While the filing of Schedule K to Form 990 is a new requirement beginning with tax year 2009, CAUSEY has extensive experience with the issues addressed on the form including:

  • Private business use issues
  • Analysis of appropriateness of management practices and procedures related to post-issuance compliance
  • Preparation of arbitrage rebate and yield reduction payment liability calculations

Many of the skills and techniques required to properly complete Schedule K are identical to those skills and techniques employed by CAUSEY in the context of providing other financial services (verification, rebate calculation, escrow monitoring, etc.) over the course of the past 20 years. We are well versed in the nuances that exist in the evaluation of public vs. private use, including the impact of management contracts and in the preparation of arbitrage rebate analyses, including the evaluation of the appropriateness of the borrower’s existing management practices and procedures related to the tracking, compilation and analysis of the information required to ensure effective post-issuance compliance.

CAUSEY will begin each engagement by submitting a detailed questionnaire to the borrower that is intended to elicit information that will allow us to address many of the questions posed on Schedule K and to provide a basic understanding of the borrower’s specific facts and circumstances. After reviewing the response to the questionnaire, we will interview, by telephone, various members of the borrower’s financial management team to obtain more detailed information regarding the use of bond proceeds, the use of the bond financed facilities, and the specific job descriptions, policies and procedures in place related to the management of tax-exempt bond proceeds. If necessary, we will conduct a site visit and review specific documentation and the physical layout of the tax-exempt bond financed facilities to complete the process of information gathering required to answer all of the questions presented on Schedule K.

Once sufficient information has been gathered, we will complete Schedule K and present our findings to the borrower. To the extent we find that improvements in the borrower’s existing management practices and procedures are warranted, we will prepare a report detailing our recommended adjustments. In the event we determine that a change in use has occurred, we will advise the borrower as to their responsibilities under the code and recommend specific action steps to ensure that the tax-exempt status of the bonds is preserved.