Accounting & Fiscal Guidance

February 2, 2001

The attached chart provides additional general guidance on the required approvals and recommended 2001-02 budgeting action for capital projects under the Educational Facilities Construction and Financing Act (EFCFA) and the recently issued Commissioner regulations (N.J.A.C. 6:23A). It identifies the type of projects into the five categories below. The specific regulatory definitions and references to these five categories is also attached.

School Facilities Projects – capital projects eligible for state support under EFCFA;

Other Capital Projects – projects not eligible for state support under EFCFA or projects not seeking state support under EFCFA;

Emergent School Facilities Projects – school facilities projects that are eligible for state support under EFCFA, which can be submitted for approval prior to approval of the district’s LRFP, according to the Commissioner’s regulations; an emergent condition exists when a condition is so injurious or hazardous that it causes an imminent peril to the health and safety of students and staff;

Routine/Required Maintenance – maintenance that is not eligible for state support under EFCFA and includes maintenance items that do not extend the useful life of the building or a building system; and

Equipment/Furniture and Fixtures - equipment, furniture and fixtures that are not part of a school facilities project and, therefore, not eligible for state support.

As the attached document indicates, other capital projects and emergent school facilities projects may be submitted to the department for review and approval prior to final approval of the LRFP. Other capital projects are reviewed only for consistency with the LRFP and educational adequacy, if applicable. If a district chooses to forfeit state funding for a non-emergent school facilities project and therefore submit it as an other capital project for review and approval prior to approval of its LRFP, such project will never be eligible for state funding under EFCFA. Such projects should be budgeted in Fund 12 and identified on supporting documentation 4 at the estimated local support to implement the project. (The estimated local support for other capital projects is 100 percent since, by definition, it will not receive state support.)

School facilities projects that are not approved as an emergent project, must receive LRFP and project approval prior to requesting approval of the project’s local support under the Commissioner’s regulations. The estimated local support for any non-emergent school facilities project for which a district anticipates receiving all required approvals and to be completed in 2001-02 should be budgeted in the district’s capital reserve (appropriation line 7690) for future withdrawal upon approval of the school facilities project. Districts are not limited to deposits into the capital reserve for such projects anticipated to be completed in 2001-02, as a district can deposit at budget time up to the total estimated local support needs to implement its entire LRFP. Deposits are not made for specific projects. Withdrawals are made for the local support of specific projects upon final project approval and determination of final eligible costs.

I hope this helps in your budget process. If you have any questions, please contact your county superintendent.

TM:DM:MN:KA\Referrals\1-30budget guidance.doc

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