1. Auxiliary Organizations Update Chapter 8 Presented by Lily Wang Chancellor’s Office KPMG LLP

2. May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 2 Reporting Deadlines 4 th quarter FIRMS Audited Financial Statements and Supplementary Schedules (3 hard copies and 1 soft copy) FIRMS for IPEDS Campus President’s review of auxiliary organization’s audited financial statements A-133 Single Audit reports (1 hard copy and 1 soft copy) for those entities required to have a single audit Due July 31, 2008 Due September 30, 2008 Due October 31, 2008 Due December 1, 2008 Due December 15, 2008 or as early as available

3. May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 3 Planning and Coordination Between Campus and Auxiliary Organization Auxiliary Organization meets required timeframe and manner that is necessary for inclusion in the basic financial statements of the campus. Campus reviews a draft of the auxiliary organization’s financial statements to ensure the accuracy and completeness of the supplementary information. Campus should attend the entrance and exit conferences of the Auxiliary Organizations and their independent audit firms or develop another method of monitoring the Auxiliary Organizations’ audit process Notify the Auxiliary Organizations of the timing of the campus audit to ensure that key Auxiliary Organizations personnel are available during audit fieldwork and during the time surrounding the submission deadline of the campus reporting package to the Chancellor’s Office Auxiliary Organizations are required to complete a GAAP financial reporting checklist (included in Chapter 8, Attachment A ‑ 1). It is important that all inter-entity accounts and transactions be reconciled with the respective Auxiliary Organizations prior to the issuance of the Auxiliary Organizations’ financial statements.

4. May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 4 Systemwide Revenue Bonds (SRB) with Auxiliary Organizations Auxiliary Organizations who are participating in the SRB financing should work with the campus, and consult the Chancellor’s Office, independent auditors of the auxiliary organization and the independent auditor of the campus to determine the 1) proper accounting treatment for the transaction, and 2) consistency in accounting treatment within the CSU as a whole.

5. May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 5 Supplementary Information Template Footnote 2 - Composition of Investments New Broke out noncurrent investments between unrestricted and restricted Endowment investments should be backed out under restricted noncurrent investments column FN 2.1 - List restricted noncurrent investments related to (e.g. Perkins loan program) Changed MetWest to Wachovia

6. May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 6 Supplementary Information Template Footnote 8 - Transactions with Related Entities New Reimbursements to University for salaries of University personnel working on contracts, grants, and other programs Reimbursements to University for other than salaries of University personnel Payments received from University for services space, and programs Gifts-in-kind to the University from Auxiliary Organizations Amounts (payable to) University (enter as negative number) Amounts receivable from University

7. May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 7 New GASB Pronouncements Chapter 14 of the GAAP manual provides new accounting pronouncements and the effective date of each application. Following are effective as of June 30, 2008: GASB 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions - All component units should implement no later than the same year as their primary government per paragraph 36. FASB auxiliaries should follow FAS 106 and 158, an amendment to 106 with additional requirements to consider on a going forward basis GASB 47 Accounting for Termination Benefits - Two Parts Part 1 - For termination benefits provided through a defined OPEB plan, provisions should be implemented simultaneously with GASB 45 Part 2 - For all other termination benefits, this statement was effective June 30, 2006 GASB 48 Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues GASB 50 Pension Disclosures, an amendment of GASB 25 and 27 - No impact to CSU. Because CSU participates in a cost sharing multi- employer pension plan with the State, the information is not available at the entity level

8. May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 8 References Financial Accounting Services Training, Education & Development Portal https://zeta.calstate.edu:8250/portal/page?_pageid=7 4,1&_dad=portal&_schema=PORTAL https://zeta.calstate.edu:8250/portal/page?_pageid=7 4,1&_dad=portal&_schema=PORTAL GAAP Manual 2008 http://www.calstate.edu/SFSR/GAAP/Manual2008/GA AP_Manual.shtml http://www.calstate.edu/SFSR/GAAP/Manual2008/GA AP_Manual.shtml Auxiliary Organization FIRMS Template 2008 http://www.calstate.edu/SFSR/y-e-r_instructions/2007- 2008/index.shtml http://www.calstate.edu/SFSR/y-e-r_instructions/2007- 2008/index.shtml IPEDS Template 2008 http://www.calstate.edu/sfsr/