| This executive order is issued pursuant to authority
granted in Section II (h) of the Standing Orders of the Board of
Trustees.
Section 1: Introduction
Though the significant majority of funding for the California State
University system comes from the State General Fund, campuses are
increasingly reliant upon alternative funding sources to be able
to provide the educational services needed by students. Those alternative
sources include donations, fees for services/facilities and income
from self-supporting activities such as parking operations and continuing
education programs.
The purpose of this executive order is to provide guidance to campuses
on the administration of their non-General Fund receipts that are
subject to local campus control, to ensure that the funds are held
in proper accounts and are administered in accordance with applicable
laws and regulations.
Campuses must continue to comply with Executive Order 753 Allocation
of Costs to Auxiliary Enterprises as they implement this executive
order.
Section 2: Activities that Generate Supplemental Revenue
Campuses and auxiliaries conduct a variety of activities that generate
supplemental revenue. This section discusses the primary activities
that are conducted and issues that determine where the receipts
should be deposited. This is not an all-inclusive list. Section
4 of this document is a table that relates how the receipts generated
from the following activities should be handled. At the end of each
of the following paragraphs describing each activity is a sentence
referencing how that activity can be found on the table (Section
4).
Fund Raising:
Donations received from alumni, businesses, and other benefactors
are primarily in the form of cash. However, in-kind donations (equipment,
books, software) are also received. Donors may impose restrictions
on their contributions. For example, they may specify how long the
donated asset must be used by the organization before it can be
sold or otherwise disposed of. Such restrictions should be recorded,
reviewed and followed.
With respect to cash donations, one issue that may arise relates
to the payee on a donor’s check. If an auxiliary conducts
a solicitation and receives a check made payable to the campus,
and there is evidence that the donor intended the funds to go to
the auxiliary, the campus may consider endorsing the funds to the
auxiliary.
Cash assets received from fund raising activities are referred
to as Gifts in Section 4.
Furnishing Goods & Services of a Research or Public
Service Nature:
CSU campuses conduct research on behalf of federal and state agencies,
and also for private (non-governmental) entities. Research topics
can range from educational-related projects (e.g., the education
of poor, urban or minority students) to environmental plant physiology
projects (e.g., reintroducing the willow tree species into urban
environments). Funds received for this activity are generally in
the form of service contracts or research grants, and are referred
to as Grants and Contracts in Section 4.
Use of Facilities:
Authority to require payment for granting rights to access campus
facilities is generally governed by Education Code 89700(a), which
states that the trustees may, by rule, require all persons to pay
fees, rents, deposits, and charges for services, facilities or materials
provided by the trustees to such persons.
Rights to facilities would typically be granted through a lease
or a license agreement. A lease confers an exclusive possessory
interest in a campus facility, whereas a license would grant a nonexclusive
permission to use. A lease has been conveyed if the possessory rights
granted are against all others, including the campus.
Lease revenue for facilities is governed by Education Code 89046
which states that any rental received by the trustees under this
or other leasing sections shall be deposited in the State Treasury
and credited to the support appropriation of the California State
University current during the period of occupancy.
If the rights granted allow continuing possession by the campus
and permits contemporaneous use by the licensee (as well as possibly
others), the arrangement should be treated as a license. License
revenue for facilities is governed by Education Code 89721(g) which
states that the chief fiscal officer of each campus of the California
State University shall deposit into and maintain in local trust
accounts moneys received in connection with fees and charges for
services, materials, and facilities authorized by Section 89700
where these fees or charges are required of those persons who, at
their option, use the services or facilities, or are provided the
materials, for which the fees or charges are made. Fees and charges
so received and deposited shall be used solely to meet the costs
of providing these services, materials, and facilities.
Monies received from licenses and leases are referred to as Rental
Receipts in Section 4.
Offering Continuing Education Programs:
CSU campuses offer a variety of programs, courses, seminars and
conferences to serve the educational needs of businesses, industry,
hospitals and governmental agencies. The programs award academic
credits or Continuing Education Units (CEU’s) and must be
self-supporting. Examples include external degree programs and special
session courses which are offered on a for-credit basis. Other examples
include summer writing programs, intensive English instruction for
international students, and professional development programs for
working professionals, which can be offered on either a for-credit
or non-credit basis.
Auxiliary organizations also offer self-supporting instructional
programs. The courses are non-credit and cannot use the California
State University name or representation in any manner other than
where California State University is part of the auxiliary’s
title. Examples include offering lifelong learning courses to individuals
age 50 and older, and providing Scholastic Aptitude Test (SAT) preparation
for high school students.
Program/course fees are the predominant revenue source, though
other fees are also charged (application fees, processing fees,
exam fees).
Monies received from Continuing Education Programs are referred
to as Continuing Education Fees in Section 4.
Selling Goods and Services from Educationally Related Activities:
Formal instruction is not always sufficient to provide students
a quality educational experience. Additional activities and laboratory
experiences are needed to supplement the instructional offerings.
Examples of educationally related activities offered by campuses
include publishing newspapers and magazines; and operating dairy
and agricultural farms.
Conducting those activities may incidentally create goods and services
that may be sold to students, staff and the general public. Examples
of incidental revenues include sales of scientific and literary
publications; and sales of products of dairy creameries, food technology
divisions or poultry farms. These revenues are referred to as Goods
and Services from Educational Activities in Section 4.
These activities can be provided by either the university or an
auxiliary.
Selling Commercial Goods and Services:
Campuses and auxiliaries also offer products or services that enhance,
but are not central to, the educational mission. Examples of these
ancillary activities include providing food services, college stores,
and selling student health insurance policies. “Pouring rights,”
the long-term granting of the right to exclusively sell certain
beverages at events, also fall into this category. Monies received
from these activities are referred to as Commercial Sales
of Goods and Services in Section 4.
Campus Events:
CSU campuses host a wide range of activities to complement the university
experience not only for students, but also for faculty, alumni and
surrounding communities.
Examples include offering laser light concerts at a campus’
planetarium; hosting track and field championships; sponsoring children’s
musical performances; sponsoring speakers of national repute; offering
backpacking trips; offering film screenings; hosting Family Fun
Days for alumni; and sponsoring basketball camps for youth in the
community. These activities can be provided by either the university
or an auxiliary.
Monies collected from these activities (from ticket sales, registrations
fees, etc.,) are referred to as Campus Events in
Section 4.
Student Fees and Other General Fees:
In addition to the above activities – fund raising, leasing
and licensing, selling goods and services, hosting events - campuses
and auxiliaries furnish yet other services, facilities and materials
that are complementary to instruction. Examples include providing
healthcare, parking and housing to CSU students. To cover the costs
of providing these services, campuses are authorized to charge fees
to students, faculty, staff and visitors.
The establishment, revision and rescission of student fees are
governed by Executive Order 740, The California State University
Student Fee Policy. As set forth in EO 740, student fees are
classified in four categories that are discussed below.
Category I – These are fees that must be paid to apply to,
enroll in, or attend the university. Examples include Instructionally
Related Activities Fee, Health Services Fee, Student Body Association
Fee, Health Facilities Fee and Student Body Center Fee.
Category II – These fees pay the full cost of instruction,
which is required of certain students. Example: tuition paid by
out-of-state students.
Category III – These are fees paid to receive materials,
services or use of facilities provided by the university. Examples
include Housing Fee, Parking Fee, Special Session Fee, Course Fee,
and Graduation Fee.
Category IV – Penalties/Late Fees/Deposits – The majority
of fees in this category are penalties, as opposed to deposits.
Examples include Check Return Fee, Replacement of Lost Parking Permit
Fee, Identification Card Replacement Fee. They are meant to cover
the additional costs that result when checks do not clear, when
cards are lost, or when property is damaged.
Monies collected from these sources are referred to as Student
Fees and Other General Fees in Section 4.
Trust Fund to Trust Fund Services:
In addition to the above activities where an operating unit provides
goods or services to a student or the community, there are instances
where a unit will provide services to another unit. If both units
have trust resources, regardless of whether they also have General
Fund resources, it may be considered a “Trust Fund to Trust
Fund” service. In cases where the entity providing the service
is funded from trust funds, that entity can charge for the service
and deposit the receipts into its trust fund. An example of this
would be a Continuing Education unit that purchases housing services
from the Student Housing unit, for its international students taking
an English as Second Language course over the summer. Another example
is the Financial Services Accounting (FSA) Department within the
Chancellor’s Office. It receives its funding from various
trust funds and the General Fund. Within the FSA department there
are units that provide financial services to other trust funds as
well as auxiliaries. FSA charges those funds and auxiliaries for
the services rendered, and deposits the receipts into the FSA trust
fund.
Receipts for such services are referred to as Trust Fund
to Trust Fund Services in Section 4.
Receipts Relating to Reimbursed Activities:
Executive Order 753 requires that auxiliary enterprises (which includes
both enterprise funds such as parking and housing, as well as auxiliary
corporations) be charged with allowable direct and indirect costs
associated with facilities, goods and services provided by the university
funded by the General Fund. Receipts for such activities are referred
to as Reimbursements in Section 4.
Section 3: Factors That Determine Where Revenues Must Be
Held
As funds are received, the campus must confirm that it may accept
the monies. The campus must clearly understand the source of the
funds; i.e., what event or activity generated the funds. Finally,
the campus must determine which entity (the university or an auxiliary)
is responsible for any losses that might arise from the event; i.e.,
has expenditure and operational control over the event/activity.
If authority to deposit a receipt of state money into a
special fund in the State Treasury or a local trust account does
not exist, the asset should be deposited into the General Fund,
to avoid any risk of misdirecting General Funds into a non-General
Fund account.
Several factors determine where a non-General Fund receipt
will be deposited: which entity provided (or will provide) the underlying
activity through its operating agreement? If the university provided
the activity, is there related university debt? And finally, does
the university have a policy, consistent with state law and CSU
policy, for holding its monies inside or outside of the State Treasury
system? These factors are discussed in the following paragraphs.
Factor 1: Who Provided the Underlying Activity?
This factor may not be as straightforward as it sounds. Normally,
whoever provided (or will provide) the service should deposit the
receipt. However, there is a critical issue here that pertains to
when an auxiliary provides the activity. The auxiliary can only
deposit the receipt if certain conditions are met.
If a campus has contracted with an auxiliary organization to provide
specific services, receipts resulting from providing those services
may be accepted by the auxiliary and deposited into the auxiliary’s
bank account. Such monies would be considered Auxiliary
Funds, not State Funds. The funds would be subject to laws
and regulations specifically applicable to CSU auxiliaries. While
an operating agreement between the campus and the auxiliary that
specifically mentions the service being provided is required, it
is not the sole requirement for fees to be accepted by an auxiliary.
The auxiliary must also be responsible for any losses that might
arise from the event or activity that generated the receipts; i.e.,
has expenditure and operational control over the event/activity.
Auxiliaries may only accept monies under these conditions. As
a matter of CSU policy, auxiliaries may not accept state funds with
the intent of administering them as an agent of the university.
Payment for services is the only instance where state funds may
be accepted into an auxiliary organization’s account.
Factor 2: Does the University have Related Debt?
This second factor applies to receipts resulting from university-provided
services. If a university has a specific project that was funded
by debt (the sale of bonds), fees collected from the operation of
that project typically are pledged to repay the bonds. The pledged
fees must be deposited into the California State University
Dormitory Revenue Fund, number 0580. Thus, if a Health
Center had been built with bond funds, health center facility fees
would be required to be deposited into this fund to cover the debt
service on the bonds. Similarly, if a student union had been built,
student union fees would have to be deposited into this fund. Reference:
Ed Code 90074.
Factors 3 & 4: Source of Funds and Campus Policy.
If a university does not have outstanding debt applicable to the
funds received, its non-General Fund receipts must be deposited
into one of several funds, depending on the source of the receipt
and the campus’ policy. Several of the funds are discussed
below.
Fees collected for providing continuing education courses
may be deposited into either the California State University
Continuing Education Revenue Fund (CERF) 0573, a special
fund in the centralized State Treasury or in local trust accessed
through an initial deposit into Trust Fund 0948.
The campus has the choice. Reference: Ed Code 89704, 89721(i), and
Executive Order 794. A benefit of depositing the funds in Trust
0948 for deposit into local trust is the ability to hold the monies
outside of the State Treasury system.
Monies received for research, workshops, conferences, institutes
and special projects may be deposited into either the California
State University Special Projects Fund 0947, a special
fund in the centralized State Treasury, or in local trust accessed
through an initial deposit into Trust Fund 0948.
The campus has the choice. Reference: Ed Code 89725 and 89721(k).
A benefit of depositing the funds in Trust 0948 for deposit into
local trust is the ability to hold the monies outside of the State
Treasury.
Monies received for parking may be deposited into either the
State University Parking Revenue Fund 0583, a
special fund in the centralized State Treasury, or in local trust
accessed through an initial deposit into Trust Fund 0948.
Reference: Ed Code 89701 and 89721(i). Monies received for student
health center facility fees may be deposited into the State
University Facilities Revenue Fund 0581, a special fund
in the centralized State Treasury, or in local trust accessed
through an initial deposit into Trust Fund 0948.
Reference: Ed Code 89702 and 89721(i).
Most other non-General Fund receipts will be initially deposited
and held in Trust Fund 0948. Trust Fund 0948 in the CSU receives
and holds monies for deposit into either the centralized State
Treasury (which has a special fund called the California State
University Trust Fund 0948, a fund different from CSU’s
holding Trust Fund 0948) or for deposit into a local trust account.
The other non-General Fund receipts include gifts made to the
state, student financial aid monies, federal grants and contract
monies where the state is the grantee or contractor, international
programs expenses, cafeteria replacement funds, miscellaneous
deposits, optional fees and charges for CSU services, materials,
facilities, instructionally related activity fees, lottery revenues
and mandatory student body organization fees.
Within CSU’s holding Trust Fund 0948, there is one last
option for a campus: to have the monies held in the centralized
State Treasury or to hold the monies in local agency trust accounts
outside of the State Treasury System. If the campus chooses the
State Treasury, the receipts are invested in the Surplus Money
Investment Fund (SMIF). If the campus chooses to hold the funds
in local agency trust accounts, the funds must nonetheless be
invested in accordance with CSU investment policy. One benefit
of using a local agency trust account is that the campus has more
control over disbursements. Regardless of the choice, these funds
are state funds and are subject to state laws and regulations.
Separate Accountability
As monies are deposited, it is important to maintain separate accountability
for receipts with different purposes or restrictions. For example,
if an activity is supposed to be self-supporting, its receipts and
disbursements must be tracked in a separate account. This will allow
campuses to more easily track that the fees being charged are indeed
adequate to cover the costs of providing the activity. Separate
record keeping also improves a campus’ ability to prepare
revenue predictions using extrapolations of current results.
Section 4: Where to Deposit Non-General Fund Receipts
The following table lists the most common sources of non-General
Fund receipts, and indicates where the receipts should be deposited.
Certain General Fund receipts are also listed; this was done to
contrast receipts that, although similar to something that may be
deposited into Trust, must be deposited into the General Fund.
|
Description
|
Deposit
into the State Trust Fund (Note
1)
|
Deposit
into an Authorized Auxiliary Organization Fund (Note
2)
|
Deposit
into the Dormitory Revenue Fund
|
Deposit
to the credit of the General Fund
|
|
Gifts:
|
|
|
|
|
|
To
the University, its units and programs
|
X
|
|
|
|
|
To
an auxiliary organization
|
|
X
|
|
|
|
To
an approved student club in support of its programs
|
|
X
|
|
|
|
|
|
|
|
|
|
Grants
and Contracts Awarded to:
|
|
|
|
|
|
The
University
|
X
|
|
|
|
|
An
auxiliary organization
|
|
X
|
|
|
|
|
|
|
|
|
|
Rental
Receipts:
|
|
|
|
|
|
For
exclusive use of University facilities on a lease basis (Ed Code 89046)
|
|
|
|
X
|
|
For
use of University facilities usually on a event-related,
license basis (Ed Code 89721 g)
|
X
|
|
|
|
|
For
use of auxiliary organization facilities (bookstore; student union)
|
|
X
|
|
|
|
For
Student Housing leased to an auxiliary organization under a capital
lease, where construction was debt-financed by the Systemwide
Revenue Bond program (lease
payment)
|
|
|
X
|
|
|
Continuing
Education Fees:
|
|
|
|
|
|
Course provided by the University
|
|
|
|
|
|
If fees are pledged to pay bond debt
|
|
|
X
|
|
|
If fees are not pledged to pay bond
debt
|
X
|
|
|
|
|
Non-credit
course provided by an auxiliary organization
|
|
X
|
|
|
|
Sales
of Goods and Services from Educational Activities:
|
|
|
|
|
Provided by the
University
|
X (Note 3)
|
|
|
X (Note 3)
|
|
Provided
by an auxiliary organization
|
|
X
|
|
|
|
Commercial
Sales of Goods and Services:
|
|
|
|
|
|
Owned
by the University
|
X (Note 3)
|
|
X (Note 3)
|
X (Note 3)
|
|
Owned
by an auxiliary organization
|
|
X
|
|
|
|
|
|
|
|
|
|
Campus
Events:
|
|
|
|
|
|
University
events, workshops, conferences, institutes, special projects, and program
fees
|
X
|
|
|
|
|
Auxiliary
organization events, workshops, conferences, institutes, special projects,
and program fees
|
|
X
|
|
|
|
|
|
|
|
|
|
Student
Fees and Other General Fees:
|
|
|
|
|
|
Category
I:
|
|
|
|
|
|
Instructionally Related Activities Fee
|
X
|
|
|
|
|
Student Body Association Fee
|
X
|
|
|
|
|
Course Fees (required for enrollment)
|
|
|
|
X
|
|
Health Services Fee
|
X
|
|
|
|
|
Health Facilities Fee
|
|
|
|
|
|
If fees
are pledged to pay bond debt
|
|
|
X
|
|
|
If fees are
not pledged to pay bond debt
|
X
|
|
|
|
|
Student Body Center Fee
|
|
|
|
|
|
If fees
are pledged to pay bond debt
|
|
|
X
|
|
|
If
fees are not pledged to pay bond debt
|
X
|
|
|
|
|
Category
II (Non-resident tuition)
|
|
|
|
X
|
|
Category
III:
|
|
|
|
|
|
Course
Fees (optional not
required for enrollment)
|
X
|
|
|
|
|
Special Session Fee
|
X
|
|
|
|
|
Optional Fees, when service/material also
avail outside Univ
|
X
|
|
|
|
|
Parking Fee
|
|
|
|
|
|
If fees
are pledged to pay bond debt
|
|
|
X
|
|
|
If fees are
not pledged to pay bond debt
|
X
|
|
|
|
|
If owned by an auxiliary organization
|
|
X
|
|
|
|
Student Housing Fee
|
|
|
|
|
|
If fees are pledged to pay bond debt
|
|
|
X
|
|
|
If fees are not pledged to pay bond
debt
|
X
|
|
|
|
|
If owned by an auxiliary organization
|
|
X
|
|
|
|
Category
IV:
|
|
|
|
|
|
If fee relates to an activity supported
by the General Fund
|
|
|
|
X
|
|
If fee relates to an activity not
supported by the General Fund
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lottery Funds
|
X
|
|
|
|
|
|
|
|
|
|
Trust Fund to Trust Fund Services
|
X
|
|
|
|
|
|
|
|
|
|
|
Reimbursements:
|
|
|
|
|
|
For
services and products provided to auxiliary enterprises and organizations,
paid from General Fund budget allocation
|
|
|
|
X
|
|
|
|
|
|
|
|
Note
1: See Section 3. Monies
received for CERF, Special Projects, Parking, Health
Facilities and
Lottery may be held in Fund
0573, 0947, 0583,
0581, and 0839 respectively,
or in Trust Fund 0948.
|
|
|
|
|
|
Note
2: A valid Operating Agreement is required.
|
|
|
|
|
|
Note 3: Depending on the source of
the money that created the Goods and Services. The income should reimburse
the source.
|
|
|
|
|
|
