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Office of the Comptroller

[ Accounting ]

Process Documentation
Capital Project Accounting Procedures

Issued June 9, 1999

Project Step Organization Action Notes Journal Entry
A. Initiation of New Capital Project School/Center Articulates a need within the context of the School or Center's master space plan. Projects are to be initiated by the School or Responsibility Center that occupies (or will occupy) the facility in which the project is to occur, even if other responsibility Centers are to participate in project funding. In the case of projects that occur in facilities occupied by more than one Responsibility Center, the project should be initiated by the Responsibility Center that is the primary facility occupant. In the case of facilities in which there is no single primary occupant, projects are to be initiated by Facilities Services. None required.
  Facilities Services Confirms that the proposed project should be capitalized and therefore the activity should be recorded in the Capital Construction Fund (Fund 000010).

Projects with estimated total costs of less than $100,000 are normally not capitalized, based on Financial Policy 1106.0, Plant Assets - Definitions. (See Attachment A.)


Small simple facilities requests that do not meet the definition of Plant Assets may be managed as Customer Work projects. These requests are budgeted and charged directly to the School or Center's Operating Budget using object code 5407. Facilities Services records their side of these transactions in the Facilities Services Special Fund (Fund 019703). These are typically "Point and Do" projects.

Some more complex requests with estimated costs of less than $100,000 may required a hybrid appoach that combines the project management procedures developed for Capital Projects with the simpler review and approval process used for Customer Work. These are typically projects the involve scheduling the work of more than one trade. See "Accounting for Non-Capital (Less Than $100,000) Facilities Projects" for detailed procedures.

None Required.
  Facilities Services Establishes and assigns a unique capital project identification number. This number was formerly known as the DFP number.  None Required.
  Facilities Services Requests a Program value from General Accounting.

Most projects will be recorded in a single Program value, even if they consist of multiple phases, but some large projects that are subdivided into multiple phases are assigned a separate Program value for each phase. For each Program value, the following information will be recorded in the general ledger and/or the program database:

  • Building Code: this is the FinMIS program value in the range 9500-9998 that represents the building. That record contains the cross reference to the space inventory database (FIMS) building identifier. If necessary, new building records are established in FIMS and in FinMIS now.
  • Capital Project Number (including phase, if only one phase is included in this Program value)
  • Fiscal year in which the project is being initiated
  • School or Center sponsoring the project, to be used to derive the CNAC for all project expenditures and any internal financing. Note that Center 00 (General University) and Center 99 (External Organization, meaning not Penn), are almost never appropriate choices as the sponsoring center: a true operating unit should be identified. Center 00 or Center 99 is to be used as the Center responsible for the project only upon the recommendation of the Capital Advisory Group.

 

None Required.
  Facilities Services Identifies Building Committee members. For large projects (those expected to cost over $500,000) the School or Center will name a Project Sponsor and the Provost or EVP (or both, as appropriate) will name a representative. Together with the Project Manager named by Facilities Services, these form the initial Building Committee. None required.

 

 

Comptroller's Office

 

Assigns a unique Program value, and notifies the School or Center, the Treasurer's Office, Facilities Services, and the Budget Office of the new Program value via e-mail. The Building, Capital Project Number, and School or Center identifiers are also included in this announcement, so that any potential misunderstandings or confusion about who is responsible for a project are identified and resolved before any entries are recorded in the general ledger. None required.

B. Determine Project Details

 

Facilities Services Reviews the project request and assists the School or Center in understanding the potential options to meet the defined need.

The Project Manager will work with the School or Center to define project scope, conduct a feasibility study (which is required for all new construction and sometimes appropriate for renovation projects), and complete a detailed cost estimate and a project schedule.

If Facilities Services determines that a feasibility study is warranted they will:

  • estimate the cost of the feasibility study;
  • conduct the feasibility study in conjunction with the School or Center; and
  • use the results of the feasibility study to further define the project scope and arrive at the detailed cost estimate.

The School or Center may elect to expense the costs associated with the feasibility study by recording the expenditures as Customer Work . Alternatively, if the feasibility study is extensive and costly, it may itself be designated the first phase of the capital project, in which case the procedures for project review, approval, budgeting and accounting set forth in this document will be utilized in the implementation of the feasibility study.

In the event the feasibility study is conducted in the Capital Construction Fund (Fund 000010) and the decision is then made not to proceed with the project, then the costs of the feasibility study will be expensed to the School or Center's General Unrestricted Fund (Fund 000000).

None required.
  Facilities Services Proposes an expenditure budget defining and itemizing the anticipated costs of the project (including anticipated costs in future fiscal years) and submits the expenditure budget to the School or Center for its approval.

The initial budget proposed by Facilities Services may be revised as School or Center needs, project scope options, related costs, and funding availability are explored and defined, until a final expenditure budget is developed.


Once the expenditure budget is determined, Facilities Services also prepares a project timetable and a related project expenditure cash flow, detailing the level of project expenditures anticipated each quarter.

None required.
   School/Center Determines scope and funding, including the probable need for any internal financing.

In addition to working with Facilities Services to define the project details described above, the School or Center also identifies potential funding sources and expected timing.

The Capital Project Statement is prepared by the School or Center with Facilities Services to summarize the proposed scope, schedule, budget, funding, and cash flow. See Attachment B for a sample statement.

 None required.
 

Treasurer's Office

 

Reviews the anticipated need for internal financing with the School or Center.

To document their common understanding of the terms proposed, the Dean or Vice President of the School or Center and the Treasurer (or their authorized representatives) will each sign a copy of the Capital Project Statement (which documents any planned interim financing) and a provisional amortization schedule for any planned long term financing. A final amortization schedule will be issued at project closeout based on the actual project experience and the then prevailing interest rate.

Schools and Centers with projects that need interim internal financing will be charged the then current TIF rate as determined monthly by the Treasurer. Interest charges will normally accumulate in the Capital Construction Fund (Fund 000010) each month and be paid by the School's General Unrestricted Fund (Fund 00000) at the beginning of the following fiscal year. In this case, the interest charges for each month are accumulated as the sum of the simple interest charges.

If the interest charges for interim internal financing are expected to be more than $250,000 for the project, the School or Center may request that the interim interest charges be capitalized as part of the permanent financing for the project. In this case, the interest charges will be compounded monthly.

Schools and Centers with projects that temporarily have excess cash in the capital construction fund will be paid the then current TIF rate on their balances. Simple interest payments will accumulate in the Capital Construction Fund (Fund 000010) each month and be paid to the School's General Unrestricted Fund (Fund 000000) at the beginning of the following fiscal year.

Projects that need long term financing after construction is completed will be charged the then prevailing 30 year Treasury bond rate at the time of project closeout, as established by the Treasurer. Long term financing is normally amortized over 7 years for renovation projects, and over 20 years for new construction.

For planning purposes, the assumed TIF rate and the assumed 30 year Treasury rate for the next 5 years will be published with other budget parameters.

In very rare cases, special self-sustaining projects and other special projects that are being funded utilizing unique or specially-dedicated financing sources, (as established by statute or by Trustee resolution) will be charged a unique interest rate associated with that source. Except for these very rare cases, no School or Center should assume a rate different from the published planning parameters for future years or from the actual TIF and 30 year Treasury bond rates for the current periods.

None required.
C. Approval of New Capital Project

School/Center

 

Seeks necessary project approvals in accordance with the University's Capital Planning Process Review and Approval Procedures as issued in June 1999 or as subsequently revised. (See Attachment C.)

 

All projects are first approved by the Dean or Vice President of the School or Center. For projects that are funded entirely by the School or Center's own resources and have estimated costs of less than $250,000, no further review is required.

For projects that are funded using central University resources or internal financing, or that have estimated costs of $250,000 or more, the Provost or Executive Vice President's approval is also required.

For projects with estimated costs of $500,000 or more ("large" projects), further review by the Capital Advisory Group and approval by Capital Council, EVP, Provost, President and Trustees may also be required. See the University Capital Planning Process Review and Approval Procedures (attachment C) for more detail on the steps involved in completing the required programmatic, financial, and architectural reviews.

None required.

 

D. Establishment of Project Budget & Certification of Funding Sources Facilities Services Initiates the Request for Certification, and forwards the proposed Capital Project Statement to the School or Center for their approval. When the project consists of multiple phases, these certification steps will be repeated for each phase of the project. At each phase, the Capital Project Statement will include an updated summary of the entire project and the detailed budget, funding sources, and cash flow analysis for the phase being certified.

None required.

 

  School/Center Prepares budget journals to budget the transfer of the available funding sources to the Program value for the project. The budget journals document the School or Center's plan to use these specific amounts of these specific funds for this specific project and "reserves" them so that they cannot be utilized for other purposes. The Treasurer's Office cannot certify a funding source until the School or Center responsible for that funding source has shown their agreement by budgeting the capital funding transfer. See Budget Entries D1 and D2.
   School/Center Ensures that pledges and any payments so far to Capital Gift Funds are recorded with the Program value being certified. Budgets the capital funding transfer from the capital gift fund. The pledge, all associated payments, and the capital project being funded must all be recorded with the same program value. If the pledge or any of the payments is recorded with a different Program value (for example, 8999, which is "To be Determined," or the value for a previous related project) then the project will not be able to draw cash appropriately from the Capital Gift Fund as expenditures occur, and interim financing will be provided instead. The School should request that the Treasurer make any necessary changes via the Gifts system to the pledge and payments. See Budget Entry D3.
   School/Center Documents the plans for any funding sources that are not yet available, but expected to be available in the future.

These might include payment schedules for any significant pledges to Operating Gift Funds (which, unlike pledges to Capital Gift Funds, cannot be automatically applied to capital projects as received); proposals for Grants which have not yet been awarded; cash surpluses expected to result from future operations (as shown in the School or Center's most recently approved Five Year Operating Budget), or any other funding resources that are expected but not yet available.

The Treasurer at his discretion may agree to certify a funding plan that includes expected resources, with the understanding that interim financing will be used in the event that sufficient expected resources are not received and substituted prior to project expenditure. It is the School or Center's responsibility to initiate a substitution to prevent or replace interim financing: no automatic process will trigger the application of expected resources upon receipt.

None required.
   School/Center Documents anticipated needs for any internal financing. This is the signed copy of the Capital Project Statement and projected amortization schedule developed with the Treasurer in step B above . None required.
  School/Center Updates the School or Center's Five Year Operating Budget, if necessary. If the School or Center's most recently approved Five Year Operating Budget already included plans for any needed capital funding transfers, internal financing, expected significant changes in operations and maintenance expense, and other significant changes associated with this project, then no revision may be needed. If sufficient funding was not already in the plan,t he School or Center may elect to submit a revised Five Year Operating Budget. None required.
  School/Center Requests liquidation of any designated investment income funds to be used as funding sources. Once the investment has been liquidated, the School or Center can budget a capital funding transfer out from the designated investment income fund (aka quasi-endowment). See Journal Entry D4 and Budget Entry D5.
  School/Center Withdraws any balances in the University Bank Fund to be used as funding sources. Since all bank transactions must use the bank transfer object code and all capital funding transfers must use that object code, the School or Center will first withdraw funds from the University Bank and deposit them in their General Unrestricted Fund (Fund 000000) and then budget the capital funding transfer from there. See Journal Entry D6 and Budget Entry D7.
  School/Center Documents the plan to satisfy any Sponsor Restrictions and Reporting Requirements. When a Grant or Contract that will be funding source is awarded, the School will convene a meeting of the Project Manager, Facilities Services, Research Services, the Treasurer's Office, and the Comptroller's Office in order to plan how best to meet the specific Sponsor Restrictions and Reporting Requirements for this award. This plan will be documented by the School and Research Services and included as part of the project documentation package. See Budget Entry D8.
  School/Center For funding sources to be provided from Other Unrestricted Funds, the School or Center sponsoring the project requests that the appropriate office prepares manual journals and/or budget journals to transfer the available funding sources to the Program value for the project. For the University Research Foundation (URF), the Research Facilities Development Fund (RFDF), and the General University Special Fund, the School or Center that received the award will budget the award (as a resource transfer in) and the capital funding transfer out after the award is received.

For the Renewal & Replacement Fund , each School or Center will budget the capital funding transfer for any of its own funds. For funds coming from the Facilities Renewal Program, (formerly known as the Deferred Maintenance Program), Facilities Services will budget the capital funding transfer.

For the Insurance Fund, the School or Center that suffered the loss will budget the capital funding transfer. With the written approval of Risk Management and the Treasurer, this may be done in advance of the receipt of the insurance proceeds if necessary.

See Journal Entry D9 and Budget Entry D10.

See Budget Entries D11 and D12.

 

See Budget Entry D13

  Treasurer's Office Approves the Request for Certification and Capital Project Statement and forwards them to the Treasurer with any necessary supporting documentation.    
  Treasurer's Office For funding sources represented to be currently available, the Treasurer's Office will confirm that they are available, sufficient, and appropriate. For currently available funding sources, the Treasurer will verify that the budget entries have indeed been made, and to the appropriate Program value.  
  Treasurer's Office For funding sources represented to be expected to be available in the future , the Treasurer's Office will confirm that these expectations are consistent with known pledges and payment schedules, proposals, and operating budget plans.

If the plan includes expected (but not yet available) funding sources, the Treasurer also confirms that the necessary contingent internal financing resources are available, sufficient, and appropriate in the event the expected resources are not received as expected.

The Treasurer will consult with Development, Research Services, and the Budget Office as needed.

 
  Treasurer's Office For General Funds and Designated Funds, the Treasurer's Office will confirm with the Budget Office that all required funding has been included in the School or Center's most recently approved Five Year Operating Budget. If necessary, the Budget Office will meet with the School or Center in order to confirm that funding is already included in the Five Year Operating Budget, or to review the School or Center's updated Five Year Operating Budget.  
  Treasurer's Office For Capital Gift Funds, the Treasurer's Office will confirm that the pledge, any payments, and the project being certified have the same Program value. Gifts from multiple donors and to multiple Schools or Centers may coexist in a single Capital Gift Fund. However, a single gift (the pledge and all associated payments) may be recorded to one and only one School or Center and to one and only one Program value. If the donor's intention was to fund projects using more than one Program, then this must be recorded as multiple gifts.  
  Treasurer's Office For Sponsored Program Funds, the Treasurer's Office wil confirm that the plan to satisfy any Sponsor Restrictions and Reporting Requirements has been documented.    
  Treasurer's Office For funding sources to be provided from Other Unrestricted Funds (URF, RFDF, Renewal and Replacement, etc), the Treasurer's Office will confirm that any necessary awards have been made and all capital funding transfers have been budgeted.    
  Treasurer's Office For internal financing, the Treasurer's Office will confirm that the plan for internal financing has been documented, and that the necessary internal financing resources are available, sufficient, and appropriate.    
  Treasurer's Office Certifies the project and authorizes the approved level of project expenditures by preparing a budget journal to the Object Code CPTA ("Construction Project Treasurer's Approval") in the Special Budget.

If the Treasurer's Office is unable to verify that all proposed project funding sources are available or expected (as represented), sufficient, and appropriate, the Treasurer's Office may forward the Capital Project Statement to the Vice President for Finance, who will review the proposed funding plan with the Capital Advisory Group. The Capital Advisory Group will either recommend the approval of the plan, or request that the School or Center propose a revised project funding plan.

All budgets and actuals in the Capital Construction Fund are to use the CNAC of the sponsoring School or Center.

If this certification is not the first for the Program value, the Treasurer's Office will budget the change from the previous level, not the newly authorized total.

See Budget Entry D14.

 

 

Treasurer's Office

Budgets the receipt of currently available project funding sources in the Capital Projects Fund (Fund 000010) by processing a budget journal.

Budgets the approved internal financing by processing a budget journal.

Issues the original Certification Letter for the project to General Accounting, accompanied by a Sponsor Restrictions and Reporting Requirements plan, if any.

Notifies the School/Center, Facilities Services and the Budget Office of the approved certification via e-mail.

This includes one line for each object code used as a funding source: all 4821s are combined into a single 4821 entry into the Capital Projects Fund, and all 4812s are similarly combined.

This should be the maximum amount expected to be outstanding at any time based on the cash flow projected in the approved Capital Project Statement.

The Treasurer also files the word and excel documents containing approved and certified Capital Project Statements and the Provisional Amortization Schedule.

See Budget Entry D15.


See Budget Entry D16.
E. Following Receipt of Certification Notification Facilities Services Upon notification from the Treasurer's Office, budgets the authorized capital project expenditures by processing a budget journal to the Capital Construction Fund.

Processes purchase order, invoices and controls expenditures to budget.
All budgets and actuals in the Capital Construction Fund are to use the CNAC of the sponsoring School or Center. See Budget Entry E1.
  Comptroller's Office

Records the project funding based on information in the certification letter.

 

 

 

 

 

 

 

 

 

For all funding sources except grants and contracts, capital gifts and internal financing, all certified funds will be transferred from the funding source to the capital construction fund at the time of certification. (Until these funds are used for project expenditures, cash balances will accrue interest at the TIF rate. See section B above.)

When the certification letter includes funding from a grant or contract, General Accounting, on a monthly basis, will record the funding equal to the amount expended during the prior month, up to the amount certified, subject to the documented Sponsor Restrictions and Reporting Requirements.

If funding is certified from a capital gift fund, the Comptroller's Office does not make manual entries. The custom process relies upon the school and Treasurer ensuring that the program value associated with the capital gift is the same as the program value for the project.

The entries necessary to record internal financing balances so that interest can be charged (or paid) are generated by the system as needed based on the cash position of each project. There is no special entry required at certification for this funding source.

See Journal Entry E2.






See Journal Entry H1.



See Journal Entry H2.

See Journal Entry H3.

   Facilities Services Charges the Project Mangement Fee

The project management fee is based on the budgeted amount, and is paid at the beginning of the project for projects less than $2 Million. For projects over $2 Million, the first 25% of the fee is paid is paid now, with additional equal payments at 50% and 75% of the project, and the final payment at project closeout.

If the project comes in over budget, no additional fee is due. If the project comes in under budget, no fee is refunded. If the project budget is changed after the project starts, whether or not an additional fee is warranted depends on the circumstances and is negotiable.

See Journal Entry E3.
F. Substitutions School/Center

Notifies the Treasurer's Office of a change in the original funding plan or the receipt of expected but previously unavailable resources.

Prepares a budget entry to budget the funding sources.

A revised Capital Project Statement is required. If the scope or schedule have also changed significantly, then updated versions supplied by Facilities Services should be included. If the substitution results in significant changes to the planned long term financing, a revised provisional amortization schedule should be attached. If, in the judgment of the Treasurer, there are significant changes in scope, schedule, budget, funding, or cash flow, then additional review and approval by Capital Advisory Group, Capital Council, EVP, Provost, President, and Trustees may also be required. See Journal Entries F1, F2, and F3.
  Treasurer's Office Verifies that the new/changed funding sources are appropriate and sufficient.


Notifies Facilities Services, the School or Center, the Budget Office, and General Accounting via e-mail of the change to the certification.
The Treasurer's Office goes through the same steps as during the original certification, except that the CPTA amount does not change.

The Treasurer's Office also files the revised Capital Project Statement word and excel documents.
See Journal Entries F4 F5, and F6.
  Comptroller's Office Records the funding for the project, based on information in the certification letter. These actions reverse any previous funding journals and record new ones as needed. See Journal Entries F7, F8, and F9. .
G. Additional Certifications School/Center Notifies Facilities Services of the additional certification requirement.

Prepares a budget entry to budget the additional funding sources.
A revised Capital Project Statement is required. If the additional certification results in significant changes to the planned long term financing, a revised provisional amortization schedule should be attached. See Journal Entry G1.
  Facilities Services Reviews request for additional certification and forwards request to Treasurer's Office. Prepares an updated project scope and schedule to be included in the revised Capital Project Statement. If, in the judgment of the Treasurer, there are significant changes in scope, schedule, budget, funding, or cash flow, then additional review and approval by Capital Advisory Group, Capital Council, EVP, Provost, President, and Trustees may also be required. None required.

 

 

Treasurer's Office

Verifies that the additional funding sources are appropriate and sufficient.

Notifies Facilities Services, the School/Center, the Budget Office, and General Accounting via e-mail of the additional certification.

Budgets the additional funding source in CPTA and in the Capital Construction Fund by processing a budget journal.

The Treasurer's Office goes through the same steps as during the original certification, increasing (or decreasing) the CPTA amount.

The Treasurer's Office also files the revised Capital Project Statement word and excel documents in the shared folder.

 

See Budget Entries G2and G3.

 

 

Facilities Services Upon notification from Treasurer's Office, budgets the additional authorized expenditures for the capital project phase by processing a budget journal.    See Budget Entry G4.
  Comptroller's Office Prepares an entry to record the project funding, based on information in the revised certification letter.   See Journal Entry G5.
H. Monthly Processing Comptroller's Office Prepares an entry to record monthly, in accordance with SFAS 116, the expiration of a donor restriction associated with a capital gift. The entry reclassifies the gift from temporarily restricted to unrestricted net asset class.


Prepares an entry to record the interim financing needed based on the net cash position of the Program at month end. If the program's cash exceeds its current spending, this entry will remove the excess cash so that the project can receive interest on it.

Prepares an entry to accrue the accumulated interim financing interest earned or charges incurred on 278x balances in the Capital Construction Funds.

This is an automatic process that looks for a Program value in the Capital Construction Fund that has expenditures and then attempts to find a Capital Gift Fund with cash available in a matching program value. If more than one such combination exists, the process will first match the same CNAC, ORG, and PROG. If expenditures remain to be funded after that source is exhausted, the process will then match the same CNAC and PROG. If expenditures remain to be funded after thatsource is exhausted, the process will match any capital gift fund with the correct PROG.

Interest earned and charged will be calculated at the TIF rate based on the ending balance for each fund for each month. The TIF rate which is posted to FinMIS and used for each month 's calculation is based on the University's short term investment performance during the previous month, as determined by the Treasurer.

See Journal Entry H2.









See Journal Entry H3.






See Journal Entry H4
  Facilities Services

Monitors the status, scope, schedule, budget, funding, expenditures and cash flow of the project and compares them to the approved plan.

Initiates a request for review and approval of a revised plan when significant changes occur.

In particular, ensures that the project budget is within the authorized CPTA level, that actual charges are consistent with the approved budget, and that expenditures are necessary, appropriate, and charged to the correct project.

  None required.
 

School /Center

 

Monitors the status, scope, schedule, budget, funding, expenditures and cash flow of the project and compares them to the approved plan.

Initiates a request for review and approval of a revised plan when significant changes occur.

In particular, monitors funding activity in their projects and identifies any missing or misdirected funding entries. Reports any apparent funding discrepancies to the Treasurer's Office.

The FinMIS 209 and 219 reports may be used to assist in this process.

 

None required.

I. Year End Processing

 

Comptroller's Office

Prepares an entry to move this year's interim financing activity into the prior year object codes. These are technical entries to facilitate proper funds checking, but they have no effect on School or Project performance.

Reviews fiscal year performance with each School orCenter. As part of this review, adjusts previously accrued interest charges for previously reported discrepancies where appropriate at the Comptroller's discretion.

 

See Journal Entry I1.

 

 

 

Treasurer's Office

 

Reviews scheduled and unscheduled payments against documented amortization schedules and stops or revises upcoming scheduled payments for any loans repaid earlier than expected.   

None required.

 

J. Beginning of Year Processing

 

Comptroller's Office

 

Prepares an entry to record the interest charges incurred on interim internal financing balances in the Capital Construction Fund in the prior year and charge the General Unrestricted Fund.

Prepares an entry to record the interest earned on unexpended balances in the Capital Construction Fund in the prior year and credit the General Unrestricted Fund.

Prepares an entry to record the amortization of any long term Internal Capital Project Loan, with principal and interest shown separately for each closed program.
 

See Journal Entry J1.




See Journal Entry J2




See Journal Entry J3.

 

K. Completion of the Project

 

Facilities Services

 

Determines when the project is essentially complete and ready for occupancy.

Notifies General Accounting and Treasurer's Office that the project is complete.


Forwards the complete records of the project to General Accounting.

 

If a long term Internal Capital Project Loan appears to be needed, the Treasurer will prepare a draft final amortization schedule for the School or Center. In some cases, the School or Center may elect to make a final Capital Funding Transfer before closeout in order to avoid the need for any permanent financing.




Documentation should include specific identification of any fixed and movable equipment acquired.

 

None required.

 

 

Comptroller's Office Reviews the records; records the equipment items separately in the Property Management System. The remaining construction project costs are recorded as the capitalized cost of the building in the Property Management System.

Prepares an entry to capitalize the project as land, building, fixed equipment, and movable equipment in the School surrogate in the General Unrestricted Fund.

Prepares an entry to close out the project into the School surrogate in the General Unrestricted Fund


Prepares an entry to return the unexpended funding (if any) from the Capital Construction Fund to the funding sources.

Prepares an entry to move the internal financing liability balance (if any) from the Capital Construction Fund to the General Unrestricted Fund


Prevents future charges to the project.













This credit to CIP Closeout will keep the closeout of projects from having an unwanted effect on the performance and budget balance available of the School surrogate's General Unrestricted Fund.

If multiple funding sources exist, the refunding will occur on a pro-rata basis to the funding accounts unless specifically directed. The CPTA amount is left at the authorized level, and is not reduced.

This entry also contains an offset (this time a debit) to CIP Closeout in order to keep the transfer of the loan from having an unwanted effect on the performance and budget balance available of the School surrogate's General Unrestricted Fund.

If there are no outstanding pledges or loans for this project, the program value is disabled. If there are outstanding pledges or loans, then the program value cannot be disabled. Instead, all existing COA combinations in the Capital Construction Fund are disabled, and a cross-validation rule that prevents the creation of any new combinations using the program value and the Capital Construction Fund is implemented.








See Journal Entry K1.


See Journal Entry K2.


See Journal Entry K3.


See Journal Entry K4.



 

 

 

Treasurer's Office

 

 

 

Establishes the long term Internal Capital Project loan amortization schedule based on final amounts funded and spent at closeout, the prevailing 30 year Treasury Bond interest rate (as established by the Treasurer), the desired number of years for repayments, and the expected useful life of the project.

Long term financing will normally be amortized over 7 years for renovation projects, and over 20 years for new construction. If this results in amortized annual amounts which are significantly different (either higher or lower) from the amounts originally agreed upon during project certification, the number of years for repayment may be revised at the Treasurer's discretion, in consultation with the school or center, to result in an annual amount closer to the original plan.

Copies of the final amortization schedule are sent to the School or Center, the Comptroller, and the Budget Office, and filed on the file server shared among the Central offices.

Reviews donor restrictions on any Capital Gifts Funds and changes the reclassification setting from manual to automatic if appropriate.
Single annual payments will be scheduled and made at the beginning of each fiscal year, starting with the next fiscal year following close out.

The expected payment schedules for donor pledges are not explicitly considered as a factor in creating the amortization schedule. However, to the extent that donor payments in a specific fiscal year (either scheduled or unscheduled) are received in excess of that amount required to make the scheduled annual payments, the School or Center will be required to make additional accelerated payments against the long term financing in order to retire the debt as soon as possible and free up cash for future projects.

The interim financing interest charges already accrued in this fiscal year and payable at the beginning of the next fiscal year are not normally capitalized and made part of this schedule. A separate payment will be made for them.

The interest to be charged from the date of closeout to the beginning of the next fiscal year when the first payment is made is normally capitalized and made part of this schedule.

As long as total capital gifts are less than the total project cost, then in accordance with SFAS 116, the donor imposed restriction was met by the completion of the project. However, until the gift fund 's restriction status is classified as automatic, any payments that are received will remain posted as temporarily restricted and in the Capital Gift Fund, and cannot be used by the school.

None required.

 

 

L. Payments of Capital Gift Pledges after Closeout

 

 

 

 

 

 

Comptroller's Office

 

 

 

 

 

 

 

Upon request, prepares an entry to reclassify donor payments on pledges in the Capital Gift Fund that arrive after the project is completed as unrestricted and transfer them to the School or Center surrogate in the General Unrestricted Fund .

To the extent that cumulative donor payments this fiscal year exceed the long term financing payments for principal and interest already made by the School or Center, prepares an entry to apply the difference as a reduction o f the principal amount outstanding.
If there is no outstanding long term Internal Capital Project loan for this project, the School or Center may use these funds for any purpose. However, if there is any outstanding long term financing for this project, the School or Center will be required to accelerate payments on the loan.

This test is necessary to allow the School or Center to substitute the Donor's payment for their own funds, which would normally have already been taken immediately following the final close of the prior fiscal year.
See Journal Entry L1.
 

Treasurer's Office

 

 

Upon request, recalculates the amortization schedule to determine the new expected date of the last payment and to show the revised amounts for principal and interest given the additional payment of principal. Although any accelerated payment will cause the amount of time necessary to fully amortize the loan to be shortened, the scheduled total payment for subsequent years will normally remain the same. However, the amount of the payment which is applied as principal and the amount applied as interest will necessarily change. None required.

Comptroller Spotlights

GL Object Codes FY2018
Concur Expense Type/Object Code Matrix (2018)
FY2017 Closing Instructions
FY17 Closing Calendar QRG
Guide to Year-End Closing
School Closing Summary Template

Comptroller Offices

Accounting
Accounts Payable
BEN
Tax and International Operations
Payroll
Travel
Office of the President Home Page Penn A-Z Directories Calendar Maps
 
 
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