TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.11 SPECIAL TOWN BRIDGE ALLOTMENT

Transcription

1 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.11 SPECIAL TOWN BRIDGE ALLOTMENT NARRATIVE Periodically, the county may exceed their Town Bridge Allotment, if this occurs the county may receive a Special Town Bridge Allotment. This additional allocation may not be required to be paid back to the State. ACCOUNTS NEEDED (const exp) (revenue) (asset) (asset) (asset) (liability) (liability) - SPECIAL TOWN BRIDGE CONSTRUCTION EXPENSES (there will be numerous construction accounts) - SPECIAL TOWN BRIDGE CONSTRUCTION - REVENUE - CASH - SPECIAL TOWN BRIDGE CONSTRUCTION - RECEIVABLE - SPECIAL TOWN BRIDGE CONSTRUCTION - ALLOTMENT - CONTRACTS PAYABLE - SPECIAL TOWN BRIDGE CONSTRUCTION - DEFERRED REVENUE

2 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.12 SEQUENCE OF EVENTS NOTIFICATION OF SPECIAL TOWN BRIDGE ALLOCATION

3 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.13 RECOGNIZE SPECIAL TOWN BRIDGE ALLOCATION Recognize the amount from the Notification of State Aid Special Town Bridge Allocation. This notification is based on the engineer s estimate and not the awarded bid. Changes to the Special Town Bridge Account may be viewed on the SAAS Status Report: Select State Aid County and Municipality Reports / SAAS Status, enter the county to view, review the Special Town Bridge Allocation changes by clicking on the Allocation Amount. Refer to page 4.19, Example A, #1 for a graphic display of this entry. Accounting Entry Special Town Bridge - Allocation Debit Account: (asset) Special Town Bridge - Allotment Credit Account: (liability) Special Town Bridge - Deferred Revenue SPECIAL CONSIDERATIONS In the case of a Special Town Bridge overpayment, the county will be billed by the state for the excess funds, an overpayment account is recommended to keep track of these excess funds. Reference D) PROJECT UNDERRUNS ORIGINAL ESTIMATE WITH AN OVERPAYMENT for further discussion. PROJECT IS AWARDED The allotment is reduced throughout the year as construction contracts are let and sent in for Special Town Bridge Funding approval. Go to State Aid Finance - SAAS Reports: Select State Aid County and Municipality Reports / SAAS Payment Document - Construction to view the payment information on the project. The appropriate entries need to be made to recognize the receivable from Special Town Bridge as well as the reduction to the Special Town Bridge Construction Allotment. Only the Special Town Bridge Obligation amount should be used for the following entry. Refer to page 4.19, Example A, #2 for a graphic display of this entry. Accounting Entry - for amount of Special Town Bridge obligation only Debit Account: (asset) Special Town Bridge - Receivable Credit Account: (asset) Special Town Bridge - Allotment 95% PAYMENT IS RECEIVED FOR THE PROJECT After the State Aid Partial Payment Request has been approved, the county will receive the actual payment for the project. State Aid advances 95% of the total Special Town Bridge Construction

4 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.14 Obligation; the remaining 5% is encumbered. In addition, if requested, Engineering, Force Account, and Right of Way will be received. Requests for actual Engineering costs are submitted along with the State Aid Final Payment Request. Refer to page 4.19, Example A, #3 for a graphic display of this entry. A) Recognize the receipt of the Special Town Bridge Payment Accounting Entry - for the 95% of Special Town Bridge obligation only Debit Account: (asset) Cash Credit Account: (asset) Special Town Bridge - Receivable B) Recognize the receipt of Engineering, Force Account, and Right of Way Accounting Entry - for the of the Engineering and/or Force Account and/or Right of Way, if any Debit Account: (asset) Cash Credit Account: (asset) Special Town Bridge - Allotment C) Recognize revenue for Engineering, Force Account, and Right of Way Accounting Entry - for the of the Engineering and/or Force Account and/or Right of Way, if any Debit Account: (liability) Special Town Bridge Deferred Revenue Credit Account: (revenue) Special Town Bridge - Revenue WORK BEGINS ON THE PROJECT Sometime after State Aid approval, work actually begins on the contract. County inspectors verify that the work is indeed done according to specifications, and a partial payment is paid to the contractor. Refer to page 4.19, Example A, #4A, 4B & 4C for a graphic display of the following entries. Amount of Work Certified ($ amount of work actually performed) minus: Any retainage ($ withheld as an insurance factor) equals: Cash paid to Contractor ($ amount of actual disbursement) A) As work is certified on contract. Accounting Entry - for actual work certified Debit Account: (const exp) Special Town Bridge Construction Expenses Credit Account: (liability) Contracts Payable B) Recognize revenue earned.

5 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.15 Make the following adjustment entry to recognize the amount of the Special Town Bridge Construction Allotment which can now be considered Current Year Earned Revenue (for the amount of work certified only). Accounting Entry - recognize revenue for amount of work certified. Debit Account: (liability) Special Town Bridge - Deferred Revenue Credit Account: (revenue) Special Town Bridge Construction - Revenue C) Recognize disbursement to contractor. Accounting Entry - for amount of contractor disbursement. Debit Account: (liability) Contracts Payable Credit Account: (asset) Cash PROJECT IS FINALIZED Numerous partial payments may be made to the contractor following the same sequence as in the step above. When the contract is completed and a State Aid Final Payment Request is submitted, the State will issue a final payment. Go to State Aid Finance - SAAS Reports: Select State Aid County and Municipality Reports / SAAS Payment Document - Construction to view the payment information on the project. This document outlines the total project costs and shows any increase or decrease to the Special Town Bridge Construction Allotment Account. Four different situations can occur. These are: A) - Project is completed as estimated B) - Project overruns original estimate C) - Project Underruns original estimate without an overpayment D) - Project Underruns original estimate with an overpayment A) PROJECT IS COMPLETED AS ESTIMATED The State will send the original encumbered amount to the county which has already been booked as a Special Town Bridge Construction Receivable. Refer to page 4.19, Example A, #5A for a graphic example of this entry. Accounting Entry - for amount of Special Town Bridge receipt Debit Account: (asset) Cash Credit Account: (asset) Special Town Bridge Construction -

6 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.16 Receivable B) PROJECT OVERRUNS ORIGINAL ESTIMATE The State will send the original encumbered amount to the county as well as additional Special Town Bridge Construction Allotment monies that are due and available in the allotment. The SAAS Payment Document Construction report Final Notice will outline the total project costs and should be reviewed, so that any costs which were not previously recorded against the allotment are recorded at this time. Refer to page 4.20, Example B, #5(B1) and 5(B2), for a graphic display of these entries. B1) Recognize overrun approved for additional Special Town Bridge funds Accounting Entry - for amount of overrun Debit Account: (asset) Special Town Bridge Construction - Allotment Credit Account: (liability) Special Town Bridge Construction Deferred Revenue B2) Recognize overrun and additional receivable Accounting Entry - for amount of overrun Debit Account: (asset) Town Bridge Construction - Receivable Credit Account: (asset) Town Bridge Construction - Allotment B3) Record receipt of the Town Bridge Construction Obligation. Debit Account: (asset) Cash Credit Account: (asset) Town Bridge Construction - Receivable C) PROJECT UNDERRUNS ORIGINAL ESTIMATE WITHOUT AN OVERPAYMENT This means that State Aid has encumbered too much and will only reimburse the portion of the encumbered amount which covers the actual project costs. The SAAS Payment Document Construction report will outline the total project costs. Remember that the amount of the underrun will reduce the Town Bridge Construction Receivable and increase the allotment accounts. Refer to page 4.21, Example C, #5(C1) and 5(C2) for a graphic display of these entries. C1) Recognize the underrun. Accounting Entry - for amount of underrun Debit Account: (asset) Special Town Bridge Construction - Allotment Credit Account: (asset) Special Town Bridge Construction - Receivable C2) Record receipt of the State Aid Obligation.

7 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.17 Accounting Entry - for amount of Special Town Bridge Construction receipt Debit Account: (asset) Cash Credit Account: (asset) Special Town Bridge Construction - Receivable D) PROJECT UNDERRUNS ORIGINAL ESTIMATE WITH AN OVERPAYMENT This means that State Aid has encumbered too much and has also advanced too much cash to the county. As a result, the county owes State Aid a refund; however, State Aid will send a bill for the excess funds paid to the county. Refer to page 4.22, Example D, #5(D1), 5(D2) and 5(D3) for a graphic display of these entries. The allotment balance must be increased by both the overpayment amount and the original encumbered amount. D1) Recognize the overpayment. Accounting Entry - for amount of overpayment Debit Account: (asset) Special Town Bridge Construction - Allotment Credit Account: (liability) Due to State Aid - Special Town Bridge - Overpayments D2) Reduce the receivable and increase the Special Town Bridge Allotment for the original encumbered amount. Accounting Entry - for amount of Special Town Bridge encumbered Debit Account: (asset) Special Town Bridge Construction - Allotment Credit Account: (asset) Special Town Bridge Construction - Receivable D3) Payment to State Aid for overpayment Accounting Entry - for amount of State Aid Town Bridge encumbered Debit Account: (liablity) Special Town Bridge - Overpayment Credit Account: (asset) Cash If another active project needs to be finalized at the same time and the payment due is equal to or greater than this project overpayment, the overpayment may be applied to the second project. Check the SAAS Payment Document Construction report to verify the transactions posted to each project. The allotment balance will be decreased by the underrun project. D1) Recognize the overpayment. Accounting Entry - for amount of overpayment

8 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.18 Debit Account: (asset) Special Town Bridge Construction - Allotment Credit Account: (liability) Due to State Aid - Special Town Bridge - Overpayments D2) Reduce the receivable and increase the Special Town Bridge Allotment for the original encumbered amount. Accounting Entry - for amount of Special Town Bridge encumbered Debit Account: (asset) Special Town Bridge Construction - Allotment Credit Account: (asset) Special Town Bridge Construction - Receivable REDUCTION OF SPECIAL TOWN BRIDGE ALLOTMENT When the project is FINALIZED, the state will reduce the Special Town Bridge Allotment for the finalized project if the allotted amount was greater than the finalized amount of the project. Changes to the Special Town Bridge Account may be viewed on the SAAS Status Report: Select State Aid County and Municipality Reports / SAAS Status, enter the county to view, review the Special Town Bridge Allocation changes by clicking on the Allocation Amount. Refer to page , Examples A D, #6 for a graphic display of this entry. Accounting Entry - for amount of Special Town Bridge Allotment Reduction Debit Account: (liability) Special Town Bridge Construction Deferred Revenue Credit Account: (asset) Special Town Bridge Construction - Allotment FINAL PAYMENT TO CONTRACTOR When the project is FINALIZED, the county will pay the retainage to the contractor and authorize the Certificate of Final Acceptance. Refer to page?? , Examples A D, #7 for a graphic display of this entry. Recognize final disbursement to the contractor.

9 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.19 EXAMPLES Example A

10 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.20 Example B

11 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.21 Example C

12 TOWN BRIDGE CONSTRUCTION ACCOUNTS 4.22 Example D