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The capital construction plant fund is used to account for all capital construction projects. A capital construction project is defined as any new building construction regardless of cost, as well as remodeling or renovation projects with an estimated cost of $75,000 or more. These projects result in a new capital asset or the addition to the book value of an existing capital asset for the university. The use of a Fund 71 project speedtype is required in order to capture all the costs of the construction and fairly present the value of these capital assets on the university’s balance sheet (090600 Construction in Progress account) and Statement of Net Position. Capital construction projects are typically managed by Facilities Management (FM) or Housing’s Project Management Group.

The retirement of indebtedness (ROI) plant fund is used to make payments of principal and interest on debt, trustee fees and expenses. The payment of principal from the ROI plant fund results in a matching reduction of the debt actually recorded in the Fund 74 investment in plant (IIP) fund to the related capital asset.

The investment in plant (IIP) fund is used only to record the capital costs of capital assets, accumulated depreciation, related expenses, and any external debt related to the capital assets. The IIP fund balance is the investment in capital assets, net of related debt on the Statement of Net Position (SNP pronounced SNiP, like a balance sheet).

BCIP Allocation is part of the end-of-month close out that CU Systems runs the day after campus month close. The “B” stands for Boulder campus and the “CIP” for Construction in Progress. The allocation has eight built-in steps that it follows but not all are active.

Steps:

• BCIP-6A sums the costs between account codes 400000-969999 and posts the amount for the month as a debit to 090600 and a credit to 970100 using project 1770001.
• BCIP-6B will reverse the costs in identified projects, e.g., a pollution remediation project or a large refresh project on a building with multiple funding sources. Credit to 090600 and a debit to 970100 within the same project speedtype.
• BCIP-6C/6D are currently inactive.
• BCIP-6E adds up the revenue from interest earned, usually from bond proceeds that are invested till needed, in account codes 230100-232497 and subtracts this from the CIP.  Credit to 090600 and a debit to 970100.
• BCIP-6F sums the costs in accounts codes determined to be non-capitalizable costs within the project. Costs in the account codes listed below are summed and the amount is credited to 090600 and debited to 970100.
  • In the operational expense range:
    • 500105 IT Maint Supplies,
    • 500800-01 Computers <$5k,
    • 500900 Servers <$5k, 501000 Printers <$5k,
    • 501100 IT Video/Voice Hardware <$5k,
    • 501200 IT Other Hardware <$5k,
    • 501400 IT Peripherals <$5k,
    • 501800 UCB Faculty Computer Program,
    • 502000 IT Equip <$5k owned by sponsor,
    • 537600-01 Equip <$5k,
    • 537603 Furniture <$5k & Furniture Systems over $5k,
    • 537605 Tools, and
    • 542600 Interest Expense.
  • In the capital expense range:
    • 810100 Equip $5k+ titled to CU,
    • 810200 Equip $5k+ Equip titled to Feds,
    • 810300 Private Titled or F&A exempt,
    • 810349 ID Equip $5k+,
    • 810350 Software $5k+,
    • 810500-607 Lease Purchase P&I transactions,
    • 810700 Fabricated Equip Components,
    • 810799 ID Fab Equip Components,
    • 810800 Fab Equip Components Fed Titled,
    • 810900 Equip <$5k F&A exempt due to late price reduction.
• BCIP-6G-H are currently inactive.
• BCIP-8A sums Fund 71 projects in 090600 and posts the total into project 1770001 as a debit to 970600 and credit to 090600. This begins the transfer process of recording CIP in Fund 74. Line description is CIP 71 Activity Transfer to 71.
• BCIP-9A sums the value in Fund 71 project 1770001 and records it in FOPPS 74-10585-31543 as a debit to 090600 and a credit to 970600. Line description is CIP 71 Activity Transfer to 74.
• BCIP-9B sums the Fund 71 projects >1770010 in 090600 and places it as a credit in 090620 and a debit to 970600 within the projects. This is a CORE Feed transaction used as an offset to because account codes feed directly into their corresponding CORE account code in Fund 320F.
• BCIP-9C sums 090620 in projects >1770010 and credits 970600 and debits 090620 in project 1770001 to offset the balance for BCIP-9B.

Pooled Investment Earnings (PIE) are interest charges based upon the average daily balance over a quarter at a quarterly rate of 1.875%, 7.5% annualized.

• PIE charges were developed, in response to a 1982 State Auditor recommendation, all accounts (now called FOPPs/Speedtypes) with cash deficits were to be charged interest on their deficits.
• CCO manages the PIE charging process and determines if a waiver requested by the department is appropriate, but the dollars collected go to a SpeedType managed by the Office of Budget & Fiscal Planning (BFP). The separation of responsibility ensures that CCO’s waiver process does not have a self-interest component.
• Typical waiver requests include a unique situation where funding coming in and going out do not match up (spend first to get reimbursement), or funds involved do not allow for charges, e.g., federal or donor funding involved.
• PIE Calculation Steps: 
  • 1. The daily cash balance of the FOPPS is averaged for the month 
  • 2. The average monthly balances are then averaged for the quarter 
  • 3. If the quarterly average is negative then the PIE SpeedType is charged PIE 
  • 4. The average daily balance for the quarter is then multiplied by the quarterly interest rate and the PIE allocation uses transfer account 997102–Voluntary transfer out within campus-PIE.

Retainage is the withholding of partial payments, typically 5 or 10% of each invoice, to ensure satisfactory completion of the work by a contractor.

• Book the full amount of the invoice to an expense account and then book the withheld retainage (5-10% of invoice) to 105300 Retainage Withheld (current liability account) as a credit and pay the balance of the invoice (credits cash). This transaction is handled within Marketplace when paying invoices.
• At times you will need to manually reverse retainage due to an agreement with your contractor. CU keeps the retainage withheld and either rebids the disputed work or does the work themselves. In this case:
  • Credit the expense account used to book the cost initially
  • Debit the Retainage Account 105300

Account codes to watch out for in Fund 71 that you may not be used to seeing on your financial statements:

• 355200 Additions to Plant is used as cash equivalent to capitalize purchases of assets in Fund 74:  Debit 090400/300/500 and credit 355200.
• 355300 Retirement of Debt is used as cash equivalent to record payments to principal.  
• 970100 on SCRENP. You can ignore this account code, it is part of a monthly allocation process that sums up eligible capital expenses and moves the amount to 090600 Construction in Process. It acts as a cash offset account code. Also, if a project does not meet the capitalization threshold the costs are moved from 090600 to 970100.
• 070600 on Statement of Revenues, Expenses, and Changes in Net Position (SCRENP – pronounced Schreck-nip or it is like an Income Statement). You can ignore this account code; it is part of the capitalization process that moves costs out of Fund 71 090600/970600 to the appropriate Fund 74 Speedtype and F74 970600. It acts as a cash offset account code.

• 084901 on Statement of Net Position (SNP pronounced snip like a Balance Sheet). Tracks remaining bond funds. Typically, Treasurer will invest bond proceeds and sell-off only what is needed to cover monthly construction costs.
• 090000 Land
• 090100 Improvements to Land, e.g., sidewalks, parking lots, bridges, roads, underground tunnels.
• 090200 Buildings
• 090300 Software
• 090400 Equipment
• 090500 Library
• 090600 on SNP. Tracks the Construction in Progress for Fund 71 projects. BCIP Allocation moves to Fund 74 for SNP.
• 090620 is an offset account for 090600 (explained in allocation BCIP-6F above) to assist the feed to the state accounting system.
• 105300 Retainage
• 105000 on SNP. Accrued Interest Payable is the current fiscal year’s interest liability. Payments of interest are done by Treasurer's Office on Dec. 1 and June 1. CCO splits those payments into monthly amounts to reflect accrued liability on our quarterly statements
• 155000 on SNP. Current fiscal year’s portion of the principal payment. The treasurer pays once per year, on June 1. 190000 is the offset account to keep total liability correct.
• 155099 on SNP. The current fiscal year's portion of the bond premium owed to bond owners. Paid once per year on June 1 and its offset account is 190099.
• 191000-192500 on SNP. The total remaining balance of bonds. Each bond issuance has its own unique account code. 191000 is the 2014a enterprise bond.