Tracking Expenses in Facilities
Requirements for Tracking Expenses when maintaining, building or
improving a facility
Minnesota State Colleges and Universities
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Overview
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Planning guidance
Key data and information elements
Project Snap Shots
Proposed program integration and analysis
Recommendations
Each campus has funds to improve its facilities:
Operating Funds: this is for annual operations as
well as the Repair and Replacement category.
Operating Funds may also support major capital
projects that add new program spaces.
Capital and HEAPR Funds: legislative appropriation – bond proceeds
Other People’s Money (revenue sources): grants, gifts, foundation, etc.
While the money (revenue) COMES IN from different sources:
it needs to be coded correctly.
General Operations
Fund 110
Program Code 710:
(Assignment to Operations that
reflects Physical Plant expenses)
Capital Projects from
Bond Proceeds:
Fund 820
HEAPR and
Capital Projects
Repair & Replacement
(R & R) Fund 830
Capital Projects from
Campus or Other
People’s Money
(Revenue) for
Improvements or
New Programs
Contact Campus
Assistance
2006-07 Reinvestment Plan and Reporting
Expectation per Board May 2006 to budget and spend on campus
$1 a square foot a year.
This $1/sqft is the dollar amount campuses need to code correctly
to assure accurate reporting
Office of Chancellor Facilities Unit will run reports from Fund 830
R & R to monitor and report campus expenditure.
Fund and Object Codes differ.
Object Codes are not fund specific: they can be attached to any
Fund Code
Reporting and analysis will be done by reviewing Fund Code 830
and the Object Code to identify :
“how much campuses are spending to maintain their facilities”.
Fund Code: A fund is a fiscal entity that has a self-balancing set of accounts. A fund contains all assets,
liabilities, fund balances and changes to fund balance. A fund segregates activity for legal compliance,
for the purpose of attaining Board of Trustees objectives or for financial management.
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In lay terms - the Fund Code separates specific financial activities, and resources within that fund can
only be used for those activities. This is like separate checking accounts
Object Code: Object codes are four-digit expense and revenue codes established and maintained by the
Office of the Chancellor.
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In lay terms – the Object Code identifies the nature of a particular expense (i.e. salaries, services,
supplies, equipment, etc).
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The same Object Code can be used in many different Fund Codes.
It is imperative for finance and facilities staff to correctly code both the
Fund and Object Codes for facilities expenses to be accurately reported.
Operations Fund 110 – Program Code 710 : is used to record general operations of the
institution (i.e. instruction, academic support, physical plant, etc). This fund mainly
contains state appropriations, tuition, instructional fees, and other revenues that support
the general operations of the institution. Program Code 710 (Physical Plant) captures
expenses within the general operations fund related to physical plant operations, It
includes activities related to the custodial care of buildings, building systems, and
attached equipment such as heating and utilities, ordinary repair and upkeep of
buildings, and plant equipment, grounds maintenance, equipment rentals, nonprogrammatic hazardous waste removal, refuse removal, building leases, safety and
security activities, debt services, services required for daily, annual, repetitive functional
uses of facilities and grounds, and scheduled repetitive work, programmed scheduled
maintenance and unscheduled repairs.
Repair & Replacement Fund 830: Repair and/or in kind replacement of physical elements
of facilities, systems and fixed equipment.
Capital Projects Fund 820 & various other funds: Usually new projects, but can be
additions and renovations that both remove backlog, address renewal and add new
program issues or improve obsolete space. Funds can be initiated from sources such
as the legislature, private donors, campus funds, etc. The source of revenue will
determine in which fund the activity should be recorded. For example, a capital project
funded from G.O. bond proceeds is recorded in Fund 820. Ask Campus Assistance
which fund to code for other sources of funding.
Physical Plant Operations
Fund 110
Program Code
710: Physical
Plant
Fund 110:
General
Operations
Cost Center
Various object
codes (identifies
type of expense)
HVAC maintenance & operation, plumbing services, general maintenance, custodial
services, grounds maintenance, physical security, debt service
Repair and Replacement
Fund 830
Program Code
710: Physical
Plant
Fund 830:
Repair &
Replacement
Cost Center
Various object
codes (identifies
type of expense)
Renovation projects, tuck-pointing, carpet/flooring replacement, repair or
replacement of systems or subsystems, electrical or mechanical replacements
Examples of Facilities Funding: type of object code
may fit in some or all of the Fund categories
Funds
Object Codes
Operations 110
R & R 830
Program Code 710
Capital 820, 825
and others
Unlikely, but there may be a
condition that warrants a site
survey for on-going operations of
some type. Don’t automatically
assume!
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Renting
Equipment
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Salary: staff
working on
project
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Unlikely, but there may be a
condition that warrants a
consultant or on-going operations
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Survey Site plan
Consultant
Unlikely to be an appropriate
use of bond funds. Review
with Director of Construction to
confirm.
MAY be an appropriate use of
internal operations funds that
are building a new program
space.
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Specifics……each project requires analysis, review,
confirmation to accurately reflect your good work!
The following pages indicate the variety of Object Codes and types of
activities that can be correctly entered for a Fund Code. If an expense
is originally coded in one fund and it is confirmed that it should have
been in a different Fund, then the CFO should correct the transaction
in ISRS.
Review these definitions carefully; the amount of dollars each campus
spends to maintain its facilities will be critically evaluated; and lack of
spending may limit the dollars for future HEAPR or capital projects!
Shaded areas are questionable and must be reviewed carefully to
accurately report the proper Fund Code and Object Code
Additional info on Specific Problems campuses may have….these
could be in the grey shaded areas…….
1.
How to code Furniture Fixture and Equipment? If it is attached to the structure
and is replacement, then it should be coded in Fund Code 830 R & R. If it is loose
table and chairs and/or improvements and not replacements, it should be in Fund
Code Operations 110 – (Program Code 710)
2.
Example of Academic Program area that is spending funds to improve the
flooring in their lab space. This activity should be reported in Fund Code 830
R & R. However, it was originally coded in the Academic Program area (General
Operations Fund 110), so this expense must be moved from Fund 110 to Fund 830.
This expense will then be reflected in the data pulled by the Facilities Unit. The
CFO will need to correct the transaction in ISRS, moving it from General Operations
Fund 110 to R&R Fund 830. If this correction is not done; then the campus is not
correctly coding their R and R expenditures.
2.
Craftspeople and staffing: Campuses MAY code staff to Fund 830 R&R if they are
actually performing R & R related duties. However, if they are just changing light
bulbs, that is not an acceptable R & R expense. Verify staff issues with us! If a staff
person is 80% daily or annual maintenance, then it is possible that 20% is spent on
replacing doors, changing out flooring, etc. Be accurate in assessment. Call the
Facilities Unit to discuss.
4.
Major improvement or program change: $100,000 from general operations is
scheduled to improve offices. But upon close review, $10,000 of it is for R & R
electrical and lighting replacement: so the campus should transfer $10,000 out of
general operations and place it in Fund 830 R & R so that is coded correctly.
FUND CODE 110 - GENERAL OPERATIONS
FUND CODE 830 - REPAIR AND REPLACEMENT
PROGRAM CODE 710 - PHYSICAL PLANT
General Definition for Operations:
The physical plant services required for programs support and other
functional uses of campus facilities and grounds
General Definition for Repair & Replacement:
Repair and/or in-kind replacement of physical elements
of facilities and fixed equipment (Boiler, pumps etc.)
Architect/Engineering/Design services attributed to new capital construction
and campus planning/development (Facilities Master Plans and Predesigns)
Architect/Engineering/Design services attributed to specific R & R projects
Generation and maintenance repair of steam, hot water, chilled water
generating equipment. Stationary Engineers (202) and Steam Boiler Engineers
Replacement of all electrical and mechanical components. Including major
projects not funded by HEAPR or Capital appropriations
Construction Management attributed to specifc R and R projects
All Utilities (electric, natural gas, fuel oil, purchased hot water/steam, water,
sewer) services
Repair and replacement of utilities
Improvements or program changes (may also be coded to Capital Fund 825)
Renovation Projects : (same general use)
Building Automation/Energy Management
Building Hardware repairs/replacement: Voice Mail, Blue Light Phones, Call
Boxes, Radio, Telephones.
Tuckpointing masonry walls
Changing fluorescent light ballast and relamping
Equipment operations (vehicle drivers and equipment operation and
maintenance)
Window and door replacements
Communication System Maintenance - Install/moving lines
Carpet and Flooring Replacement
General Maintenance Work and Custodial services (Including Space Event
Services)
Building Services Supervisor, maintenance foremen (Bargaining unit 216 &
218)
Plumbing and Steam Fitting Services
HVAC Maintenance and Operation
Hazardous Materials Management and Storage/Removal Costs
Leasing physical plant equipment
Grounds Maintenance: Lawns, Landscape, Snow Removal (Roads Sidewalks)
Sidewalk replacement, permanent water control or grounds repair that is not
annual or montly
Locksmith – daily repairs
Major re-key projects
Refuse Collection & Disposal
Maintenance Contracts: Custodial/Elevator/Boiler/EMS/Security/Grounds
Physical Security (Parking Lots not included)
Supplies and materials attributed to facilities maintenance and repair
Debt Service
Consultants (relative to the Phsyical Plant)
Land/Building Purchases
Examples of tasks and
where they should be coded
Specifics……each project or activity requires analysis, review,
confirmation to accurately reflect your good work!
If an expense is originally coded in one fund and it is confirmed that it should have been in
a different fund, then the CFO should correct the transaction in ISRS. This will assure
accurate reporting at year end.
Review these definitions carefully as the amount of dollars each campus spends to maintain
its facilities will be critically evaluated, and lack of spending may limit the dollars for future
HEAPR or capital projects!
Code correctly.
Expense data will be reviewed for accuracy and level of
spending.
i.e. If the Object code for Land Acquisition is used – it could NOT be coded to the 830
R&R Fund. …so code correctly!
Contact Facilities Unit if questions!
Repair and Replacement Budgeting and Reporting
Fund 830
 Budgets are established and can be adjusted as needed
 Expenses that meet repair and replacement definitions
are accurately recorded
 Facilities Unit within the Office of the Chancellor will
monitor budget and expenses by extracting data from
Fund 830.
 Each campus’ repair and replacement spending will be
evaluated and lack of spending may limit the dollars for
future HEAPR or capital projects.
Repairs & Maintenance
From a Financial Reporting Perspective
 Facilities uses the term Repair and Replacement (R & R)
to describe repairs and/or in kind replacement of
elements of facilities, systems and fixed equipment.
 Financial Reporting uses the term Repairs and
Maintenance to report both 1) general operating repair
and maintenance expenses and 2) other capital
acquisition or improvement expenses that do not meet
our minimum capitalization criteria. This is a line item
that is presented on the MnSCU Annual Financial
Statements.
 These two amounts will never be the same. We use
similar terms for different purposes.
Operating Statement
from the MNSCU Annual
Financial Statements
(includes all institutions)
MINNESOTA STATE COLLEGES AND UNIVERSITIES
CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
(IN THOUSANDS)
2012
Operating Revenues
Tuition, net
Fees, net
Sales and room and board, net
Restricted student payments, net
Other income
Total operating revenues
$
538,547
67,692
118,045
107,255
17,002
848,541
2011
$
539,018
71,784
121,088
103,368
16,496
851,754
Operating Expenses
Salaries and benefits
Purchased services
Supplies
Repairs and maintenance
Depreciation
Financial aid, net
Other expense
Total operating expenses
Operating Loss
1,203,159
210,875
149,088
33,299
104,102
34,931
47,057
1,782,511
(933,970)
1,249,299
218,838
164,292
34,606
97,297
56,887
46,217
1,867,436
(1,015,682)
Nonoperating Revenues (Expenses)
Appropriations
Federal grants
grants Beginning of Year
TotalState
Net Assets,
Private grants
Interest income
Interest expense
Grants to other organizations
Total nonoperating revenues (expenses)
551,293
369,139
74,346
1,870,107
30,338
5,463
(22,526)
(11,231)
996,822
613,382
420,175
65,481
1,723,766
22,377
6,418
(20,862)
(15,687)
1,091,284
Income Before Other Revenues, Expenses, Gains, or Losses
Capital appropriations
Capital grants
Donated assets and supplies
Gain (loss) on disposal of capital assets
Change in net assets
Total Net Assets, End of Year
$
62,852
75,602
56,361
484
2,302
(496)
121,503
65,480
555
1,515
3,189
146,341
1,991,610
$
1,870,107
Components of Repairs & Maintenance
on the Financial Statements
The activity in the following 5 ISRS object codes crosswalk to Repairs
& Maintenance on the annual financial statements:
1210 – Repairs to equipment and furniture ($3.8M in FY12)
1240 – Repairs & alterations to buildings ($12.0M in FY12)
1241 – Service Center – Telephone services ($46K in FY12)
1260 – Maintenance contracts ($6.4M in FY12)
1280 – Other repairs ($2.6M in FY12)
The remaining $8.2 Million of the $33.3 Million on the financial statements
comes from project expenses funded by GO Bond proceeds that did not
meet the capitalization criteria or did not extend the useful life of the asset.
 Capitalization is the financial accounting term whereby capital
acquisitions (buildings, building improvements, equipment,
etc.) are accounted for as either an asset or expense. The asset
may then be depreciated over a period of time. MnSCU’s
capitalization policy includes the following minimum requirements.
Buildings and building improvements expenses over $250,000 are
capitalized as an asset, whereas those expenses below $250,000
are shown as repairs and maintenance expense.
 Financial reporting reviews all of the college/university expenses in
Fund 820 to determine which amounts will be capitalized versus
expensed. Financial reporting works with the colleges and
universities directly for other capitalized assets in other funds.
 The minimum requirement for capitalization of equipment is
$10,000, for those purchases beginning in FY2009 (Prior to this date
our minimum requirement was $5,000). Equipment purchases that
do not meet this requirement are reported as supplies expense.
3 Examples
 Site Drainage Repair – Project cost of $300,000. This
project exceeds the $250,000 minimum requirement for
capitalization but does not extend the useful life of the
asset. It will be expensed.
 Performing Arts Stage Lighting – Project cost of $115,000.
This project doesn’t exceed the $250,000 minimum
requirement. It will be expensed.
 ABC Commons Remodel – Project Cost of $600,000.
This project exceeds the $250,000 minimum requirement
for capitalization. It will be capitalized and will become an
asset on the financial statements.
If you have questions on how a requisition or contract should be coded
- - please call us to discuss!