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)
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.
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.
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:
- Education Code
- Budget Act
- Government Code
- Financial Aid Regulations
- Grantor Agreement
- Joint Powers Authority Agreement
- Contract with an external agency
- Letter of gift acceptance
- 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:
- Funds deposited in CSU Fund 465 and 466.
- Funds specifically designated for this purpose by the Grantor and/or Endowment Agreement.
- 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:
- Funds deposited to CSU Fund 441.
- 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.
- CSU Fund 401 Supplemental Education Opportunity Grants (SEOG)
- CSU Fund 403 Perkins Loans
- CSU Fund 406 Nursing Student Loans-Graduate
- CSU Fund 407 Nursing Student Loans-Undergraduate
- CSU Fund 408 Pell Grant Program
- CSU Fund 409 College Work Study Program
- CSU Fund 410 Federal Direct Student Loans
- CSU Fund 411 ACG/SMART Grants
- CSU Fund 412 Federal Teach Education Assistance Grant
- CSU Fund 413 Miscellaneous Federal Financial Aid Grants
- CSU Fund 423 Forgivable Loan/Doctoral Incentive Program
- CSU Fund 424 California Grant Programs
- CSU Fund 431 Miscellaneous Financial Aid – Restricted
- CSU Fund 433 Campus Students Loans Trust
- CSU Fund 434 Campus Student Long Term Loans
- CSU Fund 435 Miscellaneous Financial Aid – Unrestricted
- CSU Fund 436 Miscellaneous Financial Aid and Other Agency
- CSU Fund 441 CE Extended Education
- CSU Fund 442 CE Construction-Restricted, External Sources
- CSU Fund 443 CE Maintenance & Repair/ Internally Designated Capital Project
- CSU Fund 444 CE Campus Partners
- CSU Fund 452 Facility Revenue Fund – Health Facilities Fee
- CSU Fund 453 Facility Revenue Fund – Construction-Restricted, External sources
- CSU Fund 454 Facility – Maintenance & Repair/Internally Designated Capital Project
- CSU Fund 461 Associated Student Body Trust
- CSU Fund 463 Instructionally Related Activities Trust
- CSU Fund 464 International Programs Trust
- CSU Fund 465 TF-Contracts and Grant Trust
- CSU Fund 466 TF-Endowment Trust
- CSU Fund 471 Parking Revenue Fund-Fines and Forfeitures
- CSU Fund 472 Parking Revenue Fund-Parking Fees
- CSU Fund 473 Parking Revenue Fund-Construction-Restricted, External Sources
- CSU Fund 474 Parking- Maintenance & Repair AND Internally Designated Capital Projects
- CSU Fund 481 Lottery Education Fund
- CSU Fund 485 CSU Operating Fund
- CSU Fund 491 Special Projects Fund – Special Projects
- CSU Fund 492 Dependent/Health Care Reimbursements
- CSU Fund 496 Miscellaneous Trust
- CSU Fund 499 Revolving Fund
- CSU Fund 531 Housing Operations and Revenue
- CSU Fund 532 Housing Maintenance & Repair AND Internally Designated Capital Projects
- CSU Fund 533 Housing Construction - Restricted, External Sources
- CSU Fund 534 Campus Union-Operations and Revenue
- CSU Fund 535 Campus Union- Maintenance & Repair AND Internally Designated Capital Projects
- CSU Fund 536 Campus Union-Construction-Restricted, External Sources
- CSU Fund 537 Auxiliary Organization-Operations and Revenue
- CSU Fund 538 Auxiliary Organization Maintenance & Repair AND Internally Designated Capital Projects
- CSU Fund 539 Auxiliary Organizations -Construction-Restricted, External Sources
- CSU Fund 541 Pooled Investment Fund
- CSU Fund 542 Capital Project Management
- CSU Fund 543 Cost Recovery/ Reciprocal and Nonreciprocal Campus:
- CSU Fund 544 Cost Recovery/ Exchange and Non-exchange Aux Orgs/ 3rd Party
- CSU Fund 546 TF Stockton Site Authority
- CSU Fund 547 TF CSU Risk Management
- CSU Fund 550 Restricted Expendable
APPLICABILITY AND AREAS OF RESPONSIBILITY
RESOURCES AND REFERENCE MATERIALS
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
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
Ms. Roberta McNiel
Sr Mgr Fin Sys St Rpt & Tax Ad; Sys Fin Stds & Rptg
CSU Office of the Chancellor
Ms. Josee Larochelle
Associate Vice Pres, Finance
San Jose State University
Ms. Lorlie Leetham
Asst VP Fisc Svc & Aux Fin Rpt, Fiscal Services
Cal Poly San Luis Obispo
Financial Standards Advisory Committee (FSAC)
Financial Officers Association (FOA) http://foa.calstate.edu