Appendix f

Lifespan of a Funded Project

Contracting by Project
After an award is made by the Department or the Board Legal and Compliance prepares and sends an award letter to the business. Then a contract is prepared that includes the performance obligations and terms of the award. All award recipients must enter into a contract with the Department before funds will be disbursed or tax credit benefits authorized.

Master Contract and Funding Agreements
The Master Contract is the legal document that describes requirements that apply to all programs providing financial assistance to the Project. Because each Project can have multiple program/funding sources there are separate requirements associated with each program/funding source.  The Funding Agreements are attachments to the Master Contract that describes the special requirements for each program. 

For example, the same Project can receive a direct loan from the CEBA program and tax credit benefits from the HQJC program. The business and the Department would execute one Master Contract with two Funding Agreements: one for the CEBA award, one for the HQJC award.

Contracting by Project, Closeout by Funding Agreement
Each Project has one Master Contract. Most Projects have two or more Funding Agreements. The Funding Agreements typically have different Project Completion Dates and Maintenance Dates. The Funding Agreements are monitored at their Project Completion Dates and Maintenance Dates. After a Funding Agreement completes the project and maintains the jobs through the end of the Maintenance Date, that Funding Agreement is closed and final numbers are reported. The Master Contract remains open until all Funding Agreements are closed.

Using the example above for a Project with a Master Contract that has a CEBA Funding Agreement and an HQJC Funding Agreement the following flowchart explains the contracting and closeout process:

From Award to Closeout - Example

Award Date (October 1, 2007)

Award Letter Sent

Contract Signed
            Master Contract with:
            CEBA Funding Agreement (3 yrs to complete the project; maintain jobs for additional 2 yrs)
                        (Project Completion Date for CEBA = October 1, 2010)
                        (Maintenance Date for CEBA = October 1, 2012)

            HQJC Funding Agreement (3 yrs to complete the project; maintain jobs for additional 10 yrs)
                        (Project Completion Date for HQJC = October 1, 2010)
                        (Maintenance Date for CEBA HQJC = October 1, 2020)

Funds Disbursed /Tax Credit Certificate Issued (authorizing business to claim credits)

Project Completed:

• CEBA Project Completion Date (October 1, 2010)
• HQJC Project Completion Date (October 1, 2010)

Project Completion Monitoring:

• Project Completion Report Submitted by Business
• Legal and Compliance Reviews Report and Conducts Onsite Monitoring

Maintenance Period Begins:

• CEBA Maintenance Date (October 1, 2012)
• HQJC Maintenance Date (October 1, 2020)

CEBA Maintenance Period Ends:

• CEBA Maintenance Date (October 1, 2012)

CEBA Maintenance Period Monitoring:

• End of Maintenance Period Report Submitted by Business
• Legal and Compliance Reviews Report and Conducts final Onsite Monitoring

CEBA Funding Agreement Closed

• If contract terms are met, the CEBA Funding Agreement is considered closed
• If contract terms are not met, repayment is required
• The Master Contract remains open until the HQJC reaches is Maintenance Date & the Funding Agreement is closed

HQJC Maintenance Period Ends:
            HQJC Maintenance Date (October 1, 2020)

HQJC Maintenance Period Monitoring:

• End of Maintenance Period Report Submitted by Business
• Legal and Compliance Reviews Report and Conducts final Onsite Monitoring

HQJC  Funding Agreement Closed

• If contract terms are met, the HQJC Funding Agreement is considered closed
• If contract terms are not met, the Iowa Department of Revenue and the Community are notified
• Department of Revenue may seek repayment for state tax credit benefits
• Local Community may seek repayment of local tax credit benefits

Master Contract Closed
The overall Master Contact is now closed because both the CEBA and the HQJC Funding Agreements have been closed.