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E. ADMINISTRATIVE PROCEDURES <br />1. Accounting <br />The IRF establishes a separate bank account with the Bank Agent where all repayments <br />and interest income are to be reflected. Staff will ensure that the IRF is operating in <br />accordance with Generally Accepted Accounting Principles (GAAP). <br />2. Administrative Costs <br />The IRF funds are maintained in a separate banking account at the Bank Agent. <br />Monthly bank statements are issued by the bank. Before an invoice is paid, the invoice <br />is stamped as approve and signed by Department of Community Investment <br />Accounting and IRF <br />staff. The invoice is then forwarded to the Bank Agent for payment from the bank <br />account. The administrative expenses are not to exceed IRF income. The administrative <br />and other expenses will comport with EDA procedures and regulations. From the <br />monthly bank statements, the accounting area prepares a computerized report which <br />tracks all income and expenses since the inception of the IRF. <br />As mentioned previously, loan payments are collected by IRF's loan servicing officer <br />and forwarded as soon as possible to the IRF's Bank Agent for deposit and recording. <br />All sources of income are tracked by the Bank Agent, and a report of cash receipts and <br />disbursements is issued on a monthly basis. This report shows cash on hand and all <br />outstanding loan balances. Based upon the Bank Agent's report, IRF staff creates a <br />balance sheet and income statement. This information is then used to make sure the <br />IRF spends no more than 50% of its income on administrative costs. <br />The IRF is also audited each year, thus providing a double check that all loan payments <br />and income sources have been accounted for properly. <br />3. Capital Utilization and Cash Balance <br />The IRF will use its capital and manage its cash position in accordance with the current <br />and future EDA regulations. <br />4. EDA Reporting <br />The IRF must ensure compliance with all EDA requirements. Staff will file a semi- <br />annual or annual report with the EDA. The IRF's reporting frequency will be <br />determined by EDA. <br />5. Audits <br />The EDA revolving loan funds are subject to an annual audit in accordance with 2 CFR <br />Part 200.501. The IRF must be shown every year on the City of South Bend Schedule <br />of Federal U�xpenditures. <br />37 <br />