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 Lender/Servicer Invoice Submission Validation Accounts Payable Module Accounts Receivable 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

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/M anuals.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/M anuals.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