format_list_bulleted Topic Overview

Capital Projects

A capital project is a project to construct new facilities or make significant, long-term renewal improvements to existing ones. Capital projects include new construction, renovations, landscape projects, and infrastructure projects, and typically utilize a blend of funding sources.

Buildings, facilities, and infrastructure construction projects on the Stanford University campus are under the purview of the Land, Buildings, and Real Estate department (LBRE). To manage these projects, they are divided into two categories:

  • Those that require a jurisdictional permit and plan check.
  • Those that are routine, general maintenance projects and non-capital projects.

Regardless of size, cost, or funding source, projects that require a jurisdictional permit and plan check must follow the Form 1 request process. Examples of these projects include new construction, building demolitions, and building renovations. For a detailed list of project types requiring a Form I and an explanation of the process, refer to Form 1 Project Initiation.

While construction is in process, these projects are accounted for as capital projects in the university's financial system to capture related expenditures. This treatment allows the university to categorize expenditures as capital assets or expenses and to collect expenditures in a way that supports indirect cost recovery, service center rate development, and financial reporting. Administrative Guide Policy 3.1.2: University Funds provides further guidance.

Routine general maintenance projects, such as interior painting and carpet replacement, may not require the Form 1 process and are managed either by a department or Facilities Operations. Non-capital projects, typically defined as those with a budget under $50,000 and/or a lifespan of less than one year, fall outside the scope of capital projects. Refer to Capital/Non-Capital Project Decision Tree to understand the criteria for capitalization. 

The Land, Buildings, and Real Estate department is responsible for developing, designing, and administering major capital projects. Each project has a project manager responsible for coordinating all aspects of the project. Some other areas, such as Residential and Dining Enterprises, Utilities, and Facilities Operations independently manage their projects. 

User group is the faculty, staff, and students or other group identifying the need for a new facility. Generally led by school or department facilities representatives, these groups articulate the project vision, expectations, and program requirements, providing input throughout the entire process.

Support groups include:

  • Development, if donors are involved
  • Procurement, for assistance with contracts and vendor relationships
  • The Controller's Office, primarily Capital Accounting, for project setup, vendor payments, and financial controls
  • Office of the Treasury, for debt management

The complete process is explained in the Project Delivery Process. The information below summarizes the financial aspects of the process.

Facilities Project Initiation Policy (Form 1) outlines the requirements for project initiation and approvals. In summary, the planning and approval process is as follows:

Then, if the project is approved, project setup commences.

  • For capital projects that have an approved Form 1, Capital Accounting will review the form for compliance, set up the PTA in Oracle Financials, and transfer the funds.   
  • For capital projects that do not require a Form 1, such as fixed equipment & modular furniture and software purchases/costs that exceed $1 million, the initiator can request a capital project PTA by using PTA Manager Capital (PTAC). Refer to Topic Overview: Request New Account (PTA) for more information.
  • Capital Planning also sets up the project in its database to allow the project manager to track actual and projected expenditures against approved budgets.
  • Capital Accounting sends an authorization memo to the appropriate individuals so they can grant signature authority.
  • Refer to the Capital Project Sub-Task Configurations used when capital projects are set up.

  • Contracts are established in accordance with Procurement guidelines.
  • As work is done, vendor invoices are received and reviewed by Cost Planning and Management (CP&M) and/or other responsible departments, and then end-routed to Capital Accounting for final review and approval. These invoices are paid and recorded through Oracle Financials.
  • Refer to Capital Project Sub-tasks/Expenditure Type Transaction Controls for which expenditure types are eligible for capital project sub-tasks when creating iJournals and iProcurement transactions. 
  • Refer to Resource: Capital Project vs. Non-Capitalizable Costs for cost guidelines to determine which costs can be capitalizable or must be expensed.

  • The capital project administrator initiates a capital project PTA closeout or cancellation request via PTA Manager. Capital Accounting reconciles outstanding commitments, closes the project and award, and returns unused funds in accordance with the Funding Guidelines. To request the closeout or cancellation of a capital project PTA, please see the PTA Close Requirements and Contacts table of Topic Overview: Close PTAs.
  • Administrative Guide Policy 5.2.1: Financing of Purchases explains loan terms, amortization schedules, and asset categories and lives.
Last Updated: Dec 22, 2023