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Office of the State Comptroller - Local Government & School Accountability

Local Government and School Accountability

Capital Planning and Budgeting

A Tutorial for Local Government Officials

Module 3 - From Plans to Projects
Capital Project # 1

This exhibit shows the records for a water system capital project in a town for a two-year period. Records for other classes of local government or other capital projects would be set up in the same fashion, and entries made based on the transactions of that project. More information can be found in our Accounting and Reporting Manuals (ARMs):

Sample: Capital Project #1 - List of Transactions

The following is a chronological list of capital project transactions occurring during the fiscal years 20X1 and 20X2.

The appropriate journal entries for the Capital Projects (H) Fund will be posted in the General Ledger and Subsidiary Revenue and Expenditure Ledgers for the H Fund.


7/5/X1 -- Governing Board authorizes a $1.8 million capital project for the construction of a water filtration plant. The project will be financed by a low-interest $1.3 million EFC revolving loan (funds are disbursed upon expenditures), a $300,000 Serial Bond and a $200,000 interfund transfer from the Water Fund. (Please note that the budgetary entries for individual projects are recorded by memorandum only within the individual project.)
[Show journal entry]


7/5/X1 -- Bookkeeper records the $200,000 appropriated by the Water Fund for the project.

Town issues $1.3 million serial bond. Proceeds from bond are held by EFC in a trustee bank and will be wired to the Town's bank upon submission to EFC of documentation of incurred expenditures.
[Show journal entry]


7/7/X1 -- Bookkeeper transfers $200,000 from the Water Fund to the Capital Projects Fund.
[Show journal entry]


7/15/X1 -- Town Board authorizes $300,000 serial bond and issuance of $300,000 BAN @ 4% for 20 years.
[There is no journal entry for this transaction]


8/1/X1 -- Bookkeeper records the receipt of proceeds from $300,000 BAN.
[Show journal entry]


8/15/X1 -- Bookkeeper records payment of $35,000 for project engineering costs.
[Show journal entry]


10/20/X1 -- Bookkeeper records $343,000 payment to contractors based on claims submitted for construction completed to date. Agreements require 10% to be retained pending final approval of the capital project.
[Show journal entry]


11/30/X1 -- Bookkeeper records wire receipt of $378,000 from NYS Revolving Loan based on expenditures submitted to date.
[Show journal entry]


12/30/X1 -- Bookkeeper records $314,800 payment to contractors based on claims submitted for construction completed to date. Agreements require 10% to be retained pending final project approval.
[Show journal entry]


12/31/X1 -- Bookkeeper makes closing entries at end of fiscal year (closes Expenditures and Revenues to Fund Balance, Unreserved).
[Show journal entry]


1/12/X2 -- Bookkeeper records $64,800 payment to contractors based on claims submitted for construction completed to date. Agreements require 10% to be retained pending final project approval.
[Show journal entry]


2/25/X2 -- Bookkeeper records wire receipt of $379,600 from NYS Revolving Loan based on expenditures submitted to date.
[Show journal entry]


3/14/X2 -- Bookkeeper records $405,200 payment to contractors based on claims submitted for construction completed to date. Agreements require 10% to be retained pending final project approval.
[Show journal entry]


4/6/X2 -- Bookkeeper records $115,000 payment to contractors based on claims submitted for construction completed to date. Agreements require 10% to be retained pending final project approval.
[Show journal entry]


5/12/X2 -- Bookkeeper records wire receipt of $520,200 from EFC Revolving Loan based on expenditures submitted.
[Show journal entry]


6/20/X2 -- Bookkeeper records $455,200 final payment to contractors based on claims submitted for construction completed to date. Agreements require 10% to be retained pending final project approval.
[Show journal entry]


7/15/X2 -- Bookkeeper records the 1st payment on EFC Serial Bonds from the Water Fund as follows: Debt Principal - $59,000; and Debt Interest - $13,000.

Bookkeeper records 1st payment on $300,000 BANs from the Water Fund as follows: Debt Principal - $10,075; and Debt Interest - $12,000.
[Show journal entry]


7/21/X2 -- Bookkeeper records wire receipt of $22,200 from NYS Revolving Loan based on expenditures submitted. This is the final draw on the $1.3 million serial bond.
[Show journal entry]


7/28/X2 -- Bookkeeper records payment of $169,800 for the release of retainage amounts due to contractors upon project approval.
[Show journal entry]


7/30/X2 -- Town Board authorizes Bookkeeper to close the capital project and transfer all residual money to the Debt Service Fund to pay debt outstanding on the project.

Please Note: a budgetary transfer must be made to reduce the budget for the expenditure account - H8397.2 and to increase the budget for the expenditure account - H9901.9 in the amount of $67,000.
[Show journal entry]


8/15/X2 -- Town Board authorizes the issuance of serial bonds to pay the remainder of the BAN payable. [Show journal entry]


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