Expense Certification Guide

As part of the final application process, the applicant must submit an itemized list of project costs. All project costs, both eligible and ineligible for credits, should be listed. Expense documentation, such as invoices, receipts, or a final draw sheet, must also be included with your submission. The applicant will be required to show proof of payment.

Expense Guidelines: Total Project Costs Less Than $250,000

For applications with a total project cost of less than $250,000, the applicant may prepare the expenditures list using the HTC-E form or a spreadsheet with identical column headings as the HTC-E form.  Expenses must be grouped into “categories of work.” For example, all masonry expenses must be grouped together, as should all plumbing expenses be listed together. Each category must be sub-totaled. A list of categories has been included in the Appendix.

• Separate expenses by type of work (category). Use the “Categories of Work” list provided in this packet.
• Submit back-up documentation. Group the paid invoices, receipts and/or cancelled checks in the order in which they appear on the list of itemized expenditures (HTC-E form). Back-up documentation may include, but is not limited to, the following: - Invoices or other documents that show expenses were incurred, AND
• Final signed AIA documents and supporting schedules if available,
• Final Bank and/or Title Company disbursement sheets and/or draw statements, OR
• Copies of cancelled checks, credit card statements or other documents that show the invoices were paid
• Note 1: Cash Payments will be disallowed
• Note 2: Unpaid Costs will be disallowed unless a legal document is submitted to DED and meets DED’s approval

Expense Guidelines: Total Project Costs Greater Than $250,000

For a project of more than $250,000, an audit by an independent Certified Public Accountant is required. The CPA must perform a 100% review and verification of all available invoices and proof of payment documentation to ensure that 100% of all project costs were incurred and paid. The CPA firm must also document, for review by DED, any and all accrued expenses. If an expense has been incurred and not yet paid, the applicant must submit a legal agreement outlining the scope of work and time for payment.

• A Certified Public Accountant (CPA) must perform an Audit of the project expenses. The Audit must include a 100% review and verification of all available invoices and proof of payment documentation to ensure that 100% of all project costs were incurred, paid, and are qualified or non-qualified rehabilitation expenses as defined under section 47(c)(2)(A) of the Internal Revenue Code of 1986 as amended. The CPA’s list of project expenditures must be submitted in the format of the HTC-E form.
• Submit back-up documentation. Proof of payment is required. Back-up documentation may include, but is not limited to, the following: - Development Fee and Partnership Agreements last signed, if appropriate
• Final signed AIA documents and supporting schedules if appropriate
• EITHER Final Bank and/or Title Company disbursement sheets, draw statements OR
• Copies of cancelled checks, credit card statements or other documents that show proof of payment
• Note 1: Cash Payments will be disallowed
• Note 2: Unpaid Costs will be disallowed unless a legal document is submitted to DED and meets DED’s approval
• Note 3: Audit of total project costs by independent CPA must include a 100% review and verification of all available invoices and proof of payment documentation to ensure that 100% of all project costs were incurred and paid. The CPA must also document, for review by DED, any and all accrued expenses.

There are six columns on the HTC-E form. The column headings are listed and explained below:

• Category of Work:  Each expense will fall into a broad type-of-work category, such as Carpentry, Plumbing, or Windows. Itemize all such expenses together, and subtotal each category.
• Method of Payment:  For each expense, enter the payment method, such as Check, Credit Card, or draw number.
• Date Paid:  Enter the date the expense was paid.
• Contractor:  Enter the name of the contractor or store that provided the services or supplies.
• Description of Expenditure:  Briefly explain the work. For example, if a plumber charged $300 to replace interior water pipes, include that description in this column.
• Work Completed 8/28/98 – Completion Date:  Enter the dollar amount of each expenditure in this column. Subtotal each “category of work” and total up all project costs at the end of the list. Expenses must be separated if they were incurred prior to August 28, 1998. Expenses for work done before that date may be eligible for a tax credit, but are not sellable or transferable.

An example of how to fill out the HTC-E form is shown below:

Business and Community Services
301 W. High Street, Rooms 720, 770  Jefferson City, Missouri 65102
Tel: 1-866-647-3633    Fax: 1-573-751-7384    Email: missouridevelopment@ded.mo.gov