Maintenance & Repair and Contruction Trust Funds
Maintenance & Repair and Construction Trust Funds are typically used by self-supporting activities, such as Housing, Parking, Health Services and International & Extended Studies. These Trust Funds do not have a specific fund group but are identified as such on the trust fund agreements.
Maintenance and Repair Funds
Maintenance and repair projects preserve a building, but do not significantly extend its useful life or increase its value and therefore are not "capitalizable" (i.e., recorded as a long-term asset). Maintenance and Repair trust funds should account for major maintenance and repair expenses that are not capitalizable, but are considered "major" (as opposed to "routine" repairs). A "major" repair is one which is either infrequent in nature or which is scheduled on a non-routine basis and may require setting aside funds over a period time to fund the repair. Examples of major repairs include re-roofing an entire building, replacing the carpeting throughout a building, or replacing a ventilation system.
Examples of potential expenses and their designations:
- Charges related to SJSU Facilities Development & Operations (FD&O) managed projects. The types of projects should relate to the facilities, such as repaving a parking lot, or painting a building's interior or exterior. For example, if the original parking lot paving was expected to last 10 years and after that point it gets repaved every year or so, those repaving jobs would be considered major maintenance/repair.
- Charges for repair/maintenance which is on a set schedule (every other year, every 10 years, etc.). If the repair/maintenance is part of daily operations, it is considered routine and charged to the operating trust fund.
- In general, there should be no permanent staff allocated to a maintenance & repair trust fund: only project-based salaries are to be charged to Maintenance and Repair Funds.
Construction Funds should be used to record financial expenditures and revenue associated with the construction of a building or building improvements that are capital events.
- A building is defined as a structure that is permanently attached to the land, is not infrastructure, and is not intended to be transportable or movable.
- Building improvements are defined as capital events that materially extend the useful life of a building or increase the value of a building, or both. A building improvement should be capitalized as a betterment and recorded as an addition of value to the existing building if the expenditure for the improvement is at the capitalization threshold, and the expenditure increases the life or value of the building.
Construction Funds for Self-Support Operations
Construction Funds which are 100% supported by self-supporting operations (such as Student Union, Student Recreation Center, and Student Health Center) will be set-up with FD&O as the owner of the Construction Fund. All Construction expenses will be charged directly to the Construction Fund.
- On a monthly basis, SJSU Accounting will transfer revenue based on actual expenses. The revenue fund will be determined by the self-supporting operation's owner.
- FD&O is responsible for distributing a cost report to the self-supporting operation's owner monthly to identify actual expenses. Therefore there is NO approval required by the self-supporting operation's owner prior to the transfer of revenue to the Construction Fund.
- All purchase requisitions over $100,000 must be approved by the self-supporting operation's owner.
- Project Management fees will be charged by FD&O based on approved Memorandum of Understanding (MOU) language.