# Presentation: 660099

## Construction Work-in-Progress Training

- June 23, 2006
- NOAA REAL PROPERTY CWIP PROCEDURES & FILE DOCUMENTATION REQUIREMENTS

- 6/23/2006

## Sources Reviewed

- NOAA CWIP Policies & Procedures Revised April 2005
- 4.0 Documentation Requirements
- 5.0 Transferring the Property from CWIP to PP&E
- Appendix C: CWIP Processing Flow & Responsibilities
- NOAA Real Property Internal Control Policy & Procedures

- 6/23/2006

## 5.0 Transferring Property from CWIP to PP&E

- 	The Statement of Federal Financial Accounting Standards, Number 6 states that property, plant & equipment (PP&E) should be recognized...
- When title passes to the acquiring entity or
- When the PP&E is delivered to the entity or an agent of the entity.

- 6/23/2006

**Notes:**
For this Real Property discussion of CWIP requirements, we’ll begin at the point when CWIP ceases to be CWIP and becomes Real Property and work back on the requirements from there

## 5.0 Transferring Property from CWIP to PP&E

- 	In the case of constructed PP&E, the PP&E shall be recorded as Construction Work-In-Progress until NOAA has established the Beneficial Occupancy Date (BOD).  The BOD is also used as the “acquisition date” for purposes of depreciation.

- 6/23/2006

## 5.0 Transferring Property from CWIP to PP &E

- NOAA CWIP Policy & Procedures state that the CWIP Activity Manager is to initiate the transfer by sending the completed original Form 37-6 “Report of Property Constructed,”  together with documentation supporting the costs summarized on the 37-6, to the appropriate Real Property Office.
- A copy of the Form 37-6 is also sent to the Financial Statements Branch (FSB) in the quarter in which a CWIP project has been accepted - when the Beneficial Occupancy Date (BOD) has been established.
- After reviewing, Finance will post the 37-6 to the CWIP Report.  An e-mail will be sent to the Activity Manager, the line Office CFO/M&B, the respective property office, and the Central Budget Office CWIP contact notifying them of the posting.

- 6/23/2006

## 4.0 Documentation Requirements

- 	Two files of documentation should be maintained – one for the CWIP Activity Manager and one to be provided to the Real Property office at the completion of the project.

- 6/23/2006

## 4.0 Documentation Requirements

- 	Documentation used to support the costs summarized on the 37-6 would include:
- Copies of the construction or production contract and all modifications and related invoices
- Copies of travel vouchers for inspections or design review – only for projects involving NOAA staffed, in-house designs.

- 6/23/2006

## 4.0 Documentation Requirements

-   Continued...
- Copies of architectural and engineering contract task orders and related invoices.
- Bills of lading for transportation charges.
- The CBS CWIP Report CA500D to document direct labor costs.

- 6/23/2006

## 4.0 Documentation Requirements

- 	Continued..
- Copies of contracts for construction management services and related invoices.
- Copies of billing for space charges for storage costs.
- Copies of invoices for duplicating drawings and specifications for final design.

- 6/23/2006

## 4.0 Documentation Requirements

- 	Continued...
- Copies of purchase orders, Receipt and Inspection Reports and related invoices for materials purchased for in-house construction.
- CWIP spreadsheet or planning document as a cost and documentation checklist.

- 6/23/2006

**Notes:**
When a CWIP activity is transferred, responsibility for management and documentation are also transferred to the recipient. (Section 1.3) 

## Appendix C: CWIP Processing Flow & Responsibilities 

- 	Section III Completing The Activity Phase
- The Activity Manager will notify the NOAA Budget Office if...
- The activity’s completion date changes.
- The estimated total cost has changed.

- 6/23/2006

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- The Activity Manager will complete the final NF 37-6 in the quarter the item of CWIP was accepted.
- The original is sent to the Financial Statements Branch.  A copy and the documentation supporting the costs is sent to Real Property.

- 6/23/2006

## Section III Completing The Activity Phase

Real Property reviews the supporting documentation while FSB verifies the accuracy of the accounting information on the NF37-6.
When the accuracy of the accounting information on the NF37-6 is verified, FSB signs and faxes a copy to the Property office and, via e-mail, notifies CWIP activity manager.

- Real Property reviews the supporting documentation while FSB verifies the accuracy of the accounting information on the NF37-6.
- When the accuracy of the accounting information on the NF37-6 is verified, FSB signs and faxes a copy to the Property office and, via e-mail, notifies CWIP activity manager.

- Appendix C: CWIP Processing Flow & Responsibilities

- 6/23/2006

**Notes:**
This is extremely important!  The Property office should be cc’d when FSB completes review of the NF37-6 and emails the activity manager to release the CWIP files to the Property office. THIS DIFFERS FROM MAIN POLICY

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- The completed form notifies the Real Property office of the transfer of the total costs of the activity from the CWIP general ledger account into to the appropriate general ledger property account.
- If Real Property finds the documentation to be in order, it is entered into Federal RPM, sign the NF37-6, and send a copy to the Activity Manager.

- 6/23/2006

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- The Real Property Office will annotate the 37-6 to indicate data entry into FRPM and send a signed copy to Finance and the Activity Manager indicating approval of the accuracy of the documentation.
- Incomplete files (including the NF 37-6) will be returned to the CWIP Activity Manager for correction.

- 6/23/2006

**Notes:**
The Property Office should record the same value in FRPM as that certified by FSB.  If not, the Property Office must notify FSB of the recorded costs and the reason for the difference.

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- An expandable file should be used to accommodate the expected increase of documentation as the Activity Manager moves through the project.
- The Activity Manager should maintain two identical files.
- There should be a separate tab reflected for every stage of the project.

- 6/23/2006

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- Here are some examples of labeling suggestions for documentation types that could be found in a respective section.  These examples may be revised to accommodate the supporting documentation appropriate for the respective project type.

- 6/23/2006

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- Tab #1 *“Line Office, City, State (Description) Project Close-out”*
- Documentation example:
- completed NF 37-6
- CWIP spreadsheet or planning documentation as a cost and documentation checklist
- CD-509 Property Transaction Request
- Any other close-out project summary forms

- 6/23/2006

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- Tab #2 *“Line Office, City, State (Description) Funds Document”*
- Documentation example:
- Memorandum for record.
- Tab #3 *“Line Office, City, State (Description) A/E Task Orders/Invoices”*
- Documentation example:
- Statement of Work
- Invoices

- 6/23/2006

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- Tab #4 *“Line Office, City, State (Description) Construction Contract”*
- Documentation example:
- Standard Form 1442 – Solicitation, Offer, and Award
- Tab #5 *“Line Office, City, State (Description) Construction Contract – Mods/Invoice”*
- Documentation example:
- Standard Form 30 – Amendment of Solicitation/Modification of Contract

- 6/23/2006

## Appendix C: CWIP Processing Flow & Responsibilities

- Section III Completing The Activity Phase
- Tab #6 *“Line Office, City, State (Description) Travel Vouchers”*
- Tab #7 *“Line Office, City, State (Description) Labor Costs”*
- Tab #8 *“Line Office, City, State (Description) Construction Mgmt. Svcs.– Contract/Invoices”*
- Tab #9 *“Line Office, City, State (Description) Transp. Costs/Duplication/Storage/GFE/Materials”*

- 6/23/2006

## NOAA Real Property Internal Control Policy & Procedures

- 	CWIP Confirmation
- The Real Property Office must contact the Financial Statements Branch for verification of posting to the general ledger property account if the email notification has not been received by the quarter end which the 37-6 was posted to the Real Property system.

- 6/23/2006

## NOAA Real Property Internal Control Policy & Procedures

- CWIP Confirmation
- The Real Property Office should request an email notification to be placed in the CWIP file if the posting has occurred.
- If the posting has not occurred, the email notification should explain the circumstances surrounding the decision to delay posting.  The Real Property Office will then remove the asset from the Real Property system.

- 6/23/2006

## Making sure your CWIP becomes PP&E:

- We need the 37-6 and the supporting documentation promptly.  This includes 37-6 revisions.
- We need all of the documentation to support the costs summarized on the NF 37-6.
- We need the information sent in an organized file folder.  Standardizing the organization of the documentation speeds the accuracy check.
- Finally, we need those email notifications.

- 6/23/2006

**Notes:**
NOAA’s CWIP balance is a focal point of the annual audit of NOAA’s financial statements.  This is because CWIP comprises approximately one fourth of the Department of Commerce’s total assets and nearly 50% of NOAA’s total property, plant, and equipment.  At the end of FY 2005, CWIP amounted to $2.8 billion, which was almost one-forth of DOC’s total assets.