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 Support Borrower Marketing Underwriting Loan Approvals Commitment/Closing Collateral Tracking Payment Collections Project Monitoring Risk Analysis Statistics Tracking Fundraising Investor Relations Proposal Writing Funder Reporting Covenant Tracking Cash Management G/L Accounting Budget Planning Compliance Technical Assistance Provider Outreach Eligibility Scoring Grant Approvals Monitoring Statistics Tracking TA Marketing Consulting/Training Contract Administration Statistics Tracking Contact Management Office Management Human Resources Administrative Support System Administration Software Development User Training Management Business Planning Organization Structure Workflow Control LIHF CORE BUSINESS FUNCTIONS Program Activities Funding $ $ $ Grant Making Copyright 2002: LIIF

$ $ $ 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 Copyright 2002: LIIF

Narratives & Statistics Funding Operations Program Operations (Active & History) Funding RLF Loans & Packages Clients, Funders, Vendors, Other Contacts Investor Loans & Grants Program Grants & TA Project Data (Active & History) Capital Allocation Client-Funder Operation Matching Lending Operations (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 Contact Management Strategies to manage data redundancy: G/L Interface

Copyright 2002: LIIF Funder OperationsClient Operations FUNDER – CLIENT OPERATIONS INTERFACE ProjectsFunders RLF Grants & Loans Program Grants Loans Grants Funding Pools Capital Allocation Operations matched dynamically by restrictions Operations assigned manually by staff

Copyright 2002: LIIF Funder Management $ $ Development Funder $ $ Development Funder 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

Copyright 2002: LIIF 1.Finance enters loan and grant operations from executed documents NLS Funding Operations 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/MIP General Ledger Interface 6.Finance imports journals into MIP and posts to G/L accounts MIP G/L JE File Funding Operations Overview Funder Accounting NLS Funding Operations

Copyright 2002: LIIF $ $ 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 Funding Operations Overview Funder Reporting.. $ $ Development 4.Development transmits completed report to Funder NLS Funding Ops. NLS Funding Ops.

Copyright 2002: LIIF $ $ Development Funder 1.Management provides qualified funding opportunity or System 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 NLS Funding 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 √

Copyright 2002: LIIF $ $ Development Funder 1.Funder sends Loan / Grant Agreement Fundraising Work Flow 2 – Operation Closing Funder 2.Development returns signed documents and sends thank you letter NLS Funding Ops. 3.Development saves important documents 4.Funder sends cash payments and executed documents 5.Finance creates loan/grant operation and records fund use restrictions and reporting cycle Status: EXECUTED Proposal Folder Proposal √ Agreement Report Form Correspondence 1.Geographic Area 2.Purpose 3.Sector 4.Target Population 5.Time Period Restrictions

Copyright 2002: LIIF Funder Accounting – Cash Processing Receipts and Disbursements Finance records cash deposit/funds transfer DebitAccount $999, or Bank Account (RLF/CCFF) CreditAccount 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 enters funder billing/scheduled payment Pay to $ Cash from FunderCash to Funder DebitAccount $999,99901-XXXX Funder Cash Clearing CreditAccount Concentration Account G/L Transactions

Copyright 2002: LIIF Funder Accounting – RLF Loans 1 – New Loan Setup Funding Operations Database FunderBank of America Loan Number12345 Loan Amount$500,000 Interest Rate4% Maturity Date02/10/05 Current Principal$500,000 Current Interest$0 Geographic AreaSF Bay Area Reporting CycleSemi-Annual Funder Finance enters loan operation from executed loan agreement Loan Record Transactions Loans DebitAccount $500, XXXX Funder Cash Clearing CreditAccount Notes Payable G/L Transactions Funder Loan Agreement System creates Loan Record, generates principal advance transaction, and updates loan balances Status: ACTIVE

Copyright 2002: LIIF Funder Accounting – RLF Loans 2 – Interest Accruals Funding Operations Database FunderBank of America Loan Number12345 Loan Amount$500,000 Interest Rate4% Maturity Date02/10/05 Current Principal$500,000 Current Interest$1650 Geographic AreaSF Bay Area Reporting CycleSemi-Annual Funder Loan Record Transactions Loans DebitAccount $1, XX-XX Interest Expense CreditAccount Interest on Notes Payable G/L Transactions System generates daily interest accrual transactions

Copyright 2002: LIIF Funder Accounting – RLF Loans 3 – Payment to Funder Funding Operations Database FunderBank of America Loan Number12345 Loan Amount$500,000 Interest Rate4% Maturity Date02/10/05 Current Principal$499,650 Current Interest$0 Geographic AreaSF Bay Area Reporting CycleSemi-Annual Funder Finance posts payment to funder loan Loan Record Transactions Loans DebitAccount $ Notes Payable $1, Interest on Notes Payable CreditAccount 01-XXXX Funder Cash Clearing G/L Transactions System records payment and updates loan balances: principal (amortizing loans) and interest Pay to $ Check to Funder (from A/P module)

Copyright 2002: LIIF Funder Accounting – RLF Loans 4 – Loan Payoff Funding Operations Database FunderBank of America Loan Number12345 Loan Amount$500,000 Interest Rate4% Maturity Date02/10/05 Current Principal$0 Current Interest$0 Geographic AreaSF Bay Area Reporting CycleSemi-Annual Funder Finance posts final payment to funder loan and changes status to REPAID Loan Record Transactions Loans DebitAccount $100, Notes Payable $1, Interest on Notes Payable CreditAccount 01-XXXX Funder Cash Clearing 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

Copyright 2002: LIIF Funder Accounting - RLF Grants 1 – New Grant Setup Funding Operations Database FunderDominican Sisters Grant Number12345 Grant Amount$350,000 Current Amount$350,000 Origination Date09/10/00 Expiration Date09/10/02 Target PopulationHomeless Reporting CycleAnnual Funder Finance enters grant operation from executed grant agreement Grant Record Transactions Grants DebitAccount $350, XXXX Funder Cash Clearing CreditAccount 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

Copyright 2002: LIIF Funder Accounting - RLF Grants 2 – Grant Expiration Funding Operations Database FunderDominican Sisters Grant Number12345 Grant Amount$350,000 Current Amount$350,000 Origination Date09/10/00 Expiration Date09/10/02 Target PopulationHomeless Reporting CycleAnnual Funder Finance changes grant status to SATISFIED at end of effective period Grant Record Transactions Grants Status:SATISFIED

Copyright 2002: LIIF Funder Accounting - Program Grants 1 – New Grant Setup Funding Operations Database FunderM&P Haas Fund Grant Number12345 Grant Amount$100,000 Current Amount$100,000 Origination Date03/15/02 Expiration Date03/15/04 Use RestrictionsPredevelopment Reporting CycleQuarterly Funder Finance enters grant operation from executed grant agreement Grant Record Transactions Grants DebitAccount $100, XXXX Funder Cash Clearing CreditAccount XX-04 Contributions CCFF G/L Transactions Funder Grant Agreement Status: ACTIVE System creates Grant Record, generates transaction for initial amount, and updates grant balances

Copyright 2002: LIIF Funder Accounting - Program Grants 2 – Recipient Grant Execution Program Operations Database Recipient Child Care enters grant operation from executed grant agreement Grant $ $ $ Child Care RecipientWu Yee Child Services Grant Number56789 Grant Amount$25,000 Current Amount$0 Origination Date04/15/02 Expiration Date04/15/05 Other Operational Information Grant Record Transactions CCFF Grant Agreement

Copyright 2002: LIIF Funder Accounting - Program Grants 3 – Recipient Grant Allocation $ $ $ Child Care Child Care allocates recipient grant disbursements to funding sources CCFF Program Grant Allocator Check Request $25,000 System generates Check Request Form Program Operations Database Funding Operations Database GrantRecipientAmount Wu Yee Child$25,000 GrantFunderAmount 12345M&P Haas $15, CCSF1-1 FY99$10,000 System generates memo "payable" transactions to PO and FO databases (no G/L interface) RecipientWu Yee Child Services Grant Number56789 Grant Amount$25,000 Current Amount$0 Origination Date04/15/02 Expiration Date04/15/05 Pending Draw$25,000 Grant Record FunderM&P Haas Fund Grant Number12345 Grant Amount$100,000 Current Amount$100,000 Origination Date03/15/02 Expiration Date03/15/04 Pending Release$15,000 Grant Record

Copyright 2002: LIIF Funder Accounting - Program Grants 4 – Recipient Check Generation MIP Accounting System Finance enters check request into MIP A/P module DebitAccount $25, XXXX Funder Cash Clearing CreditAccount Bank Account G/L Transactions System generates recipient check Pay to $ $ $ $ Child Care Check Request $25,000 A/P Module G/L Module System generates G/L transactions

Copyright 2002: LIIF FunderCity of SF Grant Number12345 Grant Amount$100,000 Current Amount$85,000 Origination Date03/15/02 Expiration Date03/15/04 Pending Release Grant Record FunderM&P Haas Fund Grant Number12345 Grant Amount$100,000 Current Amount$85,000 Origination Date03/15/02 Expiration Date03/15/04 Pending Release$0 Funder Accounting - Program Grants 5 – Grant Restriction Release Funding Operations Database Funder Grant Record Transactions Grants DebitAccount $15, XX-04 Net Assets Released CreditAccount XX-04 Net Assets Released G/L Transactions System generates funding release G/L transactions Check Request $25,000 Transactions update funder grant balances and clear "payables" Finance enters grant fund release transactions (against "payable" transactions) Status: RELEASED Status: ACTIVE

Copyright 2002: LIIF Funder Accounting - Program Grants 6 – Recipient Grant Disbursement Program Operations Database Recipient Grant RecipientWu Yee Child Services Grant Number56789 Grant Amount$25,000 Current Amount$25,000 Origination Date04/15/02 Expiration Date04/15/05 Pending Draw$0 Grant Record Transactions Check Request $25,000 Finance enters grant disbursement (against "payable" transaction) Transaction updates recipient grant balance and clears "payable" DebitAccount $25, XX-04 Grant Expense CreditAccount 01-XXXX Funder Cash Clearing G/L Transactions System generates grant disbursement G/L transactions

Copyright 2002: LIIF Funder Accounting - Administrative Grants 1 – New Grant Setup Funding Operations Database FunderF.B. Heron Foundation Grant Number12345 Grant Amount$200,000 Current Amount$100,000 Origination Date12/02/00 Expiration Date12/02/03 Use RestrictionLIHF General Reporting CycleSemi-Annual Funder Finance enters grant operation from executed grant agreement Grant Record Transactions Grants DebitAccount $100, XXXX Funder Cash Clearing CreditAccount XX-XX-XX Contributions G/L Transactions Funder Grant Agreement Status: ACTIVE System creates Grant Record, generates transaction for initial amount, and updates grant balances

Copyright 2002: LIIF FunderF.B. Heron Foundation Grant Number12345 Grant Amount$200,000 Current Amount$0 Origination Date12/02/00 Expiration Date12/02/03 Use RestrictionLIHF General Reporting CycleSemi-Annual Funder Accounting - Administrative Grants 2 – Grant Expiration Funding Operations Database 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 ACTIVEREPAID 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) Copyright 2002: LIIF

Funder Administration Event Notification Katharine Strunk 1/2/02 Funder Report, Grant 12345, Heron Foundation, $123, /15/02 Next Proposal, Loan 67890, Bank of America, $415, /1/02 Grant Maturity, Grant 59012, Citibank, $53, Finance Mail Group 2/1/02 Grant Maturity, Grant 59012, Citibank, $53, 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 Event Notification Process Outlook TasksExcel Reports Funding Operations $ $ Development

Copyright 2002: LIIF Funder Administration Funder Reporting NLS Funding Ops. NLS Lending Ops. NLS Programs Ops. Portfolio Indicator Reports Monthly Lending Activity Monthly Program Activity Borrower Concentration Portfolio Valuation Analysis RLF Participants Program Investors Capital Allocation Projects Impact Indicator Reports Leveraged Status Report Project Outcome Statistics Funder Activity Report MIP Financial Indicator Reports Financial Statement Development completes Funder Report $ $ Development LIHF Organizational Data Funder Reporting Requirements

Copyright 2002: LIIF Funder Administration Funder Report Logging $ $ Development 1.Development sets up reporting schedule in Funding Operations system Frequency: Semi-Annual Start Date: 7/01/01 Lead Time: 10 Days Notify Date: 12/21/01 Date 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: Submitted Date Sent: 01/01/02 Notify Date: 06/21/02 Date Due: 07/01/02 NLS Funding Operations NLS Funding Operations Fields entered by user Fields calculated by system