8.3.2 Tracking and Allocating Bond Proceeds

The process of allocating bond proceeds and developing an accurate summary of bond financed property on an issue by issue basis is an essential element of a tax compliance program. A public agency issuer should do the following:

Identify at issuance the funds and accounts into which bond proceeds are to be deposited.
Document the reimbursement of any pre issuance expenditures.
Monitor the expenditure of bond proceeds to ensure that bond proceeds are spent within applicable time frames.

Upon project completion, the issuer should make a final allocation of bond proceeds and other funds to bond financed property. This allocation should clearly reflect which portions of the project are treated as bond financed property and, conversely, which portions are not bond financed.