The following definitions may assist you in understanding terms used in project accounting:
- Capital Improvement Plan (CIP)
The University of Texas System maintains a system-wide Capital Improvement Plan (CIP). New construction and renovation projects are included in the CIP if they cost in excess of $4 million, have any type of debt financing, or are historically significant.
- Encumbrance
An encumbrance is a means of reserving funds for future expenditures. Purchase orders and other documents are recorded on the books, committing such amounts for future payment. The remaining free balance represents the estimated available budget for future expenditures.
- Project Accounts
Each funding source is accounted for separately within the budget group in order to keep an historical record of how the project was funded. Account balances continue from year to year depending upon the length of the project. Projects that meet certain requirements are capitalized upon project completion and recorded to the permanent capital asset schedules on the annual financial report.
- Project Management
Projects are managed by various groups depending upon the scope of the project.- CIP Projects —The UT System Office of Facilities Planning and Construction normally provides project management and accounting services for new construction and renovation CIP projects.
- Non-CIP Projects —The University of Texas at Austin Project Management and Construction Services (PMCS) and Facilities Services (FS) generally provide project management and accounting services for renovation projects, including some CIP projects.