1. Special Initiative Grants
YEAR-END LEGAL TRAINING
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Special Initiative Grants
Kristina Randig, Associate Director Management and Accounting Practices Office, Chancellor’s Office

2. YEAR-END LEGAL TRAINING
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Agenda
What are Special Initiative Grants?
Accounting for Special Initiative Grants
Resources
Definitions
Classification of award or grant as a scholarship
Compilation of the Awards and Grants Matrix
Accounting Entry Matrix
CPO process as it relates to Special Initiative Grants
Questions

3. What are Special Initiative Grants?
YEAR-END LEGAL TRAINING
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What are Special Initiative Grants?
Special Initiative Grants are defined as “system grants funded from CSU operating budget (CSU Fund 485) revenues.”
There are 4 Special Initiative Grants
CSUPERB - California State University Program for Education and Research in Biotechnology
COAST – Council on Ocean Affairs, Science and Technology
WRPI – Water Resources and Policy Initiative
ARI – Agricultural Research Initiative

4. YEAR-END LEGAL TRAINING
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CSUPERB
The mission of the CSU Program for Education and Research in Biotechnology is to develop a professional biotechnology workforce by mobilizing and supporting collaborative CSU student and faculty research, innovating education practices, and responding to anticipating the needs of the live science industry.
CSUPERB is recognized in the California Education Code Section
Host campus is San Diego State University (SDSU).

5. YEAR-END LEGAL TRAINING
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CSUPERB
Source of Funds
CO Budget Allocation
Campus tithe
Grants and Sponsorship (rare occasions)
Annual Symposium Registration Fees
Use of Funds
Program Administrative Costs
Grants and Awards for Faculty and Students
Faculty Assigned Time
Travel
Operating Expenses
Scholarships
Annual Symposium Registration Expenses

6. YEAR-END LEGAL TRAINING
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COAST
The mission of the Council on Ocean Affairs, Science and Technology is to provide vision, leadership, and support throughout the CSU system for education, policy and research related to California’s marine, estuarine, and coastal regions, and to promote the public dissemination of knowledge gained to foster stewardship and sustainable use of coast.
Through the efforts of the CSU Presidents and the Chancellor, the CSU Council on Ocean Affairs, Science and Technology (COAST) was established in 2008
Host campus is CSU Monterey Bay

7. YEAR-END LEGAL TRAINING
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COAST
Source of Funds
Systemwide Budget Allocation
Campus contributions
Grants and Sponsorships (outside of CSU)
Use of Funds
Program Administrative Costs
Grants and Awards for Faculty and Students
Faculty Assigned Time
Travel
Operating Expenses
Scholarships

8. YEAR-END LEGAL TRAINING
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WRPI
CSU's Water Resources and Policy Initiatives (WRPI) is developing water management solutions through research, partnerships, education and training that provides students with hands-on learning. The WRPI is focused on:
Educating communities about best practices for water management and creating a training program to help water managers in disadvantaged communities learn efficient water management.
Developing internship programs with the USDA and EPA so students can enter the workforce ready to develop solutions for business, government and the public.
Commercializing new ideas in water industries and services such as Fresno State’s Center for Irrigation Technology’s innovations that are making irrigation more efficient than ever.
Launched on July 1, 2008, under the leadership of Chancellor Charles B. Reed
Host campus is CSU San Bernardino

9. YEAR-END LEGAL TRAINING
APRIL 2016
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WRPI
Source of Funds
Systemwide Budget Allocation
Grants and Sponsorships (outside of CSU)
Use of Funds
Program Administrative Costs
Grants and Awards for Faculty and Students
Faculty Assigned Time
Travel
Operating Expenses
Scholarships

10. YEAR-END LEGAL TRAINING
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YEAR-END LEGAL TRAINING
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ARI
The Agricultural Research Initiative exemplifies the CSU working for California through university-industry partnerships. ARI provides a diversified, multicampus applied research program that annually matches $4 million in State General Funds with at least one-to-one external support for research on high-priority issues facing California agriculture.
Engages the collective expertise of the CSU’s four colleges of agriculture: Fresno, SLO, Pomona and Chico. Other campuses may be affiliated members.
Is part of the annual CA Governor's Budget each year
Host campus is Pomona

11. YEAR-END LEGAL TRAINING
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ARI
ARI engaged the collective expertise of the CSU’s four colleges of agriculture and focuses on applied research programs addressing high priority issues facing California agriculture. ARI was established in FY 1999 and is included as part of the CA Governor’s Budget each year. Host campus is Pomona and you can access information on the program at the ARI website.

12. CSU COAST-WRPI Student Research Poster Reception
YEAR-END LEGAL TRAINING
APRIL 2016
YEAR-END LEGAL TRAINING
APRIL 2016
CSU COAST-WRPI Student Research Poster Reception

13. Accounting for Special Initiative Grants
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YEAR-END LEGAL TRAINING
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Accounting for Special Initiative Grants
Resources available:
CSU Legal Accounting and Reporting Manual
Chapter 14 – CSU Operating Fund
Section 3.6 – Guidelines for Special Initiative Grants
Section 7.0 – Resources
Special Initiative Grants – CSU Business Process Procedures
Special Initiative Grants – Awards and Grants Matrix

14. Accounting for Special Initiative Grants
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Accounting for Special Initiative Grants
Campuses must record Special Initiative grants consistently across the CSU. Campuses shall establish a separate campus (PeopleSoft) fund within CSU fund 485 using one of the unique FNAT (Fund Attribute) keys listed below.
Not all Special Initiative Grants transactions require a Unique FNAT
These grants primarily fund research projects and, therefore, the program code associated with expenditures against them should derive to program code 0202, Individual and Project Research

15. Accounting Matrix (Refer to Handout)
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YEAR-END LEGAL TRAINING
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Accounting Matrix (Refer to Handout)

16. Host Campus versus Receiving Campus
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Host Campus versus Receiving Campus
Host Campus
The campus in charge of the Special Initiative Grant program in which they transfer award/grant funds to the campus recipients.
Receiving Campus
The campus receiving funds from the Host Campus.

17. YEAR-END LEGAL TRAINING
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Award versus Grant
Award
Generally, awards are based upon an application process. The funds are given to the campus to administer on behalf of the recipients. Generally awards are given in recognition of work already completed.
Grant
Generally, grants are awarded on behalf of the recipients and given for work to be performed in the future.

18. Scholarships versus Expense Reimbursement
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YEAR-END LEGAL TRAINING
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Scholarships versus Expense Reimbursement
Scholarships
The taxability of scholarships is governed by Internal Revenue Code (IRC) Section 117.
A scholarship is defined as an amount paid or allowed to, or for the benefit of, a student to aid such individual in pursuing his studies, including independent research that does not directly benefit the grantee.
A requirement that a recipient furnish periodic reports to the grantor for the purpose of keeping the grantor informed as to the general progress of the individual does not constitute the performance of services.

19. Scholarships versus Expense Reimbursement
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YEAR-END LEGAL TRAINING
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Scholarships versus Expense Reimbursement
Scholarships
Scholarships can be either qualified or nonqualified:
A qualified scholarship is one which is used to pay for tuition and related expenses at a qualified educational institution, such as any of the CSU schools. Tuition includes amounts paid for enrollment and “related expenses”, including such things as fees, books, supplies and equipment for courses. A qualified scholarship is nontaxable to the recipient.
A nonqualified scholarship is one which is used to pay for all other student expenses, such as room, board, and travel. A nonqualified scholarship is generally taxable to the recipient.
With regard to payment of travel costs, if the payment is made in support of the student’s educational pursuits (i.e. directly benefits the student and not the university), it is a scholarship.
Scholarship payments, whether taxable or nontaxable, are normally reportable in Box 5 of 1098-T.

20. Scholarships versus Expense Reimbursement
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APRIL 2016
YEAR-END LEGAL TRAINING
APRIL 2016
Scholarships versus Expense Reimbursement
Expense Reimbursements
It is under very narrow circumstances that a payment to a student will be deemed an expense reimbursement. The pertinent rule is that reimbursements can only be made for business expenses incurred by an employee in connection with the performance of the employee’s duties. A nonemployee student, therefore, can only receive a nontaxable reimbursement if incurring expenses on behalf of the university.
Examples of situations where reimbursement is appropriate: 
Where the expense incurred directly supports a faculty member’s project or research program.
Where the student incurs expenses when representing the university in the presentation of research at a conference.

21. YEAR-END LEGAL TRAINING
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Tax Resources
CSU Tax Administration Website
Guidance:
Scholarships v. Nontaxable Business Expense Reimbursements
Correspondence:
Analysis of Taxability of CSUPERB Awards to Students
Analysis of Taxability of University Expense Reimbursement

22. Awards and Grants Matrix (Refer to Handout)
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YEAR-END LEGAL TRAINING
APRIL 2016
Awards and Grants Matrix (Refer to Handout)

23. YEAR-END LEGAL TRAINING
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Entry 1
Entry records funds received by the host campus from the SW Budget Office.
Occurs once per year.
Entry does require unique FNAT for the host campus.

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Entry 2
Entry occurs once per year, if applicable, for Special Initiative Grants that tithe or contribute an agreed upon amount in support of the Special Initiative Grant.
Entry does require a unique FNAT by the host campus.
Entry does not require a unique FNAT, as it is a reallocation of the campus’ base budget to the host campus.

25. YEAR-END LEGAL TRAINING
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Entry 3
Entry is used to record an award or grant (1) that a campus (faculty member or student) has received.
(3) Entry does require a unique FNAT, for both the host and the receiving campus.
(3a) When the person expends against the grant or award at the campus, campus records expense using the proper object code and FNAT.
(1) See the Special Initiative Grants – Awards and Grants Matrix (Handout) for types of grants and awards (excluding financial aid).

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Entry 4
Entry occurs when the host campus requests another campus to provide a service or a faculty member to complete work on behalf of the Spec. Initiative Grant. For example:
CSUPERB asks Long Beach to print the annual report for CSUPERB. This is an expense of the Special Initiative Grant not the campus.
CSUPERB asks a faculty member from San Marcos to represent CSUPERB at a presentation or conference. This expense is not related to an award or grant given by the Special Initiative Grant.
Host Campus - entry requires a unique FNAT by the host campus as this is an expense of the host campus (or the Special Initiative Grant).
Receiving Campus - entry does not require a unique FNAT, as it is a an expense of the host campus to run the program. It is treated as a reimbursement to the receiving campus.

27. YEAR-END LEGAL TRAINING
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Entry 5
Entry used to record an award or grant that a campus (student) has received that meets the criteria of a scholarship (1). Note that for transaction types 5 and 5a, CSU fund 436 Agency Fund - Miscellaneous Financial Aid and Other Agency, needs to be used in this transaction.
Entry does require a unique FNAT, for the host campus only
Create an item type in the CFS Student Financial system within CSU Fund 436 to issue the financial aid to the recipient.
(1) See the Special Initiative Grants – Awards and Grants Matrix (Handout) for scholarship designation.

28. YEAR-END LEGAL TRAINING
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Example Profit and Loss Statement for Host Campus Data from FIRMS using FNAT

29. Cash Posting Order (CPO)
YEAR-END LEGAL TRAINING
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Cash Posting Order (CPO)
Ways you can help:
Adding a note under the special instructions is especially helpful.
This will insure that we insert the correct instructions to the campus(s).

30. Cash Posting Order (CPO)
YEAR-END LEGAL TRAINING
APRIL 2016
YEAR-END LEGAL TRAINING
APRIL 2016
Cash Posting Order (CPO)
How information appears on the CPO