Budget Control and Reporting - Capital Works

Approving Authority:	Council
Establishment Date:	26 March 1997
Date Last Amendment:	23 August 1999
Nature of Amendment:	5 August 2002 3.3.1, 3.3.2
Date Last Reviewed:
Publication Reference:
Contact Officer:	Director, Financial Services

Introduction
	The University's annual capital works budget is developed based on the need for additional building works which are identified and prioritised under its medium and long term capital development plan. The capital works budget comprises the following: major works; minor works; and minor modifications.
Principle
	Major works will be funded by the Commonwealth Government and the university. Minor works will be funded from a central allocation of recurrent funds. Faculties will provide funds for minor modifications of less than $25,000. Car parking facilities which are part of minor works will be funded by internal loans. There will be an approval process for each of the design, tendering and tender approval stage of each project.
Procedure
3.1	Capital development plan 3.1.1 Major works In February/March of each year, a draft is prepared based on submissions received from faculties/divisions. Priorities are determined by the Infrastructure Committee. A priority list is submitted to the Resources Committee for endorsement prior to approval by Council. 3.1.2 Minor works Requests for improvement of buildings or facilities may emerge from faculties or divisions. Requests are submitted to the Director, Buildings and Property Division for consideration and incorporation within the draft minor works budget. The Director, Buildings and Property Division prepares a prioritised minor works plan for consideration by the Infrastructure Committee. Following confirmation of funding from the Recurrent Budget, the finalised priority list of minor works is incorporated into the university's capital works budget which is submitted to the Resources Committee for approval.
3.2	Budgetary control 3.2.1 Payment of capital works Expenditure on all major and minor works is controlled within the allocation to each project in the approved annual budget. Invoices relating to capital works are budget checked by the project officer before processing of payments. Purchase Requisitions are budget checked before Purchase Orders are issued 3.2.2 Approval for additional cost/new items Additional costs or new items for any major or minor works require prior approval of the Vice Chancellor before expenditure is committed or incurred. The additional project costs are reported in the Financial Reports on Capital Works Programme to the Resources Committee and Council. 3.2.3 Allocation of budget Approved funding and expenditure for major works are allocated to individual projects for the purpose of budgetary control. Income for minor works is grouped and kept in one central account (minor works contingency) while expenditure for minor works is allocated on a project by project basis.
3.3	Accounting treatment and capitalisation 3.3.1 Income & expenditure Capital Income and Expenditure incurred under the Capital Works Programme are recorded in the General Ledger (GL) under the following source and cost centres: Source Code — mainly 001 (and source code 099 for Technical Infrastructure) Cost Centre — 110 for major works, 111 for Engineering Infrastructure, 112 for Asset Renewal, 113 for Minor Works, 126 for Technical Infrastructure (when part capitalised). Building works expenditure including architect fees, engineering expenses, construction costs and other project expenditure is treated as an asset in the Balance Sheet. 3.3.2 Capitalisation On completion of the project, the building works expenditure is capitalised as building cost. The following GL journal entry is made: DR 110, 111 or 112 – NNNN – 6101 – 000 – 1 – 01 CR 110, 111 or 112 – NNNN – 4301 – 000 – 1 – 01 CR 110, 111 or 112 – NNNN – 4302 – 000 – 1 – 01 CR 110, 111 or 112 – NNNN – 4303 – 000 – 1 – 01 CR 110, 111 or 112 – NNNN – 4304 – 000 – 1 – 01 CR 110, 111 or 112 – NNNN – 4305 – 000 – 1 – 01 CR 110, 111 or 112 – NNNN – 4306 – 000 – 1 – 01 CR 110, 111 or 112 – NNNN – 4307 – 000 – 1 – 01 3.3.3 Work in progress At the end of each financial year, balances on all capital works, which are not completed, are carried forward: 3.3.3.1 Major Works Building Works Expenditure — The balance in each account is transferred to a work in progress account which is automatically carried forward as a balance sheet item; Net Surplus/Deficit for each Project — The balance for each project is carried forward as part of the year end process. 3.3.3.2 Minor works Building Works Expenditure — The balance in each account is transferred to a work in progress account and is automatically carried forward; Net Surplus/Deficit — The balances of all minor works accounts are carried forward as one total.
3.4	Reporting 3.4.1 Four- weekly reports showing the financial outcome of the capital works programme are generated as part of the period end process. The report is distributed to the Executive Director of Administration and the Director, Buildings and Property Division. 3.4.2 A financial report incorporating revision of budgets on the capital works programme is prepared and submitted to the Resources Committee and Council on a quarterly basis.