2. Financial Reporting & Management Reports Copyright 2011 Community Resource Group, Inc. No part of this presentation may be copied or reproduced without written consent from Community Resource Group, Inc. SECTION 3

3. SECTION 3A Preparing the Annual Management Report (the Annual Budget)  All RUS borrowers are required to submit annual management reports at least 30 days prior to the beginning of each new fiscal year.  Report may be submitted on Form RD 442-2

4. SECTION 3A: Preparing the Annual Management Report CHECKLIST Annual Management Report  Line-item budget for the new fiscal year  Projected cash-flow statement for the new fiscal year  Current schedule of water and sewer rates  Current list of members of the governing body  Any additional information that may be requested by your USDA RD servicing office

11. SECTION 3B Preparing Annual Financial Statements

12.  Expenditures for the past year  Budget for the current year  Insurance coverage  Operational information  Bank balances  Accounts receivable  Net worth of your system  Financial trends (comparative data from previous vs. current year) Data On The Report Should Include The purpose of an Annual Financial Statement is to provide a comprehensive report to USDA RD on the financial status of your system

13.  Completed Statement of Budget, Income and Equity (RD 442-2, Schedule 1, Page 1)  Completed Supplemental Data Form (RD 442-2, Schedule 1, Page 2)  Completed Balance Sheet (RD 442-3)  Any additional information that may be requested by your USDA RD servicing office Annual Financial Statement Checklist Checklist

23. Quarterly Management Reports SECTION 3C

24.  Quarterly Management Reports are required for the first full year of operation for all new borrowers, or for borrowers experiencing financial or management difficulties.  The purpose of Quarterly Management Reports is to provide regular updates on how your budget and system operations are doing.  Quarterly Management Reports are required for the first full year of operation for all new borrowers, or for borrowers experiencing financial or management difficulties.  The purpose of Quarterly Management Reports is to provide regular updates on how your budget and system operations are doing.

25. Quarterly Management Reports Checklist Checklist  Completed Income and Expense Statement (a budget- to-actual comparison report) using RD 442-2, Schedule 1, Page 1  Any additional information that may be requested by your USDA/RD servicing office