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Dennis Hordyk, Assistant Vice Chancellor
Financial Services Division
401 Golden Shore, 5th Floor
Long Beach, CA 90802-4210
562-951-4540 / Fax 562-4865
www.calstate.edu
Revenue

Revenue Management Program – Meeting Notes – February 12, 2007

Dennis Hordyk’s Opening:
    Systemwide Revenue Bond Sale
         o Moody’s upgrading bonds to double A minus – this rating gives us the most credit
             capacity
         o Suspect that S&P will also upgrade in the spring
         o Refinancing all senior student union “senior” debt with this bond sale by late
             August, those with this debt will be able to move to new processes of depositing
             Union Fees in Trust. (SLO is not being re-financed as they are paying off their
             debt this year)
    Update to CABO on banking, etc.
         o Investment manager contract – CSU will continue with MetWest through June 30;
             in process of interviewing 2 firms that ranked highest; will end up with 2
             investment managers when they are done
    Enterprise funds on deposit in state treasury
         o No additional direction on how to get them out
         o Continue to spend down
         o Continue to deposit new fees in trust
    Letter from State Treasurer (was previously attorney general)
         o Were told that the CSU did not have the authority to move some housing and
             student union fees from treasurer
                  Dennis met with them to discuss our position
                          attorneys will now talk and work this through
         o Continue depositing everything to Wells until you are told otherwise
    Communications with treasurer, SCO, other agencies, etc. re: RMP
         o Encouraged not to have specific conversations with them about RMP; want to
             make sure the right questions are asked of the right people; want to make sure
             the CSU doesn’t get stuck in the process; questions should come at policy level
         o Be very careful
    One of the components of 1802 is that the SCO is authorized to do claims audits
                  SCO’s proposal is to audit to our procedures
                          there are currently no procedures
                                 o critical to get them established
    Colleen will be here later this week to go through banking procedures

Topics to review this week:
    Will be populating FOA’s agenda for Tuesday morning for dissemination of information


                                    Fresno             Monterey Bay             San Francisco
CSU Campuses
                                    Fullerton          Northridge               San José
Bakersfield
                                    Humboldt           Pomona                   San Luis Obispo
Channel Islands
                                    Long Beach         Sacramento               San Marcos
Chico
                                    Los Angeles        San Bernardino           Sonoma
Dominguez Hills
                                    Maritime Academy   San Diego                Stanislaus
East Bay
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  Will also be discussing what should be included in year-end training
  Will discuss miscellaneous topics submitted by campuses:
       o Banking transactions
       o Payroll reconciliation
       o Financial Aid investment earning
       o Claims FBC accrual
       o SUG
       o Cash remit between Wells and State Treasury
       o SWAT/CPO process
       o Fund 499
 Information has not been getting disseminated well on campuses and staff are making
   their own decisions that may not be accurate
       o Trying to share information and have collaborative discussions
                Campuses that make an independent decision
                       Could result in bad data
                       Could be the result of the wrong person being on the task force
                       Need to operate according to task force established standards
                       Example of campuses making different choices
                              o Cash Acct 101001 is used for cash STO campuses were
                                  instructed to use 101006 for cash in WELLS
                                       Some did
                                       Some mapped 101001 to 101006 combining all
                                          cash
                                       Some created 1018XX mapped to 101001 and
                                          mapped 101001 to 101006
EO 1000 – Delegation of Authority
       o Draft provided today – will walk through in detail today
       o EO attempts to establish operational definitions based on industry standards
       o This is going to be the primary EO and all procedures and other policies will
           come in the manual; this is the overriding EO that authorizes the procedures
       o FOA and CABO have reviewed and concur with the definitions outlines within the
           EO
 History
       o Over the past decade, the CSU has been granted the authority to operate
           various funds within State University Trust Fund 948
                State of CA classifies State University Trust Fund as fiduciary
                       Examples of CSU activity currently operating within 948
                              o Parking Fee Revenue Fund
                              o CERF Fund
                              o CSU Operating Fund
                       The activity currently operating within 948 is classified as fiduciary
                          to the state – clearly not fiduciary to the CSU
       o EO attempts define activity for funds deposited with the SCO according to State
           Fund classifications and activity within 948 according to CSU Fund Types (based
           on basic GAAP Government Accounting classifications).
       o CSU will review when it is required to operate according to SAM and when it can
           operate according to its own policies and procedures.
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       o    CSU will use its own policies, definitions and standards for funds on deposit with
            the central bank (Fund 948)
   In an attempt to understand EO 1000, the Task Force walk-through the exercise of
    classifying each CSU fund in SCO Fund 0948 into the newly defined CSU Fund Types
        o General consensus was that exercise had value. It helps to have a clear
            understanding of what the fund activity is and how it should be classified
                 Goal is to have comprehensive documentation around this whole thing
        o E0 1000 is principle based at a very high level – the manual would have dates
            and much more detail, and it would have as much authority as the EO
        o The general fund still exists, but you will not be operating in it. The Task Force
            discussed what to call the operating fund within 948. Based on generic GAAP
            definitions, it is “general fund”, however, since the CSU will continue to have an
            appropriated general fund it adds to the confusion.
                 No consensus on whether or not to define a CSU General Fund
        o Summary tables in the EO are helpful and would like them edited to match the
            verbiage one to one.
        o The task force reviewed definitions related to “fund”. CSU Funds can have
            multiple FNAT Keys based on different reporting requirements, and the campus
            can have multiple PeopleSoft Funds based on it s own reporting requirements.
        o Enterprise fund definitions are strictly textbook
        o Internal service funds – done today in RA, existing classification that we have not
            used, but we’ve really done it using RA; new definition of an old thing
        o Fiduciary funds – much like most of our trust activity
   CSU Fund Review – the task force went thru the exercise of discussing how each CU
    Fund within 948 would be classified according to EO 1000.
        o This could result in adding additional CSU Funds and/or eliminating some.
                 Enterprise Fund –one definition” it could have debt”
                 401 – Fiduciary: Agency/Private-purpose (not an agency in GAAP)
                 403 – Fiduciary: Agency
                 406 – Fiduciary: Agency
                 407 – Fiduciary: Agency
                 408 – Fiduciary: Agency/Private-purpose
                 409 – Fiduciary: Agency/Private-purpose
                 410 – Fiduciary: Agency
                 411 – Fiduciary: Agency/Private-purpose
                 421 – Fiduciary: Private-purpose…but it’s weird
                 422 – Fiduciary: Private-purpose…but it’s weird
                 423 – Fiduciary: Private-purpose…but it’s weird
                 424 – Fiduciary: Agency/Private-purpose
                 431 – Fiduciary: Agency/Private-purpose
                         Possible change: TF-Miscellaneous Financial Aid (from Aux?)
                 432 – Fiduciary: Private-purpose
                 433 – Fiduciary: Agency/Private-purpose
                         Some campuses have funding from auxiliaries – Agency; some
                              have funding NOT from auxiliaries, just internal funding – Private-
                              purpose
                 434 - Fiduciary: Agency/Private-purpose
                         Similar to 433
                 441 – Proprietary: Enterprise
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   442 – Proprietary: Enterprise
   443 – Proprietary: Enterprise
   451 – Governmental: CSU Operating Fund
         Today, 9 of 23 campuses put in CSU Operating Fund, the rest put
           in Trust; obviously there will be a change for some campuses here
   452 – Proprietary: Enterprise
   453 – Proprietary: Enterprise
   454 – Proprietary: Enterprise
   461 – Fiduciary: Agency
         All ASI organizations exist based on the Education Code
   462 – Proprietary: Enterprise
   463 – Governmental: CSU Operating Fund/Special Revenue Fund
         CO does not consider this part of the operating fund
   464 – Fiduciary: Private-purpose
         Only the CO has activity in this fund
   465 – Fiduciary: Private-purpose
         Must be analyzed; possible additional CSU fund
   466 – Governmental: Permanent Funds/Proprietary: Enterprise/Fiduciary:
    Private-purpose
         Example of endowment classifications
               o Governmental/Permanent
                        Endowment funds the on-going cost of a student
                           computer lab
               o Enterprise
                        Endowment funds the replacement of furniture in
                           the dorms
               o Private-purpose
                        Scholarships
   467 – Governmental: CSU Operating Fund
         These are student fees that probably belong in 485
   471 – Governmental: Special Revenue Fund
   472 – Proprietary: Enterprise
   473 – Proprietary: Enterprise
   474 – Proprietary: Enterprise
   481 – Governmental: Special Revenue Fund
   485 – Governmental: CSU Operating Fund
   491 – unable to classify – send to FSAC for review
         Examples of activity
               o Non-state capital, Federal indirect cost recovery, Grants,
                   FEMA, Joint doctoral, SMIF earnings from old special
                   projects activity, Donations – equipment that ASI
                   purchases and gift back to campus, Radio station, Energy
                   rebate, CMS Project
         Could end up with additional CSU funds, or activities could be
           moved to another fund
   492 – unable to classify
         CO only; had its own bucket at the state
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                       If campus employees sign up (dependent care), does the CO get
                        the admin fee?
              496 – unable to classify – send to FSAC for review
                     Examples of activity
                             o Cost recovery, Energy rebates, Joint powers of authority,
                               Lease income, Workshops and conferences, Facility use,
                               Equipment replacement, Orientation fee, Payment plan
                               deferral fee, UCES college allocations, Interest, Key fund,
                               Off-campus study program fees, Breakage deposits,
                               Central valley internet project, Campus programs,
                               Chargeback funds, Lifescan, Athletics,
                               Construction/facilities planning admin, Political institute,
                               Collect money on behalf of ASI/Foundation, CMS Project
                             o Some of these came out of the fact that in GF you would
                               have lost the money, and you could have kept it in Trust
              497 – Proprietary: Internal Service
              499 – Proprietary: Internal Service – but may need further review
              531 – Proprietary: Enterprise
              532 – Proprietary: Enterprise
              533 – Proprietary: Enterprise
              534 – Proprietary: Enterprise
              535 – Proprietary: Enterprise
              536 – Proprietary: Enterprise
              537 – Proprietary: Enterprise
              538 – Proprietary: Enterprise
              539 – Proprietary: Enterprise
Spreadsheet with Task Force CSU Fund classification exercise




   The task force had a lengthy discussion regarding the classification of EO1000. The
    CSU GAAP reporting model is based on GASB 35 – Business Model as opposed to
    GASB 34 Fund Accounting model. The task force is split
       o Some expressed the opinion that we could clearly define each CSU Fund and
           classify it by GAAP Net Asset Category
       o Others expressed the opinion that we are required to account according to GASB
           34 by the Fund Categories and we should modify the CSU Funds to clearly map
           to the GAAP Net Asset Category
                 Also has the CSU using the same structure as the state
       o Fund processing type – the way the fund behaves/combo-edits – we’re looking
           for the definitions for how the funds behave; what are the rule sets that define our
           behavior when we define these funds at the transaction level
   Terminology clarification especially within EO1000
       o CSU Fund Type
       o CSU Fund Group
       o CSU Fund
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          o   CSU Fund Category
          o   State Fund Type

Revenue Classification
    Student Health Service Fee currently being put into 3 different funds
         o Health Services Fund
         o State University Trust
         o CSU Operating Fund
                 The task force agreed the fee should be classified here.
    What are the revenues that we think define the estimated 1.2 billion that is considered
     on deposit in Fund 498 and therefore referenced in 1802


The task force reviewed all revenue deposited within Fund 498 as of June 30, 2006. The
majority of the funds are handled consistently amongst the campuses; however, numerous
types of revenue are not handled consistently. The task force reviewed the activity. Following
are the fees that were agreed should be deposited into CSU Fund 485 that are reportable in the
Governor’s Budget and are subject to interest payback to the state.




Campuses can record transfers in as appropriate within CSU fund 485, but these fees would not
be reportable in the governor’s budget and would therefore reduce the reportable expenditures
in and equal amount. These expenditures would then be subject to state pro-rata if they are
transferred in from a “billable” CSU Fund and have payroll activity.
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