Systemwide Revenue Bond Financial Statement Audit Terri Williams, SW Revenue Bonds & Capital...

Systemwide Revenue BondFinancial 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

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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:

• Housing Student Unions• Health Centers Continuing Education• Parking Auxiliary Organizations

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SRB Audit Requirement• Bond Indenture April 1, 2002

• Section 6.06. 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.

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SRB Financial Statements

• High Visibility

• Audience• Bond Holders Banking Industry• Institutional Investors Insurance Companies

• CSU Fund Integrity Is Critical

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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]

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Factors Impacting DSCR

• Proper recording of Pledged Revenue & Operating Expenditures

• Revenue & Expenditures recorded as Transfers

• Capital Expenditures recorded as Maintenance & Repairs

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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 2014 Year-End GAAP Training 8

PBC 152 – Detail of Transfers

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Transfer Analysis Using Data Warehouse Info

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PBC #54 – Investment Income Lead-Sheet (Exhibit 18)

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PBC #55 – Legal to GAAP Roll Forward of CSU Pool Investments (Exhibit 32)

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PBC #103 – Unearned Fees Calculation/Reasonableness Test (Exhibit 12)

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PBC #126 – Tuition and Fees Lead-Sheet (Exhibit 33)

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PBC #133 – Sales & Services of Auxiliary Enterprises (Exhibit 16)

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PBC #145 – Liability Lead-sheet (Exhibit 45)

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Auxiliary Organizations• CSU Fund 537

• SRB Related Activity• FNAT #128893• Project Code SRB000

• Recording Capital Lease Activity • Principal Payments Firms Object Code 580098• Interest Payments Firms Object Code 508092

• Recording Capital Loan Activity• Loan Payments from Aux (Prin. & Int.) Firms Object Code 250002

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Proper Legal Reporting is

Important!

Student Union Program

• CSU Fund 534

• Revenue = Student Body Center Fees Firms Object Code 504008

• Expense = Student Union Operating Expenses Firms Object Code 660045

• 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

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Student Union Program

• New Developments:

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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

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New Required Variance Form

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View in TM1

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Select a program

TM1 View

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Will be able to filter

Excel View

SRB Variance Q & A Form

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32

SRB Funds

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Key Deadlines

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The Team

www.calstate.edu

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