Capital Budgeting

Scope Capital assets are real or personal property that have a value greater than or equal to $5,000 and have an estimated life of greater than one year.  This procedure applies to all construction, capital improvements, major equipment purchases and other special projects requiring one or more expenditures totaling $25,000 or more.  This includes projects that are partially or fully funded by outside funding sources (e.g. grants, gifts, etc.). Examples include: New construction (new buildings or major additions) Building repairs, renovations, demolition, or upgrades Major maintenance (capital renewal and deferred maintenance) Safety, ADA, or Legal Compliance construction projects Energy conservation improvements Grounds improvement Real Estate Acquisition or Leasing Vehicles HVAC Telecommunication and Information Technology systems (hardware and/or software) New or replacement equipment or furniture Requests under $25,000 should be included in departmental operating budgets.

Capital Process – to Request Funds Initial Development and Review of a Capital Proposal When an individual identifies a capital need that falls under the scope, he/she should complete an Initial Capital Budget Request Form and submit it to his/her Provost or Senior Vice President. The proposal should meet a specific objective such as an academic or infrastructure requirement and be consistent with the university’s strategic plan and campus master plan. The purpose of this form is to encourage the flow of ideas and allow for advanced planning.  The Initial Capital Budget Request Form should include the following: desired project timing a brief description and justification of the project a rough estimate of the project cost, and identification of potential funding sources such as grants or gifts.  A very detailed analysis is not required at this point. This will be done after management’s initial review in order to prevent unnecessary work if it is determined that the project is not feasible given the university’s priorities and limited resources. Detailed instructions on how to prepare an Initial Capital Budget Request Form are included on the finance website. An annual submission deadline will be set during the annual budgeting process each year in order for the capital projects to be included in the following fiscal year capital budget. If this date is missed, the forms may be submitted throughout the year for consideration in subsequent years’ capital budgets and the 5-year Capital Plan.   As discussed in the budgeting presentation – these requests will be reviewed and priority will be determined by the BRT during the annual budgeting process

Other Forms Detailed Capital Budget Request: Every approved capital project/purchase is required to have a completed and approved detailed capital budget request. This is an item on the purchasing checklist. The form should include the following: Project details including name, estimated start and end date, estimated life of the new asset, project administrator’s name, department, phone number, campus location Project description and justification Project cost Funding source(s) Annual operating cost impact (if any; ex: additional staffing) All projects must be reviewed by the SVP/Provost of the area under which the project/purchase is submitted as well as the CFO. All facility projects should be reviewed by the VP of facilities and any new system implementations or IT projects require the approval of the CIO. Capital Budget Amendment: Form must be completed for any project that will exceed its approved amount by 5% or $10,000. These amendments should be filed as soon as the Project Administrator anticipates the overspend situation Include a reason for the overspend and cost details Funding for the overspend An amendment should also be filed if the timing of the project is going to change significantly and cross several years Amendments require the same signature authority as the Detailed CBR form

Capital Budgeting > When you need assistance > When you have any questions > When you have suggestions Contact information: Name Title Phone E-mail Bryana Deak Senior Financial Analyst x5-7670 btripp@luc.edu Capital expenditure policy, forms, and detailed instructions: http://www.luc.edu/finance/capexppolicy.shtml