Budget deliberations are likely to continue through the summer. At this point, do not expect to see a final budget until well into July. As in the past, we will provide guidelines to the campuses in the event the budget is delayed. We do not believe that our budget will emerge from the legislative process without major changes from the budget approved by the subcommittees of both houses in the Legislature (see item in the Budget section below).

Richard West, Senior Vice Chancellor, Business and Finance





Three listservers have been set up in order to facilitate discussion and information sharing for: 1) FIRMS, the new corporate information management reporting framework; 2) GAAP financial statement issues; and 3) Direct Vendor Pay.

Whereas e-mail is one-to-one communication, listservers allow one-to-many communication. Simply put, mail sent to a list sends an electronic message to many persons instead of just one, and a person can respond just to the user who sent the message or to the full list, allowing for more responses.

The names of the listservers are: firms, gaap, and payables. Once subscribed, you are on a list with other subscribers that is used by the listserver to distribute mail. When mail is sent to the listserver, it is automatically forwarded to all subscribers on the list. To subscribe, send a message to (no topic) with the following contents:

subscribe firms, gaap, or payables first-your first name last-your last name (you must include the words first- and last- )

Examples: subscribe firms first-George last-Pardon

To unsubscribe, send a message to with: unsubscribe firms or unsubscribe gaap or unsubscribe payables, whichever applies. To post to the listserver, send a message to,, or Potential senders must first subscribe to the listserver before they can post to it. You will get a verification from the listserver that you have been added. You will also be informed if there was a problem.

George Pardon, Director


IRS Bond Audit Program -- Stepped Up Activity

The IRS's infant municipal bond audit program has already led to preliminary determinations of taxability in dozens of cases, and the municipal bond market continues to present more opportunities for investigations than the agency can handle. The IRS indicates the program may be expanded because of these results. 270 bond audits were in progress nationwide as of the end of March. In addition, there are eighteen 501 (c) (3) bond audits underway.

There are a wide variety of conditions that could cause such problems. For bonds issued in the CSU including 501 (c) (3) financings, the area of greatest exposure is probably a change in use of a part of the bond funded facility that would result in exceeding the allowed limits for "private activity." Campuses with bond issues since the 1986 Tax Reform Act should be especially sensitive to these issues because the rules for such issues are more stringent than those rules applicable to earlier issues. Please contact Auxiliaries Planning and Bonds financial managers (Ben Figueroa or Rosa Renaud) of the respective program areas if you have questions.

Student Unions

Student Union budget information was due to Auxiliaries Planning and Bonds on June 6, 1997, including a copy of the auxiliary organization's audited financial statements for last fiscal year. Additionally, campus chief fiscal officers were requested to certify that there is an operating agreement and lease in effect between the CSU Trustees and the student union, and that the budget has been approved by the governing board of the auxiliary organization operating the union, the chief fiscal officer of the university, and the campus president. Please contact Rosa H. Renaud, Financial Manager, at (562) 985-2790 if you have any questions.

Parking Program

We have distributed information on the 1997/98 centrally paid parking expenditures that must be included in the budget planning process. For the first ten months of the year, each campus will be charged monthly via a Plan of Financial Adjustment (PFA) for the systemwide expenditures. Please contact Rosa H. Renaud, Financial Manager, at (562) 985-2790 if you have any questions.

Delegation Of Lease Authority To Campuses

On May 27, 1997, coded memorandum BF 97-03 was sent to campus Vice Presidents for Administration on the recent delegations of leasing authority to campuses. Effective July 1, 1997, the Office of Auxiliaries Planning and Bonds will be responsible for the review and approval of the property leases not delegated to campuses under Executive Order 669 and also, the personal property leases involving tax-exempt financed acquisitions referenced by Executive Order 667 through the CSU Policy Manual for Contracting and Procurement. The intent of this action is to concentrate the system review of financing issues under one program area. The Office of Contract Services & Procurement will continue to assist with procurement issues and will maintain a Contracts Resource Library that includes model agreements and other reference material. Please contact Ben Figueroa in Auxiliaries Planning and Bonds at (562) 985-2790 for approval of nondelegated real property leases, and for approval of personal property leases (financial transactions) involving tax-exempt financed acquisitions.

Request For IRS Letter Ruling On $150 Million Tax Exempt Financing Limit

In May 1997, a request for a letter ruling on the $150 million tax-exempt financing limit was finally forwarded to the Internal Revenue Service. It has been requested that for purposes of Section 103 of the Internal Revenue Code of 1986, each auxiliary is an "instrumentality" of the State of California. In the alternative, a ruling is requested that all auxiliaries will not be treated as "one organization" for purposes of computing the $150 million limitation, but rather the auxiliaries of each campus be treated as "one organization" for the rule. A final response from the IRS could take from six to eighteen months. For questions related to this request or individual campus shares of the remaining $150 million financing authority, contact the Office of Auxiliaries Planning and Bonds.


The Board of Directors of the California State University Risk Management Authority (CSURMA) approved formation of a new program, Athletic Injury Medical Expense (AIME) to provide medical coverage for athletic participant injuries up to $25,000 per injury per athlete. This new program is offered to all CSU campuses as a self-insured pooled program, but can be formed as a group purchase program similar to the Auxiliary Group Purchase Program. This coverage program has been designed and developed by several Athletic Directors, their designees, trainers, or other representatives. As with other CSURMA programs, AIME will be governed by the participating campuses, with oversight provided by the CSURMA. AIME has as its mission, a long-term cost effective solution for medical costs incurred by athletic participants up to $25,000. The NCAA provides coverage above $25,000 for catastrophic injuries. Participation is voluntary and coverage is expected to incept on August 1, 1997, with a sufficient number of campuses electing to form the program.

Any questions regarding this program may be directed to Charlene Minnick at (562) 985-2080 or Kathy Somerton of Somerton Student Insurance Services at (916) 853-8504.

Richard Leffingwell, Director


Status of the 1997/98 Support Budget

Both the Assembly and Senate versions of the 1997/98 CSU Support Budget currently working their way through the legislature mirror the Governor's Budget. The changes both houses have approved include increased stipends for current fellows in the California Studies Program, a $2.5 million reduction in the Governor's request for the Economic Improvement Initiative, and an $18 million augmentation to the Governor's Budget for technology. The Senate version also includes a $100,000 augmentation based on a member's request. A Joint Legislative Conference Committee, a committee of representatives from both houses, has been appointed to resolve differences between the Assembly and Senate versions of the budget. Following action by conference committee, the budget must be approved by both houses of the legislature and forwarded to the Governor for signature. The Governor can veto specific items of the budget bill adopted by the legislature, but he cannot augment or transfer funds appropriated.

Public Higher Education Long-Term Financing (Compact II)

Among the bills approved in the Assembly this month was Assembly Bill 1415 (Bustamante), legislation which would enact a long-term financing plan for the CSU and the University of California. The legislation is premised on a shared responsibility model with the state, students, and institutions participating in the solution and financing of educational programs. Under the bill, which will next be heard in the Senate Education Committee, the state would maintain CSU's current percentage of the state General Fund revenue - which would be achieved through the provision of annual general revenue increases based on the change in per capita personal income, specific funding for enrollment growth, and buy-out of student fee increases based on the change in per capita personal income. In turn, CSU will ensure all qualified students would be given a place in the system. CSU would also establish clearly measurable performance goals with a comprehensible set of outcome expectations. The bill was approved in the Assembly by a vote of 69-9.

FIRMS Update

The 1997/98 Governor's Budget was made available to all campuses via FIRMS FTP Server in mid-May. Campuses have until August 15 to distribute the unallocated portions to expenditure programs. On resubmission, there should be no funds remaining in "unallocated." These numbers are based on the Governor's Budget; therefore, to the extent that final budget action(s) modify campus budgets, changes may be required. As mentioned at the January 22 GAAP meeting and reiterated in the budget instruction transmittal, the budget office will review the campus submissions for certain "qualitative" issues such as, to the highest extent possible, ensuring that budget placement is consistent with the direction presented by NACUBO. In addition, the budget office will review for such technical items as State University Grant Program, General Fund compliance, and similar items.

John Richards, Director


Contract Resources Library (CRL)

The Contract Resources Library (CRL) is available on the internet at http/ It contains, along with other helpful materials, the CSU Policy Manual For Contracting & Procurement which is now fully linked to support legal and policy sources. The latest release number (#1.1) of the Policy Manual is identified on the cover page of the on-line policy manual. Referencing this release number will insure that users are working from the most current version of the manual.

The Contract Resources Library (CRL) will continue to be updated by posting CSU standard contracting terms, models, forms and contract glossaries as they are developed or revised and made available for web format. Comments and suggestions concerning the utilization and effectiveness of the CRL are welcome. These and any questions may be directed to Cliff Johnson at (562) 985-9177 or (

CSU One-Card

The CSU One-Card project is now in implementation on several campuses. The first One-Card user group meeting was held on May 27th with approximately 50 campus representatives attending. The User Group will have email communication through the listserv "". Members of the user group will be able to ask questions and share experiences relating to AT&T one-card installations. Notify Russ Utterberg ( to subscribe to the list or with technical questions. Contact Tom Roberts ( with questions about the contract.

Procurement Technology Projects

The Procurement Technology Projects team is evaluating current state-of-the-art electronic commerce applications and best practices in order to recommend pilot programs for implementation. The team is also studying the collection of procurement transaction data to support systemwide or multi-campus collaborative commodity procurements. Visit the Procurement Technology Projects web site ( for information and frequent updates on the project. Contact Tom Roberts ( with questions, comments, leads, or suggestions.

Procurement Professional Development Training Plan

The CSU Procurement Modeling Team has selected the firm of Ray T. Jensen and Associates to develop a training and educational skills plan by classification for CSU purchasing and material management employees. The consulting firm will co-partner with the CSU to assess and identify core competencies and in the design and maintenance of an on-going CSU professional development training program in procurement management.

Unified Information Access System Update

The UIAS negotiation team is currently finalizing contractual and implementation issues in conjunction with an anticipated contract signing scheduled for the end of June 1997. The UIAS project will deliver client-server front end network technology which will provide ubiquitous access from each campus library to each campus library.

Targets of Opportunity for Procurement

The systemwide PSSO Council has identified a number of services/commodities for which it is believed better pricing can be achieved using the leverage of the CSU system. Such targets include courier services, office supplies, paper, hazardous waste disposal services, cellular services, scientific/laboratory supplies, and ergonomic furniture. These initiatives are in varying stages of development. One such initiative for medical supplies for campus student health centers has been executed with Physician Sales and Services for a broad range of products at specially negotiated prices which are available to all CSU campuses.

Other master pricing agreements which have been executed recently for use by CSU campuses include: An agreement for Chemical Inventory Tracking System Software, macromedia software site licenses, credit card administration, and Microsoft software products. Soon to be released is a master pricing agreement with Sun Microsystems Computer Products for Sun workstations and other Sun products.

Pat Dayneko, Director



CSU's Capital Outlay Restructuring Proposal Approved

The Legislative budget committees completed their capital outlay budget hearings the week of May 19, 1997. A significant milestone for CSU was accomplished in both houses when they approved revised language for the Department of Finance's May Revision letter on Capital Outlay Reform. The amended proposal adds three projects to the list of four projects proposed by Finance, and further streamlines the process by eliminating the need for any further Sacramento approvals. These changes will permit us to expedite the completion of the drawing and construction phases, and accomplishes the major objective that was included in the CSU Capital Outlay Restructuring program.

The seven projects that will be governed by the approved provisional language are: CSU, Dominguez Hills: Seismic Upgrade, Educational Resources Complex; CSU, Fullerton: Seismic Upgrade, Library-Phase II; CSU, Sacramento: Perimeter Road Safety Improvements; San Bernardino: Corporation Yard/Administrative Services Addition/Renovation; San Jose State University: Seismic Upgrade, Sweeney Hall; CSU, Stanislaus: Campus Perimeter Road and Stockton Development Center-Initial Renovation.

Electricity and Services RFQ

The combined CSU/UC Request For Qualifications to find firms qualified to provide electricity and related services for the 31 campuses resulted in receipt on May 16, 1997, of 19 submittals. These are being reviewed by a committee including mostly campus representatives from both systems, as well as our consultant, Contract Services and Procurement, and Physical Planning and Development. Following interviews with several of the firms, it is planned to select a short list of qualified firms to be considered for further procurement procedures.

PPD Due Dates for CPB&G Agenda Items (September 16-17, 1997 Trustees' Meeting)

Master Plan Revisions:
All Other Items:

July 15, 1997
July 29, 1997

Jon H. Regnier, Senior Director


SIP - Systemwide Internal Partnership

On June 2, six proposals were received from potential industry partners providing their business proposition for assisting the CSU in meeting our technology and telecommunications goals for the 21st century. Those proposals will be reviewed and discussed with the campus representatives on the SIP Task Force with the goal of selecting a manageable number of potential partners with whom the CSU will continue to explore alliances. The project is still on target for the selection of a final partnership team by September 30. Additional information on this critical systemwide effort is available via the WWW at

CSUMentor Program

In pursuit of an Internet credit card payment option for the systemwide web-based application, the CSUMentor project team evaluated several different payment and approval services drawing on suggestions from campus staff. The project team selected the CyberCash "CashRegister" product as the primary system which will allow students to make Internet credit card payments without special software or "cyberwallets." The review information gathered by the project team on the various Internet credit card products was forwarded to campuses in early June 1997.

Once the systemwide option is operational, campuses having their own cashiering websites will have the option to work with the project team to develop customized web software which would allow them to link students to their webpage for accepting and processing of credit card payments of CSUMentor services instead of using CyberCash. A video conference on 6/25/97 with campus staff provided a project update and answered questions regarding web payment mechanisms for CSUMentor. Please contact Lawrence Lin at the Chancellor's Office at (562) 985-2705 or e-mail: for additional information.

Collaborative Management Systems (CMS) Project

The CMS Request For Qualifications (RFQ) which solicits responses from vendors with software packages and services which will fulfill the CSU vision for integrated campus financial, student and human resource systems was issued April 15, 1997. Approximately 40 representatives from various companies were present at the voluntary RFQ vendor conference on 5/15/97. Seven vendor responses to the RFQ were received on June 13, 1997.

The CMS RFQ evaluation team met on June 18-19, 1997 to review and evaluate the vendor responses. In addition, the State Controller's Office made a presentation to CMS on 6/10/97 regarding the personnel and payroll services they currently provide to the CSU. If you have any questions concerning CMS, please contact Lawrence Lin at the Chancellor's Office.

Benchmarking Project

Fourteen campuses to date have committed to active involvement in the 1997/98 Benchmarking Project. Several new areas will be benchmarked during the Fall, including Mail Services, Libraries, Sponsored Projects, Parking, Student Health Services, and Career Centers. Campuses are no longer required to benchmark each function area and participation by individual functions is encouraged. Data collection is expected to occur in October and November 1997, with the data being submitted to the national organization by December 31, 1997. Data analysis and summary reports will be available by summer 1998.

A Customer Satisfaction Survey covering most of the previously benchmarked function areas is in final draft stage. In development of the survey, focus groups with students, faculty, and staff were conducted at the Northridge, Pomona, Sacramento, San Bernardino, and Stanislaus campuses. The survey is intended to be administered in October with survey results available by February 1998. This is a voluntary activity and all campuses are encouraged to take advantage of the opportunity.

If have any questions concerning the above, please contact Ron Ashcroft at (562) 985-2706 or e-mail

Process Mapping Project

The Human Resources process mapping project is making good progress with the first round of interviews having been conducted on the participating campuses. Completion of the project is planned for December 1997.

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: