I have a base file FILE1 with the following data

FILE1.dat
21111111110001343 000001004OLF 029100020091112
21111111110000060 000001004ODL-CH001000020091112
22222222220000780 000001013OLF 006500020091112
23333333330001695 000001039OLF 030600020091112
23333333330000111 000001039ODL-SP002000020091112
23333333330000060 000001039ODL-CH001000020091112
24444444440001416 000001045OLF 011800020091112
......
......
..etc
i want to write a program in .KSH that the FILE2.dat should have only 4 records like below appending two new columns spouse_col & child_col at the end of each line remember this should be in while read line do loop
ODL-Ch = child_col ,
ODL-Sp = spouse_col

FILE2.DAT
spouse_col child_col
21111111110001343 000001004OLF 029100020091112 0000000 0000060
22222222220000780 000001013OLF 006500020091112 0000000 0000000
23333333330001695 000001039OLF 030600020091112 0000111 0000060
24444444440001416 000001045OLF 011800020091112 0000000 0000000

write now i am doing like this but

while read line 
 do
rec_no=`echo $line|cut -c2-10`
ben_type=`echo $line|cut -c28-33`
amount=`echo $line|cut -c11-18`
if [[ $rec_cnt -eq 1 ]]
then
     prior_rec_no=$rec_no
     prev_line=$line
else
    if [[ $rec_no -eq $prior_rec_no ]]
    then

           if [[ $ben_type =  "ODL-SP" ]]
               then
               spouse_amt=$amount
               prev_line="$prev_line  $spouse_amt"

           elif  [[ $ben_type = "ODL-CH" ]]
                then
	       child_amt=$amount
               prev_line="$prev_line  $child_amt"
           fi
    else
        echo $prev_line >>  FILE2.DAT
        prev_line=$line
	prior_rec_no=$rec_no
    fi
     spouse_amt=""
     child_amt=""
fi 
(( rec_cnt=rec_cnt + 1 )) 
  prior_rec_no=$rec_no
done <FILE1.DAT

Your script seems a bit complicated as your explanations. I don't really understand what you want to do.
Why not use 'join' which seems to me a good tool for doing such a job.
join

This is how I would do it in ksh:

#!/bin/ksh
echo|cat FILE1.DAT -|while read line; do
  case ${line:27:6} in
    ODL-SP) spouse=${line:10:7} ;;
    ODL-CH) child=${line:10:7} ;;
    *)  if [[ -n $prev ]]; then
          print $prev $spouse $child
        fi
        prev=$line
        spouse="0000000"
        child="0000000"   ;;
  esac
done > FILE2.DAT

$> cat FILE2.DAT
21111111110001343 000001004OLF 029100020091112 0000000 0000060
22222222220000780 000001013OLF 006500020091112 0000000 0000000
23333333330001695 000001039OLF 030600020091112 0000111 0000060
24444444440001416 000001045OLF 011800020091112 0000000 0000000