On bond-funded capital programs, Sources of Funds is the most scrutinized module in Kahua. Bond counsel, the controller's office, the board finance committee, and the external auditor all touch it. Yet on most implementations, Sources of Funds is configured after Cost Management, after Capital Planning, and sometimes after the program is already live. That ordering is backward, and it is the single most expensive mistake we see on public-sector Kahua programs.
Why Sources of Funds Has to Come First
Cost Management depends on the fund structure. Every commitment, change order, and pay application needs to be allocated to a funding source. If the fund hierarchy changes after the Cost module is configured, every transaction posted under the old hierarchy has to be re-mapped. On a program with thousands of commitments, that is not a quick fix.
Capital Planning has the same dependency. Multi-year program rollups assume a stable fund structure underneath them. Reorganize the funds and the entire planning view rebuilds.
What Bond Counsel Will Ask
The fund structure has to reflect the legal structure of the bond authorization. Series A, Series B, premium, interest earnings, and any restricted sub-funds need to be modeled exactly the way the official statement defines them. If the Kahua hierarchy does not match the bond documents, every drawdown report becomes a manual reconciliation.
Drawdown Sequencing Is a Configuration Decision
Most programs draw down restricted funds before unrestricted, or premium before principal, or follow a specific waterfall mandated by the bond covenants. Kahua can enforce that drawdown order, but only if it is configured to do so. Default behavior will not match your bond documents. We always model the drawdown waterfall explicitly and validate it with the controller's office before go-live.
Board Reporting Hangs Off This
The reports the board sees every quarter come out of the fund structure. Available balance, encumbered balance, expended to date, and projected drawdown are all derived from how Sources of Funds is configured. If the structure is wrong, the board reports are wrong, and the corrections happen in Excel offline. That is exactly what Kahua is supposed to eliminate.
The Right Sequence
Lock the fund structure first. Validate it against the bond documents and with the controller. Build Cost Management on top of it. Build Capital Planning on top of that. Then connect the ERP. Then build dashboards. In that order, every layer rests on a stable foundation. Out of that order, every layer rebuilds at least once.
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