Capital Project Monitoring... Commentary on the GFOA Best Practices
Part 1: Identify and incorporate Jurisdictional and Fiduciary Requirements Into Capital Project Monitoring and Reporting
This is the first of a seven part series on recommended practices on Capital Project Monitoring. CIPPlanner Corporation strives for better Capital Program Management for our customers. As we reviewed the GFOA recommended practice released last October, we were excited that the GFOA is making concrete strides in articulating exactly how to do this. Our perspective in working intimately with local governments and agencies as they implement our software puts us into day to day contact with the subtle issues that are the tips and tricks of helping the rubber meet the road in implementing the GFOA's recommended practices. This article seeks to point by point analyze the recommended practice and offer up our warnings, tips, tricks and recommendations about how to get the most out of those practices.
The first element of the recommended practice focuses on:
Identify and incorporate jurisdictional and fiduciary requirements into capital project monitoring and reporting.
Because finance officials are typically entrusted with ensuring that capital project activity is consistent with applicable laws and organizational rules and procedures, initial efforts should focus on understanding requirements related to:
- Auditing and financial reporting consistent with generally accepted accounting principles and jurisdictional accounting and grant requirements.
We find that tracking of project financials are critical to Capital Program Management at large. Key challenges that we find are the limitations of current tools such as general ledger financial systems which are focused on a static chart of accounts for the transactions and not cost breakdown structures that are needed to both estimate and then track the implementation of a project. These breakdowns need to be both intuitive and meaningful. As an example, cost breakdowns are a critical element of "Earned Value", which is a primary performance metric for monitoring the "health" of a Capital Project.
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