[ Accounting ]
Capital Project Accounting Procedures
In April 1998 all University administrators received a new Capital
Accounting/Budgeting Procedures document. This document formally
spelled out, for the first time, the procedures to be used in the
financial management of capital projects under the new BEN Financials Chart of
Accounts inaugurated in July 1996, and the "Revised RCM Model" for
University financial administration adopted in December 1997. These
Procedures were revised in June, 1999.
The following revised Capital Accounting/Budgeting Procedures were
developed following extensive discussions with School/Center senior
business administrators and two briefing sessions for senior business
administrators conducted in April 1999 by the Division of Finance, the
Division of Facilities Services, and the University Budget Office.
The primary reasons for the revision are as follows:
Need to Integrate with the University's Revised Capital Planning
Procedures: When the April 1998 Capital Accounting/Budgeting
Procedures document was issued, work was just beginning on a revised
version of the University's Capital Planning Process. Since then,
following extensive consultation with the Deans, the Academic Planning
and Budget Committee, the Executive Vice President, the Provost and the
President, the new Capital Planning Process has been finalized and is
being implemented. The Capital Accounting/Budgeting Procedures have
therefore been revised to make them fully compatible with the new
Capital Planning Process.
Subsequent Decisions to Revise Capital Project Policies:
Based on the actual experience of the Schools and Centers in implementing
the April 1998 Capital Accounting/Budgeting Procedures, the Provost and
the Executive Vice President have come to the conclusion that some of
the procedures that were announced in April 1998 needed to be modified.
The most notable of these changes are revisions to the interest rates to
be charged on Interim Construction Period Financing and on Internal
Capital Project Loans. In both cases, multiple interest rate
alternatives have been replaced with lower unified rates.
Need to Spell Out Accounting Entries in Greater Detail: In a
number of cases, the April 1998 Capital Accounting/Budgeting Procedures
did not spell out precisely how some of the accounting was going to be
carried out in order to implement the new procedures. Since we are now
much clearer as to how certain journals need to be done, and what the
resulting transactions are supposed to look like some of the "holes"
that existed in the April 1998 document have been filled in.
Among the highlights of these changes embodied in the new document
are the following:
The new draft is consistent with the University's new Capital
The new documents establish fixed interest rates for all Interim
Construction Period Financing (at the TIF rate) and for all Internal
Capital Project Loans (at the 30 Year Treasury Bond rate).
The new draft spells out in greater detail the various policies,
procedures and journal entries related to the internal financing of
School/Center capital projects.
The new draft is much more specific as regards the treatment of Capital Gift Funds.
The new draft is much more specific regarding project closeout steps
and the additional journals needed to implement closeout.
The revised procedures will be very helpful to those staff members
who have direct responsibility for the various aspects of capital
project implementation within each School and Center. We encourage you
to duplicate and distribute these materials to all those involved in the
capital projects process in your School or Center.
Questions regarding the revised procedures should be forwarded to
Fran Seidita in the Budget
Office (215.898.1929) or to Sudha Vettath in the
Comptroller's Office (215.573.2245).