University of Florida

Finance and Accounting

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Construction Accounting

  1. General
  2. Major Construction
  3. Minor Construction

1. General

    1. The Construction Accounting Department serves as the chief budgetary and fiscal office for all construction projects undertaken by the University. All construction related accounting transactions, including budget requests, invoices and deposits, should be submitted to the Construction Accounting Department, 114 Elmore Hall. Finance & Accounting procedures should be followed when submitting transaction documentation. Construction Accounting is also responsible for capitalization decisions associated with all construction projects. The Construction Accounting Department will maintain the fixed asset accounting records for construction in progress, buildings, infrastructure and land. If you have any questions concerning any of these items, please contact the Construction Accounting Department at 392-8251.
    2. Definitions Fixed Capital Outlay (FCO)“Fixed Capital Outlay” means real property (land, buildings, fixtures and fixed equipment) including additions, replacements, major repairs and renovations to real property which materially extend its useful life or materially improve or change its functional use and including furniture and equipment necessary to furnish and operate a new or improved facility, when appropriated by the Legislature in fixed capital outlay appropriation category. General Revenue funds may not be used for FCO expenditures.
      Minor Renovation/Construction Request (Form 90)
      Required University of Florida form to document the review and approval/disapproval of proposed minor construction projects (under $1,000,000) relating to new construction, major repairs, remodeling and renovation.
    3. Building Capitalization Policy
      In accordance with statutory provisions and generally accepted accounting principles, the University will capitalize and include in its real property records the following:
      1. For construction projects beginning on or before June 30th, 2008:
        1. All new construction
        2. Remodeling, renovation, and major repair projects with total cost of $100,000 or greater or 25% or more of the building value. Total cost will include all professional fees, contingencies, materials, etc. associated with the project. Purchases of tangible personal property (OCO) are not included in the evaluation of project costs for capitalization purposes.
        3. All land purchases, donations, exchanges, etc.The Construction Accounting Department, with the approval of the Associate Controller, may capitalize projects costing under $100,000 if a determination is made that the completion of the project will substantially extend the useful life or substantially improve the use of the building. In such instances the costs of project will be added to the real property records. Purchases of tangible personal property (OCO) are not included in the evaluation of project costs for capitalization purpose.
      2. For construction projects beginning on or after July 1st, 2008:
        1. The original cost to construct new buildings
        2. The costs related to renovation projects which adds new square footage
        3. The costs to a renovation project which extends the useful life of a COMPONENT part (i.e. roof, plumbing, electrical, etc) of the building by two or more years, and meets one or both of the following criteria:
          1. The costs are $250,000 or more
          2. The costs are 25% or more than the original cost of the building.Note: Total costs include all professional fees, contingencies, materials, etc. Excluded costs include tangible personal property and asbestos abatement costs.

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2. Major Construction

    1. Major construction projects are defined by Standard Practice as those costing more than $1,000,000. If your department is considering or participating in a major construction project the Facilities, Planning and Construction Management Division of Finance and Administration will assist you with any questions you may have.

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3. Minor Construction

    1. Minor construction projects include the construction of new facilities (which encompasses the addition of square footage to existing facilities), remodeling and renovation projects costing less than $1,000,000. Such projects are funded, managed and controlled at a University level.
    2. Regardless of their total cost, all minor construction projects must obtain approval through the completion of a Minor Renovation/Construction Request (Form 90). This form is an important planning document which requires the review and approval of several offices involved in minor construction management. A renovation, remodeling or new construction project may not begin until all necessary approvals have been obtained and a completed copy is returned to the initiating department. Minor Renovation/Construction Requests (Form 90) are not required for maintenance and repair projects. This work is scheduled through the appropriate Physical Plant Division work management center.
    3. The appropriate funding source for minor construction projects reported on the Minor Renovation/Construction Request (Form 90) depends upon the total estimated cost of the project. Minor projects with costs of less than $100,000 may be paid from E&G, auxiliary, contract and grant (assuming construction is an allowable expenditure of the contract or grant), foundation or other funding sources. OCO budget may not be used for minor construction. Minor projects costing more than $100,000 or adding square footage to existing facilities may not be funded from E&G resources.
    4. Proper planning and accounting for a minor construction project requires an understanding of University procedures governing construction. If you have any questions or need assistance please do not hesitate to contact the Construction Accounting department at 392-8251.

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