Departmental Business Management Guide - Facilities & Construction Accounting

Contents

• Overview
• University Guidelines
• Internal Controls
• Departmental Responsibilities
• Resources

Overview

The Facilities Department is responsible for the oversight and management of all aspects of the design and construction of all University facilities, including:

• Selecting architects/engineers and contractors
• Negotiating and preparing all contracts
• Overseeing, coordinating and integrating the design process
• Providing in-house design and technical support for smaller projects
• Providing construction oversight and quality control in the field
• Approving invoices and tracking project expenditures and progress

The University Controller, via the Construction Accounting Office, is responsible for:

• Establishing accounting guidelines for all University construction remodeling and renovation projects that are consistent with generally accepted accounting principles
• Maintaining detailed records for all fixed capital outlay projects undertaken by the University
• Coordinating funding transfers to construction projects
• Processing vendor payments for construction projects

University Guidelines

In accordance with generally accepted accounting principles the University capitalizes:

1. All new construction projects which add square footage to University facilities.
2. Material remodeling and renovation projects. In general, materiality for remodeling and renovation projects will be defined as those whose total cost is $100,000 or greater. Total cost will include all professional fees, contingencies, materials, etc. associated with the project but exclude tangible personal property (OCO).

Generally, maintenance, repair, remodeling and renovation projects costing less than $100,000 are not capitalized. The Controller’s Office may override the $100,000 threshold should a determination be made that the completion of the project will substantially extend the useful life of the facility.

(Policy OP-D-2-A – Construction Accounting Capitalization)

Internal Controls

Ensure proper authorization for all construction projects

Departmental Responsibilities

• Contacting Facilities to commence any construction or renovation projects
• Contacting Construction Accounting Services for accounting information related to construction projects

Resources

• University Policy OP-B-11 – Facilities Design & Construction
• University Policy OP-D-2-A – Construction Accounting
• Facilities Design & Construction
• General & Construction Accounting

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