NEWS FROM THE DIRECTORS
NEWS FROM THE DIRECTORS
Reversion of Cash Balances for 1995/96 Fiscal Year Appropriation
Pursuant to Executive Order 648, unexpended cash balances in funds subject to reversion will be transferred from the campus six months prior to the date that the funds are no longer available for encumbrance. The Chancellor's Office Accounting Department is to deallocate all campus cash balances that remain as of January 1, 1998, from 1995/96 General Fund appropriations. Due to the high priority that has been given to the GAAP audit, action will not be taken to deallocate these cash balances until February 2, 1998.
Deferred Maintenance Bond Funded Projects
Included in the 1995/96 appropriation is the second phase of bond funding for deferred maintenance projects. While these funds are subject to Executive Order 648 and are scheduled to revert January 1, 1998, the CSU will be subject to federal arbitrage penalties if the funds allocated for these projects are not spent by March 7, 1998. Please ensure that all bond funds are spent for the authorized deferred maintenance projects by the March deadline. We need to report a total amount expended by project for this second phase of funding totaling $24 million. The first phase totaled $17 million and has been reported as spent.
Electronic Funds Transfer Payments
The CSU has received written notice from the State Controller's Office that the CSU is authorized to make payments electronically. Campuses cannot make electronic payments directly from their revolving fund since it is a State checking account. In most cases, campuses will set up separate EFT accounts and issue one check from their revolving fund to cover payments being made. In their letter, the SCO cautioned us to ensure compliance with recent legislation (Government Code 16.5) pertaining to electronic signatures. We are looking into this legislation and its' impact on this process.
Hope Scholarship and Lifetime Learning Tax Credits
The U.S. Treasury Department has released guidelines for the 1998 reporting requirements for the Hope Scholarship and Lifetime Learning Tax Credits (Notice 97-73). A full text of this notice is available on NACUBO website at http://www.nacubo.org.
Reporting Information required for 1998:
Eligible educational institutions required under this notice to file information returns for 1998 must properly complete Form 1098-T, Tuition Payments, for each student for whom information reporting is required. For 1998, a properly completed Form 1098-T filed with the Service must include:
For purposes of section 25A and the reporting required under section 6050S, student will be considered to be enrolled at least half-time if the student is enrolled for at least half the full-time academic workload for the course of study the student is pursuing as determined under the standards of the institution where the student is enrolled. The institution's standard for a full-time workload must equal or exceed the standards established by the Department of Education under the Higher Education Act and set forth in 34 C.F.R. section 674.2(b).
Although institutions will be required, in the future, to provide the additional information specified in section 6050S (e.g., the amount of qualified tuition and related expenses received and/or reimbursed), the IRS will not impose penalties on an institution that does not provide this information for 1998.
George Pardon, Director
1998/99 Trustees' Budget
At the November 11-12, 1997, meeting the Board of Trustees approved CSU's 1998/99 budget plan. The following is a brief overview of the Trustees' Budget which has been forwarded to the Department of Finance and the Legislative Analysts' Office as well as other legislative staff and committees for their review. The 1998/99 Budget is published in two separate documents: Book I - Support Budget Overview and Book II - Documentation. Both documents are on the CSU Budget Office homepage on the world-wide web. The web address is: http://www.co.calstate.edu/bo/.
1998/99 CSU Budget Plan - Overview
In accordance with the Governor's funding compact for higher education, the budget plan includes $110.5 million in new General Fund revenue supplemented by $4.7 million in new student fee revenue. These new revenues will be used to support expenditure increases associated with one percent growth in student enrollment (2,580 FTES), a four percent compensation pool and increases in the mandatory costs of health and dental benefits rates, the opening of new facility space, campus premiums for workers' compensation and other liabilities, maintenance of plant facilities and payments on capital bonds.
Preliminary review of Fall 1997 enrollment data indicates CSU enrollment for 1997/98 will exceed by a substantial amount the compact's one percent annual growth commitment. Consequently, the 1998/99 budget plan requests $39.6 million in additional General Fund support (which will be supplemented by $9.9 million in fee revenue) to serve an additional 7,740 FTES over the one percent compact enrollment growth commitment. Also, in cooperation with the state's efforts to provide effective reuse of state facilities, the 1998/99 CSU budget plan includes a $6.5 million request to complete conveyance of the Camarillo State Hospital and Developmental Center for CSU use as an expanded off-campus facility serving higher education need in Ventura county.
In total, the 1998/99 CSU budget plan is based on $156.6 million in General Fund support and $14.6 million in State University Fee revenue from planned enrollment growth. In addition, CSU will receive General Fund support to replace $19.4 million in State University Fee revenue that will be lost as a result of AB 1318, legislation enacted in October 1997 that reduces undergraduate fees by five percent and freezes graduate fees at current levels for the 1998/99 fiscal year. Since the $19.4 million appropriation must be used to continue current CSU operations previously funded with the fee revenue, no new expenditures are proposed for this funding in the 1998/99 budget plan.
In early January, the Governor's 1998/99 State Budget will be finalized and submitted to the Legislature for review. Modifications will be made to the CSU's budget proposal based on any funding changes made by the Governor and transmitted to the campuses for planning purposes. Campuses should receive the 1998/99 campus budget allocation information in March 1998.
1997/98 Over-Enrollment Funding
Based on fall 1997 opening enrollment, the CSU calculates that it will serve 267,264 full-time equivalent students (FTES) in 1997/98, 9,264 FTES (3.59%) more than the system's target of 258,000 FTES. In an effort to accommodate this extraordinary enrollment demand, a temporary, one-time allocation of $8 million has been made available for campuses with college-year FTES that are more than 2 percent above campus 1997/98 FTES targets. Campuses are expected to meet enrollment demand within 2 percent of target with existing campus funding levels for 1997/98.
Sixty percent of the $8 million ($4,800,000) is currently being allocated on a pro-rata basis to those over-enrolled campuses. The remaining 40 percent ($3,200,000) will be allocated to campuses in late April when final summer 1997, fall 1997, and winter 1998 campus data can be annualized with spring 1998 opening enrollment reports. Temporary funding for enrollment in excess of campus targets will not be provided for under-prepared new upper division transfer students. April 1998 allocations are subject to confirmation of college year over-enrollment and the extent to which over-enrollment is composed of fully qualified new upper division transfers. For information regarding allocations, contact Sean Boylan at (562) 985-2731. For information regarding enrollment, contact Marsha Hirano-Nakanishi at (562) 985-2528.
1997/98 Economic Improvement Initiative Funding
During actions on the final 1997/98 budget, the Governor restored his original budget providing $5 million for the Economic Improvement Initiative (EII). While the initiative permits some flexibility, the Department of Finance and the Legislature have expressed concern about the need for more teachers, specifically in regions of greatest need, and modifying teacher preparation so that students will have early, multiple opportunities to prepare to become teachers. The funding plan for the initiative includes $500,000 to support the Institute for Education Reform and $4.5 million for building the capacity for teacher training at campuses. Funding guidelines include responsiveness to class size reduction and number of emergency permit teachers within the geographical area. Funding allocations to campuses will be based on increased enrollment in teacher education programs, partnership development with K-12 districts, development of high quality programs that include integration of content and teacher education courses, programs that include alternative program development efforts that are serving emergency permit holders, and efforts that are responsive to the need to develop integrated five-year programs. Campus allocations are currently being processed.
1997/98 Benefit Funding Adjustments
Campuses have been advised that PERS retirement rates have decreased approximately 3 percent over 1996/97 rates effective July 1, 1997. As a result of savings to PERS retirement costs for 1997/98, the CSU's General Fund appropriation will be permanently reduced during the first part of 1998 by Governor's Executive Order. As a result, campuses will not see a permanent budget reduction until 1998/99 base budget adjustments are made. The systemwide retirement budget reduction will be $5,092,000 with campus permanent budget reductions pro-rated based on prior year retirement expenditures. Campuses will be notified of expected reductions this month.
Campuses are also advised that both health and dental benefit rates will be increasing January 1998 by 9 percent and 3 percent, respectively. A one-time only allocation will be made later this month to fund campuses for both rate increases affecting fiscal year 1997/98 costs. Permanent full-year funding has been requested in the 1998/99 Trustees' support budget. Beth Ryan can be contacted at (562) 985-2724 for further budget information. Please contact your Human Resources' Office for information regarding the new rates for retirement, health and dental.
For additional information, please call John Richards at (562) 985-2712.
John Richards, Director
FINANCING AND RISK MANAGEMENT
Reversion of Cash Balances for 1995/96 Fiscal Year Appropriation
In early December 1997, campuses will be receiving a distribution of approximately $2.1 million in 1996/97 Housing Program interest earnings and loan repayments. This is consistent with recent recommendations of the Housing Proposal Review Committee that beginning with fiscal year 1996/97, housing loan repayments should be distributed to participating campuses based on their individual percentage of total housing design spaces as of the 1994 decentralization. The committee also recommended that future interest earnings of centrally paid funds would be distributed to campuses based on their individual share of total centrally paid costs. The future distribution of these funds will be done after the completion of the systemwide housing audited financial statements. Please note that while these funds are not earmarked to address any particular housing need, they nevertheless represent a valuable opportunity to increase program reserves and/or address any repairs and renovations previously deferred by the housing program. This is particularly important given that system reserves, which previously assisted campuses to address special housing needs, have been and will continue to be immediately distributed to all participating campuses. As stated previously, these funds as well as those generated annually by the housing program are restricted by our bond indentures for the sole purpose of DRF housing operations. Please contact Ben Figueroa at (562) 985-2790, or e-mail email@example.com if you or a member of your staff have any questions on this distribution.
Student Union Program
For student unions programs that have a project requiring the sale of bonds in 1997, please coordinate with Rosa H. Renaud as soon as possible to set up a meeting that will focus on timing and technical requirements for bond financing. The meeting should include student union staff, campus administration and facilities staff, and Financing and Risk Management. Rosa H. Renaud can be reached at (562) 985-2790.
Arbitrage Rebate Compliance for Financing Transactions
The office of Financing and Risk Management has recently completed an analysis of arbitrage rebate requirements on open Dormitory Revenue Fund construction projects funded with bond proceeds (i.e. certain student union and housing projects). A system has been established to track the expenditures at certain key times in each project's life in order to analyze each transaction for the possibility of arbitrage penalties. Our office will be working with the Accounting office to close out completed projects and to obtain expenditure information. For projects that are delegated to campuses, contacts may be made from time to time to obtain expenditure information. Please note that each tax exempt financing undertaken, regardless of whether it is system or campus originated, has the potential for arbitrage penalities. If you have questions on any specific project, please call Benjamin Figueroa at (562) 985-2790.
Arbitrage Rebate Compliance for Financing Transactions
As of July 1, 1997, the Office of Financing and Risk Management has responsibility for the review and approval of tax-exempt financed personal property acquisitions (most commonly associated with lease-financing). We are reviewing various possible changes in processes that would help to minimize campuses risk exposure while enhancing their financial position. We will be also assessing the need for future campus training. Please contact Ben Figueroa at (562) 985-2790, or e-mail him at firstname.lastname@example.org if you or a member of your staff have any questions, comments, or suggestions on how best to improve on this process.
Richard Leffingwell, Director
For copies of CSU Legislative Reports or other legislative information pertaining to the CSU, please visit our website at http://www.calstate.edu/oga
INFORMATION RESOURCES AND TECHNOLOGY
For information related to technology projects within the CSU, please visit our website at http://www.calstate.edu/irt.
Tom West, Assistant Vice Chancellor
PHYSICAL PLANNING AND DEVELOPMENT
Annual Capital Outlay SCOPE Visits
The annual campus SCOPE visits involving the Department of Finance (DOF), Legislative Analyst Office (LAO), legislative consultants, and Physical Planning and Development have been successfully concluded. The DOF selected Hayward, San Francisco, San Marcos, Dominguez Hills and Camarillo to visit in October. The LAO selected San Bernardino, Bakersfield, Camarillo, Los Angeles, San Marcos, and Fullerton to visit in the months of October/November. PP&D, Budget, and the Office of Governmental Affairs visited Camarillo with legislative staff from the Senate Budget Committee and support staff from the DOF as well as the offices of Assemblyman Brooks Firestone and Senator Jack O'Connell. The SCOPE visits are an essential component in addressing questions and concerns raised by Sacramento. Thanks to all of the campus staff members who worked to make these visits a success.
PPD Due Dates for CPB&G Agenda Items (March 17-18, 1998 Trustees' Meeting)
Jon H. Regnier, Senior Director
PLANNING AND ANALYSIS
The CSUMentor web system became fully operational on November 1, 1997 for prospective students to submit electronic admission applications for Fall 1998 enrollment to all CSU campuses. During the first month of operation, approximately 9,000 individuals established user accounts with CSUMentor and submitted over 3,600 electronic admission applications to various CSU campuses. Approximately 40% of the applicants chose to pay their application fee by credit card, while 60% paid by check. Applicants paying by credit card had their transaction processed by the CyberCash "CashRegister" which takes 5 to 10 seconds to complete and is integrated into the CSUMentor web system.
Detailed accounting reports of fee payments are being provided to each campus on a daily basis at a designated password protected FTP site on the Internet. The accounting report has been formatted into ASCII text file batch file which campuses can download into a spreadsheet for their use and record. Please contact Lawrence Lin at the Chancellor's Office at (562) 985-2705 or e-mail: email@example.com for additional information.
The "Improvement of Admission Services & Financial Aid Program" (Improvement Program) and the "Productivity and Investment Program" (PIP) have been merged to create the Partnerships for the Improvement of Campus Operations, Student Services, and Academic Services Program (PICOSAS), and will continue to encourage campuses to create partnerships with other campuses and the Chancellor's Office to improve campus operations and services.
Approximately $1 million one-time funding will be available for PICOSAS in fiscal year 1997/98. The deadline for submission of campus proposals is February 12, 1998. Instructions and forms to assist campuses in developing their proposals were distributed to campuses in December. If you have any questions about logistical or technical matters related to PICOSAS, please contact Lawrence Lin.
Collaborative Management Systems (CMS) Project
In October, the CMS Financial Services, Human Resources, Information Technology and Student Services Committees completed their review and evaluation of the system modules from Oracle, PeopleSoft and SCT. Based on the recommendations from the various CMS function committees, the CMS Task Force has approved and qualified all three vendors to participate in the third phase of the CMS Request For Qualifications (RFQ) process which will request "Best Offers" for integrated campus financial, student and human resource systems software packages and services.
The CMS Task Force also completed a systemwide survey to estimate the potential campus customers interested in the Oracle, PeopleSoft and SCT integrated products. Campuses indicated their level of interest for each vendor with the understanding that no final commitment would be required until price information was obtained from the vendors. A summation of the systemwide survey was forwarded along with a request for "Best Offer" to each vendor on November 21, 1997. Vendors are required to submit their "Best Offers" to the CMS Task Force by December 15, 1997. If you have any questions concerning CMS, please contact Lawrence Lin at the Chancellor's Office.
The initial benchmarking data collection concluded on November 5 and Function Chairs and Campus Coordinators reviewed the data to determine if corrections were necessary before final submittal on December 31. Sterling Research will prepare and return the national comparative data and the CSU cohort data to the campuses by February 15, 1998. The post data collection workshops are scheduled for March 18-20, 1998.
Campuses are currently in the process of collecting completed customer satisfaction surveys. Response rates for most campuses are higher than expected. Data tabulation will be shipped to KH Consulting by December 19. Preliminary survey reports will be reviewed by the campus survey administrators on January 15, 1998.
If you have any questions concerning the above, please contact Ron Ashcroft (e-mail: firstname.lastname@example.org, phone (562) 985-2706, fax (562) 985-2710).
Lenore Rozner, Senior Director
The Business and Finance Newsletter is now accessible from the Chancellor's Office website: http://www.calstate.edu/BF/Newsletters/Newslet.shtml.
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: email@example.com.