It hasn't been explained yet, even in the manga. It's possible that they replace a genin who passes with the top academy student. It's also possible that after they take the exam, the teams that particapated are disbanded completly, and the genin have to form teams and find a jounin willing to sponser them on their own for the next chunin exam. Most likely, since they seem to want balanced teams, the current teams that are intact remain, and the others are disbanded and the genin on them are assigned to new teams.
As of chapter 196 of the manga,
Not much of a spoiler, but better to be safe.