • Access • FMS with appropriate user id/password • Uses • Reconciliation • Compliance audit • FSA lender reviews

11. 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

12. 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

13. 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)

14. 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)

15. 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.

16. 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

17. 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.

18. 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.

19. LaRS Review Techniques cont’d • Lender/Servicer Eligibility • Part Comparison (e.g. accurately reporting disbursements in Parts I & IV) • Fee calculation

20. Timely Filing • Utilize Data Mart to check for LaRS submission gaps • Invoice must be submitted within 90 days of the end of the quarter

21. 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

22. 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

23. 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