Capital Project

Accounting Guide

TAFE Finance Page 1 of 21 July 2017 TSAF-Finance/TAFEFin/Procedures & Manuals/SAP/Project Accounting

Contents

1. Compliance Reporting ............................................................................................................................... 2

1.1 Capital Expenditure Program - Authorisation Limits ............................................................................... 2

1.2 Capital Funding ........................................................................................................................................ 2

1.3 Capital Planning Timeline ........................................................................................................................ 3

1.4 Financial Reporting Timeline ................................................................................................................... 3

1.5 Internal Consultation Process .................................................................................................................. 4

2. Operational Requirements ........................................................................................................................ 5

2.1 Creation of Capital Projects in SAP .......................................................................................................... 6

2.2 SAP Terminology ...................................................................................................................................... 6

2.3 Recording Capital Projects ....................................................................................................................... 7

2.4 Project Structures .................................................................................................................................... 8

2.5 Project Data Elements ........................................................................................................................... 10

2.6 Transaction Postings .............................................................................................................................. 11

2.7 Budgets and Forecasts ........................................................................................................................... 13

2.8 Settlement Process ................................................................................................................................ 14

2.9 Reporting ............................................................................................................................................... 15

Appendices ...................................................................................................................................................... 16

Appendix 1: TAFE NSW Minor Works Proposal Template........................................................................... 16

Appendix 2: SAP Project Settlement (Capitalisation) .................................................................................. 17

TAFE Finance Page 2 of 21 July 2017 TSAF-Finance/TAFEFin/Procedures & Manuals/SAP/Project Accounting

The objective of this guide is to provide information to assist with the management and reporting of capital projects. It is critical that capital expenditure is monitored accurately and consistently to provide accurate reporting and manage potential risks.

1. Compliance Reporting

1.1 Capital Expenditure Program - Authorisation Limits The capital expenditure program and projects are reported in Budget Paper No. 2

Infrastructure Statement for all Government agencies. It provides a four year plan for the Major Capital Works projects i.e. current financial year and three out years for new and work in progress (WIP) Capital Projects

TAFE has a total capital expenditure limit from all funding sources.

NSW Treasury encourages accurate and timely forecasting – April/May, August, October and June are key reporting dates.

TAFE is required to report the TAFE balance sheet on a monthly basis to NSW Treasury and provide a reconciliation to TAFE’s audited financial statements each year. This includes capitalisation of all assets.

TAFE must comply with Treasury approved capital expenditure authorisation limits and seek approval for any adjustments.

The NSW Treasury requirements for changes to major capital works are as follows:

Approval for new major capital works under $5M ­ Ministerial approval is required. A business case, economic appraisal and financial

appraisal must be completed.

Approval for new major capital works over $5M ­ NSW Treasury approval is required. A business case, economic appraisal and financial

appraisal must be completed. ­ If the project is over $10M, it must go through the NSW Treasury Gateway Process.

Changes to an approved Estimated Total Cost (ETC) of under 10 per cent ­ Ministerial approval is required. An updated business case, economic appraisal and

financial appraisal need to accompany the request. The Minister informs the Treasurer.

Changes to an approved ETC of over 10 per cent ­ NSW Treasury approval is required. An updated business case, economic appraisal

and financial appraisal are required. For additional information refer to the Treasury Circular at the link below: TC12-20_Budget_Controls_-_Capital_Expenditure_Authorisation_Limits_dnd.pdf

1.2 Capital Funding TAFE is required to fund capital works from revenue sources. A levy on the business for

future investment should align with the Institute strategic investment plans at any point in time.

Decisions around minor and major capital works should be based on financial viability metrics over the medium to longer term. For example, will the new/enhanced asset support an acceptable return on that investment (ROI) and other financial viability measures?

Regions must generate cash flow from business margins to fund capital projects and state-wide capital projects.

For state-wide capital projects, there may be a requirement for either a contribution from Regions or funding to be held corporately.

Refer to the following Treasury Circulars and Policy Guidelines for further information: o NSWTC15-08_Agency_Carry_Forwards.pdf o NSWTC14-29_Management_of_Contingency_Provisions_for_Major_Projects.pdf o Accounting Policy - Guidelines for Capitalisation of Expenditure on Property Plant &

Equipment o Additional NSW Treasury Guidelines have been published on the TAFE Strategy

and Finance SharePoint site at NSW Treasury Guidelines - All Documents

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1.3 Capital Planning Timeline The Total Asset Management (TAM) Timeframe is an annual process which includes:

A 10 year Strategic Asset Management Plan (SAMP)

Capital works priorities for the next 10 years (10 Year TAM Plan)

Major Works Business Cases

The timeframes and other useful information for Major Capital Works has been published on the

TAFE Strategy and Finance SharePoint site at the link below:

Asset Management - Major Capital Works

1.4 Financial Reporting Timeline The monthly reporting cycle to NSW Treasury against the current year budget includes tracking against the Estimated Total Cost (ETC) in the Original State Budget. The table below details the monthly reporting cycle and other reporting requirements:

Timing Requirement Responsibility Items

Monthly – 7 days prior to the end of the month.

Reports distributed to Regional Program Managers to confirm cashflows

TAFE Property & Logistics

YTD Expenditure Estimated Total Cost (ETC) Monthly Forecast Forecast Beyond the Current Year by Year

Monthly – approx. last day of the month

Regions submit cashflows Regional Program Managers

YTD Expenditure Estimated Total Cost (ETC) Monthly Forecast Forecast Beyond the Current Year by Year

Monthly-1st Working Day

Monthly Settlement TAFE Finance Expenses transferred from P&L to AUC

Monthly – 3rd Working Day

Extract YTD actuals from SAP and update reports

TAFE Finance YTD Expenditure

Monthly-3rd Working Day

Update SAP BPC TAFE Finance Current Year Monthly Forecast Forecast Beyond the Current Year by Year

Monthly-5th Working Day

SAP BI Reporting published on the TAFE Strategy & Finance SharePoint site

TAFE Finance Current Year Budget Current Year Forecast Forecast Beyond the Current Year by Year YTD Expenditure Estimated Total Cost (ETC)

Monthly-8th Working Day

Report to NSW Treasury TAFE Finance Current Year Budget Current Year Forecast Forecast Beyond the Current Year (consolidated amount) YTD Expenditure Estimated Total Cost (ETC)

Periods 4, 8, 10 and 13 i.e. October, February, April and July.

Requests to Treasury for Carry Forward Adjustments

TAFE Finance Data returns based on YTD expenditure & cash flows

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1.5 Internal Consultation Process The following consultation process must be undertaken when capital program changes are

required:

Assess business and 1. Identify additional or amendments to

financial viability requirements

2. Review Business Case Scope/Contract

arrangements

3. Sign off from Regional General Manager

Decision to proceed

Email Request

`

Assess impact on ETC limits Assess Business Scope/Contract

and possible variation requirements

Decision to proceed

Inform Institute

TAFE Regional General Manager

TAFE Regional Program Manager

YES NO

TAFE Finance TAFE Property &

Logistics

YES NO

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2. Operational Requirements The table below summarises the operational requirements to enable accurate management and reporting:

Timing Requirement Responsibility

Once approved Create Projects and WBS elements.

Refer to Section 2.1

TAFE Finance

Monthly Review and update of the status of works in progress.

Refer to Section 2.5

TAFE Finance

Last day of the month

(MANDATORY)

Final transactions to SAP WBS Elements i.e. journals for the month.

All

Day 1 of each month

(MANDATORY)

Monthly Settlement in SAP.

Refer to Section 2.8.

TAFE Finance

Project Completion Final Settlement (Capitalisation) in SAP:

TAFE Finance to capitalise centrally managed

major works projects

Regions to capitalise Institute managed major and

minor works projects.

Refer to Section 2.8.

TAFE Finance & Regions

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2.1 Creation of Capital Projects in SAP When funding is allocated for Capital Projects and Capital Equipment Purchases, a project and Work Breakdown Structure (WBS) code is established in SAP to comply with budgeting and reporting requirements. SAP Capital Projects are used for the construction of capital assets and encompasses the purchase of land and/or the construction of a building or facility. All types of projects are required to be advised to TAFE Finance prior to commencement to be included in the forecasting and reporting cycle. Types of projects are detailed in the table below:

Project Type Description Process Responsibility

Major Works Projects with an ETC of more than $500,000 listed in the Budget Papers.

Created directly in SAP using the Project Accounting module.

TAFE Finance

Minor Works Projects with an ETC of less than $500,000 approved by the Minister. The template for Minor Works Proposals is included at Appendix 1 and an editable version is located on the TAFE Strategy and Finance SharePoint site at 2016_17 TAFE NSW Minor Works Proposal Template.docx.

Projects are created directly in SAP following the guidelines in this document in compliance with naming conventions etc.

TAFE Finance

Asset Purchase Projects

Purchases of individual assets over $10,000 as per accounting policy

Created directly in SAP using the Project Accounting module.

TAFE Corporate Units and Institutes

2.2 SAP Terminology Project – a framework used to track the cost of an activity or program over a period of time.

Project Mask – a coding system that has been created to quickly identify different types of projects and to support reporting e.g. CTP – Capital TAFE Project.

Project Definition – (or project ID) is at the top of the project structure and contains key details about the project. WBS Element – work breakdown structure which contains critical financial data to capture the cost of the project.

Settlement rules – an instruction for the system to transfer amounts to an Asset Under Construction (AUC) and subsequently to a final asset.

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2.3 Recording Capital Projects The Project System within SAP Finance is used to maintain and monitor all aspects of a project.

Project creation can be undertaken by: 1) Creating manually –

The work instructions at the link below will assist with the manual creation of Capital Projects in SAP: Work Instruction: FIN5026 - CJ20N Create Capital Project

2) Copying from an existing capital project –

o Follow the Work Instruction linked above but at Step 6 select “Copy project”. The following screen will display:

o After selecting the next available Project Definition code, this option allows you to enter a new description, the Project Profile i.e. DEC Capital Project and the Project Definition code that you wish to copy. The Finish Date can be entered at this stage or it will default to the current date which will need to be amended or deleted on the project.

o Once created, fields i.e. cost centre will need to be updated and existing settlement rules deleted.

3) Using a template –

Templates can be created for projects that use the same hierarchical structure. These need to be created with no settlement rules but the data elements applied i.e. cost centres will need to be edited.

The status of the project needs to be changed to Release from the top level after a project is created, checked and ready for use. Releasing and saving a Capital project will prompt the system to automatically create an AUC for this project. Once released, the project can’t be changed.

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Use the guidelines in this document to ensure consistent reporting. Specific naming conventions (Project Masks) are used for Projects and WBS elements:

CTP – Capital TAFE Projects – captures costs of major and non AMU minor works projects. Major Works Projects are created through TAFE Finance.

CTM – Capital TAFE Projects (AMS) – used for capital minor works interfaced from the Asset Management System through Asset Management Directorate (AMD).

CTA – Capital TAFE Assets – for purchase of TAFE assets that are not constructed or developed and are valued at or over $10,000.

RTP – Recurrent (Operational) TAFE Projects – captures costs of specific operational projects. These must be tagged as for statistical i.e. for reporting purposes only and do not require settlement.

2.4 Project Structures WBS elements are used to separate expenditure components in the project structure, for example:

Planning costs

Building works

Contracted Fees

Furniture and equipment. A project structure can consist of WBS with different project masks i.e. can include CTP and RTP.

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The structure for TAFE Major and Minor Capital Projects (CTP) in SAP is below:

Project Definition: CTP/00XXXX – Project

WBS Elements: CTP/00XXXX-01 – Project

CTP/00XXXX-01-01 – Building Work

CTP/00XXXX-01-01-01 – Construction

CTP/00XXXX-01-01-02 – Offsite Infrastructure

CTP/00XXXX-01-01-03 – Works Insurance

CTP/00XXXX-01-01-04 – Other Works

RTP/00XXXX-01-01-05 – Demolition

RTP/00XXXX-01-01-06 – Make Good

CTP/00XXXX-01-02 –Contingency

CTP/00XXXX-01-03 – Other Costs

CTP/00XXXX-01-03-01 – Statutory Fees

CTP/00XXXX-01-03-02 – Disbursements

CTP/00XXXX-01-03-03 – Relocation costs

CTP/00XXXX-01-03-04 – ICT

CTP/00XXXX-01-04 – Fees – Consultants

CTP/00XXXX-01-04-01 - Architect

CTP/00XXXX-01-04-02 – Interior Designer

CTP/00XXXX-01-04-03 – Project Management

CTP/00XXXX-01-04-04 – Quantity Surveyor

CTP/00XXXX-01-04-05 – Engineers

CTP/00XXXX-01-04-05-01 – Structural

CTP/00XXXX-01-04-05-02 – Mechanical

CTP/00XXXX-01-04-05-03 – Hydraulic

CTP/00XXXX-01-04-05-04 – Electrical

CTP/00XXXX-01-04-05-05 – Fire

CTP/00XXXX-01-04-05-06 – Civil

CTP/00XXXX-01-04-06 – IT Consultants

CTP/00XXXX-01-04-07 – BCA Consultant

CTP/00XXXX-01-04-08 – Access Consultants

CTP/00XXXX-01-04-09 – Landscape Architect

CTP/00XXXX-01-04-10 – Planning

CTP/00XXXX-01-04-11 – Heritage

CTP/00XXXX-01-04-12 – Legal

CTP/00XXXX-01-04-13 – Other

CTP/00XXXX-01-04-13-01 – Traffic

CTP/00XXXX-01-04-13-02 – Acoustic

CTP/00XXXX-01-04-13-02 – Audio Visual Consultant

CTP/00XXXX-01-04-13-02 – Graphic Designer

CTP/00XXXX-01-04-13-02 – ESD Consultant

CTP/00XXXX-01-06 – Fees - Forward Planning

CTP/00XXXX-01-07 – Furniture and Equipment

CTP/00XXXX-01-07-01 – Capital Furniture and Equipment

RTP/00XXXX-01-07-02 – Recurrent Furniture and Equipment

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Projects can be created with a combination of CTP and RTP WBS Elements as shown in the structure on the previous page. The structure for assets (CTA) projects requires a Project Definition and at least one WBS Element, for example:

2.5 Project Data Elements The Project Definition level of each Project is set up with the following:

Company – TAFE is 1020.

Plant – specific for TAFE Corporate and each RTO.

Location – specific for TAFE Corporate and each RTO.

Profit Centre – specific for TAFE Corporate and each RTO.

User Status – will default to INIT i.e. Initial but must be amended to NEW, WIP and COMP as the project progresses:

Every WBS elements is set up with the following attributes to support reporting.

Basic Data includes: o Project Type i.e. Major Capital, Minor Capital, ICT Projects, Recurrent Operational,

etc. o Person Responsible – not mandatory. o Responsible Cost Centre – same as the requesting cost centre for Capital Projects. o Requesting Cost Centre – drives postings and workflow. o Operative indicators – check boxes to specify postings allowed on the WBS.

Defaults to Acct asst elem which can’t be deselected. No other items are required for Capital projects. The Billing element is only allowed on stand-alone Recurrent projects.

Assignments: o Object Class – should be Investment o Investment profile (only required on Level 1 WBS Elements) – determines the AUC

category and allows for reporting of categories of assets, including: ­ Z00002 – DEC: Intangibles ­ Z00005 – DEC: Land ­ Z00006 – DEC: P&E ­ Z00007 – DEC: Building

Not required to be entered on the lower level WBS Elements. o Investment reason – defaulted from the selection of the Investment profile. o Recurrent WBS Elements must be flagged as “Statistical”.

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DEC Specific Fields: o Local Govt Area and State Electorate o Program & Sub Programs specify the nature of the project, for example:

Program Code Program Name

Sub Program Code Sub Program Name

8024 Non PMM Major Building Projects (TAFE) 9030 Major Works Central (TAFE)

9031 Major Works Institute (TAFE)

9032 Online Projects (TAFE)

282 TAFE Minor Works (from AMS) 283 Minor Building Projects

284 Sites

285 Building Equipment

286 General Equipment

287 Architectural Services

288 Computers

289 National Art School

297 ICT Infrastructure

8028

Non PMM Minor Works (TAFE)

9035 9036 9037 9038 9038 9040

Minor Building Projects Sites Building Equipment General Equipment Architectural Services Computers

8025 Other Funded Works 290 Other Funded Works

o Product Line – used for reporting Major and Minor works, including: ­ 1500 = Major Construction – State Fund ­ 900 = Major IT – State Fund ­ 700 = Other Minor – State Fund

o Fund - fund codes are assigned to each WBS Element, including: ­ 400 = State Funded Projects (TAFE Funded Majors and Minors) ­ 302 = Equipment ­ 842 = Commercial Activities Accumulated Funds

o Funding Year – year the project funding started o Project Region – codes for each Institute and State Office.

2.6 Transaction Postings Postings to Capital WBS elements i.e. shopping cart and journals default to the Cost Centre

and Fund Code set up in the Project.

Monthly settlement is run on the day after the last day of the month. There must be no postings to WBS elements i.e. journals after the last day of the month.

Journal processing - all Transfer Intra and Operating Expenses accounts (i.e. 500084-88 & 528799) should not be used when transferring expenses to Capital projects (WBS). Capital Expenses must be charged against Capital GL accounts (e.g. 522869 Construction Non Contract).

Expenditure captured by capital projects in SAP must comply with project accounting

standards in AASB138 regarding capital and recurrent expenditure.

Capital transactions should use the following tax codes:

o C1 Capital expenditure (includes GST)

o C2 Capital expenditure GST-free

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All expense accounts can be used with Capital WBS Element.

Institute should regularly review the transactions against the specific construction related

GL Accounts listed below:

o 522861 – Construction Fees Regular

o 522862 – Construction Fees Forward Plan

o 522868 – Construction Costs – Contract

o 522869 – Construction Costs – Non Contract

o 522901 – Construction Fees – Non Contract

o 522902 – Construction Contract Contingency

o 522903 – Client Contingency

o 522904 – Master Planning Fees

o 522905 – Construction - Siteworks

o 523580 – Equipment - Items

o 523581 – Furniture – Items

The table below details the end to end of a capital transaction:

Transaction

Document Types

GL Postings

Reporting Elements

Cost Centre

Profit Centre

Purchases/expense postings made against a Capital Project i.e. Capital WBS Element at any level of the project can be used.

WE

SA

ZA

IS

DR

CR

Relevant expense account 5xxxxx

Vendor/Bank

Yes Yes

Monthly Settlement moves all costs from the P&L to the AUC

AA DR AUC accounts -152520 157501 157502 180020

No Yes

(Note: all settlement is posted to the top level WBS element)

CR Expense account 5xxxxx

Not reported if

not entered in

the PO

Yes

Final Settlement moves the costs from the AUC to the settlement object i.e. asset, cost centre

AA CR AUC accounts - 152520 157501 157502 180020

No Yes

(Note: all settlement is posted to the top level WBS element)

DR Asset accounts- 152501 155001 to 155005

No Yes

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2.7 Budgets and Forecasts In year Budgets and Forecasts as well as the Original Estimated Total Cost (ETC) in the State Budget and the Revised ETC are entered for each Capital Project in SAP BPC by TAFE Finance.

The web based training and work instructions at the links below provide instructions for entering Capital ETCs and Budgets in SAP BPC:

Business Planning and Consolidation Solution

How to input Original ETC and Budget

How to revise Original ETC and Budget

How to run CAPEX budgeting reports

All capital expenditure is required to be within the TAFE Authorisation Limit, notwithstanding revenue sources.

These can be entered at the top level WBS element or on each WBS element for a project.

Budget version BTC and Forecast version FTC are used. They do not roll up into the cost centre budgets and forecasts but are reported separately. The SAP BI Project Cash Flow report located in the SAP Portal Reports tab can be used to monitor actuals against the ETC, budgets and forecasts of specified projects.

Forecasting is critical in the cash management of the TAFE capital program. Accurate and timely information is required to monitor capital expenditure.

Each month templates are distributed to each Region listing both major and minor works projects. This has been designed to capture the forecast for each project by month for the current financial year and each full year onwards for the life of the projects.

The following timeline will be implemented for current Major and Minor Capital Works:

Timing at month end Requirement Responsibility

Minus day 7 Cash flow templates update and circulation TAFE Property & Logistics

Minus day 3 Return template to TAFE Property & Logistics Institutes and TCS

Day 5 Finalise capital report with updated forecasts TAFE Finance/TAFE Property & Logistics

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2.8 Settlement Process Expenses need to be settled monthly to transfer costs to the AUC. Final settlement must be

performed when the project is completed.

Monthly Settlement: All capital projects are automatically set up with the first level settlement rule that transfers

all costs from the Profit & Loss area to the AUC. The rule will debit the AUC and credit the

expense account. This rule is run at the end of each month and is the rule that can be seen

in the project. Do not alter this rule in any way. This process is run by TAFE Finance.

Final Settlement (capitalisation) This process transfers the costs from AUC to the final asset when projects are completed

and/or the asset or equipment are ready for use. It is run to:

o Capitalise the costs of a component of a large/long term project e.g. a section of a large

building project

o End and close a project - it is important to clear completed projects from AUC as soon

as a project is completed. Assets cannot start depreciating until the Project or WBS is

settled. Refer to the Capitalisation Guideline on the TAFE Intranet for more information.

The status of Capital Projects can be changed to Technically Completed (TECO) to avoid

further transactions posting against the project.

The steps for final settlement are:

1. Ensure that there are no open purchase orders by running and reviewing SAP report

CJI5.

2. Asset creation – the asset creation process is critical to the settlement process as any

inaccurate information input during asset creation will cause the settlement of the asset

to be affected. Create the asset using the SAP Asset and equipment maintenance

request form located on the Finance Tab of the SAP Portal.

3. Establish settlement rule – a rule is created for final settlement of the project to the

newly created asset using CJ20N. The rule can be allocated to the asset by percentage

or amount. Status must be set to Technically Complete otherwise system will not

perform the final settlement.

4. Finalise settlement – perform final settlement to transfer costs from the AUC using

transaction code CJ88. The total dollar amount must be settled to a Fixed Asset by

allocating a dollar value or a percentage against it, either to:

A building Asset already created in SAP

An Asset Record – for asset purchases. Ensure that separate assets are created for

each equipment item and a settlement rule created for each asset, for example:

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5. Close the project – when the project has been completed and settlement finalised the

status of the project is changed to Closed at the Project Definition level in CJ20N.

This process can be completed by officers with the SAP Project Manager role.

Refer to Appendix 2 for detailed procedures for final settlement.

2.9 Reporting SAP GUI Reports:

CJI3 – Project Actual Cost Line Items

Displays line items that have been posted against projects and WBS elements.

CJI5 – Project Commitment Line Items

Displays commitments against projects and WBS elements.

CN41N – Project Structure Overview

Displays the structure of a project.

CN43N – Overview: WBS Elements

Displays the WBS elements and levels set up for a project and the assigned data elements.

ZAM_AS_EQ_DET – Assets and Equipment Detail Report.

Lists asset master details.

ZRFI_AUC_RECON – Asset Under Construction Reconciliation Report.

Displays opening and closing balances, postings i.e. additions in the current financial year and settlement values for assets under construction. You can drill down from the reports listed above to the original posting document by double clicking the line items display on the screen.

SAP BI Reports: The reports in the screen shot below are listed in the SAP Portal Reports Tab under Projects and Assets:

For further information refer to the SAP Finance Training at the link below: FIN5031_WBT_Reporting v0.2

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Appendices Appendix 1: TAFE NSW Minor Works Proposal Template

TAFE NSW Minor Works Proposal – 2016/17 TAM

Institute: {insert Institute name}

Campus: {insert campus name}

Project Name: {insert a short project name}

Institute Priority: {insert Institute priority}

e.g. Priority 1 of 4 minor works

Estimated Total Project Cost:

{insert the estimated cost of construction plus fees up to a limit of $500,000, not including furniture and equipment}

e.g. $300,000 (plus $75,000 furniture and equipment)

Project Description: {insert a project description}

Project Rationale: {insert the rationale of the project}

Strategic Priority(ies):

{tick relevant strategic priority(ies) that is being address }

NOTE: It is anticipated that each project will meet some of the criteria for Strategic Priority 1. All projects must meet at least one of the two criteria for Strategic Priority 2. In addition, one or more of Strategic Priorities 3 to 6 may be met.

□ SP1: Implementing improvements that increase utilisation, efficiency, service and customer satisfaction

□ SP2: Demonstrating that the demand for training services cannot be met efficiently with the assets (facilities, ICT and plant) available and an assessment of nearby assets from third parties (industry, employers or other providers) indicates that they do not meet requirements or are unavailable

□ SP3: Supporting Institute specialisation in line with Institute and TAFE NSW business directions

□ SP4: Delivering industry-standard assets (facilities, ICT and plant) to meet demand for training

□ SP5: Developing more partnerships with third parties (industry, employers or other providers) to support skill needs and pathways to higher education or employment opportunities

□ SP6: Delivering safe and sustainable training assets (facilities, ICT and plant)

{describe and provide evidence on how the proposed project will meet and address the nominated strategic priority(ies) and align with the TAFE NSW Statement of Owner Expectations}

Relation to other nominations:

{Does this relate to, or has it been included in, another major or minor capital works nomination (for example, is this project part of a series of related capital works on the college site?}

Site Ownership: {Is the site owned by TAFE?}

Proposal Prepared by:

{insert the author of this proposal and contact phone number/email}

Proposal Approved by:

{Insert the name of the Institute approving officer and date approved}

Date:

Regional Asset Planner:

{insert the name of the relevant Regional Asset Planner}

Date: {insert the date of this proposal}

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Appendix 2: SAP Project Settlement (Capitalisation) This process transfers the costs from AUC to the final asset. It can be run at any time during the

project but particularly to:

Capitalise the costs of a component of a large/long term project e.g. a section of a large

building project

End and close a project - it is important to clear completed projects from AUC as soon as a

project is closed. Assets cannot start depreciating until the Project or WBS is settled.

The steps for final settlement are:

1. Ensure that there are no open purchase orders by running SAP report CJI5:

o Enter the Project code.

o Change the posting date to blank for the first box.

o Select a layout e.g. 2SAP to display project commitments. Additional fields or

alternate layouts can be used to provide further information i.e. document numbers.

The report will be displayed:

Open items will need to be cleared before settlement.

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2. Asset creation – the asset creation process is critical to the settlement process as any

inaccurate information input during asset creation will cause the settlement of the asset to

be affected.

o Determine if an asset already exists i.e. existing building. Open report

ZAM_AS_EQ_DET, enter company code 1020, enter the Plant i.e. TAXX which will

define the Institute/TAFE Corporate. Run Report. This will generate a list of all

assets at the selected Plant. The layout can be changed to display the required

information.

o Create the asset using the SAP Asset and equipment maintenance request form

located on the Finance Tab of the SAP Portal.

A form is to be completed for each asset. Shared Services will advise the asset number

when created.

3. Establish the settlement rule – when the asset number has been created, a new settlement

rule needs to be created in the project. The settlement rule will be used to move the project

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funds from the AUC to the asset. At this stage it is wise to check the project balance in SAP

report CJI3 as this is the amount that will be capitalised.

To set up the final settlement rule, go to the project builder screen CJ20N and open the

project by entering the WBS number.

The screen will open the project at the top level. You need to select the lower level WBS

and then right click on the screen. Select “Settlement rule”.

The settlement rule screen will display. All capital projects with expenditure are

automatically set up with the first level settlement rule that transfers costs from the P&L to

the AUC when monthly settlement is run at month end. The lower levels are set up with a

rule to settle to the upper levels. Do not alter these rules in any way.

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A new rule needs to be created on the next row. Enter or select from the drop down list:

The relevant data will need to be entered as the Settlement Receiver i.e. type in the cost

centre, asset number, GL account or WBS element in the second box in the row. Press

enter and the remainder of the line will populate. Note that the description of the asset has

been entered and the % field is 100%, settlement is FUL and the sequence is No 2. Check

these details and edit if required e.g. edit the percentage or enter an amount instead of a

percentage. Select the green back arrow and, on the next screen, press the Save icon.

Reselect the lower level WBS element.

Ensure that separate assets are created for each equipment item and a settlement rule

created for each asset, as shown above. Building costs and equipment costs should be

settled to separate assets.

Change the status of the project to Technically Complete by selecting he menu item Edit,

Status, Complete Technically, Set and then the Save icon. The status of Capital Projects is

changed to Technically Completed (TECO) to avoid further transactions posting against the

project.

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4. Finalise settlement – perform final settlement to transfer costs from the AUC using

transaction code CJ88. Enter the Project or WBS element, select the appropriate settlement

period and fiscal year and check the Detail List check box and select Execute.

You will get yellow error messages. Accept them and move on. If successful, the following

screen will appear. Go back via the green back icon, uncheck the Test Run check box and

run the job as final. The icon can be selected for further information.

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5. Close the project – The costs have now been transferred from AUC to the final asset. The

final step is to go back to the project and set the status to Closed. Select project builder

CJ20N, open the project by entering the WBS element. The screen will open the project at

the top level. Select the lower level and change the status of the project to Close by

selecting the menu item Edit, Status, Close, Set and then the Save icon.

Select the top level of the project and repeat the selection to close the project.