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Business Procedures Manual

18.3 Project Payment Process

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MRR may be funded by either State appropriation or State general obligation bonds. Each fiscal year’s MRR allocation and funding for that allocation will be either entirely State appropriations or entirely general obligation bonds.

18.3.1 State Appropriated MRR

For those institutions receiving State appropriated MRR funding, all related invoices may be paid from the State appropriated funding source. Since State appropriations lapse, institutions receiving State appropriated MRR funding should ensure that these funds are expended or encumbered by fiscal year end. Institutions should follow the guidelines presented below to manage the accounting process for State appropriated MRR expenditures:

  1. Institutions receiving State appropriated MRR funding should record the revenue as State Appropriations.

  2. It is the responsibility of each institution to maintain records for each MRR project managed by the institution.

  3. Institutions may wish to use the Project Indicator ChartField to assist them in tracking budget and expenditures on these projects. Use of the fiscal year as the leading digits in the Project ID field will enable current year and prior year project identification via query.

  4. State appropriated MRR expenditures should contain Classification code 16000 to distinguish the funding source.

  5. At the beginning of each project, determine if the project should be capitalized. If so, it will be considered construction work in progress in the Capital ledger.

  6. If the entire project is not capital, but components should be capitalized, capitalize the components as purchased.

  7. When purchases are made, use the following methodology for recording capital and non-capital activity. These journal entries assume current year budgeted and expended MRR funds. Journal entry origin is indicated to provide additional clarification.

    • For non-capital items:
      Purchasing/Accounts Payable Business Processes:
      DR   7xxxxx   (Appropriate expense account)  Actuals ledger
                  CR   xxxxxx   Cash

    • For capital items:
      Purchasing/Accounts Payable Business Processes:
      DR   8xxxxx   Capital Expense   Actuals ledger
                  CR   xxxxxx   Cash

      Manual Journal:
      DR   169xxx   Construction WIP   Actuals ledger
                  CR   8xxxxx   Capital Expense (Contra)
                        (Use same account as in Actuals entry)

  8. At the completion of a capital project, the asset must be added to the Capital ledger, probably as a parent/child relationship, depending on the asset. This will result in the following entry on the Capital ledger: *

    Asset Management Business Process:
          DR   16xxxx   (Appropriate capital account)   Capital ledger
                CR   169xxx   Construction WIP

* Note: For institutions using the GeorgiaFIRST model of the PeopleSoft Financials software, this will be a manual add using the CWIP trans code, which will automatically debit fixed asset 16xxxx and credit 169000.

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18.3.2 GSFIC-Funded MRR and Institution-Managed Projects

Institutions receiving MRR allocations and certain institution-managed construction projects that are funded with state general obligation bonds are subject to oversight by GSFIC. Each institution must pay all invoices for its MRR and institution-managed projects, and then seek reimbursement from GSFIC. Institutions should follow the guidelines presented below to manage the accounting process for these MRR and institution-managed projects.

  1. It is the responsibility of each institution to maintain records for each MRR and construction project that is funded by GSFIC but managed by the institution.

  2. Institutions may wish to use the Project Indicator ChartField to assist them in tracking budget and expenditures on these projects. Use of the fiscal year as the leading digits in the Project ID field will enable current year and prior year project identification via query.

  3. MRR and institution-managed GSFIC project expenditures should contain Classification code 16500 to distinguish the funding source.

  4. At the beginning of each project, determine if the project should be capitalized. If so, it will be considered construction work in progress in the Capital ledger.

  5. If the entire project is not capital, but components should be capitalized, capitalize the components as purchased and budget an expense for the expense portion. It will be necessary to post a budget amendment.

  6. When purchases are made, use the following methodology for recording capital and non-capital activity. These journal entries assume current year budgeted and expended MRR and GSFIC funds. Journal entry origin is indicated to provide additional clarification.

    • For non-capital items:
      Purchasing/Accounts Payable Business Processes:
      DR   7xxxxx   (Appropriate expense account)   Actuals ledger
                CR   xxxxxx   Cash

      Manual Journal:
      DR   12xxxx   A/R-GSFIC   Actuals ledger
                CR   4853xx   State Gifts (Noncapitalized)

    • For capital items:
      Purchasing/Accounts Payable Business Processes:
      DR   8xxxxx   Capital Expense   Actuals ledger
                CR   xxxxxx   Cash

      Manual Journal:
      DR   12xxxx   A/R-GSFIC   Actuals ledger
                CR   4854xx   State Gifts-Capitalized

      Manual Journal:
      DR   169xxx   Construction WIP   Capital ledger
                CR   8xxxxx   Capital Expense (Contra)
                          (Use same account as in Actuals entry)

  7. As reimbursements are received from GSFIC, debit Cash, and credit Accounts Receivable (A/R).

  8. At the completion of a capital project, the asset must be added to the Capital ledger, probably as a parent/child relationship, depending on the asset. This will result in the following entry on the Capital ledger: *

    Asset Management Business Process:
    DR   16xxxx   (Appropriate capital account)   Capital ledger
              CR   169xxx   Construction WIP

    * Note: For institutions using the GeorgiaFIRST model of the PeopleSoft Financials software, this will be a manual add using the CWIP trans code, which will automatically debit fixed asset 16xxxx and credit 169000.

  9. Remember to withhold retainage if appropriate.

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