BOP Program Statement 8563.09 § 8

a. B&I costs that do not meet capitalization criteria are to

be expensed as incurred to account 614300, Building Repairs. B&I

construction costs that meet the capitalization criteria will be

captured in the Construction account (172000) until the project

is complete.

b. Each item on the Operating Plan and each RSA will be

assigned an Internal Order in FMB for all approved B&I projects.

c. Purchase orders and delivery orders for items used on the

construction project must be coded to the appropriate Internal

Order.

d. Warehouse personnel must record receipt of construction

materials and supplies in the Millennium system. At the end of

the month the Millennium system will charge all related costs to

the construction account when the Internal Orders are settled.

e. Civilian and inmate payroll charges associated with

construction projects must be coded to the appropriate expense

account.

These charges are to be entered into the Millennium system.

Supporting documentation identifying and charging wages to the

construction account must be maintained in the text as

appropriate.

f. Overhead costs are to be charged to Construction projects

based upon inmate labor charged to the project. The overhead

rate is to be applied to all FPI projects at all locations at a

rate of 500% of inmate labor hours charged to the project.

PS 8563.09

7/23/2002

Page 4

g. When B&I construction is completed, the accountant is to

transfer the total cost of the construction project from assets

under construction (172000) to the B&I Account 173000 by

transferring the asset under construction to a new B&I asset.