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Comptroller's Office
University of Pennsylvania
Suite 312 Franklin Building
3451 Walnut Street
Philadelphia, PA 19104
215.898.7593 (Phone)
215.898.0817 (Fax)

[ Accounting ]

Journal At Year-End/Project-End (i to l)
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.

Year End, Year Begin and Project Close Out

Project Step	Journal#/ Type	Created By	Purpose	Entry	Amount in Example	Notes		&n bsp;            &nbs p;
I. Year End Processing	I1 Mass Allocation	Comptroller's Office	To move any interim Capital Project Loans to the prior year object codes.	Dr. 030-0300-0-000010-2780-8123-0000 Cr. 030-0300-0-000010-2783-8123-0000 OR Dr. 030-0300-0-000010-2783-8123-0000 Cr. 030-0300-0-000010-2780-8123-0000	Not applicable in this example.	These entries are made in the Capital Construction Fund to be consistent with the treatment of 2780 in other funds, where prior year balances would give misleading funds checking messages if not moved out to 2783, which is not in TEXP. These considerations are not applicable here.
J. Beginning of Year Processing	J1 Mass Allocation	Comptroller's Office	To record interest expense incurred or earned on interim internal capital project loans.	Dr. 030-0300-1-000000-INTF-8999-0000 Cr. 030-0300-0-000010-INTF-8123-0000 Dr. 000-0001-1-000000-5604-8123-0000 Cr. 030-0300-1-000000-5604-8123-0000 OR Dr. 030-0300-0-000010-INTF-8123-0000 Cr. 030-0300-1-000000-INTF-8999-0000 Dr. 030-0300-1-000000-5604-8123-0000 Cr. 000-0001-1-000000-5604-8123-0000	22,808 22,808 22,808 22,808   1,500 1,500 1,500 1,500	The first set of four entries credits accumulated interest for the project to the General Operating Fund; the second set of four entries charges interest earned from the project to the General Unrestricted Fund. For projects that were active during the prior fiscal year, these entries will be posted immediately after the prior fiscal year is finally closed. For projects that are closed during a fiscal year, payments on both interim and long term internal capital project loans (if any) will be due at the beginning of the next year. In this example project, the $22,808 in interest earnings would have happened at the very beginning of the project. The $1,500 in interest charges would have been incurred at the very end of the project. During most of the project, no significant interest would have been incurred or earned.
	J2 Manual Journal	Comptroller's Office	To record repayment of interest for long term internal capital project loans.	Dr. 030-0300-1-000000-5604-8123-0000 Cr. 000-0001-1-000000-5604-8123-0000	11,000 11,000	Once projects are closed, payments on any long term internal capital project loans will be due at the beginning of the next year and annually thereafter until repaid. In this example, we're assuming $200,000 @5.5% for 7 years.
	J3 Manual Journal	Comptroller's Office	To record repayment of principal for long term internal capital project loans.	Dr.030-0300-1-000000-2780-8123-0000 Cr: 00-0001-1-000000-2780-8123-0000	24,193 24,193	Note that the interest and principal are booked separately, and not as a single payment of $35,193. The relative amounts of interest and principal will change each year.
K. Completion of the Project	K1 Manual Journal	Comptroller's Office	To capitalize the Construction.	Dr. 030-0300-1-000000-1820-9567-0000 Dr.030-0300-1-000000-1830-9567-0000 Dr.030-0300-1-000000-1831-9567-0000 Cr. 030-0300-0-000010-1990-8123-0000	14,700,000 300,000 1,000,000 16,000,000	Object 1820 is the building and fixed equipment. Object 1830 is the furniture and fixtures. Object 1831 is the computer, networking, and security equipment. Object 1990 is the construction in progress closeout.
	K2 Manual Journal	Comptroller's Office	To close out the Capital Project.	Dr. 030-0300-0-000010-4828-8123-0000 Cr: 030-0300-1-000000-4828-8123-0000	16,000,000 16,000,000	Object 4828 is the Capital Project Closeout. The 18xx and 4828 objects are included in TEXP.
	K3 Manual Journal	Comptroller's Office	To return any unexpended funding from the Capital Project Fund to the funding source(s).	Dr. 030-0300-0-000010-4821-8123-0000 Cr. 030-0300-0-000000-4821-8123-0000	Not applicable in this example.	This is not necessary or appropriate with capital gift funds or grants, because these sources fund projects only as spending occurs.
	K4 Manual Journal	Comptroller's Office	To move the internal financing balance from the Capital Project Fund to the General Unrestricted Fund (000000)	Dr. 030-0300-0-000010-2780-8123-0000 Dr. 030-0300-0-000010-2783-8123-0000 Cr. 030-0300-1-000000-2780-8123-0000 Dr. 030-0300-1-000000-4828-8123-0000 Dr. 030-0300-0-000010-4828-8123-0000	200,000   200,000 200,000 200,000	We sum the current year (2780) and prior years' (2783) interim financing and move the sum using the current year object code, and then offset it to prevent an unwanted effect in the General Unrestricted Fund (Fund 000000). In this example, there was no prior year balance.
L. Payments of Capital Gift Pledges After Closeout.	L1. Manual Journal	Comptroller's Office	To record the expiration of the donor restriction.	Dr. 031-0300-0-651234-4812-8123-0000 Cr. 030-0300-1-000000-4812-8123-0000	Not applicable in this example.