Topic: Transfers of General Funds to Plant Fund Renewal and Replacement Accounts Date: January 1, 1993 Original___ Rev_X_ Approved by: ____________________________________ Chancellor ____________________________________ Budget Director ____________________________________ Director of Accounting Policy Statement: Each General Fund operation that uses capital facilities and/or capital equipment should establish and maintain a plan for the systematic renewal of its facilities and replacement of its equipment. For Long Bill or other approved capital construction projects, appropriate transfers shall be accomplished to provide the authorized funding, reserves and guarantees. This policy and procedures provides information specifically applicable to General Fund accounts maintaining renewal and replacement accounts. Refer to UCB Accounting Policy and Procedure 4:00 `Renewal and Replacement Account Management' for additional information and procedures applicable to auxiliary/self-funded operations. Procedures: 1. Each General Fund operation, department, school or college should maintain cognizance of the condition of the facilities it occupies and, as necessary, bring forward through facilities planning channels an initiative for the preparation of a renovation program plan. 2. Each General Fund operation should: a. maintain an up-to-date inventory of equipment in accordance with the Property Accounting System Inventory and Data Creating Guidelines and Procedures manual, and, b. establish a useful life and replacement schedule for all equipment identified in its inventory. 3. Replacement prices for assigned equipment should be updated at least annually. 4. Each General Fund operation should set aside a portion of its capital outlay allocations and/or year-end unexpended balances to provide for necessary space modifications and renovation of a minor nature and for the systematic replacement of its equipment. 5. One or more renewal and replacements accounts should be opened in the 1-0- 75XXX series for this purpose. 6. Transfers should be made periodically to renewal and replacement accounts as resources become available and especially during year-end closing as additional unexpended and unencumbered balances become apparent. Refer to `Account Control Code 48X-49X, 58X-59X - "Transfers"' for complete information on processing General Fund transfers to the plant fund. 7. Transfers of year-end unexpended balances are also an appropriate source of funds for approved cash-funded capital construction projects. 8. All General Fund activities should assign a high priority to the transfers of year-end unexpended and unencumbered appropriated balances to the Plant Fund, as necessary, to assure adequate provision for minor modifications, systematic equipment replacement and funding of approved capital construction. 9. Transfers to the Plant Fund renewal and replacement accounts may only be made for the purposes described above. Current operating expenses will not be charged to the Plant Fund accounts.
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