Business and Finance


A MESSAGE FROM THE VICE CHANCELLOR

January 2002

NEWS FROM THE DEPARTMENTS

 


A MESSAGE FROM THE VICE CHANCELLOR
Richard P. West, Executive Vice Chancellor and Chief Financial Officer

On December 31, 2001 John Richards, CSU Budget Director, retired after over 33 years of serving the university system. Mr. Richards will continue to share the wisdom and knowledge he gained over those years as a consultant through the end of this fiscal year. Stepping in to fill the vacuum left by Mr. Richard's retirement is Mr. Rodney Rideau, Acting Budget Director, who has been with the CSU since 1988.

NEWS FROM THE DEPARTMENTS

BUDGET OFFICE, 
Rodney Rideau, Acting Budget Director

2002/03 Governor's Budget

The 2002/03 Governor's Budget was transmitted to the legislature on January 10, 2002 and includes $137.8 million to fund the $269.1 million CSU budget request approved by the Board of Trustees last October. The funding is comprised of a $116.9 million state General Fund increase and a $20.9 million increase in State University Fee revenue from enrollment growth. The CSU budget plan, based on the Governor's Budget appropriation, funds mandatory cost obligations for employee health benefits, new space and property insurance, enrollment growth of 12,030 full-time equivalent students (FTES), summer year round operations at CSU Chico, network equipment associated with the CSU technology infrastructure build out, and a one percent compensation increase for employees.

Additional actions that will be required in the 2002/03 fiscal year include a $20 million permanent reduction in CSU base budget appropriations to reflect lower natural gas rates, a $6.5 million reduction in funding provided for the Educational Technology Professional Development Institute program that trains K-12 teachers in the use of technology in the classroom, a $5 million reduction in the operating budget of the CalTeach teacher recruitment program, and a $14.5 million reversion of state funds provided after 1998 and 1999 fee reductions for the CSU State University Grant program. Technical adjustments in payments for lease revenue bonds and the increase in costs for annuitant dental benefits have been incorporated in the 2002/03 Governor's Budget proposal.

As campuses plan for 2002/03, they should continue to make preparations for a current year total reduction that approaches $30 million (which includes the $20 million already identified for lower natural gas costs and another $9.5 million previously associated with statewide plans to address the $12.4 billion current year shortfall). The $84.2 million General Fund requirement for increased retirement contribution costs has been funded for both the current year and budget year in the Governor's Budget proposal.

2002/03 Governor's Budget Allocations

Campus allocations based on the 2002/03 Governor's Budget will be available by March 1, 2002. The allocations will identify current year base budget adjustments and funding changes associated with the Governor's 2002/03 budget proposals. Campus allocations will include expenditure adjustments for enrollment, compensation, new space, health benefits, property insurance, and State University Grants. Details of specific actions to implement the $20 million natural gas budget reduction will also be provided.

BUSINESS PLANNING & INFORMATION MANAGEMENT
Lenore Rozner, Assistant Vice Chancellor 

Quality Improvement (QI) Programs

Spring Training - March 11-12, 2001 at CSU Monterey Bay
Each year, the Quality Improvement Program sponsors a training event for campus representatives (Quality Improvement Facilitators and Function Reps) to provide them with information on the latest tools in the QI Toolbox. This year's Spring Training program will be held on the campus of CSU Monterey Bay on March 11 and 12.

On the morning of March 11, we will be offering two pre-conference sessions: an introductory class for those new to QI, as well as a "Master Class" in the PbViews performance management software, for experienced systems administrators. After a "Welcome" lunch, we will offer afternoon sessions that include discussions on maximizing QI efforts during "lean times" and a panel discussion on how to pull performance data into a coherent effort that is driven by your organization's strategic plan.

Day 2 will be a full-day course: "Focus on Facilitation" presented by Orion Development. Attendees will learn practical approaches and communication skills for effective group facilitation and team decision-making. This session will be an essential learning experience for anyone involved in working with cross-functional teams.

For more details on this event, visit the QI website at http://www.calstate.edu/qi.

Customer Satisfaction Survey Spring 2002
The Quality Improvement group will be administering a customer satisfaction survey this spring at participating campuses. We are continuing our efforts to move toward a web-based solution, and this year will be surveying all faculty and staff via the Internet. In addition, several campuses are exploring the possibility of surveying students as well using the web: Cal Poly SLO, CSU San Marcos, and CSU Northridge. Participating campuses will administer the survey in February and March, with systemwide reports scheduled to be published this summer. All data from this survey will be downloaded directly into PbViews for individual campus analysis and reporting.

Performance Measurement 2001
Don't forget… during fiscal year 2001/2002, campuses can individually elect to submit data via the on-line QI performance measurement website. Functional data is due in January. Results will be calculated and available to campuses by March 2002. No data analysis or systemwide report will be produced this year, except for the Procurement function. At the conclusion of their data collection effort, procurement representatives will review and analyze the data and publish the performance measurement results. Questions regarding the procurement measurement effort can be directed to Dolores Basilio at dbasilio@calstate.edu.

For more about QI activities and events, contact John Sanders at the Chancellor's Office, (562) 951-4556 or jsanders@calstate.edu, or, visit the QI website at http://www.calstate.edu/qi.

 

CAPITAL PLANNING, DESIGN AND CONSTRUCTION
J. Patrick Drohan, Assistant Vice Chancellor

CONSTRUCTION MANAGEMENT

SUAM, Section XII-Construction Management for Public Works Contracts
In November, CPDC updated the State University Administrative Manual (SUAM), Section XII-Construction Management for Public Works Contracts, primarily in response to the 2001 construction audit recommendations. A listing of the specific changes follows.

Section 9721.07, Alternatives, has been modified to include the requirement that alternatives be submitted to the CPDC facility planner for review and approval prior to bid. The revision also includes a clarification on the use of alternatives.

Section 9721.08, Allowances, has been modified to include a definition of allowances and a brief explanation of the process for using them. Also samples of allowances are provided, along with the requirement that all allowances be submitted to the CPDC construction engineer for review and approval prior to bid is included. The revision further includes the requirement that allowances shall not exceed ten percent of the project's construction value.

Section 9785, Selection of Firms to Supply Soils and Materials Testing Laboratories, and Project Management and Inspection Services (Construction Services), has been revised to include the policy to contract on-site project management and inspection services separately from testing services whenever economically feasible.

Section 9786.03, Service Agreement Amendments, has been modified to suggest that actual services performed and new services to be performed be documented, so that encumbered funds are not expended against unauthorized services. It further suggests that once the project is complete, and services for an agreement are no longer required, that the construction administrator issue an amendment to credit the agreement, and disencumber the balance of funds in the agreement.

Section 9824.01, CSU Request for Certified Payroll, has been modified to include the Hourly Labor Rate Worksheet, and require submittal of this form by the contractor for its entire payroll as well as for all of its subcontractors.

New forms: Subcontractor Change Order Request Summary, Contractor Change Order Request Summary, Hourly Labor Rate Worksheet, and Building Permit have been added to Appendix D.

It is intended that these changes and updates to SUAM serve to strengthen management practices for all public works type projects whether major, minor or special repair. Staff may download a copy of the newly updated SUAM, Section XII, and the new forms, found in Appendix D from the CPDC web site: www.calstate.edu/cpdc, under "Executive." Note that staff is currently working on revising this same section to include all the legislative updates, particularly those relative to the Minor/Major Capital Outlay contract thresholds. This update shall be posted to the web site before the end of this month.

Contract General Conditions
Staff is currently working on the updates to the Contract General Conditions for Major Capital Outlay Projects, Minor Capital Outlay Projects, Job Order Contracts and Design-Build Projects. The updated versions shall be available on CPDC's web site before the end of this month.

James R. Corsar, Chief of Construction Management

Land Use Planning and Environmental Review

On December 21, the Stockton Center Site Authority approved a long-term ground lease, by which the CSU trustees grant a long-term interest in the former Stockton State Developmental Hospital Site to the Stockton Center Site Authority. The Site Authority is a Joint Powers Agency of the City of Stockton and the trustees. It was created to establish a CSU educational center and implement an economically viable redevelopment of the site. The ground lease, with an initial term of fifty (50) years, allows for financing of future development and related improvements that are anticipated to be part of a master development plan that ultimately will be approved by the Stockton Center Site Authority and the City of Stockton. The implementation of the development plan will be accomplished through a Master Sublease from the Stockton Center Site Authority to the development partner, along with an associated development agreement.

This action is the second step in establishing the organizational framework within which the Stockton Center Site Authority can proceed with development and ultimate implementation of a master development plan for the site. The first step was the formation of the Stockton Center Site Authority. The development project is a long?term investment on the part of all the stakeholders in this project, including the City of Stockton and the CSU. The total length of the ground lease term reflects this long-term outlook.

David A. Rosso, Chief of Land Use Planning and Environmental Review

Plant, Energy & Utilities

The California State University's primary energy provider, Enron, has filed for Chapter 11 bankruptcy protection after suffering a wide array of financial difficulties over the past several months. The joint contract that the CSU and University of California have with Enron has been in place for the past four years and has allowed the Universities to enjoy substantial cost savings for electric power. The Enron contract serves 19 CSU campuses, the Chancellor's Office, 9 UC campuses, and the UC Office of the President. While Enron has canceled many of its energy contracts nationally, the CSU/UC contract still remains in place and is projected to continue in place for the near future. The CSU/UC Energy Oversight Board is following the situation closely and developing contingency plans should Enron prove unable to serve campus electrical loads.

As the energy crisis begins to subside, at least from a supply perspective, natural gas unit prices continue to drop significantly. Campuses were paying prices as high as $1.70 per therm (a therm is equal 100,000 Btu) last year during the peak of the energy crisis. A typical campus, such as San Luis Obispo, will use around 180,000 therms of natural gas per month during the winter season for heating and other utility needs. Presently natural gas is averaging about $0.55 per therm and the price is projected to drop further over the next 12 months as improvements in gas transportation infrastructure are implemented.

Mark Gutheinz, Chief of Plant, Energy and Utilities

CPDC Due Dates for CPB&G Agenda Items (May 14-15, 2002 Trustees' Meeting)

Master Plan Revisions:

March 12, 2002

All Other Items:

March 26, 2002

A complete listing of 2001/02 due dates for CPB&G agenda items is located at CPDC website http://www/tier3/PPD/Executive/index.html

 

FINANCIAL SERVICES
Dennis Hordyk, Assistant Vice Chancellor

FINANCIAL SYSTEMS STANDARDS AND REPORTING

GASB 34/35 Implementation

The Financial Standards Advisory Committee has been conducting regular meetings to review the status and progress of the GASB 34/35 implementation sub committees.

KPMG is working with this committee to provide an update on GASB/FASB reporting issues and to identify changes needed to generate financial statements in compliance with GASBs Nos. 34 and 35 effective with June 30, 2002 GAAP financial statements for CSU and related entities.

Two days of implementation training has been tentatively scheduled for all campuses at the LAX Crowne Plaza on March 12 & 13, 2002. The final training agenda and the registration package will be sent in January.

The meeting minutes of the Financial Standards Advisory Committee and other documents are available at http://www.calstate.edu/SFR/.

Electronic Interfaces with SCO
The Chancellor's Office Financial Systems, Standards & Reporting department is available to assist campuses wishing to establish secure electronic data file exchanges between the CSU and the State Controller's Office via File Transfer Protocol (FTP) with the Teale Data Center. Typical exchanges would include Agency Reconciliation Files, Controller's Balances & Prior Year Accruals, Paid Claims/CD102, Payment & Employment History, PIP, as well as new interfaces such as the State Treasury reconciliation file. Fourteen campuses have now established their connection. In addition, nine campuses and the Chancellor's Office are using a separate FTP process over the internet for sending claims audit files to the SCO Audit Division. This interface eliminates the need for mailing claim audit diskettes to the SCO. To request an FTP account for connection, campuses need to fill out and submit an Access Authorization form to the Financial Systems, Standards & Reporting department. To request a copy of the form, please contact Jan Earl at jearl@calstate.edu.

For more information, contact Laleh Graylee at lgraylee@calstate.edu or Jan Earl at jearl@calstate.edu.

Update on the IPEDS Finance Survey

The 2000/2001 IPEDS Finance Survey is due to NCES by April 19, 2002. This is the second year the data will be transmitted via the web. As in the past, the C.O. will prepare the report on behalf of each individual CSU campus. Campuses will be given an opportunity to review their data on the Web at the end of March before the report becomes finalized.

For more information, contact Sedong John at sjohn@calstate.edu.

FIRMS Update

Chief Financial Officers will receive a memo in January outlining the changes in FIRMS Reporting Requirements. This letter will provide information on changes that will become effective with the last quarter submission of the 2001/2002 fiscal year. Please forward questions to Sedong John at sjohn@calstate.edu.

Laleh Graylee, Director

CONTRACT SERVICES AND PROCUREMENT

CSU Procurement and Support Services Officers Association, Professional Development Training

The department has been working closely with the Procurement and Support Services Officers (PSSO) over the past year in developing a CSU customized, professional development program for purchasing and contracting staff throughout the system. The program offers coursework targeted at obtaining a Certificate in Purchasing Management (C.P.M.) in addition to customized CSU classes focusing on CSU procurement policy and law, contract management and administration skills. The program was integrated in January 2002. Registration and other information are available at: http://www.calstate.edu/Csp/training.shtml

SBC Datacomm Master Agreement for Network Equipment and Services

A Master Agreement has been established through which campuses and auxiliaries may purchase discounted Cisco equipment, network engineering, installation and maintenance services. The primary scope of the Agreement is to supply equipment and services in support of CSU's Infrastructure Build-Out Project; however, the Agreement may be used to purchase equipment and services not a part of the Infrastructure Build-Out Project. The agreement announcement can be found at http://www.calstate.edu/csp/Bulletins/02-01/02-01.pdf. Contact Tom Roberts via email at: troberts@calstate.edu or telephone (562) 951-4583 for additional information

 

GOVERNMENTAL AFFAIRS,

Karen Yelverton, Assistant Vice Chancellor

Copies of CSU Legislative Reports and other legislative information pertaining to the CSU are available on the OGA website at: http://www.calstate.edu/oga

INFORMATION TECHNOLOGY SERVICES
David Ernst, Assistant Vice Chancellor

TECHNOLOGY INFRASTRUCTURE INITIATIVE

Pharos Completed
The Pharos system of unified access to information resources is ready to begin service to students and faculty across the CSU. The key hardware and software components have been completed and installed, including a union catalog of the combined holdings of CSU libraries with real-time item availability status, user authentication and authorization, and an automated intercampus circulation system that enables direct patron-initiated borrowing. The Web-based Pharos portal incorporates the union catalog, direct patron borrowing, and integrated searching of a wide array of library information sources within the CSU and beyond to the World Wide Web. Library staff training for Pharos is now underway and intercampus circulation will be activated in March. Planning is also underway to expand Pharos to incorporate instructional tools in information competence, online reference assistance, and access to other resources such as image databases and the CSU Specialty Centers. For a look at the Pharos portal and the CSU union catalog, go to http://130.150.173.189/webpac/spharosstart.html.

 

COMMON MANAGEMENT SYSTEM (CMS)

Successful Year for CMS PeopleSoft Project
2001 was a truly momentous year for the CMS PeopleSoft project. Eleven campuses are now operationally using the CMS PeopleSoft Human Resource and/or Finance software from a new, outsourced data center, the CMS Student Administration project is on schedule to go live on three campuses this quarter, and several 2nd wave campuses have begun their Finance and/or Human Resource prototyping using the CMS baseline software.

The three-campus Student Administration pilot project remains on schedule to meet the February campus milestones of processing Admissions/Recruitment data and generation of Financial Aid award letters for new and returning students. Conversion and testing are key activities this month.

Ongoing Support for Legacy Financial System
BMS continues to maintain the Financial Records System (FRS) for campuses as they plan their migration to PeopleSoft Financials. A minor FRS release was distributed in December. BMS also continues to provide FRS Data Warehousing services for campuses that have gone live with PeopleSoft to facilitate accessing their FRS data for historical and audit reporting needs.

MMS+ Incorporates CMS Chart of Accounts
BMS supports MMS+, a facilities management system used by six campuses. An interface has recently been developed and tested to incorporate the CMS

PeopleSoft Chart of Accounts for work order entry, purchase order and most major system modules.

Please visit the CMS web site for additional information at: http://cms.calstate.edu/

The Business and Finance Newsletter is accessible from the Chancellor's Office website http://www.calstate.edu/BF/. Questions related to receiving the B&F newsletter or changes in e-mail addresses should be directed to James Francel at (562) 951-4547 or jfrancel@calstate.edu.