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Accounting Policy 22401 on Capital Assets

This procedure covers guidance for construction and related activities on projects managed by campus facilities operations and defines the project coding, accounting and funding, reimbursement process, and reporting within Unity Construct (formerly e-builder) and PeopleSoft.  The focus of the process design is centered around the recording of capital and non-capital expenses within facilities chartfields to align with the management of contracts in Unity Construct and the financial system of record of PeopleSoft. 

Project Number Coding

Project codes are utilized in both Unity Construct and PeopleSoft for segregation of activity.  The project numbering scheme is designed to facilitate the contract management needs within Unity Construct as well as the chartfield design in PeopleSoft.  Additionally, the structure allows for a “roll-up” of costs by board approved project to meet reporting needs.

The numbering design is as outlined below for each system:

Unity Construct: the driving force for project definition within Unity Construct is to allow for management of contracts/agreements where expenses can be monitored and scrutinized by contractor.  In this system, the project numbering system will allow for a parent/child relationship, which will use a segment of the project number to feed over to PeopleSoft as the project ID.

• The first 8 digits of the project number will correspond to a PeopleSoft project ID.  This represents a consolidated project.
• Child projects will be identified by the last five digits of the project number, which corresponds to class chartfield within PeopleSoft.
• Each project within Unity Construct will use one facilities chartfield string for the cost pool to record expenses as outlined within this procedure.  At a minimum, the cost pool chartfield must have a facilities deptID, projectID and class.   It is at the discretion of the campus on whether additional segregation is desired for purposes of tracking expenses by building.  If desired, deptID or program code could be used to identify the building that the project is related to.  This chartfield can then be used to aggregate costs in the ledger and would be used in conjunction with the parent/child project numbering to allow for the segregation while maintaining one chartfield string/mocode per project in Unity Construct.
• The first 8 digits of the project number from Unity Construct will correspond to a PeopleSoft project ID.  This represents the rolled-up project.
• DeptID or program code may be used in the facilities cost pool to indicate the building, if desired.
• Additional roll ups that may be individual to a business unit’s needs, can be utilized through the project tree structure.  This roll-up requires a lot of maintenance and is not recommended for the purposes of tracking by building.  Additionally, due to the integrations between PeopleSoft and Workday Planning, the tree roll-up would not be able to be utilized to track board approved projects.

PeopleSoft: the reporting needs within PeopleSoft allow for accounting of funding sources and reporting by board approved project and building.  In this system, the project numbering methodology will utilize project ID to track the consolidated project.  For those consolidated projects that are board approved projects, an attribute on the project ID will be utilized to separately report on board approved projects.

Accounting Process

The accounting process is designed to accommodate constraints within Unity Construct which allows for one chartfield per purchase order line.  As a result, a single facilities unrestricted chartfield string will be utilized as a cost pool for all expenses on each project ID. 

After payments are made, the facilities chartfield will be reimbursed in PeopleSoft on a regular basis. The reimbursement process is structured to use accounts which records revenues in the facilities chartfield (i.e. construction cost pool) and records an expense in the chartfield that is funding the project.  The funding sources, which may include restricted and unrestricted, are identified using separate accounts.  This approach aids in the tracking the various funding sources that support the project. 

The illustration below shows the concept of the facilities construction cost pool.  All project expenditures (i.e. capital expense and non-capital expense accounts) reside in the cost pool.  Journal entries to capital expense or repair/maintenance accounts should not occur in relation to funding of the project.  This keeps the original expenses in the construction cost pool, with funding sources entering the pool as revenues. The resulting reporting allows for visibility of all expenses in one location and identifies the funding source types in the same chartfield by utilizing separate accounts by funding type.