Letter of Credit (LOC)

Overview

When creating Letter of Credit Invoices, you have two options -

• Select each Award individually using the Letter of Credit Fund, or
• Select a grouping of Awards using Letter of Credit Fund Group.
• Following is a table with examples of how you might set up the Letter of Fund Group Codes based on the responsibilities within your organization. 

Responsible For:	Letter of Fund Group Code
Two teams responsible for specific Agencies	NSF - Team 1 NSF - Team 2 NIH - Team 1 NIH - Team 2 etc.
Two teams responsible for specific Awards	Team 1 Team 2

The Process

Step 1: Create the Letter of Credit Fund Group Codes

Step 2: Create Letter of Credit Funds for each Award - Assign A LOC Fund Group Code to each one

Step 3: Associate the Award with the appropriate Letter of Credit Fund

Step 4: Prep data to facilitate running the LetterofCredit batch job

The letterOfCreditJob will create Cash Controls and Payment Applications to apply payment to LOC Invoices. Letter of Credit Invoices are created, but are not sent to the granting sponsor. They also are also paid that night with the letterOfCredit batch job. The letterOfCredit batch job creates a Cash Control and Payment Application documents to process the payment. The Cash Control document routes for approval. Once the payments are confirmed, the Cash Control is approved. 

• The following parameters need to be updated with a valid Processing Chart and Organization, set up in the System Information table.
  • PROCESSING_CHART
  • PROCESSING_ORGANIZATION
• Payment Medium WT - Wire Transfer must be active. When the Cash Control is created, the payment medium used is WT. 

Step 5: Create Invoices

The Contracts & Grants LOC Review is used to review draw amounts for letter of credit awards, prior to creating Contracts & Grants invoices and payment transactions for those awards.

When you select Contracts & Grants Letter of Credit Review from the menu, the system displays the Contracts & Grants LOC Review Initiation tab.

 

Select either the Letter of Credit Fund Group or the Letter of Credit Fund. 

Click Continue to open the Contracts & Grants Letter of Credit Review document. The two tabs unique to this document are the General tab and the Award Accounts tab. 

General Tab

The General tab displays the Letter of Credit Fund Group or Letter of Credit Fund Group Code that was selected on the initiation screen. 

Award Tab

The Award tab displays information about the LOC awards that are associated with the selected Letter of Credit Fund Group or Letter of Fund Group Code. The only editable fields are the Claim on Cash Balance. Click the "show" button to display this field. 

The Claim on Cash Balance is equal to the amount of expenses that have posted to the account less any invoices that have been previously billed. The Amount To Draw can be reduced and the recalcluate button will update the Funds Not Drawn to reflect the difference between Claim on Cash Balance and Amount to Draw. If the Amount to Draw exceeds the Claim on Cash Balance, a warning is presented. Clicking past the warning will add a note to the Letter or Credit Review document. 

The Awards can be exported into a spreadsheet and can be printed using the Export and Print buttons. 

Export

Print

Submit creates Contracts & Grants Invoices. If the Awards are set to Auto Approve and there are no Suspension categories, the invoices will go to Final. Otherwise, they will route to the Fund Managers for resolution. 

Post Processing

The letterOfCreditJob will create a Cash Control and Payment Applications for all Final LOC invoices. The Cash Control routes for approval and is approved once the LOC deposit has posted to the bank. Bank offsets are created if the bank offset functionality is turned on. 

Letter of Credit Draw Report

Allows you to search for or print two reports pertaining to letter of credit draws.

The Report Type toggle is used by the Print button to determine which report to generate:

• The Amounts Not Drawn Report displays Letter of Credit Review documents where the amount drawn was drew less than the full amount available to draw.
• The Detail Report displays all Letter of Credit Review documents.

Enter the appropriate filters.

• Click Search to view the matching results, export to spreadsheet if desired.
• Select a Report Type and click Print to create a pdf report of the matching results.