VERIFY THE DIVIDEND CONFIGURATION VALUES
The first step is to review the dividend configuration for each Dividend Application needing a regeneration. There is a Tool, Tool #680: Print Share Dividend Appl Config Report, that will give you the necessary information.
Start Date – This value represents the last time dividends were posted to member records. The dividend regeneration program uses this date + 1 to begin the calculation process. In many cases this date equals the date dividends were last accrued. However, credit unions can elect to pay dividends in Beginning of Day on the next processing day. If the Start Date is not equal to the Last End-of-Day date (which is when the last daily accrual was performed), it needs to be updated to that date.
Example – A credit union pays a Simple Daily dividend that posts monthly on the 1st of the following month. The START DATE will be on the 1st and the last dividend accrued date would be the last day of the month. In this case, the Start Date would need to be updated to the last day of the preceding month for the regeneration, then maintained back to the 1st when the regeneration is completed.
PERFORMING THE DIVIDEND REGENERATION
The menu option is located on OPER > 7 > 4 Share Dividend Regeneration. The following selections are available:
- Individual Share Dividend Type – This is the most commonly used selection. Enter each Dividend Application Code needed.
- All Share Types – The system will perform the regeneration on ALL Dividend Application Type Codes
- Individual Member Account – this selection is generally used for testing situations.
**The “TIS Information Regeneration” options are not used.
REVIEWING THE REPORT
There are two reports generated for each Dividend Application – PREGAR1 and PREGAR2. Place both of these spool files on a SAVE Status. You will need to print some of the pages, without losing the spool file. SAVE(*YES)
Share Account Type Dividend Regeneration Report – PREGAR1
The heading shows the Dividend Application Type, the Calculation Start Date, the Calculation End Date, the Base Rate of the dividend configuration, and the Dividend Compounding Frequency
Each member account is listed showing the previous accrued amount and the new accrued amount, the current balance and the minimal balance. Because the Dividend Regeneration includes the current day, the new accrued amount will always be higher than the previous amount, even if the dividend rate decreased.
What you are looking for on this report is that the amounts changed for each member. It also delivers the totals of both of these columns. The net of these two totals will be the General Ledger entry that interfaces in End of Day.
Share Account Type Dividend Regeneration Transaction Register – PREGAR2
The heading shows the same parameters as PREGAR1.
This report shows the number of days, the math of each calculation, the computed accrual value and the accumulated accrual value and the number of days in the calendar year.
KEY POINTS TO VERIFY
- Is the number of days for the current dividend period accurate?
- Is the number of days in the calendar year accurate?
- Are the dividend rates accurate?
- Do they change for split rate situations? Consider the Plateau flag
- Is the Minimum Balance to Earn accurate?
- Manually calculate the dividend accrual for:
- USE THE SAME CALCULATION THE PROGRAM USES! You can find these in the on-line help documentation. Search for “Dividend Calculation Methods”. (There is an Excel spreadsheet called Dividend Verification TEMPLATE for Compound.xls located in S://Client Services/CSR Department Internal Forms/to help verify the compound daily method.)
- Accounts with transactions
- Accounts without transactions
- Accounts with a minimum-balance exclusion for a partial time in div period.
- For split rates, account with multiple rates
- Review the member inquiry found for Dividend calculation for the accounts you manually verified (Cmd 11) in a suffix detail screen found through Member Inquiry (Cmd 1). The “Computed Accrual” should match the “Current Accrual” in this view.
- Document your calculations and the account number used for your verification. Keep both sets of reports in your OUTQ until member statements have been sent.
General Ledger Interface
In the next processing day (after end of day has processed for the day you performed the regen and Beg-of-Day has processed for the next date), verify that the accrual general ledger numbers are in balance with the member records using Tool #877: Trial Balance GL Verification. Report any out-of-balance conditions resulting from the dividend regeneration to your Supervisor immediately.
SPECIAL YEAR-END CONSIDERATIONS
Because dividends paid are critical to accurate tax reporting both to members on their Annual Statements and to the IRS, dual verification is required for dividend re generations performed in the month of December of each year. The second verifier will use different member accounts that satisfy the Key Points for their verification.