CAPITAL PROJECT OVERVIEW

Transcription

1 CAPITAL PROJECT OVERVIEW

2 OBJECTIVES To understand plant fund policies and procedures To determine when a plant fund is appropriate Complete the Project Establishment Form correctly Assist with maintenance and completion of projects 2

3 GENERAL INFORMATION Purpose: Track expenses related to construction, renovation, repair, replacement, major equipment purchases, or fabricated equipment on a plant WBS element ( plant fund or project ) Business Procedure Manual References: BPM E-3-1: Unexpended Plant Fund Policy BPM E-3-2: Minor Renovation Policy BPM E-3-3: Fabricated Equipment Policy 3

4 DEFINITIONS Fabricated equipment: Construction of a single piece of capitalizable equipment by UK personnel from several smaller vendor purchases Funding: Transfer of funds to the plant fund for expenses using Transfer GLs via Journal Voucher (JV) Legislative Authority: Projects authorized by the Kentucky General Assembly (GA) Overdraft: Posted expenses exceed funding Plant fund: WBS element beginning with 4 where capital project revenues and expenses are recorded and tracked for the life of the project Responsible Person: Contact for project issues Scope: Total budget to complete the project, supported by quotes or invoices 4

5 PROCEDURES 1. Determine need for construction, renovation, repair, purchase of equipment, etc. 2. Obtain quotes or estimates 3. If the project total meets the applicable dollar threshold, a plant fund should be used Fabricated equipment: $5,000 or more Construction, renovation, repair, replacement: $100,000 or more Major equipment purchase: $200,000 or more Software purchase or development: $400,000 or more 4. Complete Project Establishment Form and obtain approvals as required by area 5

6 PROCEDURES, CONT. 5. Submit Project Establishment Form to Accounting & Financial Reporting Services (AFRS) with supporting documentation and funding JV 6. Capital Projects Accountant creates the WBS element in SAP, establishes the budget, posts the funding JV, and notifies those involved/responsible for the project 7. End user charges all expenses related to the project directly to the plant fund WBS element 8. Notify Capital Projects Accountant when project is ready to close 6

7 LEGISLATIVE AUTHORITY Authorization is required if the project scope meets the applicable dollar threshold Construction, renovation, repair, replacement: $1,000,000 or more Information technology (IT) systems: $1,000,000 or more Major equipment purchase: $200,000 or more References UK Administrative Regulation (AR) 8:2, Policies and Procedures for the Approval of Capital Projects Kentucky Revised Statutes, Capital Projects and Bonds section KRS : KRS : 7

8 LEGISLATIVE AUTHORITY, CONT. Major construction projects with scopes of $1,000,000 or more are generally managed by the Capital Project Management Division (CPMD) Work performed by internal departments (Campus or Medical Center Physical Plant Divisions, Information Technology Services, or Agriculture Facilities Management) must not exceed $999,999 8

9 LEGISLATIVE AUTHORITY, CONT. Questions should be directed to the below contacts prior to initiation of projects or any changes University Budget Office (UBO) Laurie Sorg Elizabeth Baker Area Capital Coordinators Departments beginning 1 or 9 - UBO Departments beginning 3, 7, or 8 Gus Miller Departments beginning 4 Judy Duncan Departments beginning H or M Teresa Centers Any IT projects Karen Willmott Any Athletics projects Russ Pear 9

10 EXAMPLE OF STUDENT CENTER PROJECT Legislative Authority: Capital Budget Authorized project scope: $175,000,000 10

11 PROJECT ESTABLISHMENT INSTRUCTIONS 1. Project Establishment Form 2. Supporting documentation 3. Funding JV 11

12 1. PROJECT ESTABLISHMENT FORM Project Establishment Form on UK eforms website: oject%20establishment%20form.pdf Project Establishment Form Instructions on UK eforms website (hyperlink also provided on the PDF form): oject%20establishment%20form%20instructions.pdf 12

13 Section 1 and 2 completed at the department level Section 3 for AFRS use only 13

14 SECTION 1: PROJECT INFORMATION Department must complete all fields in Section 1 Note: Many items have helpful tips when cursor is hovered over the PDF field 14

15 Project Title: Name of the project Start Date: Date the project will begin End Date: Estimated date the project will be complete Location: Building name and number, including room numbers if applicable Campus Guide: Capital Assets Accounting: 15

16 Business Area: Select appropriate area for which the project applies from the drop-down menu Functional Area: Select 1060-Other Maintenance and Operation Expense from the drop-down menu Exception: Auxiliary Enterprises, such as Athletics or Hospital, use the appropriate area for which the project applies. Listing available under BPM E-17-16: Chart of Accounts-Functional Area: Department Number: Five digit code designating the academic or support unit for which the project applies. Listing available under BPM E-17-7: Departmental Codes: 16

17 Responsible Person: Name of contact for project issues Responsible Cost Center: Capital cost/funds center for the department, usually begins with Search SAP t-code ZFI_COBJ by department number Requesting Cost Center: Based on area performing work and creating/approving orders Campus Physical Plant Division (PPD) Capital Project Management Division (CPMD) Medical Center Physical Plant Division (MCPPD) Information Technology Services (ITS) Cost center funding project Vendor/Ag Facilities Management (Ag FM)/Other Cost center funding project 17

18 EXAMPLE OF STUDENT CENTER PROJECT 18

19 Work to be performed: Explain what the project entails Classification of space: Select yes or no based on whether the current space will be modified for a different use and explain (i.e. classroom to lab, lab to offices, etc.) Upgrades: Select yes or no based on whether the renovation, new item, etc. is an upgrade when compared to what currently exists and explain Example: Additional features, more capacity, etc. Not an upgrade: exact replacement, only new Justification of request: Explain the purpose of the project 19

20 Legislative Authority: Must obtain proper approval and provide documentation if applicable. Some information will be included as part of the WBS element s properties: Legislative Authority: Biennium dates (i.e. GA ) Legislative Authority Date: Beginning of biennium (i.e. 7/1/2016 for the Biennium) Board Date: Date of Board of Trustees or UBO approval 20

21 SECTION 2: ESTIMATE/FUNDING INFORMATION Department must complete all applicable fields in Section 2 Note: Many items have helpful tips when cursor is hovered over the PDF field 21

22 Quotes/estimates should be obtained prior to submitting a Project Establishment Form and are summarized in Section 2 Enter the information on the appropriate line in relation to the quotes/estimates received from an area for the project Campus Physical Plant PPD Capital Project Management CPMD Info Technology Services ITS Med Center Physical Plant MCPPD Vendor/Ag FM/Other External vendor, College of Agriculture Facilities Management, or other source not provided 22

23 Estimated Amount/Scope: Total of all estimates/quotes by area performing work Amount Funded: Total amount funded for each area, must equal the total scope unless approved exception to full funding exists Project Total: Total of Estimated Amount/Scope and Amount Funded 23

24 EXAMPLE OF STUDENT CENTER PROJECT Note: Exception to full funding since the project has funding of $160,000,000 in bond proceeds 24

25 Signatures are required prior to submitting the Project Establishment Form and should follow the approval guidelines as determined by area Area Fiscal Officer/Sr. Vice President is determined by the beginning of the department number: 1, 3, or 9 Anthony Russell, Brad West, Roxanne McLetchie 4 Judy Duncan 7 or 8 Angel Reed, Gus Miller H or M Teresa Centers 25

26 SECTION 3: WBS ELEMENT INFORMATION FOR AFRS USE ONLY Note: Many items have helpful tips when cursor is hovered over the PDF field. This section is for AFRS use, but all fields are available for entry if the department has the information available. 26

27 2. SUPPORTING DOCUMENTATION Total scope must be supported with vendor quotes, PPD estimates, etc. Documentation or Project Establishment Form must provide sufficient information regarding the work to be performed Indicate any special instructions, such as funding by multiple sources with specific allocation, grantfunded, etc. Approval for exception to full funding if applicable Legislative authority if applicable 27

28 EXAMPLE OF STUDENT CENTER PROJECT Estimate/Budget from CPMD 28

29 3. FUNDING JV Park one-sided JV by entering only the debit entry to charge the cost center funding the project Use Transfer GL account (Transfer to Unexpended Plant Funds) for the debit JV amount must equal the total scope unless an exception has been approved for partial funding Upon creation of the plant fund WBS element, the Capital Projects Accountant will add the credit entry for posting Projects funded by grants do not require a funding JV 29

30 EXAMPLES OF STUDENT CENTER PROJECT 1. One-sided JV for funding from one source only: 2. One-sided JV for funding from multiple sources: 30

31 ONGOING PROJECTS 1. Expenses Pro-card, purchase order, etc. Plant fund should be charged directly in the WBS element field, not cost center or grant Any charges erroneously posted to a cost center or grant must be transferred from that cost center or grant to the plant fund WBS element in order to properly track project expenses, regardless of original posting date PPD or ITS work orders Area performing work charges plant fund directly Settlements and direct billings generally post at month end 31

32 ONGOING PROJECTS, CONT. 2. Scope changes Notify the Capital Projects Accountant and provide supporting documentation for the increase or decrease Increases a funding JV for the increase amount should be submitted with the documentation so project funding equals the scope Decreases the difference will be returned to the cost center that originally funded the project so funding equals the scope (or allocated appropriately if funded by multiple sources) 32

33 ONGOING PROJECTS, CONT. 3. Overdrafts Not permitted must be funded by month end Capital Projects Accountant will contact the Responsible Person for funding before monthly closing Grant-funded projects funds are drawn from the grant on a monthly basis to reimburse the plant fund (cover overdrafts as they occur), no action required unless there are issues with the grant Persistent overdrafts may result in the project being locked to prevent additional expense postings while there are insufficient funds 33

34 ONGOING PROJECTS, CONT. 4. Funding JV Similar to the initial funding JV, the department should debit their cost center with GL account Following standard Transfer guidelines, the plant fund WBS element should be credited with the appropriate GL account that corresponds with the debited cost center Example: Funding a project from a Restricted cost center results in a credit to the plant fund WBS element with (Transfer from UK Restricted) AFRS links for assistance: Transfer Accounts list of all transfer GL accounts JV Hints see TRANSFERS at end for general information Amount on JV must equal the amount of the scope increase or overdraft 34

35 ONGOING PROJECTS, CONT. Review plant fund transactions in SAP T-code: CJI3 At prompt, select Database Profile: Select Variant: CAMPUS 35

36 ONGOING PROJECTS, CONT. Enter plant fund in WBS Element field, then Execute 36

37 ONGOING PROJECTS, CONT. Detail is similar to KSB1 for cost centers Actual postings are displayed Encumbrances (PO, JV, etc.) are not shown Drill-down into transactions Overall credit balance project has sufficient funding Overall debit balance project is in overdraft 37

38 ONGOING PROJECTS, CONT. Review plant fund budget vs. actual in BW FI Financial Accounting Funds Management/Budget Control Capital Projects Budget vs Actual Enter Fiscal Period/Year and Funded Program (WBS) Overview of expense and encumbrance totals to date 38

39 PROJECT COMPLETION Notify Capital Projects Accountant when the project is complete to close out There should be no encumbrances such as open purchase orders Excess funding will be returned to the cost center that originally funded the project if applicable When funding is split between multiple sources, the excess amount will be returned based on the original funding allocation Plant fund WBS element will be locked, with no further posting allowed 39

40 QUESTIONS Accounting & Financial Reporting Services Chantal Le Rutter, Capital Projects Accountant Phone: Bill Coleman, Capital Assets Accounting Manager Phone: Area Capital Coordinator Area Fiscal Officer Department performing work Campus Physical Plant Division: Medical Center Physical Plant Division: Capital Project Management Division: 40