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Rent Collection & Expense Distribution

This document outlines the process for managing rent collection and expense distribution for homes without mortgages in the Seabird Island Band. It details the steps for accounts receivable (AR) to charge rent, accounts payable (AP) for expense tracking, and finance analysts reallocating reserve contributions. It includes definitions of contingency, replacement, and maintenance reserves, their uses, audit requirements, and guidelines for ensuring financial viability. For inquiries, contact Finance Supervisor Nigel Selvadurai.

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Rent Collection & Expense Distribution

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  1. Rent Collection & Expense Distribution Homes without Mortgages Seabird Island Band

  2. Steps in Process • #1: AR charges/records rent to units based on set rent by cost center on monthly basis • #2: AP records all expenses for each household by object code & cost center based on approved invoices

  3. Steps Continued • #3: Finance analyst reallocates contribution reserves monthly based on rent charge: • Contingency Reserve (5% of rent) • Replacement Reserve (29% of rent) • Maintenance Reserve (27% of rent)

  4. The ‘Reserves’ • The Reserves are reallocated to a balance sheet item similar to how the replacement reserve is set up (social housing) • Expenses related to the reserves are coded to the balance sheet items by cost center • These reserves are kept separate from the social housing reserves

  5. What are the Reserves used for? • Maintenance Reserve • Regular maintenance items throughout year • Replacement Reserve • Larger replacement items; appliances, windows, etc • Contingency Reserve • Anything over and above the reserve for maintenance/replacement (offset) ***IMPORTANT: Only use what is available. Carry over each year.

  6. Audit • The 3 reserves (contingency, replacement, maintenance) require a working paper • Breakdown of all contributions and expenses • Reconcile to ending balance sheet of each reserve by cost center

  7. Viability • No deficit • Determination of set rents should factor in all expenses and contingencies to ensure program is viable

  8. Questions? • Further questions, contact Nigel Selvadurai, Finance Supervisor for SIB nigelselvadurai@seabirdisland.ca Or 604-796-6815

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