Chapter 6 – Interest audit

This module independently recalculates interest on every savings and loan account, and reports exceptions.

0. Introduction

0.1. Description of the Audit Tests

0.2. Suggested sequence and frequency of using this module

0.3. Operating Hints

0.4. Essential Financial Package Information

1. Default Loans Interest parameters

2. Loans Interest Parameters

2.1 Clear Loans Interest parameters

2.2 Edit Period Dates

2.3 Edit Loans Interest Rates

2.4 Account Levels to exclude

2.5 Display Loans Audit parameters to screen

2.6 Display Loans Audit parameters to printer

2.7 Mortgage Breaker Parameters

3. Loans Interest Audit

4. Print Loans Interest Audit

5. Loans Discrepancy Enquiry

6. Overdraft Audit Parameters

6.1 Clear Overdraft Interest parameters

6.2 Edit Period Dates and other parameters

6.3 Edit Overdraft Interest Rates

6.4 Account Levels to Include

6.5 Display Overdraft Audit parameters to screen

6.6 Display Overdraft Audit parameters to printer

6.7 Overdraft Limit Data Capture

7. Overdraft Audit

8. Print Overdraft Interest Audit

9. Overdraft Discrepancy Inquiry

10. Savings Interest Data Capture

11. Default Saving Interest Parameters

12. Savings Interest Parameters

12.1 Clear Savings Interest parameters

12.2 Edit Period Dates

12.3 Edit Savings Interest Rates

12.4 Account Levels to exclude

12.5 Display Savings Audit parameters to screen

12.6 Display Savings Audit parameters to printer

13. Savings Interest Audit

14. Print Savings Interest Audit

15. Savings Discrepancy Enquiry

16. Savings Bonus Parameters

17. Savings Bonus Audit

18. Savings Bonus Print

19. Discrepancy Enquiry

20. Savings Bonud Clear Interest Audit Files

0. INTRODUCTION

0.1. Description of the Audit Tests

Interest is the main income and expense for any Financial Institution. Therefore, if you can verify interest, then you can have a high degree of confidence in the material accuracy of the whole ‘Profit and Loss’ account.

Before CAPS, auditing interest manually was a frustrating, time-consuming and ineffective task. The main method involved the selection of a few accounts at random checking their interest calculations. The chance of finding any significant error or problem was very small. Then, you would do an overall 'reasonableness' calculation and accept it if the result was within perhaps ten percent of the account’s figure.

The reason CAPS is so effective is that it performs a complete check of the calculation of interest on every account. Apart from immediately highlighting problems that might have occurred, it gives you confidence in the material accuracy of the overall profit and loss account.

Since CAPS performs all the calculations for you, all you need to check is that the interest rates, days of grace and interest calculation bases have been properly authorised. Then you just have to investigate any interest calculation discrepancies CAPS might report.

Problems CAPS may discover include:

The 'days of grace' may be entered incorrectly, so that a member who draws savings at the beginning of the month may be paid interest for the whole month.

  • The interest accrual may be altered manually. CAPS will show this as a discrepancy.
  • Errors can be made in setting up the interest rates.
  • Errors can be made setting up the basis for interest calculations.

0.2. Suggested sequence and frequency of using this module

External auditors will probably want to run the interest audit module every three or six months. Internal auditors will be able to run the interest audit module at the end of each month.

You will always have to run it before the Financial Institution purges any relevant information from the files.

The steps to follow are these:

Step Description
1. Use menu option 1 and 11 to set up some standard parameters for loans and savings interest calculation. You only need to do this once unless the Financial Institution changes their rules.
2. If necessary, carry out a Data Capture of the Financial Institution’s Savings accounts using menu option 10 - SAVINGS INTEREST DATA CAPTURE. It is best to run the Data Capture on the first day of the month. This is usually run overnight. Note that Loans interest audit and Overdraft interest audit do not need a Data Capture (see Essential Financial Package information below for an explanation).
3. When you decide to do an interest audit, select menu option 2, 6 or 12 - INTEREST PARAMETERS to tell CAPS what period you want to audit. You probably do not need to enter interest rates and interest calculation bases information because these can only apply to a particular account level, and rates now vary widely within an account level (set “Special Rate” to ‘Y’ to use rate information on the account). If you need a Data Capture file for your savings interest audit, you must allow at least one month in between the process date and the audit.
4. This step will not apply if you set “Special Rate” to ‘Y’ in default parameters. When you are satisfied you have entered the correct interest rates and calculation bases, make sure you are in Test Mode and select menu option 3,7 or 13 - INTEREST AUDIT.
5. Print the results of the test audit using options 4,8 or 14 - PRINT INTEREST AUDIT. Examine the printouts and carry out any appropriate investigations.
6. After running an audit in 'Test Mode', use menu options 2, 6 or 12 - INTEREST PARAMETERS again to correct any mistake you might have made. Then, when you are totally satisfied the parameters are correct, use menu option 3,7 or 13 - INTEREST AUDIT to run the audit overnight in 'Live Mode' (set via “System Utilities” option 6).
7. Print the results of the audit using menu options 4,8 or 14 - PRINT INTEREST AUDIT. Examine the report and carry out any appropriate investigations.
8. When you are satisfied the audit is complete, and you have no further use for any of the CAPS files generated, you can select menu option 16 - CLEAR INTEREST AUDIT FILES to release the space taken up on the Financial Institution’s computer system. Note that the Interest Data Capture file is not cleared using this menu option, nor any parameter data.

0.3. Operating Hints

From bitter experience we have found it very easy to make a mistake entering interest parameters. So, you should always check by running the audit in 'Test Mode' before submitting it for the full overnight run in 'Live Mode'. This is because if you have made a mistake, CAPS could print an interest calculation discrepancy for every account on file. This will be a very large and totally useless report!

There is no harm in having a Savings Interest Data Capture. You don't have to use it if it's not required. And you might find it very useful if some minor savings accounts have interest credited at differing times of the year.

For example, ‘Christmas Club’ accounts might have interest credited at a different time to normal savings accounts. If you have a Data Capture file, it means you can audit all savings account interest at the same time. If you don't have a Data Capture you'll have to do a special audit of ‘Christmas Clubs’ at a different time to other savings accounts.

The Financial Package generally accrues interest monthly, although in some cases it may be fortnightly or weekly, and records the current accrual in the file. For Savings accounts, the accrual is reset to zero when interest is paid. Since most loan accounts are charged monthly we need not be concerned with the accrual amount.

CAPS uses the following formula to calculate the accrual figure on each Savings account:

Closing accrual = Financial Institution’s calculated interest - Interest Paid + Opening accrual

Note: that no record is kept of the previous accrual figure.

Therefore, for all savings interest calculations, the last period covered by the audit must be the month immediately preceding the current month. For example, if we are now in January the last period would be December. The only exception to this rule is if you audit up to an interest payment and enter “Y” to the questions on ignoring the credit and debit accruals. This allows you to audit up to any month prior to the current month, because the accrual amount will be ignored. CAPS will only compare total interest calculated to the total interest paid during the audit period.

As explained, the opening date of the period under review must be the beginning of the month in which the Data Capture was carried out. The only exception to this is if you start your audit period from the beginning of a month immediately after an interest payment, in which case the Data Capture does not need to be used for the audit.

The final date of the audit period must be the date of the current accrual (usually the last day of the previous month), unless you answer “Y” to ignore Credit and Debit accruals.

It should also be noted that when looking at discrepancies between the client figures and the CAPS figures, CAPS uses the effective date when calculating interest on daily interest accounts.

0.4. Essential Financial Package Information

You will need to run a Data Capture of savings accounts if:

The Financial Institution pays interest annually, or six-monthly,
and ....

The Financial Institution is regularly purging its transactions,
or ....

You perform your audits at any time other than immediately after the interest was paid.

To perform a successful savings interest audit, transactions for the period under review must exist on file and fulfil the following conditions:

  • The period must cover the period from the date of the Data Capture to the current accrual date.
  • If no Data Capture has been done, the period must start immediately after savings interest was paid.

Consider the following example which illustrates the use of the Data Capture file. For further information, see '10. Savings Interest Data Capture' later in this chapter.

In this example interest is paid six monthly and the Financial Institution has at any point in time, four months of transactions on the system.

In the above example the Savings Data Capture has been run at the beginning of March, after interest has been accrued for February. Since interest was paid at the end of December, the file stores the interest accrued for January and February for each account. In early July when the Interest Audit will be run, the Savings Interest Audit Period will be set up for March, April, May and June and the option to use the Data Capture for the audit will be set to 'Y'. CAPS will calculate the interest for March to June and add the January and February accrual amount (stored on the file). This method allows CAPS to compare the Financial Institution's payment of interest in June, to that calculated by CAPS for January to June.

1. DEFAULT LOANS INTEREST PARAMETERS

CAPS allows you to preset the standard calculation parameters. Once adjusted correctly for your Institution, these need not be changed again unless the system changes. It is also possible to set CAPS to calculate interest using the opening balance of the day instead of the closing balance (for daily accounts) using these parameters.

<1> New Disbursement Codes (window)
Enter the transaction codes that are used for new disbursements to loan accounts.

<2> Interest Adj Codes (window)
Enter the transaction codes used for interest adjustments. CAPS does not include adjustments in its loan calculation. This highlights accounts on which adjustments have been made.

<3> Default Fraction
For monthly accounts, the interest fraction for each month may either be 1/12 of the interest rate or vary according to the number of days in the month. Enter [T] to use 1/12, or [D] to use the number of days in the month.

<4> Alt. Fraction Level (window)
If you have some accounts using 1/12 as the fraction and some using number of days in month as the fraction, you should define those that are different from the default fraction.

Level
Enter the account level(s) that use a different fraction method for calculating interest.

<5> Default Open/Close Calc Method
Enter the default calculation method for daily accounts. [O] for opening balance of the day, [C] for closing balance.

<6> Alt. Open/Close Method Levels (window)
Enter the loan level(s) which use the alternative calculation method to the default.

<7> Effective Date (window)
Enter [Y] if you want to use the effective date on transactions or [N] if you do not.

<8> Minimum Disbursement Amount
The transaction codes used for new disbursements may also be used for some loan charges. Normally the loan charges are very small compared to a new disbursement. That is why CAPS distinguishes them using a minimum disbursement amount. This distinction is necessary because there may not be any part-month interest charged on loan charges.

NOTE: Screen 2 for Default Parameters is no longer applicable. No data entry required.

<9> Add to Rest Balance
Indicate here if you would like new disbursements to be added to the rest balance for each month.

<10> Full or Part Month Interest
For new disbursements please indicate if your require that full or part month interest be charged ('F' or 'P') for the month in which it starts. This will be the default method. Exceptions can be input below in field <11>.

<11>Full / Part exceptions
For account levels that are exceptions to the above rule please type in here For Example, If you have input 'F' for option 9 above but L8 accounts only charge part month interest, input an '8' here.

<12>Default method, Closing account penalties
Indicate here the default method for calculating interest on accounts that close during month.

This code is made up of four parts, separated by slashes '/'. The first part is used to indicate the base method of calculating interest for last month (This is just the normal interest due and is not a penalty amount). This interest is called the base interest. It can be either 'P' for part month interest (calculated on the number of days till closure), or 'M' to calculate a full months interest (Interest is calculated as if the balance was maintained for a full month). The base method code is compulsory. The remaining parts are optional. (EG it is permissible just to enter 'P' which effectively means no penalty)

The next part determines the method of calculating the penalty interest, if any, for the last month. There are four options for the calculation of penalty interest. This part is not compulsory. The penalty amount can either be a part months interest (Enter 'P'), a full months interest (Enter 'M'), or a fixed amount (eg 'FA550' is a fixed amount of $550.00) or a fixed percentage (eg 'FP.5' is a penalty of .5% of the balance outstanding).

An example of a full code; 'M/FA300' instructs CAPS to calculate a full months interest in the month in which the accounts closes plus impose a penalty of $300. Another example is 'M/P' which tells CAPS to calculate a full months interest and add a penalty of a months interest calculated on the number of days until closure.

In addition to the base method code and the penalty method code there are modifiers. These are optional. There are three modifiers as follows:

  • The 'T' modifier tells CAPS only to impose the penalty if the loan is paid out within a certain number of years (eg 'M/FP.8/T3' tells CAPS to impose a .8% penalty if the loan is paid out within 3 years);
  • The 'S' modifier tells CAPS to penalise with either the penalty interest or another dose of the base interest, whichever is lower (eg 'M/FP.6/S' tells CAPS to calculate a full months interest and add either an extra full months interest or .6% of the outstanding balance, which ever is less.)
  • The 'L' modifier does the opposite to the 'S' modifier. It tells CAPS to choose the penalty that is larger.

The 'S' and 'L' modifiers can only be used if you have specified two methods of calculating penalty interest.

<13>Exceptions, Closing account penalties
Enter here any accounts that use a different method to the one indicated above. Enter the level only (eg '3' not 'L3'), and the alternative method code.

<14> Minimum Special Rate
The audit will report all special interest rates less than the Minimum Special Interest Rate parameter.

<15> Maximum Special Rate
The audit will report all special interest rates greater than the Maximum
Special Interest Rate parameter.

<16> Loan Special Rate
Enter [Y] if you want the audit to use the Special Interest Rate (Non-Standard Rate) and use all rate information for the account, or [N] if you want to use your rate parameters.

<17> Suppress Interest Discrepancy Report
Enter [Y] to suppress the Interest Discrepancy Report, [N] to create it. NOTE: If you enter [Y], run the audit and then enter [N] and print the report, a blank report will be returned.

<18> Create Special Rate Report
Enter [Y] to create the report which shows accounts outside the Special Interest Rate range, as defined in your parameters.

<19> Ignore Tran Rates
Enter [N] to pick up interest rate changes from the Transaction file narrations and [Y] to ignore them.

<20> Offset Savings Same Month

Note: This field is no longer applicable for Ultracs sites.
Enter [Y] to offset maximum monthly loan accounts with the current (same) months savings interest. Enter [N] to offset the loan account with the previous months savings interest; this is the default.

<21> Equalise Savings

Note: This field is no longer applicable for Ultracs sites.
Enter [Y] to limit the maximum savings balance offset to be no more than the balance of the loan account [N] for no limit.

<22> Use 365 Days
Enter loan levels that should use 365 days only in their interest calculations.

<23> Use Effective Date
Enter 'Y' to use the effective date for the offset account.

<24> Offset Use Open/Close
Enter [O] to use the opening daily balance for the offset account. Enter [C] to use the closing daily balance.

<25> Tran Rate Changes Apply
This parameter refers to interest rate changes which are loaded by the Financial Institution as Rate Change Transactions. CAPS can read the narration of these transactions and apply the rate change. Enter 'D' if you would like CAPS to apply the rate change as at effective date or enter 'M' for CAPS to apply rate change to the whole month in which the rate change occurs.

2. LOANS INTEREST PARAMETERS

This menu option allows you to adjust the parameters for the Loans Interest Audit.

On entering the parameters menu, CAPS will determine if the period dates have yet been input. If not, CAPS will place you immediately in the Period Dates input screen (Please look below the parameters menu). If the Period Dates have been input, CAPS will place you in the parameters menu as follows:

2.1. Clear Loans Interest parameters

This function allows you to completely clear the Loans Interest parameters. This will mean you will be required to re-input the period dates, interest rates and exclusion levels. CAPS will not clear the default parameters. CAPS will check to make sure you have not chosen this option by mistake :

Are you sure you want to clear the loans interest audit parameters?

Enter [N] to return to the Loans parameters menu with no change, or [Y] to clear all the Loans parameters. If you choose [Y] CAPS will display the fact that it is clearing the parameters and then return to the menu.

2.2. Edit Period Dates

This function allows you to tell CAPS the loan interest audit periods. CAPS prompts you to enter the dates as follows :

If the period dates have been previously input and not cleared CAPS will only allow you to view these dates without editing. If you wish to input new dates first use function 1 Clear Loans Interest parameters.

< 1> Date Parameters (window)

Start Day
Enter the first day of the period (inclusive).

End Day
Enter the last day of the period (inclusive).

You may notice that CAPS automatically inserts the Start Day from the second period onwards. This is to ensure that each Start Day is the day after the last End Day. When you have input all the period dates, enter [\] in the Start Day position of the latest field to remove the inserted date. Then press [Enter] to exit the period dates entry window.

You must enter whole month periods here. Interest rate changes will normally become effective at the beginning of the month.

Do NOT attempt to use part-month periods here. You can break months up into sub periods for FCS sites in the Edit Loans Interest Rates section following.

When the dates have been entered you can either press [1] to re-edit the dates or [Enter] to accept. Once you accept a set of new dates CAPS will briefly display a message before returning to the menu: Building period information, please wait

This indicates CAPS is producing special data structures which will be used next in the Edit Loans Interest Rates function.

2.3. Edit Loans Interest Rates

Important Note: No rate information is required for Ultracs sites if you set “Loans Special Rates” to ‘Y’, in which case CAPS will use all the appropriate rates for each account for the audit period.

If you choose to enter your own rates, this function allows you to specify the exact interest rates and methods for each Loan account level. Do not try to use this function immediately after you have cleared the interest audit parameters as you must have first input the period dates. CAPS will now ask you to indicate the Loans account level to be edited:

Which level of account do you want to input parameters for ? (Return to end)

You may choose any level between 1 and 99. If you have finished editing simply press [Enter] and CAPS will return to the menu. Important: The rate information you use for an account level applies to all accounts of that level. It does not allow for any variation of rates within an account level.

If you choose a level, CAPS will display the following screen:

Level
This indicates which account level parameter you are editing. This is not an input field.

Key
This indicates which period within the level you are in. For instance Key 3 indicates that the information on the screen belongs to the third period.

< 1> Action

Enter the action required. The possible actions are as follows:

- [N] Display the Next period.
- [P] Display the Previous period.
- [Q] Quit the editor and return to level choice.
- [E] Edit the period currently displayed.
- [CP] Copy the data from the Previous period.
- [CN] Copy the data from the Next period.

< 2> Period Start

After setting the Period dates CAPS will have set up the main periods each consisting of one single sub-period. You can insert more sub-periods on FCS sites by simply moving the Period Start forward or the Period End backward. If you do this, CAPS will automatically set a new sub-period to cover the days in-between. You may have as many sub-periods per period as there are days in the period (i.e. sub-periods may be one day long). To save input time CAPS provides you with the [CP] and [CN] functions to copy the period information from the previous and next periods respectively.

The reason you would want sub-periods is to handle a rate change part-way through a month.

CAPS will not allow you to move a sub-period Period Start day back past the beginning of the main period. Conversely you are not allowed to move a Period End day forward past the end of a period. If you move a sub-period Period Start or Period End that are not already on the limits of the main period, CAPS will not insert a new period. Instead CAPS will drag along the relevant Period Start or End of the neighbouring sub-period.

< 3> Period End

Enter the end date for this period. If you wish to create a sub-period (because of a rate change), enter a new date than what is initially presented.

< 4> Method

Enter the loans interest method applicable. The possible methods are:
- [1] Daily Rest
- [2] Maximum Monthly
- [3] Maximum Half Yearly
- [4] Maximum Quarterly

< 5> Base

Normally, the interest rate for all accounts is the same within one account level. But at some institutions, interest rate also depends on either security type or purpose type. Enter the interest base required. They are:
- [1] Security
- [2] Purpose
- [3] Nil.
- [4] LARS rating

If the interest rate is not tied to any of the above mentioned methods there will not be a history available for CAPS to use. Some sites actually use the Non Standard Interest Rate field to hold the normal interest rate applicable for an account at a point in time. This method does not keep a history of rates back to previous months and therefore not auditable. If accounts are to have different rates not tied to a security code, purpose code or LARS rating, they should then be on different account levels. The only other alternative is for a history of Special Interest Rates to be supplied for each account, implemented by your main software supplier (CUSCAL/ULTRADATA).

If CAPS detects a non standard interest rate it will apply that rate to all periods of the audit.

< 6> Interest rate

Tier
Enter the tier dollar amount(s) that are applied for different interest rates. The first tier must be zero (0). If there are no tiers, and only one rate for this account level, then use zero as the first tier, and enter the interest rate.

Interest Rate
Enter the interest rate for the relevant tier.

How CAPS determines which rate to use.

There are a number of factors involved in determining which rate the Loans Interest audit actually uses. When you initially set your period dates, CAPS attempts to locate the corresponding interest rates from backups it keeps the rates you set for the same months in previous audits. If you have entered a month that you have not audited previously then CAPS will extract the current rate from the Financial Institution’s files. Bear in mind that these current rates may not apply to all your periods. You are then free to edit these rates in the above Loans Rate Changes screen.

If you set “Loans Special Rate” to ‘N’ in the Default Loans Parameters, the rates you set in the Loans Rate Changes screen for the audit periods will apply to all accounts of that particular account level.

Finally, to over-ride all of the above, you can set the Ignore Tran Rates field in the Default Loans Parameters screen to ‘N’. This will tell CAPS to override all previous rate parameters with those found on each accounts transaction record. It is possible for the FI to record interest rate changes on their client’s transaction record with a narration indicating the old and new rate. CAPS will pick up the changes from here and apply them in the calculations. Provided your client has sufficient transactions on file (up to 6 months) and makes use of the interest rate change narrations, then this is the most reliable method.

2.4. Account Levels to exclude

CAPS will allow you to indicate the loan account levels to exclude from the interest audit as follows :

CAPS will not check the interest calculations for these account levels.

2.5. Display Loans Audit parameters to screen

CAPS will allow you to display the edited interest rate parameters to screen in a similar format to the Loans edit screens. Simply press [Enter] to continue displaying or [Q] to quit.

2.6. Display Loans Audit parameters to printer

CAPS will allow you to display the edited interest rate parameters on the printer in the same format as above. Please refer to the example at the end of the chapter. A print password is not required.

2.7 Mortgage Breaker Parameters

This screen only relates to sites using the FCS Financial software. The mortgage breaker loans interest program offsets loan account balance with the balance from the corresponding savings account. It is displayed as follows:

<1> Start day/End day combination (window)

Start Day
Enter the start day of the period for which the minimum (monthly) savings account balance will offset the loans balance (CUSCAL method). Bear in mind that for Maximum Monthly loan accounts the offset balances is obtained from the previous months minimum savings account balance. For Daily Rest loan accounts the interest is charged at the end of the month so the offset balance comes from the same month.

If you are auditing Maximum monthly accounts for June, July and August, you should have May, June and July in the offset parameters above. If your were auditing the same period for Daily Rest loan accounts you would need to enter parameters for June, July and August above.

End Day
Enter the last day of the corresponding savings period.

Fraction
Enter the percentage of the savings account balance that will be offset against the loan account balance (eg Enter 65 for 65%).

Offset Minimum
Enter the minimum savings balance required for the offset to occur.

Method
Enter either D for daily interest or M for Minimum Monthly accounts.

3. LOANS INTEREST AUDIT

Once you have completed the parameters in Menu option 2, CAPS will allow you to perform the Loans Interest Audit. It is possible to set a flag in the default parameters (screen 2) to prevent the Special Interest Rate report from being generated. Loans Interest Audit will first prompt you to see if you want the reports generated in account level order:

Do you want to have the reports generated in account level order?
Enter [Y] if you would or [N] if you would not.
- if you are in Test Mode, CAPS prompts:

You are in Test Mode, do you want to start 'Loans Interest Audit' now (Y/N)
Enter [Y] if you want to do a quick test run by checking interest calculations on only a small number of members loan accounts.
Enter [N] if you want to return to the Interest menu.
- if you answer [Y], CAPS prompts:

Records to process?
Enter the number of members loan accounts you want CAPS to use as a test sample.
CAPS displays messages to let you know what it is doing. When finished it returns to the Interest menu.
- if you are not in Test Mode, CAPS prompts:

Program 'Loan Interest Audit' requires running overnight.
Confirm (Y/N)
Enter [Y] to add for overnight queue.
Enter [N] to cancel the request, and return to the Interest menu.

Result

CAPS will produce data in a file ready to be printed by the PRINT LOANS INTEREST menu option 4 below.

4. PRINT LOANS INTEREST AUDIT

This menu option allows you to print the results of the LOANS INTEREST AUDIT. CAPS will prompt you with:

< 1> Minimum dollar discrepancy
Enter the minimum discrepancy (in dollars) between the CAPS and the Financial Institution’s calculations for an account to be reported.

< 2> Minimum percentage discrepancy
Enter the minimum discrepancy (in percentage) between the CAPS and the Financial Institution’s calculations for an account to be reported.

< 3> Conditions requirement
Enter [B] if you require that both of the above conditions be satisfied for selection. Enter [E] if only one of the above (Either) conditions need be satisfied.

Once you have entered the parameters above, press [Enter] to continue:

Print Password
Enter your print password. No user can print a report unless they have their print password. The user will be given two opportunities to enter the correct password or CAPS will automatically shut down. This feature provides security to reduce the likelihood of unauthorised users gaining access to CAPS reports.

YOU MUST COLLECT THE PRINT OUT IMMEDIATELY!
DO NOT LEAVE AT THE PRINTER!

Result

CAPS uses the information from the Loans Interest Audit to print the following reports, examples of which are below:

Summary of interest calculation for each account level, for each period
Interest calculation summary by level, by rate
Loans interest discrepancies
Summary of interest discrepancies for each account level
Accounts with no client record
Accounts with interest rates outside a valid range

It is possible to suppress the generation of the Special Interest Rate report if desired by setting a flag in the default parameters - screen 2. This report will show any account where the applied interest rate during the audit period was outside the valid range you specified in the default parameters. Please refer to the example at the end of the chapter.

5. LOANS DISCREPENCY ENQUIRY

CAPS will allow you to display detailed information on accounts listed on the discrepancy report using the following screen:

Account No
Input the account number of the account for which you want the discrepancy checked. All other fields on the screen will be displayed by CAPS (ie. You are only required to input the Account Number)

Balance <1>
CAPS will display the balance of the account.

Security Code <2>
CAPS will display the security code for the account.

Purpose Code <3>
CAPS will display the purpose code for the account.

Total Interest Calculated <4>
CAPS will calculate and display the total interest that should have been charged.

Total Interest Charged <5>
CAPS will display the actual amount of interest charged to the account.

Offset <6>
CAPS will display 'Y' here if there was a loans offset account attached. Otherwise it will display a 'N'.

Interest Detail <7> (window)
CAPS will display the interest discrepancies for each period as follows :

Opening Balance
CAPS will display the opening balance for the period.

Rate Used
CAPS will display the rate used at the beginning of the period.

Interest Calculated
CAPS will display the interest calculated for that period.

Interest Charged
CAPS will display the interest charged for that period.

6. OVERDRAFT AUDIT PARAMETERS

The overdraft audit is designed to audit accounts that have an approved overdraft facility, as opposed to accounts that have become overdrawn.  This menu option allows you to adjust the parameters for the Overdraft Interest Audit.

6.1. Clear Overdraft Interest parameters

This function allows you to completely clear the Overdraft Interest parameters. This will mean you will be required to re-input the period dates, interest rates and exclusion levels. CAPS will not clear the default parameters. CAPS will check to make sure you have not chosen this option by mistake :

Are you sure you want to clear the Overdraft interest audit parameters?

Enter [N] to return to the Overdraft parameters menu with no change, or [Y] to clear all the Overdraft parameters. If you choose [Y] CAPS will display the fact that it is clearing the parameters and then return to the menu.

6.2. Edit Period Dates and other parameters

This function allows you to tell CAPS what the different loan interest rate periods are. CAPS prompts you to input the dates as follows:

<1> Ledger
Input the ledger (L,S or I) that you wish to audit. It is not possible to audit more than one ledger at a time although it is now possible to audit up to 100 different account levels within a single ledger.

<2> Start Day
Enter the Start Day for the audit period (inclusive). Use the following format: (dd/mm/yy)

<3> End Day
Enter the End day for the audit period (inclusive). Use the following format: (dd/mm/yy)

CAPS will look at all interest charges between the first and the last date you entered here.

NOTE: Do NOT attempt to audit a period longer than 1 year and 4 months.

<4> Balance Method
This controls whether to use opening or closing balance. The default for this is ‘O’ which mean use opening balance (The opening balance from the day after a charge to the day of the next charge). To using Closing balance set this to ‘C’

<5> Suppress Interest Discrepancy Report
Enter [Y] to suppress the Interest Discrepancy Report, [N] to create it. NOTE: If you enter [Y], run the audit and then enter [N] and print the report, a blank report will be returned.

<6>  Restrict audit to accounts with approved limit
Normally this will be ‘Y’ to only audit accounts that have an overdraft limit associated with it. Only accounts matching those specified in the “Account Levels to Include” will be audited.

<7> Special Interest Rate
Enter [A] if you want CAPS to use the Special Interest Rate (Non-Standard Rate) as recorded on the members account or [P] if you want to use the Special Rate(s) from your parameters.

<8> Field
Enter the location on file for the special interest rate (normally 11).

<9> Value
Enter the location on file for the special interest rate (normally 1).

<10> Sub-value
Enter the location on file for the special interest rate (normally 4).

<11> Create Special Rate Report
Enter [Y] to create the report which shows accounts outside the Special Interest Rate range, as defined in your parameters.

<12> Minimum Special Rate
The audit will report all interest rates less than the Minimum Special Interest Rate entered here.

<13> Maximum Special Rate
The audit will report all interest rates greater than the Maximum Special Interest Rate entered here.

<14> Suppress Over Limit Report
Enter 'Y' to Suppress the Overdraft Over the Limit Report or 'N' to create it.

<15> Suppress Changed Limit Report
Enter 'Y' to suppress the Overdraft Changed Limit Report or 'N' to create it. Note: You must have done an “Overdraft Limit Data Capture” before you can use this feature.

<16> Use 365 days
Enter any overdraft accounts which use 365 days only, even for leap years.

Interest Charge Codes

<17> Savings
Enter interest charge transaction codes used on Savings accounts.

<18> Loans
Enter interest charge transaction codes used on Loan accounts.

6.3. Edit Overdraft Interest Rates

Important Note: You do not need to enter interest rates if you specified “A” in the “Period Dates and other Parameters” screen, as CAPS will determine all the rates to be applied for the audit period. This function allows you to specify the exact interest rates and methods for each Overdraft account level. Do not try to use this function immediately after you have cleared the interest audit parameters as you must have first input the period dates. CAPS will now prompt you to indicate the Overdraft account level to be edited :

Which level of account do you want to input parameters for? (Return to end)

You may choose any level between 1 and 99. If you have finished editing simply press [Enter] and CAPS will return to the menu.

If you choose a level CAPS will display the following screen:

Level
This indicates which account level parameter you are currently editing. This is not an input field.

Key
This indicates which period within the level you are in. For instance Key 3 indicates that the information on the screen belongs to the third period.

< 1> Action
Enter the action required. The actions are as follows:
- [N] Display the Next period.
- [P] Display the Previous period.
- [Q] Quit the editor and return to level choice.
- [E] Edit the period currently displayed.
- [CP] Copy the data from the Previous period.
- [CN] Copy the data from the Next period.

< 2> Period Start

< 3> Period End
CAPS will skip these fields. In Overdraft it is not possible to insert Sub-periods, thus the period dates may not be adjusted. 

< 4> Basis
Enter the Overdraft interest Basis for this period. The possible options are:
[1] Flat (The same rate to all accounts regardless of the balance)
[2] Tiered on Whole Balance (One rate to the entire account balance depending on what the balance is)
[3] Tiered on each Portion of the Balance (Different Rates apply to each portion of the balance)

Tier
Enter the balance at which the following interest rates begin to apply. The first tier should always be 0.

Interest Rates to be supplied for each account, implemented by your main software supplier (CUSCAL/ULTRADATA). In the Overdraft audit there are four types of interest rate:

  • Under the Limit Standard: This is the rate applied if the balance is not over the account credit limit and the special interest rate field is not set.
  • Under the Limit Special Rate: This is the rate applied if the balance is under the account credit limit and they have a special interest rate.
  • Over the limit Standard: This is the rate applied if the account balance exceeds the account credit limit and the special interest rate field is not set.
  • Over the Limit Special Rate: This is the rate applied if the balance exceeds the account credit limit and they have a special interest rate.

6.4. Account Levels to Include

You must specify the account levels to include for the interest audit.

CAPS will only check the interest calculations for these account levels.

6.5. Display Overdraft Audit parameters to screen

CAPS will allow you to display the edited interest rate parameters to screen in a similar format to the Overdraft edit screens. Simply press [Enter] to continue viewing or [Q] to quit.

6.6. Display Overdraft Audit parameters to printer

CAPS will allow you to display the edited interest rate parameters on the printer in the same format as above. Please refer to the example at the end of the chapter.

6.7 Overdraft Limit Data Capture

This option records the current Overdraft limits to a file for later comparison.

NOTE: Do not perform a Data Capture in Test Mode. You achieve nothing and run the risk of overwriting an essential Data Capture with useless ‘test’.

7. OVERDRAFT AUDIT

This menu option allows you to run the Overdraft Interest Audit.

- if you are in Test Mode, CAPS prompts:

You are in test mode, do you want to start 'Overdraft Audit' now?
Enter [Y] if you want to perform a quick test run by checking interest calculations on only a small number of members loan accounts.
Enter [N] if you want to return to the Interest menu.
- if you answer [Y], CAPS prompts:

Do you want to process individual accounts?
- if you enter [Y], CAPS prompts:

Account to Process:
- if you enter [N] CAPS prompts:

Records to Process:
Enter the number of members loan accounts you want CAPS to use as a test sample.
CAPS displays the progress of the audit. When finished it returns to the Interest menu.
- if you are not in Test Mode, CAPS prompts:

 Do you want ‘Overdraft Audit’ submitted for over night running?
Confirm (Y/N)
Enter [Y] to add to overnight queue.
Enter [N] to cancel the request, and return to the Interest menu.

Result

CAPS will produce data in a file ready to be printed by the PRINT OVERDRAFT INTEREST Menu option.

8. PRINT OVERDRAFT INTEREST AUDIT

 This menu option allows you to print the results of the OVERDRAFT INTEREST AUDIT. CAPS will prompt you with :

< 1> Minimum dollar discrepancy
Enter the minimum discrepancy (in dollars) between the CAPS and the Financial Institution’s calculations for an account to be reported.

< 2> Minimum percentage discrepancy
Enter the minimum discrepancy (in percentage) between the CAPS and the Financial Institution’s calculations for an account to be reported.

< 3> Conditions requirement
Enter [B] if you require that both of the above conditions be satisfied for selection. Enter [E] if only one of the above (Either) conditions need be satisfied.
Once you have entered the parameters above, press [Enter] to continue:

Print Password
No-one can print these audit reports unless they know the password. Enter it if you know it. Note - to stop unauthorised people 'fiddling' with CAPS, you only get two chances. The CAPS automatically closes itself down.

CAPS displays messages to let you know what it is doing. When finished it returns to the menu.

COLLECT YOUR PRINTOUT IMMEDIATELY. DON'T LEAVE IT AT THE PRINTER!

Result
CAPS will print the results of the Overdraft Interest Audit.

Please refer to the example at the end of the chapter.

If you wish to compare the summary with the General Ledger figures please bear in mind that the figures here do not reflect first interest charges to accounts that opened during the period and do not reflect interest charges at the end of a cycle when the previous cycle incurred no interest. This is because both of the above cases have no interest charge for CAPS to use as a start point.

9. OVERDRAFT DISCREPANCY ENQUIRY

CAPS will allow you to view individual Overdraft discrepancies using the following screen:

Account Number
Enter the account number for which you wish to see the discrepancy details. Press the [Enter] key on a blank line to exit this screen.

Balance <1>
CAPS will display the current account balance here.

Total Interest Calculated <2>
CAPS displays the total interest that it calculated over the entire period.

Total Interest Charged <3>
CAPS displays the total interest that was actually charged during the entire period.

Interest Details <4> (window)
CAPS will display the interest details on each date interest was charged in the audit period:

Charge Date
CAPS will display the date the interest was charged.

Interest Calculated
CAPS will display the interest it calculated to this date.

Interest Charged
CAPS will display the interest that was actually charged this date.

Rate
The interest rate that CAPS used from the first day of the charge period.

Tiered On
CAPS will display the method used for the interest calculation; ‘Tiered on Whole Balance’, ‘Tiered on Portion of Balance’ or ‘Flat Rate’. Over-limit rate only applied to balances (or portion of balance) over the limit of the account. For ‘Tiered on Portion’, any portion of the balance which falls within a tier, will use that rate on that portion only.

10. SAVINGS INTEREST DATA CAPTURE

Some Financial Institutions only pay interest on member’s Savings accounts every six months, or every year. In the mean time they accrue interest in a memorandum field on each individual account. To check the accrual calculation for each savings account, CAPS needs the accruals opening balance. This menu option lets you make a 'Data Capture' of the accruals for each savings account.

CAPS can use the captured accrual position as a starting point to verify the current accrual. This is because it may be impossible to start at the month for which the current accrual calculation started, because the transactions may have been purged from the system. The other reason why the capture is used is to avoid auditing the same period (months) twice.

Generally, if Data Captures are required, you should perform your audit, check the results and run a Data Capture within the first few days of the month. When a savings account closes, the accrual is set to zero as the interest is credited to the member. If the Data Capture is left too late it will store zero accrual for these accounts. This will cause problems. For example when CAPS comes to verify six months worth of interest paid to an account that closed on the 16th of a month, it would add its 16 days of interest to the accrual figure which should represent around 5 months of interest. Instead, because the Data Capture was done late, the accrual from the Data Capture is zero and a savings interest discrepancy results.

An example of the use of the savings Data Capture is as follows: Let’s say you want to verify the current accrual which represents the last 5 months interest (Interest was last paid 5 months ago). If transactions have been purged off the system for the first three months, you will need to have done a Data Capture of the accrual at the start of the fourth month to use as your starting point. You should then enter periods for the remaining two months and answer ‘Yes’ to the question on the use of the Data Capture. CAPS will take the captured amount (interest accrued up to the end of the 3rd month if the process was done at the beginning of the fourth month) and add it to its calculation amount (interest for the remaining two months), and then compare with the five month figure on file. If there are discrepancies, they are reported.

Note - Do not perform Data Captures in Test Mode. You achieve nothing, and you run the risk of overwriting an essential Data Capture with useless 'test' data.

- if you are in Test Mode, CAPS prompts:

 You are in Test Mode, do you want to start 'Savings Interest Data  Capture' now (Y/N)
Enter [Y] if you want to do a quick test run for checking interest calculations on only a small number of member’s savings accounts.
Enter [N] if you want to return to the Interest menu.

- if you answer [Y], CAPS prompts:

How many records do you want to process?
Enter the number of savings accounts you want CAPS to use as a test sample.

CAPS displays the progress of this procedure. When completed it returns to the Interest menu.

- if you are not in Test Mode, CAPS asks:

Do you want ‘Savings Interest Data Capture’ submitted for overnight running? Confirm (Y/N)
Enter [Y] to add to overnight queue.
Enter [N] to cancel the request, and return to the Interest menu.

Result

CAPS sets up an instruction for 'Savings Interest Data Capture' to be run overnight under 'NIGHT AUDIT’. (See CAPS UTILITIES, Section 2 - NIGHT AUDIT for more details).
The results of running 'Savings Interest Data Capture' are stored in a file for use by CAPS.

11. DEFAULT SAVING INTEREST PARAMETERS

CAPS allows you to preset the standard calculation parameters. Once adjusted correctly to your institution these need not be touched again, unless the system changes. It is also possible to set CAPS to calculate interest on the closing daily balance (for daily accounts) instead of the opening balance using these parameters.

This is the screen for CUSCAL sites. ULTRADATA sites have an additional parameter <7> Fraction which is described below.

Effective Date (same period)
This allows you to define the effect of effective dated transactions. Enter [Y] to use the effective date, [N] to use the posting date.

< 1> Min Monthly
Define the effect of an effective dated transaction for minimum monthly balance accounts. If a transaction is effective dated to a date within the same month as the processing date, should it be used by CAPS or should CAPS use the processing date.

< 2> Daily
Define the effect of effective dated transaction for daily interest accounts. Enter ‘Y’ to use the effective date when it is within the same month as the processing date.

Effective Date (diff period)
This allows you to define the effect of an effective dated transaction that goes into a prior period. Enter [Y] to use effective date, [N] to use 1st date of the posting period.

< 3> Min Monthly
Define the effect of effective dated transaction for minimum monthly balance accounts. If you indicate [N] then CAPS will only bring the date back to the beginning of the month in which the processing date occurred, providing you have set field <1> to [Y].

< 4> Daily
Define the effect of effective dated transaction for daily rest accounts. If you indicate [N] then CAPS will only bring the date back to the beginning of the month in which the processing date occurred, providing you have set field <2> to [Y].

Minimum Monthly Accounts
These parameters allow you to define whether interest should be calculated for minimum monthly accounts in their opening and closing month.

< 5> Open
Enter [Y] to calculate interest for the opening month. Regardless of what you enter here, if the account is opened before the first day of grace for the month in which it is opened, interest will be calculated for that month (providing there are days of grace).

< 6> Close
Enter [Y] to calculate interest for the closing month. Regardless of what you enter here, if the account closes after the 'last' day of grace for the month in which it closes, interest will be calculated for a full month (providing there are days of grace).

The following parameter is for Ultracs only:

<7> Fraction
Enter [Y] if you want to use the number of days in a month instead of 1/12 of the annual rate for the interest calculation.

The following parameter numbers will increase by one for Ultracs sites.

< 7> Overdrawn Interest Transaction Code
Enter a code here (usually 63 or 64) if you are using the ‘Daily minus’ or ‘Monthly minus’ methods of interest calculation to audit overdrawn accounts (not for OVERDRAFT). Overdraft accounts should be audited using the Overdraft module.

< 8> Interest Adjustment Transaction Codes (window)
Enter the transaction codes for interest adjustment transactions.
This is the second default parameters screen for FCS. The parameter numbers will vary slightly for Ultracs sites:

<9> Minimum Special Rate
The audit will report all interest rates less than the Minimum
Special Interest Rate. Enter the minimum special interest rate

<10> Maximum Special Rate
The audit will report all interest rates greater than the Maximum
Special Interest Rate. Enter the maximum Special Interest Rate.

<11> Savings Special Rate
Enter [Y] if you want CAPS to use the interest rate on file for all accounts. If you enter ‘Y’ here, you do not need to enter any interest rate information in CAPS for the Savings Audit. Enter[N] if you want to use the rates from your parameters.

<12> Create Special Rate Report
Enter [Y] to generate data for the report which shows accounts whose interest rate was outside the valid range as defined by your Min/Max parameters.

<13> Savings Account use Open/Close
Enter ‘O’ to have CAPS use the opening balance or ‘C’ for closing balance for each day of the audit period.

<14> Suppress Interest Discrepancy Report
Enter [Y] to suppress the Interest Discrepancy Report, [N] to create it. NOTE: If you enter [Y], run the audit and then enter [N] and print the report, a blank report will be returned.

12. SAVINGS INTEREST PARAMETERS

This menu option allows you to adjust the parameters for the Savings Interest Audit. On entering the parameters menu CAPS will determine if the period dates have yet been input. If not, CAPS will move immediately to the Period Dates input screen (The parameters menu is displayed below). If the Period Dates have previously been input, CAPS will move you to the parameters menu as follows:

12.1 Clear Savings Interest parameters

This function allows you to completely clear the Savings Interest parameters. This will mean you will be required to re-input the period dates, interest rates and exclusion levels. However CAPS will not clear the default parameters. CAPS will check to make sure you have not chosen this option by mistake:

Are you sure you want to clear the savings interest audit parameters?

Enter [N] to return to the Savings parameters menu with no change, or [Y] to clear all the Savings parameters. If you choose [Y] CAPS will display the fact that it is clearing the parameters and then return to the menu.

12.2. Edit Period Dates

Most Important: The final date of the audit period must be the date of the current accrual. Usually this will be the last day of the previous month. And the first date must either be the day after interest was paid to the account or the 1st  of the month in which the Data Capture was performed. For example, if the Data Capture was done on the 5th of April, your Start Day for the first period would be 01 April.  This is because the accrual amounts in the Data Capture will be from the 31 March, and you need to follow on from the next day after the Capture. So, if the current month is November, you cannot simply audit the previous two months. The starting period must be either from an interest payment or from the 1st day of the month of the Data Capture.

This function allows you to tell CAPS what the different loan interest rate periods are. CAPS prompts you to input the dates as follows:

If the period dates have been previously input and not cleared CAPS will only allow you to view these dates without editing. If you wish to input new dates first use function 1 Clear Savings Interest parameters.

< 1> Date Parameters (window)

Period Dates

Start Day
Enter the first day of the period (inclusive). The following format is required (dd/mm/yy)

End Day
Enter the last day of the period (inclusive). The following format is required (dd/mm/yy)

WARNING: Do not attempt to audit a period longer than one year and four months.

You must enter full month periods here. If there are interest rate changes part of the way through a month the place to indicate that fact is in the edit interest rates. Please refer to section 12.3 to find how to indicate an interest rate change mid month.

Days of Grace

Start Day
If the savings account interest is calculated on a 'minimum monthly balance', then enter the final date on which the Financial Institution will accept a deposit and still pay interest on it for the full month. Enter the date in the form (dd/mm/yy)

Or press [Enter] if there are no days of grace allowed,

End Day
If the savings account interest is calculated on a 'minimum monthly balance', then enter the earliest date on which the Financial Institution will accept a withdrawal and still pay interest on that amount for the full month. Enter the date in the form (dd/mm/yy).

Press [Enter] only if no end day of grace.

You may notice that CAPS automatically inserts the Start Day from the second period onwards. This is to ensure that each Start Day is the day after the last End Day. When you have input all the period dates press [\] in the Start Day position of the latest field, to remove the inserted date. Then press RETURN to exit from the window. Now you can either press [1] to re-edit the dates or RETURN to accept. Once you accept a set of new dates CAPS will display a message before returning to the menu:

Building period information, please wait

This indicates CAPS is producing special data structures which will be used next in the Edit Interest Rates function.

12.3. Edit Savings Interest Rates

Important Note: You do not need to enter any rate information if you specified ‘Y’ for ‘Savings Special Rate’ in the default parameters. In this case, CAPS will use all the applicable rates for the account during the audit period.

This function allows you to specify the exact interest rates and methods for each Savings account level. Do not try to use this function immediately after you have cleared the interest audit parameters as you must have first input the period dates. CAPS will now ask you:

Which level of account do you want to input parameters for ? (Return to end)

Indicate the Savings account level to be edited.

You may choose any level between 1 and 99. If you have finished editing simply press [Enter] and CAPS will return to the menu.

If you choose a level CAPS will display the following screen:

Level
This shows you which account level you are editing. This is not an input field.

Key
This shows you the current period and sub-period. For instance Key 3.2 indicates that the information on the screen belongs to the second sub-period of the third period.

< 1> Action

Enter the action required. The actions are as follows
- [N] Display the Next period.
- [P] Display the Previous period.
- [Q] Quit the editor and return to level choice.
- [E] Edit the information currently displayed.
- [D] Delete the current sub-period.
- [CP] Copy the data from the Previous period.
- [CN] Copy the data from the Next period.

<2 > Period Start

Enter the first day (inclusive) of the interest (sub-) period.

After setting the Period dates CAPS will set up the main periods each consisting of one single sub-period. You will need to specify a sub-period whenever there is a rate change. You can insert more sub-periods simply by moving the Period Start forward or the Period End backward. If you do this, CAPS will automatically set a new sub-period to cover the days in between. You may have as many sub-periods per period as there are days in the period (ie. Sub-periods may be one day long). To save input time CAPS provides you with the [CP] and [CN] functions to copy the period information from the previous and next periods respectively.

CAPS will not allow you to move a sub-period Period Start day back past the beginning of the main period. Conversely you are not allowed to move a Period End day forward past the end of a period. If you move a sub-period Period Start or Period End that are not already on the limits of the main period, CAPS will not insert a new period. Instead CAPS will drag along the relevant Period Start or End of the neighbouring sub-period.

< 3> Period End

Enter the last day (inclusive) of the interest (sub-) period.

< 4> Method

Enter the Savings interest method required. The methods are :
- [1] Daily Plus
- [2] Daily Minus
- [3] Min. Monthly Plus
- [4] Min. Monthly Minus

The Minus methods above both take overdrawn interest into account. The minimum interest calculated (after subtracting overdrawn interest) is zero (i.e. no interest charges). To audit overdraft charges use the Overdraft Audit.

< 5> Base

Enter the interest base required. They are:

- [1] Flat
- [2] Tiered on whole balance.
- [3] Tiered on portion of balance.

< 6> Overdrawn Method

Enter the Overdrawn Method required. When the savings interest Calculation Method is set to 'plus' (eg, Daily Plus) the Overdrawn Method must be set to Nil. If the Calculation Method is set to 'minus' (eg, Daily minus) then the Overdrawn Method must not be Nil. This is because the 'minus' Methods offset the savings interest and so an Overdrawn Method is required. Please bear in mind that these overdrawn calculations are not for accounts which have an official overdraft facility. Accounts with an official overdraft facility should be audited using the Overdraft Interest Audit.

The options for the overdrawn method are:
- [1] Daily
- [2] Monthly
- [3] Nil

< 7> Overdrawn Rate

Enter the overdrawn rate as a percentage (eg. 14.5) 

< 8> Interest rate (window)

Tier
Enter the tier as an amount of money. Any amount from the current tier amount to the next tier amount is subject to the current tiers corresponding interest rate. The first tier must be zero (0). For account levels using the flat rate method there will be only one tier. For multi-tier method the account balance (or part balance) must be larger (not equal or larger) than the tier balance to attract the corresponding rate.

Interest Rate
Enter here the interest rate for the relevant tier.

How CAPS determines which rate to use.

There are a number of factors involved in determining which rate the Savings Interest audit actually uses. When you initially set your period dates CAPS attempts to locate the corresponding interest rates from backups it keeps of the rates you set for the same months in previous audits. If you have entered a month that you have not audited previously then CAPS will extract the current rate from the Financial Institution’s files. Bear in mind that these current rates may not apply to all your periods. You are then free to edit these rates in the above Savings Rate Changes screen.

You then have the option of overriding these rates with each account’s Special Interest Rate. CAPS allows you to set a flag in the Default Savings Parameters screen that will make CAPS use the applicable interest rate set individually on each account. This will override the parameters set above.

12.4. Account Levels to exclude

CAPS will allow you to indicate the savings account levels to exclude from the interest audit as follows:

12.5. Display Savings Audit parameters to screen

CAPS will allow you to display the edited interest rate parameters to screen in a similar format to the Savings edit screens. Simply enter [Enter] to continue looking or [Q] to quit.

12.6. Display Savings Audit parameters to printer

CAPS will allow you to display the edited interest rate parameters on the printer in the same format as above. Please refer to the example at the end of the chapter.

13. SAVINGS INTEREST AUDIT

Once you have completed the parameters in Menu option 10, CAPS will allow you to perform the Savings Interest Audit. It is possible to set a flag to prevent the Special Interest Rate report from being generated in the default parameters (screen 2). There are a number of prompts that you must answer when you initiate the Savings Interest Audit:

Would you like to have the reports generated in account level order?
Enter [Y] if you would or [N] if you would not.
-CAPS will then prompt:

Is the Data Capture file needed for this audit?
Enter [Y] if you want it used or [N] if not.
-CAPS will then prompt:

Do you wish to ignore the credit interest accrual on file?
If you are auditing up to an interest payment (set in your period date parameters) and your client has accrued interest (either a weekly or a monthly accrual) since that payment then you will want to ignore the current positive accrual by entering a [Y] in response to this question above. Otherwise enter [N].

CAPS then prompts:

Do you wish to ignore the debit interest accrual on file?
Answer either [Y] or [N] according to the same criteria used above.
- If you are in Test Mode, CAPS will prompt:

You are in Test Mode, do you want to start 'Savings Interest Audit' now (Y/N)
Enter [Y] if you want to do a quick test run by checking interest calculations on only a small number of member’s savings accounts.
Enter [N] if you want to return to the Interest menu.

    • if you answer [Y], CAPS prompt:

Do you want to process individual accounts?
Type ‘Y’ to enter specific accounts to audit. Type ‘N’ to jump to the next prompt. If you typed ‘Y’ you will be prompted for each account to audit. Press [Enter] on a blank line to finish.

- If you answered ‘N’ to the above, you will be prompted:

How many records do you want to process?
Enter the number of member’s savings accounts you want CAPS to use as a test sample.

CAPS displays the progress of the Savings Interest audit. When complete, it returns to the Interest menu.
- If you are in Live Mode, CAPS prompts:

Do you want ‘Savings Interest Audit’ submitted for overnight running?
Confirm (Y/N)
Enter [Y] to add to the overnight queue.
Enter [N] to cancel the request, and return to the Interest menu.

Result

CAPS will produce data in a file ready to be printed by the PRINT SAVINGS INTEREST Menu option.

14. PRINT SAVINGS INTEREST AUDIT

This menu option allows you to print the results of the SAVINGS INTEREST AUDIT. CAPS will prompt you with :

Because of calculation rounding differences the interest calculated by CAPS is likely to differ slightly from the interest posted by the Financial Institution. To stop CAPS printing every account it lets you enter filter out discrepancies. CAPS will not print an account if its discrepancy is less than the amounts you enter.

< 1> Minimum dollar discrepancy

Enter the minimum discrepancy (in dollars) between the CAPS and the Financial Institution’s calculations for an account to be reported.

<2> Minimum percentage discrepancy

Enter the minimum discrepancy (in percentage) between the CAPS and the Financial Institution’s calculations for an account to be reported.

<3> Conditions requirement

Enter [B] if you require that both of the above conditions be satisfied for selection. Enter [E] if only one of the above (Either) conditions need be satisfied.

Once you have entered the parameters above, press [Enter] to continue:

Print Password

Enter your print password. No user can print a report unless they have their print password. The user will be given two opportunities to enter the correct password or CAPS will automatically shut down. This feature provides security to reduce the likelihood of unauthorised users gaining access to CAPS reports.

YOU MUST COLLECT THE PRINT OUT IMMEDIATELY !
DO NOT LEAVE AT THE PRINTER !

Result

CAPS uses the information from the Savings Interest Audit to produce the following reports, examples of which are below:

    • Saving interest exceptions
    • Accounts with no client record
    • Accounts with special rates
    • Summary of interest audit

It is possible to suppress the generation of the Special Interest Rate report by setting a flag in the default parameters screen 2.

If you wish to compare the summary to General Ledger figures, bear in mind that this summary includes interest paid out to accounts closed during the audit period. The General Ledger figures usually only show the current accrual and do not reflect interest paid out.

Please refer to the example at the end of the chapter.

15. SAVINGS DISCREPANCY ENQUIRY

CAPS allows you to enquire on individual Savings interest discrepancies. CAPS will display the discrepancy information after you type in the relevant account number. If the account did not produce a discrepancy CAPS will inform you that it cannot be found. The screen is as follows :

<Enter> to proceed, 'EX' to cancel, or prompt# to change

Account Number
Enter an account number to show discrepancy details for each audit period. If the account you enter has no discrepancy, nothing is displayed. To return to the Interest menu simply press [Enter] on a blank line.

Balance
CAPS will display the current account balance.

Total Interest calculated
CAPS will display the total interest that it calculated for the entire audit period.

Total Interest Paid
CAPS will display the actual amount of interest paid for the entire audit period.

Open Accrual
CAPS will display the opening accrual.

Current Accrual
CAPS will display the current accrual.

Interest Details
Interest (window)

CAPS will display the period number, interest rate used, interest calculated, interest paid and interest calculation basis for each period.

16. SAVINGS BONUS PARAMETERS

This is an optional module that allows you to audit these special Savings accounts that earn bonus interest at a higher rate when the member meets certain criteria.

Levels
Enter the account levels to be audited using the Savings Bonus audit.

From date
Enter the starting date for each month to audit. Press [Enter] on a blank line to signal the end of date entry.

To date
Enter the ending date for each month to audit.

Debit exempt codes
Enter any additional Debit transaction codes that are exempt from the criteria that would cause a failure to earn Bonus interest. The standard codes are those defined by your system.

Ledger
Enter the applicable ledger for the accounts to be audited, either ‘S’ or ‘L’.

Balance Method
Indicate whether CAPS is to use the Opening daily balance or the Closing daily balance for interest calculation (‘O’ or ‘C’).

Report sort order
Indicate how you wish the report data to be sorted, either by Member number or by account Level (‘M’ or ‘L’).

Each input line of the following 10 prompts is associated with the level you specified at the “Levels” prompt above. This allows for different criteria for earning Bonus Interest for different levels.

Code (Interest Transaction)
Enter the Interest Transaction Code that is used to pay interest to the member’s account. Each line within this input window relates to the account levels you intend to audit as entered at the “Levels” prompt.

F.I. Frequency (interest paid)
Enter the frequency code to indicate the frequency that the Financial Institution pays interest to the member’s account (W, F, 4, M, Q, H, Y, A).

Minimum Bal
Enter the minimum balance that the member must maintain in order to attract Bonus Interest (whole dollars).

Member Frequency (action)
Enter the code to indicate the action frequency that the member must take in order to attract Bonus Interest (eg: Must deposit the “Minimum dollar Credits” amount into their account at this frequency). Possible codes are the same as for FI Frequency.

Minimum number Credits
Enter the minimum number of times a member must make Credit transfers to their account at the required frequency in order to attract Bonus Interest.

Minimum dollar Credits
Enter the minimum dollar amount (whole dollars) a member must make Credit transfers to their account at the required frequency in order to attract Bonus Interest.

Maximum number Debits
Enter the maximum number of Debit transfers a member may make from their account before they will fail to earn Bonus Interest.

Standard Rate
Normally this is left blank to use the interest rates on file for this account level. If you enter a rate here, this one rate will apply across all accounts of this level for the entire audit period.

Bonus Rate
Normally this is left blank to use the interest rates on file for this account level. If you enter a rate here, this one rate will apply across all accounts of this level for the entire audit period.

Fail Rate
This is the rate that will be applied if the member fails on the Bonus Interest criteria. Normally this is left blank to use the interest rates on file for this account level. If you enter a rate here, this one rate will apply across all accounts of this level for the entire audit period.

17. SAVINGS BONUS AUDIT

This audit may be run in Live Mode or in Test Mode (set via System Utilities / Control Parameters). If run in Live Mode, it will be queued in Night Audit with any other audits you have setup to run. You must use Night Audit to actually run the audits.

If you are in Test Mode, you may run against a sample of accounts or a series of specific accounts (entered one at a time).

This process will only audit accounts that match the level(s) you specified in the “Levels” prompt of the Savings Bonus Parameters. Any discrepancies in interest calculations will be recorded in a file. To print this report, use menu option 18.

18. SAVINGS BONUS PRINT

Enter the print password to print this report. See the end of this chapter for a sample report.

19. SAVINGS BONUS DISCREPANCY ENQUIRY

CAPS will allow you to display detailed information on accounts listed on the discrepancy report, using the following screen. Enter the account number and CAPS fills in the remaining portions of the screen.

20. CLEAR INTEREST AUDIT FILES

This allows you clear all files relating to the interest audit.

CAPS, prompts:

Are you sure you want to clear all interest audit files?

This is just a warning and a check to make sure you really know what you are doing. If you answer [Y], CAPS immediately clears all interest audit files. They cannot be regained. If you answer [N] CAPS returns you to the Interest menu without doing anything.

Note - this does not clear the Savings Interest Data Capture file, the Overdraft Limit Data Capture, nor any parameter/rate information.

Result

The following files are irretrievably cleared:
Loan interest discrepancies
Loan Accounts with invalid rates
Saving interest discrepancies
Savings Accounts with invalid rates
Accounts with no client record
Summary of interest audit
Savings Bonus discrepancies