|A. Initiation of New Capital Project
a need within
the context of the School or Center's master space
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,
should be initiated by the Responsibility Center that is
primary facility occupant. In the case of facilities in which
there is no single primary occupant, projects are to be initiated
that the proposed project should be
capitalized and therefore
the activity should be recorded in the
Capital Construction Fund
Projects with estimated total
costs of less than
$100,000 are normally not capitalized, based
on Financial Policy
1106.0, Plant Assets - Definitions. (See
Small simple facilities
that do not meet the definition of Plant Assets may be
as Customer Work projects. These requests are budgeted and
directly to the School or Center's Operating Budget using
code 5407. Facilities Services records their side of these
in the Facilities Services Special Fund (Fund 019703).
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
Projects with the simpler review and approval process
Customer Work. These are typically projects the involve
the work of more than one trade. See "Accounting
(Less Than $100,000) Facilities Projects"
and assigns a unique capital
project identification number.
||This number was formerly known as the
a Program value from General
Most projects will be recorded
single Program value, even if they consist of multiple phases,
some large projects that are subdivided into multiple phases
assigned a separate Program value for each phase. For each
value, the following information will be recorded in
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
only one phase is included in this Program value)
- Fiscal year in which the project
- School or Center
the project, to be used to derive the CNAC for all
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
Building Committee members.
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
Program value, and notifies the School or Center, the
Office, Facilities Services, and the Budget Office
of the new Program
value via e-mail.
Project Number, and School or Center identifiers
are also included in
this announcement, so that any potential
confusion about who is responsible for a
project are identified and
resolved before any entries are recorded
in the general
B. Determine Project
project request and assists the School or Center in understanding
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
Services determines that a feasibility
study is warranted they
- estimate the cost
of the feasibility study;
- conduct the feasibility study
in conjunction with the
School or Center; and
the results of the feasibility
study to further define the project
scope and arrive at the detailed
The School or Center may
to expense the costs associated with the feasibility study by
recording the expenditures as Customer Work . Alternatively,
feasibility study is extensive and costly, it may itself
designated the first phase of the capital project, in which
procedures for project review, approval, budgeting and
forth in this document will be utilized in the
implementation of the
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
Fund (Fund 000000).
||Proposes an expenditure budget defining and itemizing
anticipated costs of the project (including anticipated costs
future fiscal years) and submits the expenditure budget to
or Center for its approval.
The initial budget
Facilities Services may be revised as School or Center
project scope options, related costs, and funding
are explored and defined, until a final expenditure
Once the expenditure budget is determined,
also prepares a project timetable and a related
cash flow, detailing the level of project
funding, including the probable need for any internal
with Facilities Services to define the project details
above, the School or Center also identifies potential
and expected timing.
Capital Project Statement
is prepared by the School or Center with
to summarize the proposed scope, schedule,
budget, funding, and
cash flow. See Attachment B for a sample
Reviews the anticipated need
for internal financing with
the School or Center.
their common understanding of
the terms proposed, the Dean or Vice
President of the School
or Center and the Treasurer (or their
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.
Centers with projects
that need interim internal financing will be
charged the then
current TIF rate as determined monthly by the
charges will normally accumulate in the Capital
Fund (Fund 000010) each month and be paid by the
Unrestricted Fund (Fund 00000) at the beginning of
fiscal year. In this case, the interest charges for
are accumulated as the sum of the simple interest
If the interest charges for
financing are expected to be more than $250,000 for
the School or Center may request that the interim
be capitalized as part of the permanent financing
for the project.
In this case, the interest charges will be
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.
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
|C. Approval of
New Capital Project
Seeks necessary project
in accordance with the University's Capital Planning
Review and Approval Procedures as issued in June 1999 or as
revised. (See Attachment C.)
All projects are first
by the Dean or Vice President of the School or Center. For
that are funded entirely by the School or Center's own
and have estimated costs of less than $250,000, no further
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
For projects with estimated costs of $500,000 or
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
financial, and architectural reviews.
Establishment of Project Budget & Certification
the Request for Certification, and
forwards the proposed Capital
Project Statement to the School or
Center for their approval.
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.
budget journals to
budget the transfer of the available funding
sources to the Program
value for the project.
budget journals document
the School or Center's plan to use these
specific amounts of these
specific funds for this specific project
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
Budget Entries D1 and D2.
that pledges and any payments so far to Capital Gift Funds are
recorded with the Program value being certified. Budgets the
funding transfer from the capital gift fund.
all associated payments, and the capital project being
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
Budget Entry D3.
the plans for any funding sources that are not yet available,
expected to be available in the future.
These might include
for any significant pledges to Operating Gift Funds
pledges to Capital Gift Funds, cannot be automatically
to capital projects as received); proposals for Grants which
have not yet been awarded; cash surpluses expected to result
future operations (as shown in the School or Center's most
approved Five Year Operating Budget), or any other funding
that are expected but not yet available.
The Treasurer at his discretion
may agree to
certify a funding plan that includes expected resources,
understanding that interim financing will be used in
the event that
sufficient expected resources are not received
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.
for any internal financing.
is the signed copy of
the Capital Project Statement and projected
developed with the Treasurer in step B
the School or
Center's Five Year Operating Budget, if necessary.
or Center's most recently approved Five Year Operating
included plans for any needed capital funding
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.
liquidation of any
designated investment income funds to be used
the investment has been liquidated, the School or
budget a capital funding transfer out from the designated
income fund (aka quasi-endowment).
||See Journal Entry
D4 and Budget Entry D5.
any balances in the University Bank Fund to be used as funding
all bank transactions must use the bank transfer
and all capital funding transfers must use that object
the School or Center will first withdraw funds from the
Bank and deposit them in their General Unrestricted Fund
000000) and then budget the capital funding transfer from
||See Journal Entry D6 and Budget Entry D7.
the plan to
satisfy any Sponsor Restrictions and Reporting Requirements.
Grant or Contract that will be funding source is awarded, the
will convene a meeting of the Project Manager, Facilities
Research Services, the Treasurer's Office, and the
Office in order to plan how best to meet the specific
Restrictions and Reporting Requirements for this award.
will be documented by the School and Research Services
as part of the project documentation package.
||For funding sources to be provided from Other Unrestricted
Funds, the School or Center sponsoring the project requests that
appropriate office prepares manual journals and/or budget
transfer the available funding sources to the Program
value for the
the University Research Foundation (URF), the
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
out after the award is received.
the Renewal & Replacement Fund , each School or Center
budget the capital funding transfer for any of its own funds.
funds coming from the Facilities Renewal Program, (formerly
the Deferred Maintenance Program), Facilities Services
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
See Budget Entry D13
the Request for Certification and Capital
Project Statement and
forwards them to the Treasurer with any
sources represented to be currently available, the Treasurer's
will confirm that they are available, sufficient, and
funding sources, the Treasurer will verify
that the budget entries
have indeed been made, and to the appropriate
funding sources represented to be expected to be
the future , the Treasurer's Office will confirm that
are consistent with known pledges and payment
and operating budget plans.
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
will consult with
Development, Research Services, and the Budget
Office as needed.
General Funds and Designated Funds, the Treasurer's
confirm with the Budget Office that all required funding
been included in the School or Center's most recently approved
Five Year Operating Budget.
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
||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.
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
Funds, the Treasurer's Office wil confirm that the
plan to satisfy
any Sponsor Restrictions and Reporting Requirements
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.
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,
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
to verify that all proposed project funding sources are
expected (as represented), sufficient, and appropriate,
Treasurer's Office may forward the Capital Project Statement
Vice President for Finance, who will review the proposed
with the Capital Advisory Group. The Capital Advisory
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.
certification is not
the first for the Program value, the Treasurer's
budget the change from the previous level, not the newly
Budget Entry D14.
Budgets the receipt of currently
funding sources in the Capital Projects Fund
(Fund 000010) by
processing a budget journal.
Budgets the approved internal
financing by processing a budget
Issues the original Certification
the project to General Accounting, accompanied by
Restrictions and Reporting Requirements plan, if any.
Notifies the School/Center, Facilities Services and the Budget
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
This should be
the maximum amount
expected to be outstanding at any time based on
the cash flow
projected in the approved Capital Project
The Treasurer also files the word and excel
approved and certified Capital Project
Statements and the Provisional
Budget Entry D15.
See Budget Entry
|E. Following Receipt of Certification
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
budgets and actuals in the Capital
Construction Fund are to use
the CNAC of the sponsoring School or
Budget Entry E1.
Records the project funding based
information in the certification letter.
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
funding equal to the amount expended during the prior month,
the amount certified, subject to the documented Sponsor
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.
entries necessary to record internal financing balances so
interest can be charged (or paid) are generated by the system
needed based on the cash position of each project. There is
special entry required at certification for this funding
See Journal Entry E2.
See Journal Entry H1.
See Journal Entry H3.
||Charges the Project
The project management fee is based on the
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
If the project budget is changed
after the project
starts, whether or not an additional fee is
on the circumstances and is negotiable.
Journal Entry E3.
Notifies the Treasurer's
of a change in the original funding plan or the receipt of
but previously unavailable resources.
Prepares a budget entry to budget the funding
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.
Entries F1, F2, and F3.
the new/changed funding sources are appropriate and
Notifies Facilities Services, the School or
Center, the Budget
Office, and General Accounting via e-mail of the
change to the
Office goes through the same steps as during the
certification, except that the CPTA amount does not
The Treasurer's Office also files the revised Capital Project
Statement word and excel documents.
F5, and F6.
funding for the project, based on information in the certification
actions reverse any previous funding
journals and record new
ones as needed.
Journal Entries F7,
and F9. .
Facilities Services of the additional certification requirement.
Prepares a budget entry to budget the additional funding
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
Journal Entry G1.
request for additional certification
and forwards request to
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,
cash flow, then additional review and approval by Capital
Group, Capital Council, EVP, Provost, President, and
also be required.
Verifies that the additional
sources are appropriate and sufficient.
Services, the School/Center, the Budget Office,
Accounting via e-mail of the additional certification.
Budgets the additional funding source in CPTA
in the Capital Construction Fund by processing a budget journal.
The Treasurer's Office goes through
steps as during the original certification, increasing
decreasing) the CPTA amount.
The Treasurer's Office also
files the revised Capital Project
Statement word and excel documents
in the shared folder.
Budget Entries G2and
notification from Treasurer's Office, budgets the additional
authorized expenditures for the capital project phase by processing
Budget Entry G4.
an entry to record the project
funding, based on information
in the revised certification
Journal Entry G5.
|H. Monthly Processing
entry to record monthly, in accordance with SFAS 116, the
of a donor restriction associated with a capital gift.
reclassifies the gift from temporarily restricted to
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
remove the excess cash so that the project can receive
Prepares an entry to accrue the
accumulated interim financing
interest earned or charges incurred on
278x balances in the Capital
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
be calculated at the TIF rate based on the ending
each fund for each month. The TIF rate which is posted to
and used for each month 's calculation is based on the
short term investment performance during the previous
as determined by the Treasurer.
Journal Entry H2.
See Journal Entry H3.
See Journal Entry H4
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
the authorized CPTA level, that actual charges are
the approved budget, and that expenditures are
appropriate, and charged to the correct project.
Monitors the status,
budget, funding, expenditures and cash flow of the
compares them to the approved plan.
Initiates a request for review and approval
revised plan when significant changes occur.
In particular, monitors funding activity in
and identifies any missing or misdirected funding
any apparent funding discrepancies to the Treasurer's
The FinMIS 209 and 219 reports
may be used to
assist in this process.
I. Year End
Prepares an entry to move this
interim financing activity into the prior year object
are technical entries to facilitate proper funds
checking, but they
have no effect on School or Project performance.
Reviews fiscal year performance with each
As part of this review, adjusts previously
accrued interest charges
for previously reported discrepancies
where appropriate at the
See Journal Entry I1.
unscheduled payments against documented amortization
stops or revises upcoming scheduled payments for
any loans repaid
earlier than expected.
J. Beginning of Year
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
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.
Journal Entry J2
Journal Entry J3.
K. Completion of the
Determines when the project is
essentially complete and
ready for occupancy.
Notifies General Accounting and
Treasurer's Office that the project
Forwards the complete records of the project to General
If a long term Internal Capital
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
Documentation should include
specific identification of any fixed
and movable equipment
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
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
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
available of the School surrogate's General Unrestricted
If multiple funding sources exist, the refunding will
a pro-rata basis to the funding accounts unless
directed. The CPTA amount is left at the authorized
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
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
See Journal Entry
See Journal Entry
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.
results in amortized annual amounts which are significantly
(either higher or lower) from the amounts originally
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
Copies of the final amortization schedule are
sent to the School
or Center, the Comptroller, and the Budget Office,
on the file server shared among the Central
Reviews donor restrictions on any Capital Gifts
Funds and changes
the reclassification setting from manual to
automatic if appropriate.
annual payments will
be scheduled and made at the beginning of
each fiscal year, starting
with the next fiscal year following
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
(either scheduled or unscheduled) are received in excess
amount required to make the scheduled annual payments,
the School or
Center will be required to make additional accelerated
against the long term financing in order to retire the
debt as soon
as possible and free up cash for future projects.
interim financing interest charges already accrued in this
year and payable at the beginning of the next fiscal year
normally capitalized and made part of this schedule.
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
payments that are received will remain posted as
restricted and in the Capital Gift Fund, and cannot be
L. Payments of Capital
Gift Pledges after Closeout
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
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
already been taken immediately following the final close
of the prior
Journal Entry L1.
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
any accelerated payment will cause the amount of time necessary
fully amortize the loan to be shortened, the scheduled total
for subsequent years will normally remain the same. However,
amount of the payment which is applied as principal and the
applied as interest will necessarily change.