BUSINESS AND FINANCE NEWS
October 25, 1995
The California State University
Business and Finance Division
Richard P. West, Vice Chancellor
THE VICE CHANCELLOR'S DESK....................
Many of you have participated in recent discussions and activities related to the production of consolidated CSU financialstatements, reporting of the financial activity of auxiliary organizations, implementation of a comprehensive risk management program, and the decentralization of enterprise activities. These efforts, and others discussed in this issue of the newsletter, require frequent and effective communication between campuses and the chancellor's office. As thepresident's primary liaison for business and financial issues, the Chief Administrative and Business Officers (CABO) perform an invaluable serviceby providing insight and guidance when business and financial matters of systemwide importance or consequence require attention. CABO has been a great help to me and I look forward to our future collaboration.
Richard West, Vice Chancellor, Business and Finance
NEWS FROM THE DIRECTORS
Direct Vendor Pay Pilot
The three campus Direct Vendor Pay Pilot project is at the mid point of its second year. We are in the process of developing the report on the results of the pilot project due to the Legislature on January 1, 1996. Our current plan is to submit a proposal to pursue legislation during the 1996 legislative session to gain the authority for all CSU entities to implement a program to pay vendors directly. Unfortunately, our success is far from assured since we can expect active opposition from the State Controller's Office (SCO). In an effort to bolster our case that both the SCO and the CSU can benefit from this project, campuses should make sure that complete documentation is prepared for claim schedules. The SCO is keeping a watchful eye on both pilot and non-pilot campuses.
Income (UBI)A tentative plan has been made for the CSU to file a 990-T for fiscal year 1995/96. This plan has been approved by the vice presidents of administration and will be presented to the campus presidents at their December meeting. A training session for UBI is being developed. We hope to offer the training at the end of November. The current plan would have the campuses submit their UBI worksheets to the Chancellor's Office for the filing of a consolidated return.
The GAAP audit for 1994/95 for ten campuses is scheduled for completion before the end of December. Plans are being made for the GAAP audit of all campuses for 1995/96. The GAAP audit for 1995/96 will include a single audit report on federal funds. A determination is being finalized as to whether the auxiliary organizations will be included in the scope of the audit.
George Pardon, Director
Auxiliaries Planning and Bonds
Vending Operations on CSU Campuses
Current State of California statutes regulate certain vending operations on state property. These statutes generally require the profits from these activities to be sent to the Department of Rehabilitation for use in disability programs. The CSU has a long history of making a valid case that these regulations do not apply to the CSU for some very specific reasons. Because of recent court actions, the Department of Rehabilitation is once again attempting to applying these regulations to CSU campuses and asking that profits from such activities be forwarded to them.
We are currently reviewing the request and developing a response that will again make the case that the CSU is not subject to the requirements. This effort includes the advise and assistance of our attorneys as well as a knowledgeable spokesperson and attorney for many CSU auxiliary organizations. Many of your auxiliary organizations have been apprised of this issue through our contact with AOA. Please call Ben Figueroa at (310) 985-2790 or email@example.com or Rick Leffingwell at (310) 985-2790 or firstname.lastname@example.org if you have questions on this issue.
Student Union The student union budget process for 1995/96 is coming to an end. In an effort to improve the process, we have expanded our analysis and we are considering making available a workshop prior to next year's budget submittal. We will be requesting input from the union directors on key topics to be addressed. More information will follow in early 1996. Questions and comments may be forwarded to Ms. Rosa H. Renaud, at (310) 985-2790 or email@example.com.
Great strides have been taken in the decentralization of the parking program. It has been a learning experience for all and will continue to be so during this transition year. Campuses have been informed of changes via coded memoranda sent to business and finance, accounting, parking operations, and budget departments (see BF 95-09, AD 95-10, APB 95-09). If campuses need further assistance, please contact Ms. Rosa H. Renaud, at (310) 985-2790 or firstname.lastname@example.org.
New California State University Auxiliaries
There are a total of 70 recognized Auxiliary Organizations in the California State University. Some of the most recent additions include:
The CSU Risk Pool became effective July 1, 1995 creating a systemwide risk sharing program to control and reduce losses to the CSU and its individual campuses for general liability and workers' compensation losses.
Each campus President has appointed a representative and an alternate to the Risk Pool Advisory Board. The first Risk Pool Advisory Board Workshop is scheduled for November 10, 1995 at the Chancellor's Office.
The Risk Pool has four standing committees: Executive, Liability, Safety and Workers' Compensation. The Executive Committee is chaired by Frank Lebens, Cal Poly- SLO; the Liability Committee is chaired by John McDonald, Chico; Safety Committee by Joe Vasquez, SDSU; and Workers' Compensation by Lee Bateman, Hayward.
Key dates for Risk Pool activities are as follows:
October 18, 1995- Committee meetings: Liability,Safety and Workers' Comp.
November 10, 1995-Risk Pool Advisory Board Workshop.
November 15, 1995-Liability Claims Workshop, Southern location.
November 28, 1995-Liability Claims Workshop, Northern location.
Formore information, please contact Charlene Minnick, CSU Risk Manager, (310) 985-2790 or email@example.com.
1996/97 Support Budget Development
The Budget Office is preparing the Board of Trustees' Support Budget for 1996/97. Preliminary information is being transmitted to the Department of Finance for development of the Governor's Budget that will be introduced in January. In addition, meetings are being held in Sacramento on various topics relevant to the preparation of the budget.
1995/96 Retirement Rate Increases
One issue that campuses have been facing since July is 1995/96 retirement rate increases. Section 3.60 of the 1995 Budget Act increased employer paid retirement rates for miscellaneous, first tier employees by over 24% and nearly 12% for peace officers. As a result, the CSU's retirement costs will increase by over $30 million in 1995/96.
The Department of Finance (DOF) has indicated that additional General Fund money will be appropriated to cover the CSU's rate increases. However, it is unclear when these funds will be made available to CSU. Funds will probably not be available before January 1996. Until funding is received, you will need to pay for increased retirement expenditures from existing base budgets. According to the DOF, the CSU's 1995/96 final budget will be used to calculate the additional cost of the retirement rate increase. This office is currently reviewing an allocation methodology but anticipates a pro-rata distribution of additional State funds based on campuses' actual 1994/95 retirement expenditures.
For additional information, please call Beth Ryan at (310) 985-2712 or firstname.lastname@example.org.
John Richards, Director
Contracts and Procurement
California Multiple Award Schedule (CMAS)
Several northern campuses have expressed interest in having a CMAS training session. Don Smalley at San Francisco State University has offered to host a session on his campus. There is also the possibility that CMAS training could be included as part of the upcoming Procurement Support Services Office (PSSO) conference at Chico in February. Charleen Wood will be making final arrangements for CMAS training. For further information on CMAS training she can be reached at (310) 985-2548 or email@example.com.
Major Capital Project Delegations to Campuses
In response to a request from the Procurement Advisory Council, a meeting was held at SWRL on August 22, 1995, with representatives from Physical Planning and Development (PP&D), Contracts and Procurement (C&P), and campus facility planning and procurement offices to discuss ways to eliminate some of the chronic problems encountered over the past few years relating to delegated major capital outlay projects. The main issues discussed were:
University of California (UC) Office of the President Business Affirmative Action Advisory Task Force
Loren House, CSU Business Affirmative Action Specialist, has been invited to participate in the UC's Office of the President Business Affirmative Action Advisory Task Force. The task force will be responsible for the development of an implementation plan to address the UC Board of Regents, July 20, 1995, resolution prohibiting preferences being exercised based upon race, religion, sex, ethnicity or national origin as criteria in its employment and contracting practices. This effort provides an excellent planning opportunity to analyze implementation issues associated with current legislative initiatives which may impact CSU's MWDVBE participation goal requirements.
Sprintlink on Campus
Due to the collaborative efforts of San Diego State and several other campuses, Sprint Communications Company has been selected, through an invitation for bid, to provide systemwide dial-up Internet access to CSU students, faculty and staff. The Chancellor's Office Contracts & Procurement Department completed the contract negotiations and finalized the three year systemwide state Master Enabling Agreement in August. Since that time several campuses have signed agreements with Sprint, and more participating campuses are expected soon. Benefits of this systemwide agreement include:
We are pleased to welcome Darryl Dearborn (Clerical Assistant III) who will provide contract processing support to C.O. and systemwide contracting operations. Darryl will also be supporting our database management and WEB access projects.
Pat Dayneko, Director
Physical Planning and Development
1996/97Capital Outlay Budget
The 1996/97 Capital Outlay Program is scheduled to be presented to the CSU Board of Trustees at their November 1995 meeting. The program will have been reviewed by both the Chief Administrators/Business Officers (CABO) and the Executive Council in October. The request is for $416 million and the Governor[[Otilde]]s Compact support is $150 million.
Seismic safety, telecommunications, utility and facility renovations make up the bulk of the request with small growth projects for the Stanislaus and San Marcos campuses. These are the only campuses that have grown over the past four years.
1995/96 Capital Outlay
As the last of the interim financing was approved at the September State Public Works Board/Pooled Money Investment Board meeting for the 1995/96 program, staff worked on securing authorizations to proceed from DOF. Co-funding of projects has been secured from the Department of Water and Power for the Los Angeles ($2.5M) and Northridge ($2.1M) infrastructure projects.
Special Repairs 1994/95--$17M
Allocations have been made and campuses are moving forward with roof and Heating, Ventilation, Air Conditioning (HVAC) repairs. Many campuses are working to beat the rainy season to keep dry.
Special Repairs 1995/96--$24M
Campuses are to confirm to their Program Manager the priority list of projects for 1995/96. A draft list was sent to each campus July 21, 1995 for review and revision. The use of third-party financing will be presented for Trustee approval at the November 7-8, 1995 meeting. It is projected that funds will be allocated to campuses in February or March 1996.
Minor Capital Outlay 1995/96
Release of funding is contingent upon the campus submittal of an ADA self-evaluation and/or progress report, and Program Manager approval of the campus priority list of projects. Campuses are encouraged to finalize their list of projects so that funds can be allocated soon after the ad hoc committee reviewing the progress reports approve the release of funds.
LADWP Grant and TES Incentive Program
Physical Planning and Development has completed two years of negotiations with the Los Angeles Department of Water and Power (LADWP) for incentive payments in connection with Thermal Energy Storage (TES) portions of Central Plant Infrastructure projects on the campuses at CSU Northridge and CSU Los Angeles. The incentive amounts, in excess of $2 million for each campus, represent the value that LADWP calculates these projects are worth to the utility department as a result of reduced electrical demand during peak daytime hours. These are the largest incentives ever granted by LADWP and the last of their TES incentive program.
A CSU-sponsored legislative bill initiated by PP&D, AB 1520 (McPherson), has successfully passed both houses of the Legislature and was signed by the Governor. As a result, effective January 1, 1996, the CSU will have the authority to:
Utilizing the knowledge gained from the audit of the 1987 Whittier earthquake recovery process, a new section to the Disaster Recovery Manual was developed, titled Fiscal Procedures. The purpose of the Fiscal Procedures, and the larger overall manual currently in draft, is to assist campuses in managing the financial records required in their disaster recovery efforts and to ensure that all planned disaster recovery funds are received.
Anyone who is involved in disaster recovery management should review the draft and download a copy for reference. Please provide us with any comments or suggestions that you may have.
A draft copy of the Fiscal Procedures is on the World Wide Web. The address is http://www.co.calstate.edu/PPD/admin/disastintro/html.. The complete Disaster Cost Recovery Manual is being updated, and will also be placed on the WEB.
Hazardous Waste Audits: Joint Project
Environmental Resources, in partnership with the University of California is of finalizing a working agreement with the Lawrence Livermore National Laboratory for conducting audits of hazardous waste Treatment, Storage, and Disposal Facilities (TSDF). The program is designed to reduce significant short and long-term liabilities associated with the use of marginal hazardous waste TSDF. By identifying facilities that meet minimum criteria, potential risks can be minimised for the participating entities. Participating institutions experience positive benefits including substantial cost efficiencies, from these co-operative ventures. Partners will share resources and technical expertise to produce detailed audits of forty TSDF used by participating entities. For more information, contact Elizabeth Stowe, Director of Environmental Resources at (310) 985-9460 or firstname.lastname@example.org.
PPD Due Dates for CPB&G Agenda Items (Jan. 23-24, 1996, Trustees Meeting)
Master Plan Revisions: November 28, 1995
All Other Items: December 12, 1995
Jon Regnier, Senior Director
Planning and Analysis Productivity and Investment Program (PIP)
Proposals for the 1995/96 cycle are due by October 31, 1995 to Vice Chancellor Richard West. Campuses are limited to two individual proposals, but are encouraged to participate in additional multicampus initiatives. Funding will by made by February 29, 1996. Larry Lin (310-985-2705 or email@example.com) will provide the staff support on this program.
Process Mapping Project
A multicampus process mapping project covering Worker's Compensation and Unemployment Insurance is being developed. Campuses participating are Fresno, Hayward, Sacramento, San Marcos and San Luis Obispo. Lee Bateman, Associate Vice President, Business Affairs, Hayward, will lead the project. Charlene Minnick, Chancellor' Office; Joanne Davis, Sacramento; and other campus representatives will serve on the project team. Ron Ashcroft of the Chancellor's Office Planning and Analysis Department (310-985-2706 or firstname.lastname@example.org), will provide staff support. An RFP for consulting assistance will be released on October 16, 1995. The project is expected to begin in January 1996.
As a follow-up to prior studies, a senior level task force with Chancellor's Office and campus representation is being organized to address the recommendations contained in the Building Design and Construction Process Mapping.
CSU/NACUBO Benchmarking Project
The '95 CSU Benchmarking Project is in full operation with sixteen campuses participating. Function Group Chairs met September 20 with the Coopers & Lybrand trainers and the CSU Task Force to finalize training and meeting schedules. Training sessions for Campus Coordinators and Function Representatives will be at the Crowne Plaza near LAX on November 6-9. NACUBO training for Campus Coordinators will be the following week, November 15-17, in Dallas, Texas. Data collection will begin in November and must be submitted to NACUBO by February 2, 1996. Contact Ron Ashcroft, (310) 985-2706 or email@example.com, for further information.
Corporate Information Management Project
Chancellor's Office cross functional committees have been formed to develop a corporate information management framework and data warehouse. A kickoff meeting was held on October 5. Over the next few months we will be developing recommended roles and responsibilities for the Chancellor's Office, information principles and a consultative process with the campuses. Lenore Rozner (310-985-2704 or firstname.lastname@example.org) is chairing the steering committee.
On September 18, Larry Lin joined our department and the Chancellor's Office. He previously ran his own consulting business and also brings experience in county government operations. As of October 9, Suzanne Wallace, most recently from CSU Fullerton, also joined our group. We are very excited to have both of them in our department and are looking forward to applying their considerable talents in a wide range of projects!
Lenore Rozner, Senior Director