Budgeting and Allocation Procedures

General Procedures

1. The methodology by which adjustments to campus budgets are formulated should be based primarily on campus enrollment targets.

2. As a general rule, the Board of Trustees will approve a Lottery Revenue Budget each year at its March meeting. Soon thereafter, the budget will be transmitted to campuses by memorandum from the CSU Budget Office. Updates of lottery programs and policies will occur periodically and will be distributed via budget memo until such time as there have been substantial changes when a new Lottery Policies and Budget Manual will be issued. Should hardcopy be desired, the CSU Budget Office home page on the world web will offer this option for your convenience.

3. All campus expenditure authorizations will be made as early as possible each fiscal year. The initial campus expenditure authorization will contain the authorization for all campus programs. The initial expenditure authorization will be followed by campus allocation orders. The timing of allocations will depend on the amount of lottery funds received.

4. Generally, all allocations will be for a period of one year.

5. Program categories, unless otherwise amended by the Chancellor or the Board of Trustees, will remain under the general terms of Access and Academic Development, Instructional Partnership and Campus-Based Programs.

a. Programs designated as Access and Academic Development programs consist of programs that seek to increase college participation, retention and graduation rates of students who are disadvantaged because of their economic, educational, or environment background.

b. Instructional Partnership (Summer Arts) which has been administered by a campus on behalf of the entire system will be managed by Chancellor's Office staff and implemented at a designated campus.

c. Authorization of Campus-Based Program Funds will occur at the beginning of the fiscal year. The submission of Expenditure Plans for these funds are no longer required prior to the authorization of these funds. However, all campuses receiving these funds must be listed in the Campus-Based Programs Expenditure Report (refer to pages 36 & 37). The allocation of these funds are considered a priority funding mechanism, which allow campuses maximum flexibility to manage resources to fit campus needs. Campus allocations will be based on established enrollment targets.

6. Funds unexpended or uncommitted by June 30 of each fiscal year will remain at the campus level and should be rolled forward to the next fiscal year until expended. Campuses may consider unexpended/uncommitted funds discretionary.

7. The only allocations excluded from transferability are the programs for disadvantaged students. This exclusion provides that no funds will be transferred out of these programs, but funds may be transferred into these programs. The following are identified as disadvantaged student programs: Access and Academic Development, CSU Scholarship Program for Future Scholars, Forgivable Loan/Doctoral Incentive Program, Teacher Diversity and the California Pre-Doctoral Program.

8. Campuses may transfer Campus-Based Program funds into an already-existing lottery global account to facilitate project management and allocation control on the campuses. For example, if a campus decides to expend Campus-Based Program funds to augment an Disadvantaged Students program, such amount may be transferred to the appropriate Disadvantaged Students program global account. Year-end reporting of the expenditure of Campus-Based Program funds for Disadvantaged Students purposes should occur in the Disadvantaged Students global account.


Technical Procedures

The allocation and accounting procedures for the California State University Lottery Education Fund (Fund 839) have been designated to parallel as closely as possible those currently used for other funds. However, a number of differences exist.

1. Approved budget detail and the authority to implement the budget by committing funds will be provided by means of a program "expenditure authorization." It is anticipated that one expenditure authorization will be issued at the beginning of the fiscal year. Should lottery revenue fail to materialize in the amounts projected, subsequent notice and revised authorization of lottery funds will be forwarded to campuses. Funding and notification to the State Controller's Office as to the amount of campus funding will be provided by the traditional allocation order process.

2. Due to the periodic nature of revenue flowing into the Fund from the State Lottery, authorization commitments will exceed the funds provided by allocation order. This imposes on the campus the responsibility for cash management.

3. The expenditure authorization is specific as to purpose. Funds may not be transferred from one authorization to another, except as provided under general guideline number 8, above. To ensure this discrete identification of both budget and expenditures, the accounting procedures follow a project accounting format by assigning a distinct global account number and subledger account number to each program authorization.

4. Notwithstanding the delegation of fiscal flexibility contained in Executive Order No. 648, local approval of the following transactions within each program authorization, i.e., global account, is authorized by the Vice Chancellor of Business and Finance pursuant to the authority delegated to him by Executive Order No. 648:

a. Transfers between and among allotments within the global account for that project.

b. Transfers between the budgetary programs of Instruction and Academic Support as required to implement approved authorizations. This authority does not extend to transfer between program expenditure authorizations, except as provided under general guidelines number 7 and number 8 above.

c. Establishment, deletion, conversion, or reclassification of any position for the period of the single fiscal year for which the project has been funded. All payroll/personnel documentation must cite the appropriate payroll agency code for Fund 839 as shown in the FAS chart of accounts.

Local approval authority is to be restricted to those individuals currently designated by each campus President to act on his/her behalf in implementing Executive Order No. 648.

Allocation orders to establish expenditure accounts in the records of the State Controller will be issued in the same format as all other Special Fund allocations. However, due to the periodic flow of revenues into the CSU Lottery Education Fund itself, it is not possible to allocate at one time the total required to support the entire budget. Consequently, the total of a campus's program authorizations will normally exceed its allocations until the fourth quarter of the fiscal year. This means that each campus must manage the timing of its expenditures among its various authorizations so as not to exceed the total funds remaining in its cumulative allocation at any point in time.

In view of the above, it is critical that each campus program manager forecast the expenditure flow for his/her program so as to enable campus business management personnel to monitor and accommodate the total flow of expenditures for all programs. It is also critical that all those involved clearly understand the distinction between an "allocation order," which is the total actually available for expenditure, and a program "expenditure authorization," which represents CSU approval to commit funds to implement a program at a certain dollar level.

Dates for issuing allocation orders are unclear at this time, however, it is anticipated that the first allocation order will occur as soon after the beginning of the fiscal year as possible. Allocations will take into consideration systemwide programs requiring early funding, after which, other campus based programs will receive funding. At least two other allocations will be made to campuses, the dates of which will depend upon the date and amount of the transfer of funds from the California State Lottery to the CSU.

All expenditure authorizations will be transmitted to each campus as supplies and services totaling to the approved authorization. In addition, the authorization detail will include a negative allotment, "allocation order pending," which will be a global cost center. The amount in this program account will totally offset the budget authorization. This detail, including the negative global account, will be established in the campus FAS. Allocation orders will be issued to fund the negative global account. Each allocation order will be posted to the FAS as a single entry.

The President of each campus will be responsible for insuring that no program is overexpended, that the total campus allocation is not exceeded, and that the intent of the program expenditure authorization is met. Conversely, the Chancellor's Office assumes responsibility for insuring that programs are not authorized which will exceed the total funding available in any given fiscal year.



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