Copyright 2002: LIIF LIIF Fund Processing Workflows The following document is posted by the Low...

Copyright 2002: LIIF

LIIF Fund Processing Workflows

The following document is posted by the Low Income Investment Fund (LIIF) in accordance with the requirements of the Fannie Mae Foundation’s October 2001 grant in support of LIIF’s continued information technology (IT) development. Materials posted by LIIF outline the organization’s strategic IT plan, as well as document the implementation process of this plan. LIIF’s IT plan included customization of loan servicing software, report automation, impact statistics generation, fund administration, and asset liability monitoring. LIIF’s knowledge and experience developing this IT workplan is posted as an aid to other non-profit Community Development Financial Institutions (CDFIs) who may be generating their own IT workplan and who may find the subsequent materials helpful in that regard.

$ $$

Lending

$$

Development

Finance Administration

Management

Support

Borrower MarketingUnderwritingLoan ApprovalsCommitment/ClosingCollateral TrackingPayment CollectionsProject MonitoringRisk AnalysisStatistics Tracking

FundraisingInvestor RelationsProposal WritingFunder ReportingCovenant Tracking

Cash ManagementG/L AccountingBudget PlanningCompliance

Technical Assistance

Provider OutreachEligibility ScoringGrant ApprovalsMonitoringStatistics Tracking

TA MarketingConsulting/TrainingContract AdministrationStatistics Tracking

Contact ManagementOffice ManagementHuman ResourcesAdministrative Support

Information Technology

System AdministrationSoftware DevelopmentUser Training

Management

Business PlanningOrganization StructureWorkflow Control

LIHF CORE BUSINESS FUNCTIONS

Program Activities Funding

$ $$

Grant Making


$ $$

Lending

$$

Development

Finance

$ $$

Grant Making

Technical Assistance

Contact Management

Administration

Program Operations

Lending Operations

Project Statistics

General Ledger

Capital Allocation

Funding Operations

TARGET APPLICATION ARCHITECTURE

Nortridge Lending System

Custom Application

Application Key

MIP General Ledger



Narratives & Statistics

FundingOperations

ProgramOperations

(Active & History)

Funding

RLF Loans & Packages

Clients, Funders, Vendors, Other Contacts

Investor Loans & Grants

Program Grants & TA

ProjectData

(Active & History)

CapitalAllocation

Client-Funder Operation Matching

LendingOperations

(Active & History)

Replication: Records copied to one or more separate databases; changes permitted only in database of origin.

Linking: Single copy of records held in one database with references to records stored in one or more separate databases.

Export: Summary transaction information exported to external file and detail records marked as closed.

DATABASE INTEGRATION ARCHITECTURE

Programs

ContactManagement

Strategies to manage data redundancy:

G/L Interface

G/L Interface

G/L Interface


Funder Operations Client Operations

FUNDER – CLIENT OPERATIONS INTERFACE

ProjectsFunders

RLFGrants & Loans

ProgramGrants

Loans

Grants

FundingPools

Capital Allocation

Operations matched

dynamically by restrictions

Operations assigned

manually by staff


$

Funder

Management

$$

Development $

Funder

$$

Development $

Funder

Finance

3. Development writes formal proposal for capital or administrative funding

4. Funder approves proposal and sends Loan/Grant Agreement

1. Management oversees investor relations and prospects funding opportunities

5. Development returns signed agreement and sends thank you letter

Funding Operations Overview

Fundraising

6. Funder sends cash payments and executed documents

2. Funder indicates commitment level, funding terms and budget constraints


Finance

1. Finance enters loan and grant operations from executed documents NLS

FundingOperations

2. System generates principal advances and interest accruals

3. Finance enters payments and restriction release transactions

4. G/L Interface process summarizes detail transactions

5. G/L Interface process creates journal entry batch file

NLS/MIPGeneral Ledger

Interface

6. Finance imports journals into MIP and posts to G/L accounts

MIPG/L

JE File


Funder Accounting

NLSFunding

OperationsFinance


$$

Development

$

Funder

2. Development gathers consolidated organizational data

1. System generates notice of pending Funder Report

LIHF Data Sources

3. Development builds report based on funder requirements

5. Development logs report submission in database


Funder Reporting

..

$$

Development4. Development transmits completed report to Funder

NLSFunding

Ops.

NLSFunding

Ops.


$$

Development

$

Funder

1. Management provides qualified funding opportunityorSystem generates notice of loan maturity or grant renewal

3. Development gathers data and writes proposal

4. Development sends proposal to Funder

5. Funder returns proposal acceptance

NLSFunding

Operations

Management

Status: PROSPECT Status: PROPOSAL Status: APPROVED

Fundraising Work Flow

1 – Proposal Submission

Proposal Folder

2. Development reviews funding history and opens new proposal folder

Proposal Proposal√


$$

Development

$

Funder

1. Funder sends Loan / Grant Agreement

Fundraising Work Flow

2 – Operation Closing

$

Funder2. Development returns signed documents and sends thank you letter

NLSFunding

Ops.

3. Development saves important documents

Finance

4. Funder sends cash payments and executed documents

5. Finance creates loan/grant operation and records fund use restrictions and reporting cycle

Status: EXECUTEDProposal Folder

Proposal√ $

MICROSOFT CORPORATION

Agreement

ReportForm

Correspondence

1. Geographic Area2. Purpose3. Sector4. Target Population5. Time Period

Restrictions


Funder Accounting – Cash Processing

Receipts and Disbursements

Finance

Finance records cash deposit/funds transfer

Debit Account$999,999 01-1080 or 01-1065

Bank Account (RLF/CCFF)

Credit Account<$999,999> 01-XXXX

Funder Cash Clearing

G/L Transactions

Pay to $

System generates G/L transactions

MIP Accounting System

A/P Module

G/L Module Finance

Finance enters funder billing/scheduled payment

Pay to $

Cash from Funder Cash to Funder

Debit Account$999,999 01-XXXX


Credit Account<$999,999> 01-1010

Concentration Account

G/L Transactions


Funder Accounting – RLF Loans

1 – New Loan Setup

Finance

Funding Operations Database

Funder Bank of AmericaLoan Number 12345Loan Amount $500,000Interest Rate 4%Maturity Date 02/10/05Current Principal $500,000Current Interest $0Geographic Area SF Bay AreaReporting Cycle Semi-Annual

FunderFinance enters loan operation from executed loan agreement

Loan Record

Transactions

Loans




Notes Payable

G/L Transactions

Funder Loan Agreement

$


System creates Loan Record, generates principal advance transaction, and updates loan balances

Status: ACTIVE



2 – Interest Accruals



Funder

Loan Record

Transactions

Loans

Debit Account$1,650 01-5370-30-XX-XX

Interest Expense


Interest on Notes Payable

G/L Transactions

System generates daily interest accrual transactions



3 – Payment to Funder

Finance



Funder

Finance posts payment to funder loan

Loan Record

Transactions

Loans

Debit Account$350 03-2210

Notes Payable$1,650 01-2050

Interest on Notes PayableCredit Account<$2,000> 01-XXXX


G/L Transactions

System records payment and updates loan balances: principal (amortizing loans) and interest

Pay to $

Check to Funder (from A/P module)



4 – Loan Payoff

Finance


Funder Bank of AmericaLoan Number 12345Loan Amount $500,000Interest Rate 4%Maturity Date 02/10/05Current Principal $0Current Interest $0Geographic Area SF Bay AreaReporting Cycle Semi-Annual

Funder

Finance posts final payment to funder loan

and changes status to REPAID

Loan Record

Transactions

Loans

Debit Account$100,000 03-2210

Notes Payable$1,650 01-2050

Interest on Notes PayableCredit Account<$101,650> 01-XXXX


G/L Transactions

System records payment, updates principal and interest balances, and sets payoff date to current system date.

Pay to $

Check to Funder (from A/P module)

Status: REPAID


Funder Accounting - RLF Grants

1 – New Grant Setup

Finance


Funder Dominican SistersGrant Number 12345Grant Amount $350,000Current Amount $350,000Origination Date 09/10/00Expiration Date 09/10/02

Target Population HomelessReporting Cycle Annual

FunderFinance enters grant operation from executed grant agreement

Grant Record

Transactions

Grants



Credit Account<$350,000> 03-4120-30-XX-XX

Contributions RLF

G/L Transactions

Funder Grant Agreement

$


Status: ACTIVE

System creates Grant Record, generates transaction for initial amount, and updates grant balances


Funder Accounting - RLF Grants

2 – Grant Expiration

Finance


Funder Dominican SistersGrant Number 12345Grant Amount $350,000Current Amount $350,000Origination Date 09/10/00Expiration Date 09/10/02

Target Population HomelessReporting Cycle Annual

Funder

Finance changes grant status to SATISFIED at end of effective period

Grant Record

Transactions

Grants

Status:SATISFIED


Funder Accounting - Program Grants


Finance


Funder M&P Haas FundGrant Number 12345Grant Amount $100,000Current Amount $100,000Origination Date 03/15/02Expiration Date 03/15/04

Use Restrictions PredevelopmentReporting Cycle Quarterly


Grant Record

Transactions

Grants



Credit Account<$100,000> 04-4110-50-XX-04

Contributions CCFF

G/L Transactions


$


Status: ACTIVE




2 – Recipient Grant Execution

Program Operations Database

RecipientChild Care enters grant operation from executed grant agreement

Grant

$ $$

Child Care

Recipient Wu Yee Child ServicesGrant Number 56789Grant Amount $25,000Current Amount $0Origination Date 04/15/02Expiration Date 04/15/05

Other Operational Information

Grant Record

Transactions

$


CCFF Grant Agreement



3 – Recipient Grant Allocation

$ $$

Child Care

Child Care allocates recipient grant disbursements to funding sources

CCFF Program

Grant Allocator

Finance

CheckRequest$25,000

System generates Check Request Form



Grant Recipient Amount56789 Wu Yee Child $25,000Grant Funder Amount12345 M&P Haas $15,00099999 CCSF1-1 FY99 $10,000

System generates memo "payable" transactions to PO and FO databases (no G/L interface)

Recipient Wu Yee Child ServicesGrant Number 56789Grant Amount $25,000Current Amount $0Origination Date 04/15/02Expiration Date 04/15/05

Pending Draw $25,000

Grant RecordFunder M&P Haas FundGrant Number 12345Grant Amount $100,000Current Amount $100,000Origination Date 03/15/02Expiration Date 03/15/04

Pending Release $15,000

Grant Record



4 – Recipient Check Generation

Finance

MIP Accounting System

Finance enters check request into MIP A/P module




Bank Account

G/L Transactions

System generates recipient check

Pay to $

$ $$

Child Care

CheckRequest$25,000

A/P Module

G/L Module

System generates G/L transactions


Funder City of SFGrant Number 12345Grant Amount $100,000Current Amount $85,000Origination Date 03/15/02Expiration Date 03/15/04

Pending Release

Grant Record

Funder M&P Haas FundGrant Number 12345Grant Amount $100,000Current Amount $85,000Origination Date 03/15/02Expiration Date 03/15/04

Pending Release $0


5 – Grant Restriction Release

Finance


Funder

Grant Record

Transactions

Grants

Debit Account$15,000 04-4999-50-XX-04

Net Assets Released

Credit Account<$15,000> 01-4999-50-XX-04

Net Assets Released

G/L Transactions

System generates funding release G/L transactions

CheckRequest$25,000

Transactions update funder grant balances and clear "payables"

Finance enters grant fund release transactions (against "payable" transactions)

Status: RELEASED

Status: ACTIVE



6 – Recipient Grant Disbursement


Recipient

Grant

Recipient Wu Yee Child ServicesGrant Number 56789Grant Amount $25,000Current Amount $25,000Origination Date 04/15/02Expiration Date 04/15/05

Pending Draw $0

Grant Record

Transactions

Finance

CheckRequest$25,000

Finance enters grant disbursement (against "payable" transaction)

Transaction updates recipient grant balance and clears "payable"

Debit Account$25,000 01-5420-50-XX-04

Grant Expense

Credit Account<$25,000> 01-XXXX


G/L Transactions

System generates grant disbursement G/L transactions


Funder Accounting - Administrative Grants


Finance


Funder F.B. Heron FoundationGrant Number 12345Grant Amount $200,000Current Amount $100,000Origination Date 12/02/00Expiration Date 12/02/03

Use Restriction LIHF GeneralReporting Cycle Semi-Annual


Grant Record

Transactions

Grants



Credit Account<$100,000> 02-4100-XX-XX-XX

Contributions

G/L Transactions


$


Status: ACTIVE



Funder F.B. Heron FoundationGrant Number 12345Grant Amount $200,000Current Amount $0Origination Date 12/02/00Expiration Date 12/02/03

Use Restriction LIHF GeneralReporting Cycle Semi-Annual

Funder Accounting - Administrative Grants

2 – Grant Expiration

Finance


Funder

Finance enters "release" transaction and changes grant status to RELEASED at end of effective period

Grant Record

Transactions

Grants

Status: RELEASED

System updates grant balance (no G/L interface)

Proposal

EXECUTED

DEAD

PROPOSALPROSPECT

DENIED

APPROVED

ACTIVE REPAID

RELEASED

SATISFIED

Funding Operation Status Flow

WITHDRAWN

Loan/Grant

Program and Administrative Grants (fully disbursed)

RLF Grants (reporting period passed)

RLF Loans (principal repaid to funder)



Funder Administration

Event Notification

Katharine Strunk

• 1/2/02 Funder Report, Grant 12345, Heron Foundation, $123,000.00

• 1/15/02 Next Proposal, Loan 67890, Bank of America, $415,000.00

• 2/1/02 Grant Maturity, Grant 59012, Citibank, $53,000.00

Finance Mail Group

• 2/1/02 Grant Maturity, Grant 59012, Citibank, $53,000.00

Event List for 12/21/01

• Grant/Loan Maturity Date

• Funder Report Date

• Next Proposal Date

Event Dates

1. Nightly batch process scans database and extracts upcoming and past due events

2. Staff can run Excel-based Event Notification Report

3. Selected events will generate tasks in Outlook Task List

Nightly EventNotification

Process

Outlook TasksExcel Reports

Finance

FundingOperations

$$

Development



Funder Reporting

NLSFunding

Ops.

NLSLending

Ops.

NLSPrograms

Ops.

Portfolio Indicator Reports

• Monthly Lending Activity• Monthly Program Activity• Borrower Concentration• Portfolio Valuation Analysis• RLF Participants• Program Investors

CapitalAllocation

Projects

Impact Indicator Reports

• Leveraged Status Report• Project Outcome Statistics• Funder Activity Report

MIP

Financial Indicator Reports

• Financial Statement

Development completesFunder Report

$$

Development

LIHF Organizational

Data

Funder Reporting Requirements



Funder Report Logging

$$

Development

1. Development sets up reporting schedule in Funding Operations system

Frequency: Semi-AnnualStart Date: 7/01/01Lead Time: 10 Days

Notify Date: 12/21/01Date Due: 01/01/02

Fields entered by user

Fields calculated by system

$$

Development

2. System sends reminder message to Development on Notify Date

$

Funder

3. Development generates report and transmits to Funder

4. Development logs report completion in Funding Operations system

Status: SubmittedDate Sent: 01/01/02

Notify Date: 06/21/02Date Due: 07/01/02

NLSFunding

Operations

NLSFunding

Operations

Fields entered by user

Fields calculated by system

Copyright 2002: LIIF LIIF Fund Processing Workflows The following document is posted by the Low...

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