Systemwide Revenue Bond Financial Statement Audit Terri Williams, SW Revenue Bonds & Capital Projects Chancellor’s Office Year-End GAAP Training April 18, 2014

Revenue Bond Program Overview & Requirements SRB Required Lead-sheets Legal Reporting Reminders Auxiliary Organizations Student Unions Q & A Flux Analysis New Variance Comment Form Variance Q & A Form Key Dates and Deadlines Department Contacts April 2014Year-End GAAP Training2 SRB Program

SRB Debt Outstanding 2002 – System-Wide Revenue Bond (SRB) program Bonds issued by the Board of Trustees June 30, 2013 – SRB debt outstanding: $3.6 billion All campuses plus Chancellor’s Office participate Programs benefiting from SRB bonds: HousingStudent Unions Health CentersContinuing Education ParkingAuxiliary Organizations April 2014Year-End GAAP Training3

SRB Audit Requirement Bond Indenture April 1, 2002 Section Accounting Records and Financial Statements (a) … accurate entries shall be made in accordance with industry standards of all transactions relating to the proceeds of Bonds, the Gross Revenues, and all funds and accounts established pursuant to this Indenture. (b) …after the end of each Fiscal Year of the Board…the Board will furnish to the Trustee a detailed, certified report of audit, … prepared by an Independent Certified Public Accountant…showing the Gross Revenues and expenses ( by major classification) for such period. April 2014Year-End GAAP Training4

SRB Financial Statements High Visibility Audience Bond HoldersBanking Industry Institutional InvestorsInsurance Companies CSU Fund Integrity Is Critical April 2014Year-End GAAP Training5

Tax-Exempt Bond Requirements Financing Policy – Key Benchmarks: Campus proposals in line with Executive Order 994 Debt Service Coverage Ratios* Campus: minimum 1.35 overall Program: minimum 1.10 Auxiliary organizations: 1.25 *[net income/annual debt service] April 2014Year-End GAAP Training6

Factors Impacting DSCR Proper recording of Pledged Revenue & Operating Expenditures Revenue & Expenditures recorded as Transfers Capital Expenditures recorded as Maintenance & Repairs April 2014Year-End GAAP Training7

SRB Required Lead-sheets Investment Income Lead-Sheet (Exhibit 18) Legal to GAAP RF of CSU Pool Investments (Exhibit 32) Unearned revenue reasonableness test (Exhibit 12) Student Tuition and fees (Exhibit 33) Sales & services of auxiliary enterprise revenues (Exhibit 16) Liability Lead-Sheet (Exhibit 36) Detail of Transfers – PBC 152 April 2014Year-End GAAP Training8

PBC 152 – Detail of Transfers April 2014Year-End GAAP Training9

Transfer Analysis Using Data Warehouse Info April 2014Year-End GAAP Training10

PBC #54 – Investment Income Lead-Sheet (Exhibit 18) April 2014Year-End GAAP Training11

PBC #55 – Legal to GAAP Roll Forward of CSU Pool Investments (Exhibit 32) April 2014Year-End GAAP Training12

PBC #103 – Unearned Fees Calculation/Reasonableness Test (Exhibit 12) April 2014Year-End GAAP Training13

PBC #126 – Tuition and Fees Lead-Sheet (Exhibit 33) April 2014Year-End GAAP Training14

PBC #133 – Sales & Services of Auxiliary Enterprises (Exhibit 16) April 2014Year-End GAAP Training15

PBC #145 – Liability Lead-sheet (Exhibit 45) April 2014Year-End GAAP Training16

Auxiliary Organizations CSU Fund 537 SRB Related Activity FNAT # Project Code SRB000 Recording Capital Lease Activity Principal Payments Firms Object Code Interest Payments Firms Object Code Recording Capital Loan Activity Loan Payments from Aux (Prin. & Int.) Firms Object Code April 2014Year-End GAAP Training17 Proper Legal Reporting is Important!

Student Union Program CSU Fund 534 Revenue = Student Body Center Fees Firms Object Code Expense = Student Union Operating Expenses Firms Object Code Support Required to document expenditures: Copies of Operating Expenditure Checks ( aka Return of Surplus) Budgets Check Requests Memorandums Submission Date for support required: August 25, 2014 April 2014Year-End GAAP Training18

Student Union Program New Developments: April 2014Year-End GAAP Training19

Q & A Flux Analysis Process Changes Initial Comments will be entered in a new view Webcast will be offered to review new process (TBA) Follow up comments will be entered in Q & A Form April 2014Year-End GAAP Training20

New Required Variance Form April 2014Year-End GAAP Training21

April 2014Year-End GAAP Training22 View in TM1

April 2014Year-End GAAP Training23 Select a program TM1 View

April 2014Year-End GAAP Training24 Will be able to filter Excel View

SRB Variance Q & A Form April 2014Year-End GAAP Training25

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April 2014Year-End GAAP Training31

32 SRB Funds

April 2014Year-End GAAP Training33 Key Deadlines

April 2014Year-End GAAP Training34 The Team

April 2014Year-End GAAP Training35