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June 6, 2011



CSU Presidents


Charles B. Reed


Utilization of Campus Auxiliary Organizations Executive Order 1059

Attached is a copy of Executive Order Number 1059, which establishes the California State University policy for appropriate utilization of campus auxiliary organizations.

This executive order augments and supplements the following executive orders pertaining to auxiliary organizations.

No. Title
698 Board of Trustees Policy for the California State University Auxiliary Organizations
731 Designation of Chief Financial Officer
732 Compilation of Policies and Procedures Pertaining to California State University Auxiliary Organizations
751 Centers, Institutes, and Similar Organizations on Campuses of the California State University
849 California State University Insurance Requirements
1000 Delegation of Fiscal Authority and Responsibility

In accordance with policy of the California State University, the campus president has responsibility for implementing executive orders where applicable and for maintaining the campus repository and index for all executive orders.

If you have questions regarding this executive order, please call Mr. George Ashkar, Assistant Vice Chancellor/Controller, Financial Services at (562) 951-4540If you have questions regarding this executive order, please call Mr. George Ashkar, Assistant Vice Chancellor/Controller, Financial Services at (562) 951-4540.





Vice Presidents, Finance/Administration
Executive Staff, Office of the Chancellor

Executive Order 1059

Office of the Chancellor
401 Golden Shore
Long Beach, California 90802-4210


Executive Order:


Effective Date:

June 6, 2011


Executive Order No. 1052 and FS 2010-03


Utilization of Campus Auxiliary Organizations

This executive order is issued pursuant to parts d. and h. of section VI of the Standing Orders of the Board of Trustees of The California State University, and the Education Code Sections 89720 et seq., 89756 and 89900 et seq. This executive order establishes the CSU policy for appropriate use of campus auxiliary organizations, superseding E.O. 1052 and FS 2010-03, and augments and supplements all other existing CSU policies pertaining to auxiliary organizations.

  1. Campus Oversight of Auxiliary Organizations

    1. Campus auxiliary organizations are California nonprofit corporations which are legally separate entities and are organized and operated solely for the benefit of the campus. The separate legal status of auxiliary organizations enables strategies that are important to the campus educational mission and provides capabilities essential to a comprehensive university.

    2. Campus auxiliary organizations shall not operate outside the regulation and oversight of the campus.

    3. The campus president is responsible and accountable for prudent judgment in the utilization of campus auxiliary organizations, for ensuring the fiscal viability of campus auxiliary organizations, and for compliance with applicable CSU policies.

    4. The campus chief financial officer (CFO) shall be the primary responsible campus official in respect to administrative compliance and fiscal oversight of campus auxiliary organizations.

  2. Campus Utilization of Auxiliary Organizations

    1. The campus, with the approval of the chancellor (or designees), may assign certain functions to campus auxiliary organizations pursuant to the California Code of Regulations, Title 5, Section 42500. A written agreement on behalf of the Board of Trustees, executed by the chancellor and the auxiliary organization, is required for the performance by an auxiliary organization of any of the functions listed in Section 42500, except for the student government activities of a student body organization.

    2. Auxiliary organizations shall not perform any of the functions listed in Section 42500 unless the function has been specifically assigned in the operating agreement with the campus. The campus shall review, at least every five years, the auxiliary organizations to ensure that written operating agreements are current and that auxiliary organization activities are in compliance with those agreements. Confirmation that this review has been conducted will consist of either an updated operating agreement, or a letter from the campus president to the executive vice chancellor/chief financial officer (EVC) certifying that the review has been conducted. As part of these periodic reviews, the president should examine the need for each auxiliary and look at the efficiency of the auxiliary operations and administration.

    3. The campus may choose to assign responsibility for an activity or program to an auxiliary organization. When the auxiliary accepts this responsibility it also assumes the associated legal obligations and liabilities, fiscal liabilities, and fiduciary responsibilities. Being accountable and responsible for an activity or program is referred to as ownership. Indications of ownership include:

      • Authority and discretion to contract for services or materials required by the activity
      • Responsibility for business losses
      • Legal liability as an owner or principal entity
      • Fiduciary obligations associated with the activity
      • Responsibility for establishment of operating and administrative policies
      • Primary control or discretion over the expenditure of funds

      A determination of ownership of an activity or program is not necessarily tied to:

      • Employment of individuals granted signatory authority related to the activity (e.g., person or persons who can sign a letter or other related documents on behalf of a principal entity)
      • Ownership of the facility where the activity occurs
      • Authority to request an expenditure
      • Academic or similar programmatic control over the activity

  3. Administration of Funds

    1. The EVC may establish additional policy guidance associated with common campus activities to ensure consistent application of the rules regarding placement of funds established in this executive order. Placement refers to ownership of the funds and accounts where funds are deposited. Auxiliary organizations shall ensure that fiscal procedures and management systems are in place, consistent with Section 42401 of Title 5, to ensure effective coordination of auxiliary activities with the campus and in accordance with sound business practices.

    2. Employees of the campus with documented delegation of fiscal authority, who may or may not be officers of the auxiliary organization, may request or approve the receipt or disbursement of funds held by a campus auxiliary organization, except those revenues listed in part D, below. The duly authorized chief operating officer of the auxiliary organization, or designees, shall establish documented corporate delegations of fiscal authority and ensure that receipts and disbursements comply with the auxiliary organization fiscal policies and internal controls, and with the written agreement with the university. The auxiliary organization shall retain any legal obligations and liabilities, fiscal liabilities, and fiduciary responsibilities associated with transactions initiated or approved by such campus employees with delegated authority.

    3. Auxiliary organizations may accept or administer campus funds as an agent of the university (except those revenues listed in part D below) when specifically authorized in writing by the campus president or his/her designee. Said authorization shall be granted judiciously and only when it is advantageous to the university and supportive of the university mission. The authorization should include the rationale for making this choice and clearly articulate the advantages to the university

    4. The following revenues shall be solely the revenues of the campus and shall be reported in compliance with Executive Order No. 1000: Delegation of Fiscal Authority and Responsibility.

      1. Revenues from CSU systemwide mandatory fees which includes student fees established and adjusted by the Board of Trustees and that must be paid to apply to, enroll in, or attend the university, or to pay the full cost of instruction required of some students by state statute.

      2. Revenues from campus mandatory fees which include student fees established for a campus and that must be paid to enroll in or attend the university.

      3. Revenues from campus student fees directly related to any state-supported course of instruction which includes Miscellaneous Course Fees and fees for materials, services, field trips, and travel.

      4. Revenues from fees paid by matriculated CSU students to attend campus self-supported instructional programs for academic credit.

    As the custodian of mandatory fees collected on behalf of a student body organization, the campus CFO may only disburse such funds upon the receipt of a request for payment. Other fees, if any, collected on behalf of a student body organization will be similarly administered unless otherwise designated by a student fee referendum.

    The campus shall also collect and be the custodian of student body center fees. The campus CFO is responsible for ensuring auxiliary organization expenditures of student center fees comply with the approved purposes of the fees and with Board of Trustees and campus policy.

Charles B. Reed Chancellor

June 6, 2011