Q&A: CIIS 10.0 Addresses Multi-CDE Project Reporting

Question: How do multiple community development entities (CDEs) investing in the same new markets tax credit (NMTC) project meet the new reporting requirements in Community Investment Impact System (CIIS) 10.0?

Answer: Within 180 days of the allocatee’s fiscal year-end, the allocatee is required to report its NMTC transaction data in the Community Development Financial Institutions (CDFI) Fund’s online reporting system: CIIS. CDEs have been reporting increasing levels of transaction-related data for the past several years. The CDFI Fund uses the data for various reasons, including monitoring compliance with allocation agreements, determining the amounts and types of projects financed with NMTCs and collecting community and economic impact data.

Over the years, numerous projects have been financed by multiple CDEs that have partnered to provide allocation. The trend has been useful in enabling individual CDEs to spread allocation among a greater number of projects, and providing larger amounts of subsidy for large-scale, high impact projects. However, the trend has created some unintended reporting concerns for the CDFI Fund as it compiles and produces NMTC program outcomes data and reports.

The CIIS Transaction Level Report (TLR) includes numerous data points in which CDEs report community impacts and outcomes for projects financed. This data includes items such as: total project costs, NMTC loan or equity amounts, construction and permanent jobs, annual business revenues and square feet of real estate developed. In multi-CDE projects, CDEs historically would each report all of the project information, including the project outcomes. Thus, the aggregate data collected in CIIS was often overstated.

To improve the integrity of the data reported, the CDFI Fund has implemented a new reporting feature in its latest version of CIIS – CIIS 10.0. The changes in CIIS 10.0 are effective for CDEs reporting for fiscal year 2012 with reporting dates after Aug. 1, 2012. The requirement is effective only for projects financed during and after the CDE’s 2012 fiscal year. CDEs are not required to retroactively report multi-CDE projects for financings that occurred prior to 2012. In the latest version, CDEs that financed projects in conjunction with other CDEs will utilize the new feature for multi-CDE project reporting in the TLR. For projects financed by multiple CDEs, a multi-CDE project number will be assigned by CIIS upon initial entry of the project in the system. The reporting feature allows CDEs some flexibility for reporting by providing for two distinct reporting options: collaborative or lead CDE reporting. Under the collaborative reporting option, each CDE will report its pro-rata share of project outcomes in CIIS. Under the lead CDE reporting option, only one CDE will report all project outcomes for the project on behalf of the CDEs that participated in the financing.

The multi-CDE project link is accessed through the drop-down menu under the TLR option on the menu bar. Once accessed, a user can add or update a multi-CDE project. It is important to note that only one CDE should set up the multi-CDE project. The setup requires some basic information including a project description and address. Once set-up, CIIS will automatically generate a multi-CDE project number that must be used by each CDE that participated in the financing of the project. A word of warning: once a multi-CDE project has been entered and a multi-CDE project number assigned, users cannot delete the project from the system. In order to delete a multi-CDE project that was inadvertently or erroneously entered into the system, CDEs must contact the CIIS help desk at [email protected].

CDEs required to report should consider and resolve the following before entering data in CIIS:

• Will the reporting be done by one CDE (the lead CDE approach) or will all CDEs report their proportionate share of the data (the collaborative approach)?
• What are the agreed-upon outcomes and information being reported (number of actual jobs, total project size, project underwriting criteria, etc.)?
• Which CDE will take the lead to set up the multi-CDE project in the system, and when will the project be set up in CIIS? How will the project number be communicated to the other CDEs?

There are still a number of open questions regarding the multi-CDE project reporting option. The CDFI Fund reports that it plans to issue further guidance to provide additional clarification. The new reporting arrangement will require some planning and coordination on the part of multiple CDEs involved in financing the same project. As such, CDEs should coordinate early to avoid any problems as the deadline for filing approaches.