OFFICE OF THE CHIEF FINANCIAL OFFICER CFO What the heck is C-W-I-P and Why should I care?

OFFICE OF THE CHIEF FINANCIAL OFFICER

CFO

What the heck is

C-W-I-P

and

Why should I care?


CFO

So what is CWIP, anyway?

C W I P =C W I P =

Construction Work in Construction Work in ProgressProgress


CFO

More About CWIP Accounting process

Holding account for property costs not yet ready to be placed in service

Completion Asset placed in service Transferred from CWIP account to an Asset

account Inventory procedures are applied

Tagging, depreciation, annual inventory, loans, borrows, transfers, etc.

Larger context

Proper use of fund types for activities of creating or enhancing assets


CFO

And Why Should I Care? Timely closeout matters!

Compliance with DOE accounting procedures Visible to regulatory and auditing agencies Can impact life cycle/funding of projects Appropriate use of funds (“color of money”)

Responsibility Belongs to research program/Principal

Investigator Financial management community supports

research program Policy and processes are Lab checks & balances

for accountability


CFO

CWIP Policy

Formalized and published August 2005

CFO website URL:http://www.lbl.gov/Workplace/CFO/co/ga/pa/cwip.html

Describes roles and responsibilities Divisions Property Accounting Budget Office Property Management

CWIP


CFO

CWIP Policy (cont.)

Flow chart of project accounting procedures

Table - Plant and Capital Equipment (PACE) criteria, guidelines and procedures

PACE Project Life Cycle Form


CFO

What’s New? PACE Life Cycle Form (electronic)

Improve work flow Track progress

Role of Property Accounting One clear process “owner” Uses PACE form for processing Reviews proper use of funds (aka “color of money”) Dedicated staff to process CWIP Property Management

Additional Processes CWIP Project Log on website Follow up on status of closed project IDs Follow up on project IDs with no recent activity


CFO

PACE Project Life Cycle Form

Date _____________

Submitted by ___________________________Extension ____________

Closed Project

Prototype?Yes No

Yes No n/a Date of disposal:

Yes No n/a Date abandoned:

Extension:

Extension:

* Need exact location for tagging

YearFiscalYear

Annual CostLabor

Annual CostOther

Total

1 $0.002 $0.003 $0.004 $0.005 $0.006 $0.007 $0.008 $0.009 $0.00

10 $0.00

$0.00

Total Project Cost must be > $25K (includes > $5K of labor)

Accounting approval (initials): _______

For assistance, contact Helena Cheng, Property Accounting ([email protected]), or extension 4044

Email completed form to Helena Cheng (see email address above)

Name:

Total Project Cost

Comments

Alternate contact Name:

Property tag number (if available)

Contact (PI or Custodian)

Division

Project ID

Project title

Estimated completion date

For fabrications

Asset description

Specific asset location*

Property disposed of?

Project or prototype abandoned?

Number of units:

Partial Project Closure

Plant and Capital Equipment (PACE)Project Life Cycle Form

Parent project ID:

New Project

Project completion date

Estimated useful life: ____ years

For Fabrications,complete table below:


CFO

Click here for Facilities Construction Projects


CFO

PACE ProjectLife Cycle Form (cont.)

Submission through project life cycle New project opening Partial completion or capitalization Completion or closeout

Critical information Description of asset (including location)

Sufficiently detailed for assessing proper use of funds

Estimated useful life Estimated completion date Who to contact for additional information

PACE PROJECTLIFE CYCLEFORM


CFO

What is the “Color of Money”?

The proper use of funds

Impacts Project opening Requisitions Final processing by Property Accounting

Approval processes addressing “color of money” for requisitions are currently being implemented


CFO

“Color of Money”Flow Chart

Funding OptionsFunding Options

Construction(Real Property)

Construction(Real Property)

Equipment(Personal Property)

Equipment(Personal Property)

RepairMaintenance

AlterationExperimental & Demo

RepairMaintenance

AlterationExperimental & Demo

NewConstruction

NewConstruction

OperatingOperating

DivisionalDivisional InstitutionalInstitutional

Non-CapAlterations

Non-CapAlterationsExp & PilotExp & Pilot

GPPGPPLine ItemLine Item

<$50K< 2 year service life

<$50K< 2 year service life

>$50K>2 year service life

>$50K>2 year service life

DivisionalDivisional InstitutionalInstitutional

OperatingOperatingAddition

BettermentConversion

AdditionBettermentConversion

GPEGPECapitalEquipment

(CE)

CapitalEquipment

(CE)


CFO

Resource Analysts’ Tasks Confirm availability of funds, including “color of

money” issues

Obtain and document descriptive information from PI

Complete and submit Pace Life Cycle form at appropriate times in project life cycle Open Partial capitalization Abandonment Updated cost or completion date estimates Completion

Document “color of money” considerations


CFO

Resource Analysts’Tasks (cont.)

Work with property accounting to review exception or issues reports

Closed project IDs VWIP Inactive project IDs Requisition exceptions

Review and approve purchase requisitions over $50,000


CFO

VWIPVWIP

Phrase coined by CWIP working groupPhrase coined by CWIP working group VALID work in progressVALID work in progress Identify when work is still in progress Identify when work is still in progress

(probably at higher project ID hierarchy (probably at higher project ID hierarchy level) examples:level) examples: Work ordersWork orders Complex Work Breakdown Structure (WBS)Complex Work Breakdown Structure (WBS)

Provide comment for CWIP log, identify Provide comment for CWIP log, identify parent project, estimated completion dateparent project, estimated completion date


CFO

Your Input Matters

We need your help to make this work in support of the scientific programs

How can we effectively propagate this policy to the Principal Investigators?

Suggestions (venues, exercises, examples)


CFO

Questions/Discussion


CFO

Contact Us…

Lesta Nadel x 4670

Tim Young x 4832

Michele Mock x 2415

Anil More x 5254

OFFICE OF THE CHIEF FINANCIAL OFFICER CFO What the heck is C-W-I-P and Why should I care?

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