# Presentation: 269773

## 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/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

## 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/Manuals.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

**Notes:**
Handout Interst Rate Chart
LaRS Crosswalk

## 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)

**Notes:**
Sample of Calculation Worksheets

Speaker Notes –
How lender world has evolved. 90%+ use a third party servicer. Many use multiple servicers.

## 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.

**Notes:**

Give formula for calculating interest and special allowance
Create a slide to show statistics on specific entities

## 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

**Notes:**
Keep passwords updated

## 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.

**Notes:**
Handout Qtrs Chart
Handout Interest Rate Chart

## LaRS Review Techniques cont’d 

- Lender/Servicer Eligibility
- Part Comparison (e.g. accurately reporting disbursements in Parts I & IV)
- Fee calculation

**Notes:**
Handout LaRS Form dated to expire 10/31/2006    Need to handout updated copy.
Angela, are there other system edits?

## 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

## LaRS Review Session

## 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_

**Notes:**
Ang