We will enter shortly the legislative budget cycle for the 1997/98 budget. Even with the Governor's budget compact, this will undoubtedly prove to be a challenging year. Your assistance will be critical in helping to persuade our legislative representatives in Sacramento that their continued support and investment in the California State University is critical to the long-term success and vitality of the State.

Richard West, Senior Vice Chancellor, Business and Finance




Centralization of Investments

A revised investment policy was submitted to the Board of Trustees in January. The policy adopts the recommendation submitted by KPMG Peat Marwick's Investment Consulting Group that the CSU should establish a centralized treasury function. The CSU will be hiring an outside investment manager to administer the investment portfolio and provide expert investment advice. The timing for the selection of an investment manager will be made in April 1997 and the centralization of the treasury function will be implemented on July 1, 1997.


For those who attended the FIRMS/GAAP Audit Workshop on January 22, 23, and 24, 1997, you are aware that the implementation of FIRMS and the GAAP Audit are moving forward. A reporting package is being developed that will include the information layout that will be required from the auxiliary organizations. KPMG audit teams will be contacting the campuses in the next several weeks. At this time, campuses should be working toward the April 30 deadline for a draft June 30, 1996 balance sheet.

Direct Vendor Payment Implementation

Campuses have received letters from the State Controller's Office regarding new information that the SCO wants for the Direct Vendor Pay program. At this time, there are no changes being mandated. A meeting was held on February 7, 1997, at the Chancellor's Office with State Controller's Office staff to discuss their information requirements. At this time there are no changes in the type of information required, however, there are some fundamental problems that need to be resolved. First, less than half of the campuses have submitted diskettes in the agreed upon format. Seven campuses have not submitted anything at all. The SCO is requesting that all campuses submit a disk at least once a month. The SCO would, however, like to limit the number of diskettes sent by each campus to two each month. Campuses having problems preparing their diskettes should contact Chuck Kensicki in IRT. Each campus that has not submitted a diskette or has submitted their diskette in the wrong format has been sent an e-mail notice. Campuses will be notified by the Chancellor's Office if there is a change in the information required to be submitted to the SCO.

Continuing Education Audit Task Force Report

In March 1996, the Bureau of State Audits issued a report based on an investigation conducted of the Continuing Education program at California State University, Los Angeles. A number of issues were raised in the report that had systemwide policy implications. A task force was established in May 1996 to review the audit findings.

The task force considered the issues raised by the audit and reviewed the existing policies and statutes impacting the Continuing Education Program. The task force has identified recommended changes to better align CSU policies with existing statutes related to the appropriate activities of auxiliary organizations as they relate to campus programs with an emphasis on the Continuing Education Program.

The audit findings primarily resulted from inadequate documentation of business activities between CSU, Los Angeles and University Auxiliary Services (UAS), a non-state auxiliary organization, and non-compliance with existing CSU policy. The task force prepared an analysis for each finding and developed recommendations that seek to remedy the issues raised by the Bureau of State Audits. The task force report was distributed to campuses on February 3, 1997.

George Pardon, Director


Risk Management

As authorized by the Board of Trustees at their November 1996 meeting, the long awaited joint powers authority was officially formed on January 1, 1997. The California State University Risk Management Authority (CSURMA), a joint powers authority composed of the CSU and 18 auxiliary organizations, is permitted under a new law. This joint powers authority is a vehicle to organize our risk management activities and to create a group insurance purchase program for the participating auxiliary organizations.

The CSU Risk Pool became part of this JPA and will continue to operate as a separate program of the JPA. Auxiliary organizations will not be risk-sharing with the campuses but will participate in a separate commercially insured program. Through this program the auxiliaries gain market clout and pricing advantages.

The JPA is governed by a Board of Directors comprised of one representative from each campus and the Office of the Chancellor, and 10 members elected by the auxiliary participants. The JPA is chaired by Frank Lebens, Cal Poly SLO, with Patricia Farris, Cal Poly Pomona as Vice Chair. Other members of the Executive Committee are: Lee Bateman, CSU, Hayward; John McDonald, CSU, Chico; Richard Leffingwell, Office of the Chancellor; Bill Pollock, CSU, Fullerton auxiliary organization; and Art Butler, CSU, San Bernardino auxiliary organization.

Questions concerning this program should be addressed to Charlene Minnick, Systemwide Risk Manager at 562-985-2080, or Dennis Mulqueeney or Raj Thomas from Sedgwick at 415-983-9634.

Auxiliary Organization "On Behalf of..." Financings

We recently completed a survey of campus tax-exempt financings completed by auxiliary organizations where the transactions were classified as financings on behalf of the Board of Trustees. As of January 1, 1997, there is approximately $95 million in debt outstanding. This debt is subject to the current systemwide $150 million tax exempt financing debt limit. We are currently in the process of making additional contacts with professional and political resources to assist in planning a request for a letter ruling from the Internal Revenue Service that would expand the limit for the CSU. Contact Benjamin Figueroa, Financial Manager, at 562-985-2790 regarding this issue.


Student Union Program


On December 10 1996, we sold $6.58 million of bonds on behalf of the Trustees for the expansion and remodeling of the Los Angeles Student Union. The project adds approximately 6,500 gross square feet to the existing facility for a program and event center with reception space, as well as food service areas and informal study areas. The issue was awarded to Smith Barney, Inc. as the low bidder in a competitive sale.

On December 10, 1996, we also refinanced $9.59 million for the Fullerton Student Union. We were able to take advantage of favorable interest rates so that the student union will experience a total savings of $819,423 over the next twenty-five years. These savings equate to a net present value savings of $408,826. The issue was awarded to Merrill Lynch & Co. as the low bidder in a competitive sale.

Questions pertaining student union bond sales may be directed to Rosa H. Renaud, Financial Manager, at 562-985-2790.

Richard Leffingwell, Director




Governor's Budget

The 1997/98 Governor's Budget includes a $113.4 million General Fund appropriation increase over last year's budget act appropriation for the CSU, fully funding the entire request submitted by the Board of Trustees. The budget provides sufficient funding to eliminate the need for increasing student fee rates, funds enrollment growth of 2,499 FTES, and provides General Fund appropriations in full accordance with the provisions of the four-year higher education compact. The budget also fully funds debt service requirements for lease revenue bonds.

The Governor's Budget funding level will enable CSU to sustain its priority focus on technology initiatives and continue the critical support for physical plant needs identified in the 1997/98 Board of Trustees' Budget Plan. In addition, CSU will be able to continue to support growth at the Monterey Bay campus and provide compensation support needed to compete for and retain a highly qualified and productive workforce.

The Governor's budget proposal for 1997/98 also recognizes the need for continued improvements in productivity, and supports CSU's commitment to initiate establishment of an effective operating and capital infrastructure for information technology in order to reap the benefits from technological advances as shared libraries, distance learning, and mediated instruction. Funding in the Governor's Budget beyond the dollars received through compact funding include $1.7 million for the Stockton Development Center, $1 million to expand CSU outreach activities, and $275,000 to expand the Center for California Fellows program to include judicial fellows.

The Governor also continued a $5 million one-time allocation received in 1996/97 for technology as a permanent allocation for an Economic Improvement Initiative focusing on K-12 education activities that include expansion of outreach efforts at charter schools, and improving instructional methods and curriculum that emphasize reading skills.


1997/98 Budget Calendar


The calendar outlined below is to assist campus budget offices in preparing for specific activities during the budget process. This calendar is for planning purposes only and is subject to change.

February 1 - March 1
Budget Office receives and finalizes all inputs and allocates Governor's Budget funding to campuses.

March 1
Campuses notified through e-mail that summarized allocations are available via FTP on Chancellor's Office server. Release of budget letter identifying and explaining campus allocations made by Budget Office.

Chancellor's Office holds a North/South meeting (if necessary) to explain in detail both the specific allocations and the FIRMS format requirements.

March 1 - July 15
Campuses review and make internal allocations on the basis of their Governor's Budget allocations. Campuses are encouraged to use summarized allocation files to prepare data in anticipation of Final Budget allocations and submittal via FTP to Chancellor's Office server for final Budget Office review.

July 1 (or after)
Final Budget approved by Legislature and signed by Governor. Budget Act chaptered.

July 15 (or after)
Via budget letter, Chancellor's Office release to campuses any changes that occurred to the March 1 allocations as a result of Final Budget enactment.

August 15
Campus final budget submissions due in Budget Office. Campuses are encouraged to submit data via FTP to Chancellor's Office server between July 15 and August 15.

August 15 - August 30 Chancellor's Office Budget Office performs qualitative review and makes systemwide final budget details available to campuses.

Final Budget Qualitative Review (FIRMS Format) Budget Office staff will review all campus submissions to ensure some effort is being made to comply with the directions recommended by a systemwide committee whose findings were published in a memo dated July 5, 1996, and which are included in the latest version of the FIRMS manual. Still unresolved, at this writing, are Independent Operations, revenue/reimbursements and Work Study. The latter is in the final stages of resolution and staff expects a draft paper to be issued in the next month.


Budget Office Web Site Information

The CSU Budget Office has established its own web page located at:

This website is viewed as an efficient communication tool whereby the Budget Office may post and update key financial and budgetary information. As an example, last year publishing of the 1996/97 Lottery Policies and Budget Manual in hardcopy was eliminated. The Budget Office will continue to make the lottery manual available on the web as well as other information it regularly publishes, such as the CSU Support Budget request for 1997/98 and the Final Budget Summaries.

The Budget Office website contains budget information from fiscal year 1995/96 through the current status report of the 1997/98 Governor's Budget. It also contains miscellaneous information regarding fees and enrollment and links to other sites of interest including the California Department of Finance and the Legislative Analyst's Office.

We encourage you to review our website and give us feedback, particularly if there is information you would like to see posted regularly.

John Richards, Director



New VISA/MC Contracts


Recently, the State executed five new Master Service Agreements with four different charge card transaction processors, one of the four being American Heritage Bancard, Inc. (AHB). Joyce Peters, Senior Vice President of AHB, administrator for our current systemwide VISA/MC transaction processing contract with Mellon, will be contacting a designated staff member at each CSU campus to discuss conversion, at campuses option, to the new AHB Master Service Agreement with the State. Her phone number is 818-734-2910. The CSU contract will remain in effect through November 15, 1997.

The new Student Friendly Services program which allows students to pay application fees on-line by using their VISA/MC credit cards will also be accommodated under the new AHB contract with the State. Additionally, rates for the phone-in and mail-in VISA/MC transaction are expected on average to be reduced in the near future. Rate reductions will be reflected under the State's new Master Service Agreements that employ VISA or Mastercard.

For other information related to any of the other four State Master Service Agreements with credit card transaction processors, please refer to the DGS Management Memo 96-30 or call Gloria Anderson at DGS, 916-327-2107. Cliff Johnson at 562-985-9177 may also provide assistance.

New CSU Policy Manual for Contracting & Procurement

The final draft of the new Policy Manual was disseminated on January 17 by Senior Vice Chancellor Richard West to campus Vice Presidents for Administration, with copies to the PSSOs and the IRMs for comment. The target for release of the new manual, which significantly improves campus flexibility and autonomy for purchasing operations, is March 1997. Copies of the final draft may be obtained by contacting Cliff Johnson at 562-985-9177.

CSU Procurement Card Update


Currently, 18 campuses have implemented use of procurement cards for delegated purchasing at the customer level. All but one of the participating campuses have elected to utilize the CSU procurement card program with Rocky Mountain Bank. Use of the card has gained wide acceptance and the dollar volume of purchases continues to increase each month. Currently, there are 822 cards issued to the CSU. During the first half of 1996/97, there were 8,602 transactions, for an average dollar amount of $162, with total charges equaling $1,397,155.

This year all credit card transactions will be subject to an administration fee of 1/2 of 1% which will be collected by DGS for the period 7/1/96 through the billing cycle ending 1/22/97. Fees will be collected via electronic transfer and thereafter will appear as a charge on EACH card holder statement beginning with the 1/23/97 billing cycle.

If participating campuses wish to have these charges reflected at the Level 4 (Campus), CS&P will pursue the possibility of customizing CSU billings. This issue will be brought before the PSSO's at their next meeting.


Planned Purchasing Program Update

Targets of Procurement Program The PSSO council has successfully completed the first in what is hoped to be a number of master CSU pricing agreements. A discount pricing agreement for health center and medical suppliers, has been awarded to Physician Sales and Service. A CS&P Bulletin providing further details and information was issued on February 18.

CSU Site Licensing Activity There have been a number of systemwide pricing agreements executed recently for the benefit of campuses. Some of the most recently initiated agreements include the opportunity to buy Claris, Apple, and Microsoft software through a designed reseller. You may visit Wareforce's dedicated CSU home page at Wareforce's dedicated CSU home page for pricing and other information.

An agreement has been executed with Credit Card Solutions, Inc., for discount pricing of software which provides for the maintenance and customization a client/server software program that facilitates the purchasing card transactions. For more information see P-Card Solution's Web page at .

For further information on any of CSU's planned purchasing activity visit CS&P's homepage at or call Jackie Baird.

M/W/DVBE FY 1995-1996 Annual Report


The CSU Office of the Chancellor has recently submitted our annual report of Minority, Women, and Disabled Veteran Business Enterprises that have participated as prime or subcontractors on CSU commodities, service agreements, or public works projects procurements.

For fiscal year 1995/96, the CSU expended $399,402,667 in the three categories mentioned above, marking the third consecutive year that the CSU has met the California Legislature's goals for Minority, and Women Owned Business participation by collectively achieving levels of 15% and 10% respectively. For the first time, the CSU was able to report close to a 1% participation level for Disabled Veteran business enterprises. Congratulations to all campuses procurement professionals for the hard work and dedication in achieving these goals.

Pat Dayneko, Director




1997 CSU/UC Joint Facilities Conference - "A Partnership for the 21st Century"

The Office of Physical Planning and Development and the University of California Office of the President have finalized arrangements for the second joint systemwide conference on capital planning, construction, and plant operations and maintenance. The conference is March 2-5, 1997, at the Marriott Fashion Island in Newport Beach.

The conference represents a continuation of a commitment to stimulate cooperative efforts to meet the challenges of higher education. Presentations will focus on changes in the CSU's capital project delivery system and legislative authority, and provide mutually beneficial information for all attendees. We are anticipating strong participation from both UC and CSU personnel. Professional networking activities and vendor exhibits are part of the agenda.

The complete agenda and registration information are available at the PP&D web site, on the CSU Home Page at http// A preview copy of the complete agenda is in the mail to all CSU personnel on the conference mailing list. Additional information is also available by calling Ms. Glenda Echols in PP&D at 562-985-9493.

CSU Database of Prequalified Architects Available on the Web

The current 1996/97 database of architects prequalified to perform architectural services for the CSU is now available via the PP&D A&E web page at For further information on any of CSU's planned purchasing activity visit CS&P's homepage at The database can be searched for architects with a particular project experience or within a specific geographic area, or both. The complete database report for any chosen firm is also available. Access to and use of the database is available with any current browser, i.e., Netscape Navigator, 2.0 or later. No other software is required to access the database. The 1997/98 list will be available on-line immediately upon its completion. As always, database reports are also available via phone or written requests.

PPD Due Dates for CPB&G Agenda Items (May 13 - 14, 1997 Trustees' Meeting)

Master Plan Revisions:
All Other Items:

March 11, 1997
March 25, 1997

Jon H. Regnier, Senior Director



Productivity and Investment Program (PIP)


To share the productivity knowledge and experiences gained through the various PIP projects, CSU productivity fairs and workshops (PIP Fairs) will be held in March 1997. To ensure maximum accessibility and attendance, the project results will be presented during two different times at locations in Northern and Southern California. CSU, Fullerton will be hosting the Southern California PIP Fair March 19-20, 1997, and CSU, Sacramento will be hosting the Northern California PIP Fair March 26-27, 1997.

The PIP Fair program, registration information, and status reports on all awarded projects are available on the Chancellor's Office web page under the Business and Finance section. Hard copies of the PIP Fair programs were also mailed to campus management staff during February. Lawrence Lin (562-985-2705, e-mail: can be contacted for more information.


CSU One-Card Initiative

Over the last two months, the sixteen campus task force has proceeded with evaluation of best offers from the participating vendors (excluding banking which was dropped from this process) and final negotiations. Given successful completion of negotiations and appropriate approvals, it is anticipated that a master contract could be in place as early as April 1997. Eleven campuses have committed to participation in the one-card component of the project, additional campuses have indicated interest in the long-distance card and long distance trunking components. Contact Lawrence Lin (562-985-2705, or E-mail: for further information.

Collaborative Management Systems (CMS) Project

The task force is finalizing an RFQ for March 1997 issuance to generate industry responses as to how their software packages will fulfill the CSU vision for integrated campus financial, student, and human resource systems. Concurrently, an industry scan is being conducted to support the evaluation team in determining viable vendors. The task force plans to convene the function groups (previously nominated by campus presidents) on March 6 to review the results of the industry scan and again in April for proposal review and software demonstrations. Contact Lenore Rozner (562-985-2704) if you have questions.

Benchmarking Project

Planning for the 1997/98 benchmarking data collection cycle is now underway and campuses will be asked for a participation decision by mid March 1997. Data collection is expected to occur in October and November 1997, with the data being turned into the national organization in early January 1998. Data analysis and summary reports will be available by summer 1998.

The contract for development of a customer satisfaction survey relating to the benchmarking effort has been awarded to KH Consulting. Work on this project will begin in early March.

The Benchmarking Task Force is also pleased to announce a recent expansion of membership on the task force to include two vice presidents of student affairs, Dr. Francine Martinez of San Marcos and Dr. Shirley Uplinger of Sacramento; a representative from the Chancellor's Office human resources division, Senior Director Cathy Robinson, and Ed Chambers of San Jose.

If have any questions concerning benchmarking, please contact Ron Ashcroft (E- mail, Phone: 562-985-2706, Fax: 562-985-2710).

Process Mapping Project

The Human Resources process mapping project is underway and an RFP was issued for consulting assistance on February 7; proposals are due March 7. Five campuses - Long Beach, Monterey Bay, Northridge (lead campus), San Diego and Stanislaus - will be the primary participants and representatives from both administrative and academic human resource areas are on the project team.

If you have any questions concerning process mapping, please contact Ron Ashcroft at the numbers noted above.


Lenore Rozner, Senior Director

The Business and Finance Newsletter is now accessible from the Chancellor's Office website:

If you have a question or comment on a technical issue related to receiving the B&F newsletter or want to add, delete, or modify an e-mail address, please contact Suzanne Wallace at voice: 310-985-2075, fax: 310-985-2710, or e-mail: