1. Construction Work-In-Progress (CWIP)Overview December 2, 2009

2. What is CWIP? • Temporary asset holding accounts (1720 and 1832) used to track cost during the design and construction of property, plant, & equipment (PP&E): • Material capital asset on NOAA’s financial statements. • Criteria for CWIP (must meet all four conditions): • Aggregate acquisition cost of $200k or more, and • Estimated service life of 2 years or more, and • Long-term economic benefit to the organization which maintains or obtains control, and • Not intended for sale in the ordinary course of operations. • Three major groups of PP&E: • Real property, personal property, and internal use software.

3. What is CWIP? (cont.) • The costs remain in the CWIP account until the PP&E has been constructively delivered and accepted by NOAA (placed in service, commissioned, etc.). • Eventually depreciated over asset’s useful life on NOAA’s financial statements upon completion of project.

4. Roles and Responsibilities • NOAA Finance Office (FO): • Ensuring that the policies are consistent with external requirements (e.g. FASAB). • Issuing, interpreting, monitoring, and maintaining the CWIP policy and procedures. • Maintaining the CWIP Activity database and generating reports from the database.

5. Roles (cont.) • NOAA Personal and Real Property Offices (PPMB and RPMD): • Overall responsibility for oversight of NOAA’s CWIP activities. • Reviewing and providing guidance in the determination as to whether an activity will result in a CWIP activity and of the policies for capitalization of personal and real property. • Reviewing NF 37-6s and supporting CWIP documentation to ensure the accuracy of costs included in the CWIP asset.

6. Roles (cont.) • NOAA Line/Staff/Corporate Offices (L/SO): • Ensuring compliance to all CWIP policies and procedures. • Designating a CWIP Activity Manager and CWIP Project manager for each activity.

7. Overall Process • Planning Phase • Establishes a CWIP activity. (L/SO) • Assigns CWIP Activity Manager and CWIP Project Manager. (L/SO) • Completes CWIP Determination Letter that documents why an activity is CWIP. (L/SO) • Completes CWIP Activity database form. (L/SO) • Enters data into the CWIP Activity database. (FO) • Posts monthly reports to the web. • Follow-up with L/S/COs regarding project codes that are not linked to a CWIP activity.

8. Overall Process (cont.) • Construction Phase • Captures all costs. (L/SO) • Maintains supporting documentation, specifically cost information in CWIP Documentation File. (L/SO) • Prepares monthly reconciliation of the CWIP Documentation File to CBS CWIP Report (CA500D). (L/SO) • Reviews the reconciliation. (FO) • Determine if any adjustments need to be made to CBS (NOAA’s general ledger).

9. Overall Process (cont.) • Capitalization/Completion Phase • Completes the NF 37-6 form. (L/SO) • Reviews and certifies the NF 37-6. (FO) • Review for clerical accuracy • Project code validation • Verify that amounts on the NF 37-6 do not exceed current balances on the CBS CWIP Report (CA500D). • Reviews the NF 37-6 and supporting documentation. (PPMB and RPMD) • Certifies the NF 37-6. (PPMB and RPMD) • Enters the asset into the appropriate property system. (PPMB and RPMD) • Transfers costs from CWIP account to PP&E account. (FO)

10. Questions? Mark P. Miller301-444-2704Mark.P.Miller@noaa.gov Melvin Spencer 301-444-2128 Melvin.L.Spencer@noaa.gov Jones Harbor 301-444-2133 Jones.Harbor@noaa.gov Heather Potter 301-444-2158 Heather.L.Potter@noaa.gov