Integrated CSU Administrative Manual

CSU POLICY

--DRAFT POLICY--

Section:  GENERAL ACCOUNTING

Section 3000 Policies

Policy Number:  3140.01

Policy Title: CSU Fund Policy for the State Controller’s Office “California State University” Trust Fund, 0948

Policy Effective Date: April 19, 2013

Last Revision Date: July 1, 2013
(see revision history)

POLICY OBJECTIVE

It is the policy of the California State University (CSU) that each CSU campus Chief Financial Officer (CFO) is accountable for the monies held within State Controller’s Office(SCO) “California State University” Trust Fund 0948, as authorized by Education Code (EC) § 89721. As authorized by Executive Order (EO) 1000, the campus President is delegated authority and responsibility for effective oversight of all funds. This policy is to provide direction for the establishment and management of CSU funds within the SCO’s “California State University” Trust Fund 0948, in order to comply with all applicable laws, codes and regulations.

Written procedures to support this policy can be found in the Legal Manual. Campus should prepare more detailed written procedures to support this policy.


POLICY STATEMENT

100 Purpose

EC § 89721 provides for the broad delegation of authority for certain monies to be deposited in SCO Fund 0948.  In order to provide management, governance and ensure compliance, the CSU has established unique CSU funds within SCO Fund 0948 to account for the financial resources collected for a specific purpose. Generally, these funds exist to support the campus in the achievement of its mission.

SCO Fund 0948 exists both in the records of the State Controller and in the official records of the CSU.  For further discussion regarding the relationship between the SCO and the CSU, please see EO 1000.

CSU funds that are not established and used in accordance with the EC and CSU policy expose the university to both financial and public relations risks.

200 Authority

Authority to establish a CSU fund within SCO Fund 0948 is provided through a “Delegation of Authority” (DOA). Examples of DOA’s include but are not limited to:

  1. Education Code
  2. Budget Act
  3. Government Code
  4. Financial Aid Regulations
  5. Grantor Agreement
  6. Joint Powers Authority Agreement
  7. Contract with an external agency
  8. Letter of gift acceptance
  9. Executive Order

For those categories listed above, a separate Local Trust Agreement is not required.

In the absence of a DOA, a Local Trust Agreement (LTA) must be completed to establish a local trust fund. The LTA and supporting documentation define the purpose of the trust fund and document the project's ability to be self-supporting. LTA’s must be established in accordance with campus approved and documented procedures. Lack of complete trust fund documentation increases the risk of improper fund management and inappropriate expenditures. The following information must be included on the LTA:

  • Type of trust.
  • Effective and expiration date.
  • Purpose of the trust.
  • Source of trust money or donor and method of collecting revenues.
  • Allowed types of expenditures and/or restrictions on the use of moneys for administrative or overhead costs.
  • Reporting requirements.
  • Instructions for closing the account and disposition of balance in the account.
  • Agreements, i.e. any provision for financial and account maintenance service charges or administrative fees.

CSU Funds established via a LTA that have no activity within the last 24 months must be reviewed and analyzed to determine if purpose of the fund, as stated in the LTA, is still valid. LTA’s for active funds must be reviewed every five years. Per the Records Retention and Disposition schedule, trust fund documentation will be retained for four years after the trust is dissolved.

300 General Requirements Applicable to All CSU Funds in 0948

All trust funds must adhere to the following criteria:

  • Must be self-sufficient by maintaining a continuous positive cash flow and fund balance.
  • Unrestricted cash must be available for working capital in order to finance expenditures. 
  • Every expenditure from the CSU Operating Fund must be for official University business, supports the educational mission of the CSU, is not economically wasteful, and serves the best interest of the CSU and the campus. 
  • Expenditures must comply with all applicable CO directives (ie. EO’s, Coded Memorandums); laws; statutes and regulations of the State of California, local or federal governments.
  • Expenditures must be consistent with CSU Contracting and Procurement standards, and State procurement policies where applicable.
  • Expenditures must not be for the private benefit of any individual or non-CSU entity.
  • Expenditures must not be primarily for the benefit of an auxiliary enterprise or corporation without reimbursement.
  • Expenditures for capital projects must adhere to the requirements of the current Budget Act.
  • Monies must not be used for merit or program based student grants or scholarships, with the exception of:
    1. Funds deposited in CSU Fund 465 and 466.
    2. Funds specifically designated for this purpose by the Grantor and/or Endowment Agreement.
    3. Fees approved by Executive Orders, where part of the fee is designated for scholarships.
  • Monies must not be used for “needs based” scholarships, grants or financial aid, with the exception of:
    1. Funds deposited to CSU Fund 441.
    2. Fees designated for “needs based awards” that are already approved financial aid programs and/or approved through Executive Orders.
  • Revenues collected in advance should not be used for current operations.
  • Controls must be in place to maintain trust fund documentation and ensure that all trust fund expenditures are properly approved and supported in accordance with the trust fund purpose.
  • Under authority of EC § 89760, CSU campuses are permitted to loan money from one fund to another fund in order to meet the campus’ commitments. The current earnings rate of the loaner fund will be established as the interest rate charged to the loanee fund. Loans between trust funds must be allowable per the trust agreement of the donating project
  • Any residual balances are distributed as defined in the trust agreement.

Additional requirements may exist for certain funds as specified in the “Fund Authority and Specifics,” Section 800 of this policy.

400 Investment Earnings

Campuses must record the investment earnings allocation in CSU Fund 541, Pooled Investment Fund. The net investment earnings should be allocated internally within the campus’ Fund 0948 according to the campus’ allocation policy. The CSU Operating Fund’s earnings must be recorded within the CSU Operating Fund or used for Special Projects as approved by the CFO.

500 Service Provider Arrangements and Agreements

The university Chief Financial Officer (CFO) must ensure that costs incurred by the CSU enterprise programs/activities/funds for services, products, and facilities provided to other enterprise programs/activities/funds are properly and consistently recovered in accordance with an interfund agreement or service provider arrangements supported by campus chargeback policies for recovery of overhead and direct cost services. All allowable and allocable direct and indirect costs shall be recovered based upon campus policies or, in some cases, individual agreements. Service provider arrangements and agreements shall be reviewed in accordance with the contractual terms of the agreement or if not specified then annually, by the university Chief Financial Officer (CFO), or designee.  Chargeback agreements should be reviewed at a minimum of every two years.

600 Risk and Liabilities

The activities generating the monies being deposited into a CSU fund may expose the university to unusual risks and liabilities. Appropriate insurance coverage should be assessed and obtained when necessary. For information about risk exposure, communicate with campus risk management, Systemwide Risk Management & Public Safety and/or the Office of General Counsel.

700 Carry forward balances

Carry forward balances may be subject to restrictions, see the Carryforward Fund Policy, adopted by Executive Council on August 28, 2007, for guidance.

800 Fund Authority and Specifics

“Fund Authority and Specifics” is located at the following link:
ICSUAM CSU FUND POLICY FOR THE STATE CONTROLLER’S OFFICE “CALIFORNIA STATE UNIVERSITY” TRUST FUND, 0948, Section 800, Fund Authority and Specifics

For future reference, the “Fund Authority and Specifics” for the funds listed below will be stipulated in the Legal Manual. Although the “Fund Authority and Specifics” will be located in the Legal Manual, they are ICSUAM Policy and an extension of this policy. Campuses must be in compliance.

  1. CSU Fund 401 Supplemental Education Opportunity Grants (SEOG)
  2. CSU Fund 403 Perkins Loans
  3. CSU Fund 406 Nursing Student Loans-Graduate  
  4. CSU Fund 407 Nursing Student Loans-Undergraduate
  5. CSU Fund 408 Pell Grant Program 
  6. CSU Fund 409 College Work Study Program
  7. CSU Fund 410 Federal Direct Student Loans
  8. CSU Fund 411 ACG/SMART Grants
  9. CSU Fund 412 Federal Teach Education Assistance Grant
  10. CSU Fund 413 Miscellaneous Federal Financial Aid Grants
  11. CSU Fund 423 Forgivable Loan/Doctoral Incentive Program
  12. CSU Fund 424 California Grant Programs
  13. CSU Fund 431 Miscellaneous Financial Aid – Restricted
  14. CSU Fund 433 Campus Students Loans Trust
  15. CSU Fund 434 Campus Student Long Term Loans
  16. CSU Fund 435 Miscellaneous Financial Aid – Unrestricted
  17. CSU Fund 436 Miscellaneous Financial Aid and Other Agency
  18. CSU Fund 441 CE Extended Education
  19. CSU Fund 442 CE Construction-Restricted, External Sources
  20. CSU Fund 443 CE Maintenance & Repair/ Internally Designated Capital Project
  21. CSU Fund 444 CE Campus Partners
  22. CSU Fund 452 Facility Revenue Fund – Health Facilities Fee
  23. CSU Fund 453 Facility Revenue Fund – Construction-Restricted, External sources
  24. CSU Fund 454 Facility – Maintenance & Repair/Internally Designated Capital Project
  25. CSU Fund 461 Associated Student Body Trust
  26. CSU Fund 463 Instructionally Related Activities Trust
  27. CSU Fund 464 International Programs Trust
  28. CSU Fund 465 TF-Contracts and Grant Trust
  29. CSU Fund 466 TF-Endowment Trust
  30. CSU Fund 471 Parking Revenue Fund-Fines and Forfeitures
  31. CSU Fund 472 Parking Revenue Fund-Parking Fees
  32. CSU Fund 473 Parking Revenue Fund-Construction-Restricted, External Sources
  33. CSU Fund 474 Parking- Maintenance & Repair AND Internally Designated Capital Projects
  34. CSU Fund 481 Lottery Education Fund
  35. CSU Fund 485 CSU Operating Fund
  36. CSU Fund 491 Special Projects Fund – Special Projects
  37. CSU Fund 492 Dependent/Health Care Reimbursements
  38. CSU Fund 496 Miscellaneous Trust
  39. CSU Fund 499 Revolving Fund
  40. CSU Fund 531 Housing Operations and Revenue
  41. CSU Fund 532 Housing Maintenance & Repair AND Internally Designated Capital Projects
  42. CSU Fund 533 Housing Construction - Restricted, External Sources
  43. CSU Fund 534 Campus Union-Operations and Revenue
  44. CSU Fund 535 Campus Union- Maintenance & Repair AND Internally Designated Capital Projects
  45. CSU Fund 536 Campus Union-Construction-Restricted, External Sources
  46. CSU Fund 537 Auxiliary Organization-Operations and Revenue
  47. CSU Fund 538 Auxiliary Organization Maintenance & Repair AND Internally Designated Capital Projects
  48. CSU Fund 539 Auxiliary Organizations -Construction-Restricted, External Sources
  49. CSU Fund 541 Pooled Investment Fund
  50. CSU Fund 542 Capital Project Management
  51. CSU Fund 543 Cost Recovery/ Reciprocal and Nonreciprocal Campus: 
  52. CSU Fund 544 Cost Recovery/ Exchange and Non-exchange Aux Orgs/ 3rd Party
  53. CSU Fund 546 TF Stockton Site Authority
  54. CSU Fund 547 TF CSU Risk Management
  55. CSU Fund 550 Restricted Expendable

 

 

APPLICABILITY AND AREAS OF RESPONSIBILITY

 

REVISION HISTORY

 

RESOURCES AND REFERENCE MATERIALS

Useful Guidelines:

Appendix A:  Sample Custodial Fund Agreement
Carryforward Fund Policy adopted by Executive Council on August 28, 2007
General Guidelines for Lottery Expenditures
Legal Manual Chapter 5 Common Financial System, Section 5.1, When to Establish a PeopleSoft Fund

Source, Flow, and Scope of State Government Authority and Regulations

Related Principles:

 

Sound Business Practices:

 

Laws, State Codes, Regulations and Mandates:

Education Code 89230
Education Code 89301
Education Code 89303
Education Code 89701
Education Code 89702
Education Code 89703
Education Code 89704
Education Code 89721
Education Code Section 90010
Executive Order 1000
Government Code 8880, California State Lottery Act of 1984


COGNIZANT OFFICE(S)

CO Manager:

Ms. Kelly Cox 
Associate Director, Financial Services – Accounting Department
CSU Office of the Chancellor
kcox@calstate.edu

Ms. Roberta McNiel 
Sr Mgr Fin Sys St Rpt & Tax Ad; Sys Fin Stds & Rptg
CSU Office of the Chancellor
rmcniel@calstate.edu

Subject Expert:

Ms. Josee Larochelle
Associate Vice Pres, Finance
San Jose State University
josee.larochelle@sjsu.edu

Ms. Lorlie Leetham
Asst VP Fisc Svc & Aux Fin Rpt, Fiscal Services
Cal Poly San Luis Obispo
lleetham@calpoly.edu

 

Affinity Group:

Financial Standards Advisory Committee (FSAC)

Financial Officers Association (FOA) http://foa.calstate.edu

 

Feedback/Questions/Comments