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Q&A: Guidance on Job Reporting within CIIS with Release of Version 14.0

Published by Genie Goricki on Friday, March 3, 2017

Journal cover March 2017   Download PDF

Question: What changes were made to Community Investment Impact System (CIIS) reporting with respect to jobs data with the release of version 14.0?

Answer: CIIS is the Web-based data system used by community development financial institutions (CDFIs) and community development entities (CDEs) to submit required annual reports, including the Institution Level Report (ILRs) and Transaction Level Report (TLRs), to the CDFI Fund. CIIS 14.0 was released in August 2016. The Allocatee TLR Data Point Guidance for CIIS 14.0 issued by the CDFI Fund included new guidance related to the calculation of jobs created or maintained as a result of a CDE’s new markets tax credit (NMTC) financing for purposes of CIIS reporting.

The Allocatee TLR Data Point Guidance for CIIS 14.0 states that the reporting organization should calculate or prorate the jobs created or maintained by the loan the CDE made based on the share that the loan constitutes of the given project or business operation. The guidance describes the manner in which jobs created or maintained should be calculated based on three categories of business loans.

Business working capital loans are described in the Allocatee TLR Data Point Guidance for CIIS 14.0 as loans or investments that will be used to cover ongoing operating expenses of a business such as payroll, rent or utilities. The new guidance requires the allocatee to prorate jobs supported or maintained by working capital loans based on the portion of the shortfall that exists between current expenses and revenues that is covered by the working capital loan. The approach directs the CDE to determine the amount of annual operating expenses of the business that will be covered by the loan or investment and apply the resulting percentage proportionately to the total number of jobs of the business. Thus, if a CDE’s loan is in an amount that represents two months of operating costs of the business, the CDE would report 16.67 percent (two months divided by 12 months) of the jobs of the business.

Business fixed asset loans are described in the Allocatee TLR Data Point Guidance for CIIS 14.0 as loans or investments that will be used to pay for any tangible property used in the operation of a business that are not expected to be consumed or converted into cash in the ordinary course of events. The new guidance prohibits the CDE from reporting jobs for loans or investments used for purchases of tangible property. Previously, CDEs that made loans or investments for purchases of tangible property reported the jobs created as a result of that financing. There are concerns within the industry that the new guidance will result in an inconsistency in or underreporting of job data to the CDFI Fund. 

Business expansion or startup loans are described in the Allocatee TLR Data Point Guidance for CIIS 14.0 as loans to support the expansion or startup of a business or to develop a new product line or service. The new guidance requires the CDE to calculate jobs created or added by such loans by estimating the projected total full time equivalent (FTE) jobs created or added and then prorating based on the share of the loan as part of the total financing package. For example, if a CDE makes a $1 million subordinate loan for a business expansion with total project costs of $5 million and the total financing package includes a $3 million senior loan from a bank and $1 million in owners’ equity, the new guidance suggests that if 20 new jobs were created as a result of the business expansion, the CDE would report the creation of four FTE jobs (20 percent of the 20 new jobs) in CIIS ($1 million of CDE financing divided by $5 million of total project financing equals 20 percent). Previously, only CDEs involved in multi-CDE financings prorated the number of jobs created or maintained based on the Multi-CDE Reporting Guidance issued by the CDFI Fund, which specifically addresses situations where two or more CDEs financed the same transaction. However, the new guidance suggests that jobs created or maintained should also be prorated for other non-NMTC financing for reporting purposes, as in the above example. 

The Allocatee TLR Data Point Guidance for CIIS 14.0 also addresses jobs reporting for micro-loans and construction jobs. The guidance includes helpful examples for CDEs for determining and reporting construction jobs. 

The changes to job reporting in CIIS 14.0 apply only for new projects and single CDE projects. Previously reported data does not need to be revised and CDEs in multi-CDE deals should continue to follow the multi-CDE reporting guidance issued by the CDFI Fund.

CDEs and NMTC industry groups are seeking further clarification from the CDFI Fund regarding the new guidance, particularly the guidance prohibiting the reporting of jobs for loans that financed the purchase of fixed assets or equipment. More information is expected and additional guidance may change the interpretations noted in this article.

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