Legal Basis ReportingSystemwide Accounting

May 2009

Kelly Cox Manager, Systemwide Accounting

(562) 951 4611kcox@calstate.edu

http://www.calstate.edu/acct/

Topics Cash Posting Orders (CPOs)

Bank of CSU Website Accounting for SWIFT Investments Interagency Payments California State University, Risk Management Authority

(CSURMA) Accounting Accounting for Campus Loans Prior Year Payroll Reimbursed Activities Systemwide Revenue Bond Accounting

Legal Basis ReportingSystemwide Accounting

Cash Posting Order (CPO) Mechanism to move SWIFT dollars between campuses

and the CO Examples:

Redemption/Investment in SWIFT (Cash Positioning) Charge for a product or service Reimbursement of expenditures Systemwide Allocation Transfer (SWAT) Request for Cash Transfer Order (RCTO)

CPO should be recorded exactly as indicated on memo This will reduce the number of GAAP elimination entries

needed. Notify the CO contact listed on the CPO memo if you are

unable to comply with the posting instructions3

Cash Posting Orders

Cash Posting Orders Systemwide Allocation Transfer (SWAT)

Supplemental campus funding from the Priority Fund SWATs may only be used for Operating Funds (CSU Fund

485) The campus will always record as a SWAT in 506100

Request for Cash Transfer Order (RCTO) CO department (e.g. Academic Senate) transfers funds to a

campus for additional support or reimbursement RCTO may only be used for Lottery Funds (CSU Funds 481)

and Operating Funds (CSU Fund 485) Operating Funds will be recorded as a SWAT in 506100 Lottery Funds will be recorded as a transfer in 571000

Cash Posting Orders

Bank of CSU If you need copies of CPOs, visit the

Bank of CSU website www.calstate.edu/bank

This site list all the CPOs related to your campus by month with a brief description of the transaction.

Questions on CPOs can be directed to:

cmo@calstate.edu

Lilian Audet laudet@calstate.edu 562.951.4209

Kelly Cox kcox@calstate.edu 562.951.4611

Sean Boylan sboylan@calstate.edu 562.951.4619

Cash Posting Orders

Accounting for Investment Earnings Investment Earnings are allocated to the SWIFT campus

accounts Allocated on quarterly basis Campus records allocation in Pooled Investment Fund

(CSU Fund 541) based on the CPO instructions Income is allocated internally within campus funds

according to that campus’ allocation policy Net Income in the Pooled Investment Fund is zero at end

of fiscal year “no fund balance”

GAAP entry will be made to record June earnings and classify appropriately

Investment Earnings

Accounting for Investment Earnings

Quarters are: First Quarter = Jun, Jul, Aug Second Quarter = Sep, Oct, Nov Third Quarter = Dec, Jan, Feb Fourth Quarter = Mar, Apr, May

Note: Campuses will receive an ADNOAT to record June earnings for GAAP adjustment purposes.

Benefits: To record all investment earnings consistently across all

campuses To record in a timely manner for legal basis close

Investment Earnings

Accounting for Investment Earnings Campus investment earnings allocation are net of

charges Allowable Charges in the Pooled Investment Fund (CSU

Fund 541) Wells Fargo Bank charges Investment Services Chancellor’s Office Indirect support

Investment Earnings

Accounting for Investment EarningsCampus Quarterly Earnings Accounting Entries1) SWIFT allocation to Campus of $1,500,000

Debit Fund 541, Acct 108090, Investments $1,500,000 Credit Fund 541, Acct 508001, Income from External

Investments $1,500,000

2) Wells Fargo Bank (WFB) charges to campus of $2,500 Debit Fund 541, Acct 660046, WFB Charges $2,500 Credit Fund 541, Acct 108090, Investments $2,500

3) CO Indirect Support charges to campus of $2,500 Debit Fund 541, Acct 660047, CO Indirect Support $2,500 Credit Fund 541, Acct 108090, Investments $2,500

4) Investment Services charges to campus of $10,000 Debit Fund 541, Acct 660049, Investment Services $10,000 Credit Fund 541, Acct 108090, Investments $10,000

Investment Earnings

Accounting for Investment EarningsAccounting Entries for campus allocation of interest to

other funds5) Campus investment earnings allocation to other funds

$1,500,000 - $2,500 - $2,500-$10,000 = $1,485,000 Debit Fund 541, Acct 508001, Income from

External Investments $1,485,000 Credit Fund 541, Acct 108090, Investments $1,485,000

Important! Fund Balance in CSU Fund 541 should be zero at year end Credit balance in 508001 will equal the combined balance in 660046,

660047 & 660049 so fund balance will net zero. No due to or due from entries are allowed

Investment Earnings

Accounting for Investment EarningsAccounting Entries for campus allocation of interest to other

funds –con’t6) In CSU Fund 485, CSU Operating Fund

Debit Fund 485, Acct 108090, Investments $700,000 Credit Fund 485, Acct 508001, Income from

External Investments $ 700,000

7) Other CSU Funds in 0948 Debit to CSU funds, Acct 108090, Investments $ 785,000 Credit to CSU funds, Acct 508001, Income from

Ext Investments $ 785,000

Important! For CSU Fund 485, Earnings must record in FNAT Key 127942 which uses FIRMS Project: INTAC RMP-Interest Income Activity

Investment Earnings

Accounting for Investment Earnings Campuses receive an ADNOAT July 27th for their June

net earnings "Changes in Unrealized Gain/Loss" are no longer

included in the monthly investment earnings calculation effective 7/1/2008. The unrealized activity will be held in the SWIFT pool clearing account for tracking purposes and then passed down to campuses for GAAP reporting.

no legal entry required

Investment Earnings

Interagency Payments When paying outstanding invoices, use wire transfers or ACH

payments!!! If a check must be cut, please mail checks out by Tuesday,

6/23 to be received by Tuesday, 6/30.

If payment is made after this date, please email Accounting to verify that we have received the payment. If not, entries are needed so we all pass the manual FIRMS edit.

mwong@calstate.edu for payments to CSURMA

solivas@calstate.edu for all other payments

The CO will follow this same practice when paying campus outstanding invoices.

Interagency Payments

How to Record CSURMA Expenses/Reimbursements CSURMA expenditures need to be

consistently recorded across the CSU Non-Industrial Disability Leave (NDI) /

Industrial Disability Leave (IDL) payments should be recorded to 603009:Non-Industrial Disability & 603008:Industrial Disability BUT the reimbursement (& YE Accrual) from CSURMA should be credited to 660011:Insurance Claim NDI/IDL. Note: At year-end the sum of these accounts should net zero.

Unemployment Insurance (UI) payments to EDD should be coded to 603010: Unemployment Compensation AND the reimbursement (& YE Accrual) from CSURMA should be a credited to 603010. Note: At year-end, 603010 should net zero

California State University, Risk Management Authority

(CSURMA)

Premiums Object CodeGeneral Liability Premiums, AIME Premiums, Auto Liability & AORMA Liability Premiums 660010Workers' Comp Premiums & AO Comp Premiums 660010NDI/IDL/UI Premiums 660010Property Premiums & AORMA Purchased Insurance Premiums 660010Purchased Property Liab Prem to Alliant by CSURMA on behalf of campuses & Aux Orgs 660010Payroll ExpenseNDI Non-Industrial Disability 603009IDL Industrial Disability 603008Payment to EDDUI Unemployment Compensation 603010ReimbursementsNDI/IDL billed to CSURMA by campus 660011 (CR)UI billed to CSURMA by campus 603010 (CR)

How to Record CSURMA Expenses/Reimbursements Payments to CSURMA for deductible

amounts should be recorded to 660012: Insurance Claim Deductible.

Should only be used for Deductible payments.

Account should tie back to all 4 quarter deductible amounts plus any property deductible entries made.

Dividends should be credited against the original premium expense in 660010: Insurance Premium Expense

California State University, Risk Management Authority

(CSURMA)

Object CodeDeductiblesReimburse CSURMA for deductibles paid on behalf of campus/CO for General Liability& AORMA Liability claims. 660012Property Deductibles 660012DividendsAIME & AORMA Liability Dividends 660010 (CR)Workers' Comp & AO Comp Dividends 660010 (CR)

IDL/NDI/UI Accruals AR to the Campuses & AP to CSURMA Due to the interagency transactions between CSURMA and the

campus, the recording of the IDL/NDI/UI activity needs to be properly communicated between both groups

Actual invoices or estimated accruals from the campuses should be emailed to Mandy (mwong@calstate.edu) by 7/1

Either a pdf of the actual invoice or an email listing the amounts

Campus MUST indicate what CSU fund that will record the accrual on their Legal books

When recording in 0948, the campus entry would be 131547, Due from CSU 547 - TF CSU Risk Mgmt

A confirmation of these accruals will be included on the CO Interagency Receivables, Payables and Transfers ADNOAT published on or before July 7th

California State University, Risk Management Authority

(CSURMA)

Deductible RecoveryAP to the Campuses & AR to CSURMA

• The CSURMA Deductible Recovery ADNOATs will be posted no later than end of business on July 7th

• The campus entry will be 231547, Due to CSU 547 - TF CSU Risk Mgmt

• Our assumption is that the campuses will record this entry in 485. If not, email Mandy Wong (mwong@calstate.edu) indicating in which CSU fund it will be recorded

• This must tie so we all pass the manual FIRMS edit!!!  

California State University, Risk Management Authority

(CSURMA)

Campus Loans In a year where a Trust fund has no reserve balance and expenditures

exceed revenues, the result is an overall deficit balance. In this case, a loan must be made from another self-supporting activity on the campus. The loan will not affect the fund balance, but will increase cash and create a liability.

A loan document should be created to specify the terms of the loan including the interest rate and repayment terms.

To book the entry initial loan: Due to/from FIRMS Object Codes at the CSU Fund level for principal (ex. 130441 &

230464) Do not use Transfer in/out to record Loan activity

108090: External Investments To record the accrual of quarterly interest activity:

660004: Interfund Interest Expense / 580012: Interfund Interest Revenue Due to/from FIRMS Object Codes at the CSU Fund level (ex. 130441 & 230464)

To book the loan payoff: Due to/from FIRMS Object Codes at the CSU Fund level for both principal and interest (ex.

130441 & 230464) 108090: External Investments

Campus Loans

Change your payroll headers!!! Prior period payroll activities occur in our old funds

because the payroll headers on the adjustments still reflect our old data

Changes are needed to ALL payroll headers prior submission of payroll to the SCO

To correct prior period payroll activity form STD 407 (Changes in Payroll Header) must be completed and submitted to the SCO

No PFA will be accepted to move from 0001/0573/0580 to 0948 Campus Payroll Departments have access to the information

needed to complete the form not Accounting. SCO Resource: http://www.sco.ca.gov/Files-PPSD/PPM/c.pdf

Prior Year Payroll Activity

Definition and Usage Reimbursed Activity can only be used in CSU Funds 485

or 499 for costs that are incurred by the university on behalf of a third party

Must not be used for campus regular, on-going activities. Program code 1100 CAN be used for 2008/2009.

Reimbursed Activities

SRB Audit Starts with FIRMS data It is critical to ensure our legal data is consistently reported so that

we have a smooth SRB audit. There should never be any SRB-related activity recorded in CSU

Fund 461: TF-Associated Student Body Trust The CSU Fund is used to collect the ASB fee on behalf of the

Associated Students auxiliary organization and transfers the funds to the auxiliary organization. Refer to RMP Implementation Guide #21 ASB Fee Document at http://www.calstate.edu/BF/rmp/

ASB Fees are different from Student Union Fees.  Student Union Fees should be captured in CSU Fund 534.  The two fees should not be co-mingled.

There should never be any SRB-related activity recorded in CSU Fund CSU Fund 462: TF-Campus Union Operating Revenue Trust.

It has been eliminated and therefore all Student Union SRB entries should be recorded to CSU Fund 534: TF Campus Union-Operations and Revenue

Systemwide Revenue Bond (SRB)

SRB Audit Starts with FIRMS data CSU Fund 534: TF Campus Union-Operations and Revenue

Return of Surplus Check(s) to the Auxiliary Student Unions should be recorded to object code 660045: Return of Surplus.

Please email scanned copies of check(s) AND backup to Terri M. Williams tmwilliams@calstate.edu

CSU fund 537: TF Auxiliary Org.-Operations and Revenue is mainly for SRB related activity.

If you have non-SRB transactions (Deposits held for an auxiliary org that is not a Campus Union) the PS fund need a special FNAT key, FNAT #127073

FNAT #128893 for SRB Transactions

Systemwide Revenue Bond (SRB)

CSU Fund 537: TF Auxiliary Org For SRB Debt issued prior to 1/2008 Receipts of Auxiliary Base Rental Payments should be recorded as

follows: For principal payment:

Since no lease receivable is established in legal, record the payment in the new object code 580098 "auxiliary lease principle payment", mapped to GAAP account 723006.

For interest payment: Use the existing object code 508001 "Income from external

investments", mapped to GAAP account 723003. Please do NOT record May and June accrual of the Auxiliary Base

Rental interest payment in legal. This will be a GAAP accrual.

Systemwide Revenue Bond (SRB)

CSU Fund 537: TF Auxiliary Org For SRB Debt issued after 1/2008 through a loan rather

than a lease: Due to the approval of Senate Bill 855 which provides the

authority to issue bonds on behalf of auxiliaries Since the loan is between CO and the auxiliary directly,

campus acts as an agency only and the receipt of auxiliary base rental payments should not have a P&L impact to campus book. Receipts of Auxiliary Base Rental Payments and interests

should be credited the object code 250002 unclear collection (other current liability).

When the payments and interests are remitted to CO, debit the object code 250002 (other current liability).

Systemwide Revenue Bond (SRB)

Student Union Decentralization The Student Union Decentralization will cause the campus SAM99 report

to be out of balance in some SCO funds. The CO SAM99 will also be out of balance for those same funds in an equal amount but in the opposite direction. On a systemwide basis the combined SAM99 errors will net zero for each SCO fund involved.

Please refer to the AD NOAT 08-064, 08-065, 08-078, 08-079, 08-085, 08-104, &08-105 for recording information and supporting documentation to our SAM99 reconciliation

Those campuses are: Northridge, Fullerton, Chico, San Francisco, San Diego, San Luis

Obispo, & San Jose  For specific questions regarding this issue please contact:

Brian Lee: Lead Revenue Bond Accountant (562) 951-4399 or blee@calstate.edu

Systemwide Revenue Bond (SRB)

Fund Balance Clearing Adjustments Fund balance adjustments for the CSU Dormitory Revenue fund

(SCO Fund 580) and the CSU Dormitory Building Maintenance and Equipment Repair Fund (SCO Fund 0575) due to Prior Year out of Balances that resulted in Errors to the Fund Balance Clearing Account.

This will cause your SAM99 to be out of balance Please refer to the Code AD NOAT 09-020 for the supporting

documentation to be included in our SAM99 reconciliation  For specific questions regarding this issue please contact:

Brian Lee: Lead Revenue Bond Accountant (562) 951-4399 or blee@calstate.edu

Systemwide Revenue Bond (SRB)

Spend Down!! 580: Calif State University Dorm Revenue Fund (DRF)

Spend down by 6/30 OR November Debt Service will consume ALL of the CSU’s remaining balances!!

If you have other plans please notify: Terri M. Williams

Revenue Bond Accounting and Financial Reporting Supervisor (562) 951-4386 or tmwilliams@calstate.edu

Brian Lee: Lead Revenue Bond Accountant (562) 951-4399 or blee@calstate.edu

Continue to spend down 575: State College Dorm Bldg Maint and Equip Res Fund.

No systemwide plan yet but we are still thinking!

Systemwide Revenue Bond (SRB)

www.calstate.edu