Accounting for capital projects begins with fund number 171. The Accounting for Capital Projects diagram shows an example of accounting for capital projects by sub-funds within Fund 177. For each fund number, there is a balance sheet, statement of revenues, and statement of expenditures. Within this fund there can be sub-funds noted by three letters or numbers. Each sub-fund will also have a balance sheet, statement of revenues, and statement of expenditures. This allows for appropriate organization and documentation when maintaining the capital projects budget. Sub-fund accounting allows the managers of each project to have a separate accounting for their project and allows a separate reporting of the project to department heads, county commission, school boards, and the public. Sub-funds are often used to help insure the cost credibility of each project by not commingling funds from different projects. It is recommended that counties consider using sub-fund accounting for large individual projects and smaller projects by yearly sub-funds. Various examples are as follows:
Recommended Practice: Establish sub-funds within a Capital Project Fund if your county has a number of separate projects.
Recommended Practice: If your county has a number of capital improvement grants, you should consider establishing a Capital Project Fund and related sub-funds for the grants.