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Office of the Comptroller

[ Accounting ]

Non-Capital Procedures
Capital Project Accounting Procedures

Non-Capital (Less Than $100,000) Facilities Projects - Process Documentation

Issued June 30, 1999

Project Step Organization Action Notes  
A. Initiation of New 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.  
  Facilities Services Confirms that the proposed project should be NOT be capitalized but needs to be recorded initially in the Capital Construction Fund. for project management purposes.

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. 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 019704). These are typically "Point and Do" projects.

Some more complex requests with estimated costs of less than $100,000 may require the hybrid approach detailed here 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 that involve scheduling the work of more than one trade.

 
  Facilities Services Establishes and assigns a unique project identification number. This number was formerly known as the DPP number.    

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, and complete a detailed cost estimate and a project schedule.

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. For projects under $100,000, the entire project is often contained in a single quarter, so the timetable and cash flow are very simple. This information is summarized in the Non-Capital (LessThan $100,000) Facilities Project Statement.

 
   School/Center Determines scope and funding.

In addition to working with Facilities Services to define the project details described above, the School or Center also identifies the funding source. This is typically a single funding source for projects under $100,000. Internal financing is not available for these projects.

The Facilities Renewal Program (formerly known as the Deferred Maintenance Program), may be an appropriate funding source for these projects; this is determined by Facilities Services within the context of the overall plans for the Facilities Renewal Program and the School or Center's master space plan. If the use of this funding is contemplated, the School or Center will request this funding at this point.

 
C. Approval of New Capital Project

School/Center

 

Approves the Proposed Project and Budget, as detailed in the Non-Capital (Less Than $100,000) Facilities Project Statement. Projects with estimated costs of less than $100,000 are approved by the Dean or Vice President of the School or Center. No further review is required.

 

 

D. Establishment of Project Budget & Transfer of Funding Source Facilities Services Creates a unique Center 97 Center Reference (CREF) value for the project. Center References values will be established in CNAC 970, in the range starting with 1000.

 

 

  School/Center Transfers the approved budget amount to Facilities Services using the established Center 97 CREF.

Activity for projects less than $100,000 will be recorded in Facilities Services' CNAC, using org 9703, which is Customer Work, in the Facilities Services Special Fund (019704). The Program used will be 9200, which is Non-Capital (less than $100,000) Facilities Projects. The CREF is unique to each project, and is 1987 in this example.

Dr. 030-0320-1-000000-5407-4567-5678

Cr. 970-9703-2-019704-5407-9200-1987

For the Renewal and Replacement Fund, each School or Center will make the journal entry to actually transfer any of its own funds. For funds coming from the Facilities Renewal Program, Facilities Services will make the journal entry transfer to do the actual transfer. The center reference used with the Facilities Renewal Program denotes the school or center.

Dr. 960-9600-2-000005-5407-7801-0003

Cr. 970-9703-2-019704-5407-9200-1987

The School or Center (or, for the Facilities Renewal Program, Facilities Services) notes the batch name for the actual transfer on the approved Non-Capital (Less Than $100,000) Facilities Project Statement.

We are assuming the funding source was already budgeted appropriately. If not, a budget reallocation may also be necessary, but the funding source does not need to be budgeted to this specific project.

 
 E. Following Receipt of Funding Notification Facilities Services Upon notification from the School or Center, budgets the authorized project expenditures by processing a budget journal to the Capital Construction Fund.

Processes purchase order, invoices and controls expenditures to budget.

Each project will be budgeted in detail and have actuals recorded in detail in the Capital Construction Fund, by CREF.

Dr. 970-9700-0-000010-1921-9200-1987

Dr. 970-9700-0-000010-1923-9200-1987

Dr. 970-9700-0-000010-1941-9200-1987

Dr. 970-9700-0-000010-1962-9200-1987

 
  Facilities Services Charges the Project Management Fee

The project management fee is based on the budgeted amount, and is paid at the beginning of the project. The fee for these projects is 3% of the project costs before any contingency.

Dr. 970-9700-0-000010-1941-9200-1987

Cr. 970-9703-2-019703-5503-9200-0003

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.

 
  Comptroller's Office Moves any activity out of the Capital Construction Fund and into the Customer Work Fund each month.

Dr. 970-9703-2-019704-5401-9200-1987

Cr. 970-9700-0-000010-1990-9200-1987

where 1990 is the sum of the balances in the 19xx objects.

 
  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 this case, return to step C.

 
K. Completion of the Project Facilities Services  Returns any unspent funding to the school.

Dr. 970-9703-2-019704-5407-9200-1987

Cr. 030-0320-1-000000-5407-4567-5678

 

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