FIACCT 07-06_00 Capital Construction/Remodel and Transfer to DFCM- Overview

A.

All projects involving remodeling or other improvements to existing facilities or construction of new facilities for state departments and institutions must be approved and supervised by DFCM if the cost
will exceed $100,000. Projects may not be artificially subdivided to stay below this limit. Projects costing less than $100,000 may be supervised by DFCM if requested to do so by the department or
institution. For all projects supervised by DFCM, the total cost will include the cost of inspection and other costs normally charged to capital projects.

B.

All capital projects including remodeling, improvements, new construction, or creation of new space with a total cost of $100,000 or greater must be approved by the Legislature. Evidence of Legislative approval must be documented and submitted to the Division of Finance for verification and approval before funds are transferred to the Capital Projects Fund. Legislative approval will be interpreted as one or more of the following:

1. Appropriation directly to DFCM for the capital projects.
   
2. Intent language in the appropriation act specifying the project to be completed.
   
3. Other statutory construction authority to DFCM or other agencies or institutions.
   
4. Acknowledgment and acceptance of a project in a legislative hearing and substantiated in the minutes.
   
5. Documented evidence that the project was included in the department’s or institution’s budget request and was not disapproved by the Legislature or its committees.
   
6. A specific line-item appropriation for the purpose of acquisition and development of land and buildings.

C.

Funds for all projects meeting one or more of the criteria set forth in section B. will be transferred to the Capital Projects Fund as follows:

1. The department or institution which received the funds will reduce its Appropriation Budget through the use of an Appropriation Adjustment which are entered on-line by the departments and approved on-line by the Division of Finance. The Division of Finance will coordinate with DFCM to transfer the funds to the Capital Projects Fund.
   
2. At fiscal yearend, any unexpended funds on unfinished projects will be carried forward by DFCM in the Capital Projects Fund.
   
3. Upon completion of the project, any unexpended funds may be treated as if they had remained in the department’s or institution’s budget. If the project is completed within the same fiscal year that the funds were transferred to DFCM, any unexpended funds will be returned to the Department’s or institution’s budget through the use of an Appropriation Adjustment. Departments will be provided with instructions from the Division of Finance to enable them to complete the Appropriation Adjustments form. If the project is completed in a subsequent fiscal year, any unexpended funds will be treated in accordance with the statutory provisions which applied to the original appropriation.

D.

Capital projects for remodeling, improvements, and new construction which have a total cost of less than $100,000 and which are funded through a department’s or institution’s appropriation will be treated as follows:

1. The head of the department or institution will be responsible for authorizing the project. This authorization should not be given if the project was specifically disapproved by the Legislature. The impact that the project will have on the building must also be considered and approved by the department or institution responsible for its maintenance as well as the legal owner. In cases of leased facilities, all remodeling and improvements must also be approved by the landlord.
   
2. These projects may be supervised by either the department, institution, DFCM, or the landlord in the case of leased facilities.
   
3. If the project is supervised by the department or institution, the Division of Purchasing, under the guidance of purchasing rules and regulations, will be utilized for the procurement of the necessary architectural/engineering services and construction.
   
4. If the project is supervised by DFCM, it will be treated on a reimbursement basis. As costs are incurred (on the accrual basis) the department will reimburse DFCM on an Inter-Agency Transaction resulting in the costs being charged against the department’s or institution’s budget. Before any costs are incurred on the project, the department or institution must provide a letter to DFCM guaranteeing payment of all applicable costs as incurred in each fiscal year regardless of the status of the department’s own budget. This letter must guarantee payment in future fiscal years if the project is not completed during the current fiscal year.
   
5. For projects under $100,000, the only exception to Policy section D.4. is that funds may be transferred in accordance with Policy section C. to the Capital Projects Fund if the project received legislative approval as defined in Policy section B.

E.

This policy is affected by the following statutory provisions:

1. DFCM may not expend appropriated or non-appropriated funds to acquire or construct any facility for any state agency or instrumentality unless expressly authorized to do so by the Legislature through the Appropriations Act or other specific legislation. — Utah Code Annotated 1953, Section 63A-5-217
   
2. The Director of DFCM shall recommend the need for and exercise direct supervision over the design and construction of all alterations, repairs, and improvements to all existing facilities of the State, its departments, commissions, institutions, and agencies if the estimated cost is in excess of $100,000. No existing facility may be altered, repaired, or improved on the property of any state institution, department, commission, institution, or agency if the estimated cost of work exceeds $100,000 until the location, design, plans, and specifications have been approved by the Director of DFCM and the officials charged with the administration of the affairs of the particular department, commission, institution, or agency. Utah Code Annotated 1953, Section 63A-5- 206(3)
   
3. Section 63A-5-206(5) of the Utah Code Annotated 1953, places similar restrictions on the construction of new facilities as that given above for improvements except that it provides for an additional requirement that the location must be approved by the Legislature.
   
4. No amounts may be transferred from an item of appropriation of any department, institution or agency into the Capital Projects Fund or any other fund without the prior express approval of the Legislature. — Utah Code Annotated 1953, Section 63-38-8(3)