Capital Projects Fund
Accounting
WASBO Annual Conference 2006
Presented by Christie Hazlett, OSPI,
Supervisor School District and ESD
Accounting
Capital Projects Fund
A Governmental type fund.

It is used to account for the acquisition of
financial resources to be used for construction
of major capital facilities (other than those
financed by proprietary funds and trust funds).
GASB Cod. Sec 1100.103a[3].
Capital Projects Fund
School Districts in the state of Washington
have two funds considered Capital Project
funds. Can you name them?
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Capital Projects Fund
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Transportation Vehicle Fund
How is the CPF financed?
Generally from proceeds of the sale of bonds.
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Voter approved bond issues – proposition must
include a description of the projects for which the
money is being raised.
RCW 28A.530.010 authorizes School Districts to
issue bonds for certain capital projects.
The acquisition of school buses is not a capital project;
therefore, bonds issued pursuant to this RCW cannot be
used to acquire school buses.
State matching revenues.
Special Levies.
What is the focus of CPF
Accounting?
Modified Accrual Basis (except cash basis
districts).

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Earned, measurable, and available (same for
all governmental fund types).
Accrual basis – Earned and measurable only.
Sources and uses available resources.

Amounts are recorded as revenues or other
financing sources when they are both
measurable and available.
What are the allowable
expenditures in the CPF?
Revenue source: Sale of Bonds.
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Restricted to sites and buildings as authorized by law
or as necessary or proper to carry out the function of
a school district.
Improvement of energy efficiency and installation of
energy systems and components.
Structural changes and additions to buildings and
sites.
The purchase of initial equipment as defined in this
section is also allowable.
What are the allowable
expenditures in the CPF?
Revenue Source: Special Levies.
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Same purposes as bond proceeds.
Major renovations of buildings.
Renovation and rehabilitation of playfields.
Costs associated with implementing technology
systems, facilities and projects, including acquiring
hardware, licensing software, and on-line applications
and training related to the installation of the foregoing.
Additional major items of equipment and furniture
(RCW 28A.320.330).
The resolution approved by the voters authorizing the special
levy must include the purpose of raising the moneys.
What are the allowable
expenditures in the CPF?
Revenue Source: Investment earnings.

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Investment earnings from bond proceeds and
the proceeds from special levies are restricted
to the same purposes.
The purchase of initial equipment is also
allowable.
What are the allowable
expenditures in the CPF?
Revenue Source: Insurance Proceeds.
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Insurance proceeds that represent
reimbursement for loss of a building and
contents shall be deposited to the CPF.
Insurance proceeds for business interruption
insurance shall be credited to the general
fund.
Expenditures for the replacement of the
building and contents shall be expended from
the CPF.
What are the allowable
expenditures in the CPF?
Revenue Source: State Apportionment.

State apportionment may be used for the
same purposes as special levies and bond
proceeds.
Revenue Source: Sale of Real Property.

The sale of real property may be used for any
legal purpose of the CPF.
What are the allowable
expenditures in the CPF?
Revenue Source: Lease, Sale, or Rental
of Surplus Property.

Expenditures necessary to transact the sale
of real estate or the lease, sale, and/or rental
of surplus property are charged to the CPF.
Include attorney fees, sales commissions, and
appraisal fees.
What are Capital Outlay
Expenditures?
Those expenditures which result in the
acquisition of capital assets or additions to
capital assets:
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Land
Existing buildings
Improvement to grounds
Construction of buildings
Additions to buildings
Remodeling
Initial equipment
What Other Items are considered
Capital Outlay in the CPF?
Facilities to house students during the
construction or remodeling of a school
building.
Legal fees for capital projects.
Election costs upon passage of the levy.
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Failed levy election costs are charged to the
GF, however, the CPF may reimburse the GF
for these expenditures if the levy passes at a
later time within the same fiscal period.
Are repair charges charged to the
CPF?
Typically no.
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Repairs for building structures that do not add
to existing facilities are recorded in the GF.
Rule of thumb, if changes involve roof,
structure, or walls the expenditure would be
recorded to the CPF as remodeling.
Capital Projects Fund Expenditures
Type Codes
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See Handout
Capital Projects Fund Expenditures
What type code would you use for
expenditures to pave the parking lot?
12 - Improvements
Capital Projects Fund Expenditures
The school district has incurred election
costs for the bond/levy election. The
election was successful.
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Can the CPF pay for the election costs?
Yes
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What expenditure type code would be
appropriate?
63 ~~~
Capital Projects Fund Expenditures
The school district is going to hire a
construction manager to oversee the
construction of a new building.
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Can the costs associated with hiring the
construction manager or management company
be charged to the CPF?
Yes
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What expenditure type code should be used?
21
Capital Projects Fund Expenditures
Is it ok to pay the rent for another facility
from the CPF if you have to relocate
students for a remodeling project?
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Yes
What expenditure type code do you use?
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22
CPF Expenditure Object Codes
The only difference in the classification of
objects of expenditures between the CPF
and the General Fund are the following
definitions:
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Object 5 Supplies, Instructional Resources,
and Noncapitalized Items.
Object 9 All Other Capital Outlay.
CPF Expenditure Object Codes
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Object 5 Supplies, Instructional Resources,
and Noncapitalized Items.
Only initial expenditures for new buildings for the
purchase of nonconsumable library, text, and
reference books are allowable in the CPF.
Items of a consumable nature are not allowed in
the CPF (i.e. workbooks).
CPF Expenditure Object Codes
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Object 9 All Other Capital Outlay.
Since all expenditures of the Capital Projects Fund
are of a capital outlay nature, Object 9 is labeled
All Other Capital Outlay in the CPF.
CPF Expenditure Source/Use
Codes
As we discussed earlier, school districts
receive and use resources that have
restrictions or conditions attached.
When revenues are received, the school
district must account for amounts received
and expended for that purpose. The
source/use code provides a common
coding classification for both restricted–
use revenues and expenditures.
CPF Expenditure Source/Use
Codes
A one-digit source/use code should be assigned
as follows:
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0 – Unrestricted and undesignated.
1 – Derived from the sale of bonds and investment
proceeds and used for the purposes expressed in the
bond proposition.
2 – Received from capital project levies and used per
levy propositions.
3 – Received from state agencies and used for
funded projects.
4 – Received from federal agencies and used for
federal portions of individual grants.
CPF Expenditure Source/Use
Codes
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5 – Other sources and uses not described
above.
9 – Amounts to be distributed.
This is an intermediate code for use during the
fiscal year and does not have a balance at budget
preparation time or when year-end reports are
issued.
CPF Expenditure Source/Use
Codes
Revenues and Other Financing Sources that are
not restricted in their use should be coded with
source/use code “0”.
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For example, state apportionment revenues
(Revenue 3100) that have been redirected from the
General Fund to the Capital Projects Fund are not
restricted and should be accounted for by using the
“0” source/use code.
If the district puts restrictions on these resources, then
source/use code “3” should be used.
Reservation of Fund Balance Using
Source/Use Codes
Establishing reservations of fund balance is
done by closing Account 960 Revenues and
Account 965 Other Financing Sources to the
reserve accounts listed below through the use of
the source/use code.
To set up reservations of fund balance, the third
digit in the revenue or other financing source
account number must match the third digit in the
reserve account section of the balance sheet.
Reservation of Fund Balance Using
Source/Use Codes
Closing expenditures that were expended
on the restricted use reduces the
restriction on Capital Projects Fund
resources.
So the account 530 Expenditures that
were restricted are closed to the general
ledger reserve accounts representing that
restriction.
Reservation of Fund Balance Using
Source/Use Codes
The applicable general ledger reserve
accounts are:
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861 – Reserve of Bond Proceeds
862 – Reserve of Levy Proceeds
863 – Reserve of State Proceeds
864 – Reserve of Federal Proceeds
865 – Reserve of Other Proceeds
869 – Reserve for Undistributed Proceeds
Reservation of Fund Balance Using
Source/Use Codes
The portion of G/L 960 Revenues and G/L
965 Other Financing Sources representing
unrestricted resources should use
source/use code “0” and must be closed to
890 Unreserved, Undesignated, Fund
Balance.
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Examples include redirected state
apportionment and revenue from the lease of
real property.
Reservation of Fund Balance Using
Source/Use Codes
The following are general guidelines in
determining which reserve account to use:
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Investment earnings have the same
expenditure restrictions as do the underlying
resources generating the revenue.
Assume that the most restrictive resources
were expended first.
Example Journal Entries
See Handout