Properly Tracking SHIP Funds

Question:
Last September, I had my first experience creating the SHIP annual reports for our county. It took a lot longer than I thought it would to compile the data. What can I do now to prepare for the next reports due next September?

Answer:
The key to creating timely and accurate annual reports is maintaining an accurate SHIP tracking system. The creation of an annual report actually begins 15 months before you have to turn it in. When you first receive a new SHIP allocation on July 1st, create a system to track how this money will be encumbered and then expended. The SHIP administrator in each jurisdiction is required by the SHIP Rule to maintain a tracking system (Rule 67-37.019, FAC). You cannot simply rely on data provided by your finance department. Although they maintain detailed records of SHIP expenditures, finance department staff may not track SHIP encumbrances—and they almost certainly do not track demographic data or compliance with SHIP set-asides. It is essential for you to track this information, and you must do so on a very regular basis. Update your tracking system more often than once a month. Florida Housing’s SHIP staff has indicated that your tracking system should be updated often enough that they can call you on any given day if they need to know how much of your jurisdiction’s SHIP funding is currently expended, encumbered and unencumbered.

Entering updated data into the tracking system is at least a two-step process. After determining an applicant’s eligibility, you provide an award letter that commits SHIP funds specifically to this applicant. This is when you should first enter information about the applicant into your tracking system, along with the amount of the SHIP commitment. It is only later, however, that you start expending these SHIP funds. For example, it is several weeks or over a month later when a home buyer applicant receives SHIP payment assistance at the time of closing. At this time, you should update your tracking system; the funds that had been committed for the applicant are now officially expended.

Each SHIP jurisdiction should document that the annual report it generates reconciles with the general ledger maintained by the jurisdiction’s finance department. This helps document compliance with the Florida Single Audit Act (FSAA), which directs auditors to “determine whether required reports include all activity in the reporting period”. The State Projects Compliance Supplement outlines several suggested audit procedures that an auditor can use to determine whether or not the SHIP reports contain all required activity (and reconcile to the general ledger), including the following: “Select a sample of reports and test specified line items for accuracy and completeness.” (from State Projects Compliance Supplement Part 3, Section H. “Reporting”).
Work with your finance department to ensure your compliance with the FSAA. Set up a way to periodically meet with finance staff to reconcile the general ledger with your SHIP tracking system. Consider suggesting a system to communicate to the finance department whether an expense should be charged to the 04/05 SHIP distribution, for example, or to the 05/06 distribution.

There are many ways that the Coalition can help you reach the goal of creating complete and accurate SHIP annual reports. First, the Coalition has designed an Excel-based SHIP tracking system. It has been used by many SHIP jurisdictions for years, and is available to you at no charge. Call the Coalition for technical assistance on properly setting up a tracking system, accurately updating information, or using the tracking system to create the annual reports that you will submit to Florida Housing. Some questions require more assistance than others; the Coalition may need to visit you in your community to assist you with your tracking and reporting questions. After all, some SHIP administrators have inherited a faulty, unorganized or inaccurate SHIP tracking system. The Coalition can assist you with getting your tracking system back on track by helping you work with your finance department to reconcile your system with the general ledger.