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Comptroller's Office
University of Pennsylvania
Suite 312 Franklin Building
3451 Walnut Street
Philadelphia, PA 19104
215.898.7593 (Phone)
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[ Accounting ]

Journal During Project (e to h)
Capital Project Accounting Procedures

REVISED as of June 7, 1999

In this hypothetical example, an anonymous School (School 03) is erecting a new building, to be named later. The building is categorized as "general use" and will include classrooms, computer laboratories, seminar rooms, and faculty and administrative offices.

The School Surrogate organization, 0300, is used for most of the entries, although other organizations in the School, and in other Schools and Centers, are sometimes used as funding sources. Organization 0320 and its associated Research Institute 0325, among others, will occupy the building. Organization 0345 is the clinical practice of the department.

A variety of funds, both real and imaginary, are used.

The school's default program value for its regular activities is 4567.  The program value assigned to the project is 8123. The program value assigned to the building is 9876.

The center reference values are always all zeros in the transactions in the Capital Construction Fund (Fund 000010). The school has defined a center reference value of 1234 to be used to flag other transactions associated with this project. Another center reference, 5678, is used for transactions associated with Professor Star, who leads the Research Institute.

Sample Journals During the Project

Project Step	Journal#/ Type	Created By	Purpose	Entry	Amount in Example	Notes		&n bsp;            &nbs p;
E. Following Receipt of Certification Notification	E1 Budget Journal	Facilities Services	To budget the project expenditures.	Dr. 030-0300-0-000010-1911-8123-0000 Dr. 030-0300-0-000010-1912-8123-0000 Dr. 030-0300-0-000010-1913-8123-0000 Dr. 030-0300-0-000010-1914-8123-0000 Dr. 030-0300-0-000010-1920-8123-0000 Dr. 030-0300-0-000010-1921-8123-0000 Dr. 030-0300-0-000010-1923-8123-0000 Dr. 030-0300-0-000010-1926-8123-0000 Dr. 030-0300-0-000010-1927-8123-0000 Dr. 030-0300-0-000010-1928-8123-0000 Dr. 030-0300-0-000010-1929-8123-0000 Dr. 030-0300-0-000010-1930--8123-0000 Dr. 030-0300-0-000010-1932-8123-0000 Dr. 030-0300-0-000010-1936-8123-0000 Dr. 030-0300-0-000010-1937-8123-0000 Dr. 030-0300-0-000010-1938-8123-0000 Dr. 030-0300-0-000010-1950-8123-0000 Dr. 030-0300-0-000010-1952--8123-0000 Dr. 030-0300-0-000010-1960-8123-0000 Dr. 030-0300-0-000010-1963-8123-0000 Dr. 030-0300-0-000010-1962-8123-0000	5,000 30,000 75,000 250,000 9,000,000 750,000 750,000 100,000 120,000 16,834 25,000 1,380,000 69,000 150,000 157,500 5,000 200,000 200,000 250,000 338,333 1,353,333	See sample Project Budget for details.
	E2 Manual Journal	Comptroller's Office	To record funding for the project	Dr. 030-0300-1-000000-4821-8123-0000 Dr. 030-0345-2-010302-4821-8123-0000 Dr. 030-0320-1-461234-4821-8123-0000 Dr. 030-0300-1-000000-4821-8123-1234 Dr. 030-0320-2-000003-4821-8123-5678 Dr. 030-0300-2-000005-4821-8123-1234 Dr. 960-9600-2-000005-4821-8123-0003 Dr. 030-0300-2-000009-4821-8123-1234 Cr: 030-0300-0-000010-4821-8123-0000	100,000 200,000 4,000,000 500,000 70,000 80,000 90,000 100,000 5,140,000	Note that the Comptroller's Office doesn't make any entries to fund the project from a Grant, Capital Gift Fund, or Interim Internal Capital Project financing at this time. See section H for those entries.
	E3 Manual Journal	Facilities Services	To charge the project management fee.	Dr. 030-0300-0-000010-1941-8123-0000 Cr. 970-9704-1-000000-5503-7831-0003	84,583.25 84,583.25
	E4 Purchase Orders and Payments of Invoices	Facilities Services	To charge the project expenditures as they occur.	Dr. 030-0300-0-000010-1911-8123-0000 Dr. 030-0300-0-000010-1912-8123-0000 Dr. 030-0300-0-000010-1913-8123-0000 Dr. 030-0300-0-000010-1914-8123-0000 Dr. 030-0300-0-000010-1920-8123-0000	5,000 30,000 75,000 250,000 2,000,000 ... etc, as they are spent.	Where possible, all project expenditures should be initiated using a Penn purchase order. In situations where a purchase order cannot be used, payments of invoices may be made through FinMIS. In no situations should a capital project expenditure be made through another accounting system with the charge then transferred into a capital project.
F. Substitutions	F1 Budget Journal	School/Center	To budget the funding sources when substituting one available resource for another available resource.	Dr. 031-0300-0-651234-4812-8123-0000 Cr. 031-0300-0-651234-4400-8123-0000 Dr. 030-0300-1-000000-4825-0001-0000 Cr. 030-0300-1-000000-4821-8123-0000	100,000 100,000 100,000 100,000	In this example, another capital gift has been received. (If a different kind of funding source were being substituted, we would have used 4821 instead of 4812). In this case, we are are budgeting the new gift revenue (in object 4400) because it will be booked this year. If the gift had come in last year, we would omitted that line. These new funds will replace the General Operating Fund money the School originally used for the project. The funds returned to the General Operating Fund will be budgeted as a resource transfer out (to be determined) for now.
	F2 Budget Journal	School/Center	To budget the funding sources when substituting another source for internal financing.	Dr. 030-0300-1-612345-4821-8123-0000	1,110,000	In this example, payments have also been received for operating gift pledges from previous years. We couldn't certify these as a funding source when they were only pledges in an operating gift account, but now that the cash is here we can substitute for the plant advance. Note that in this particular case this is a one sided entry, since the other side would have been to credit the pledge in 1230, and we don't normally budget pledges. But a credit entry may be appropriate in other situations.
	F3 Budget Journal	School/Center	To budget the funding sources when substituting internal financing for another source	Dr. 030-0345-2-010302-5100-8123-0000 Cr. 030-0345-2-010302-4821-8123-0000	200,000 200,000	In this example, the clinical practice needs their money back to pay salaries. Until the School identifies another funding source, interim internal financing will be used if needed.
	F4 Budget Journal	Treasurer's Office	To budget the project when substituting one funding source for another.	Dr. 030-0300-0-000010-4821-8123-0000 Cr. 030-0300-0-000010-4812-8123-0000	100,000 100,000	This entry is only necessary if one of the funding sources uses 4821 and the other uses 4812. If both funding sources use the same object code, there is nothing to change here. The debit and credit would be reversed if a capital gift fund was being replaced by another source.
	F5 Budget Journal	Treasurer's Office	To budget the project when substituting another source for internal financing.	Dr. 030-0300-0-000010-2780-8123-0000 Cr. 030-0300-0-000010-4821-8123-0000	1,110,000 1,110,000	This entry could contain a 4812 instead of the 4821 if the new funding source was a capital gift fund.
	F6 Budget Journal	Treasurer's Office	To budget the project when substituting internal financing for another source	Dr. 030-0300-0-000010-4821-8123-0000 Cr. 030-0300-0-000010-2780-8123-0000	200,000 200,000	This entry could contain a 4812 instead of the 4821 if the old funding source was a capital gift fund.
	F7 Manual Journal, perhaps with Custom Process	Comptroller's Office	To record the substitution when one available funding source replaces another.	Dr. 031-0300-1-651234-4812-8123-0000 Cr. 030-0300-0-000010-4812-8123-0000 Dr. 030-0300-0-000010-4821-8123-0000 Cr: 030-0300-1-000000-4821-8123-0000	100,000 100,000 100,000 100,000	Note that the 4812 entries are done automatically by the Custom Process, so only the 4821s would actually be done manually. If the new funding source were not a Capital Gift Fund, then the 4812s would be replaced by 4821s, and all the entries would be done manually.
	F8 Manual Journal	Comptroller's Office	To record the substitution when the new source replaces internal financing.	Dr. 030-0300-1-612345-4821-8123-0000 Cr: 030-0300-0-000010-4821-8123-0000	1,140,000 1,140,000	The plant advance (if it had already been needed) goes away by itself at month end when the mass allocation runs. The only reason to do it now is if we can't wait until month end to see it. This entry could contain a 4812 instead of the 4821 if the new funding source was a capital gift fund.
	F9 Manual Journal	Comptroller's Office	To record the substitution when internal financing replaces another source	Dr. 030-0300-1-000010-4821-8123-0000 Cr. 030-0345-2-010302-4821-8123-0000	200,000 200,000	The plant advance will be automatically generated at month end (assuming it is needed) when the mass allocation runs. It will look like this: Cr. 030--0300-0-000010-2780-8123-0000 The only reason to do it now is if we can't wait until month end to see it. This entry could contain a 4812 instead of the 4821 if the old funding source was a capital gift fund.
G. Additional Certifications	G1 Budget Journal	School/Center	To budget additional funding sources.	Dr. 030-0300-2-000004-4821-8123-5678 Cr:.030-0300-2-000004-4910-4567-5678	750,000 750,000	In this example, the rights to produce a robot invented at the Research Institute are licensed. The School uses their share of the royalties to upgrade one of the planned classrooms in the new building into a robotics lab for undergraduate teaching and research.
	G2 Budget Journal	Treasurer's Office	To increase the authorized amount of project expenditures	Dr.030-0300-0-000010-CPTA-8123-0000	750,000	This entry is made to the Special al Budget, not the Original or Operating Budgets.
	G3 Budget Journal	Treasurer's Office	To budget the certification of additional project funding sources	Cr.030-0300-0-000010-4821-8123-0000	750,000	This entry would use object 4812 if the additional funding source was a Capital Gift Fund, or object 2780 if the additional funding source was an internal capital project loan.
	G4 Budget Journal	Facilities Services	To budget the additional project expenditures.	Dr. 030-0300-0-000010-1933-8123-0000	750,000	This assumes a single contract to a Robotics Lab Specialist that includes design and installation.
	G5 Manual Journal	Comptroller's Office	To record additional funding for the project	Dr. 030-0300-2-000004-4821-8123-5678 Cr. 030-0300-0-000010-4821-8123-0000	750,000 750,000
H. Monthly Processing	H1 Manual Journal	Comptroller's Office	To record funding for the project from a Grant or Contracts.	Dr. 030-0300-4-512345-4821-8123-0000 Cr. 030-0300-0-000010-4821-8123-0000	6,000,000 6,000,000 (but not all at once: as spent)	This is subject to the specific Sponsor Restrictions and Reporting Requirements for each award.
	H2 Custom Process	Comptroller's Office	To record funding for the project from a Capital Gift Fund.	Dr. 031-0300-0-651234-4812-8123-0000 Cr. 030-0300-0-000010-4812-8123-0000	3,000,000 3,000,000 (but not all at once: as spent)	Funds are reclassified and moved to the Capital Construction Fund upon the expiration of the donor restriction, as project expenditures occur.
	H3 Mass Allocation	Comptroller's Office	To record internal financing required based on net cash position of the fund and program	Dr. 000-0001-1-000000-2780-8123-0000 Cr. 030-0300-0-000010-2780-8123-0000 OR Dr. 030-0300-0-000010-2780-8123-0000 Cr. 000-0001-1-000000-2780-8123-0000	200,000 200,000 OR 2,695,416.75  2,695,416.75	If a project needs cash, the first pair of entries will give it the interim internal capital project loan it needs. If this project goes according to plan, $200,000 will be needed at the end of the project. If the project has more cash than it immediately needs, the second pair of entries will take it away by recording a "loan" to General University for the project funding in excess of expenditures. For many projects, including this one, this will happen at the beginning of the project. The cash position of each project is reevaluated each month.
	H4 Statistical Manual Journal and Mass Allocation	Comptroller's Office	To accumulate interest charged or earned on interim capital project loans. This is a statistical amount that can be queried online by using STAT instead of USD.	Dr. 030-0300-0-000010-INTF-8123-0000 Cr. 030-0300-1-000000-INTF-8999-0000 OR Dr. 030-0300-1-000000-INTF-8999-0000 Cr. 030-0300-0-000010-INTF-8123-0000	22,808 22,808   1,500 1,500	The first pair of entries accrues an interest credit to the project; the second pair accrues interest charges. This is just posting the accumulation of interest as a "statistical object" for planning purposes; it will actually be paid or received by the General Operating Fund after the fiscal year is finally closed. In both cases, the amount to be accumulated is the balance in 2780 or 2783 times the TIF rate posted for that month, as determined by the Treasurer based on Penn's actual short term investment performance during the prior month. During the transition to these Capital Accounting Procedures, these entries will be made manually by the Comptroller's Office after adjusting for any capital funding transactions that were inadvertently delayed. Once each School or Center has been reviewed and all certified funding applied to all its projects, the School or Center will be added to the mass allocation and from that point on the accrued interest charges and credits will be automatically generated for all of that School or Center's capital projects each month.