340 Fiscal Services

The Vice President for Administration and Finance, the Chief Fiscal Officer of the campus, shall be responsible for the performance of those functions related to the receipt, deposit, management, investment and disbursement of cash and other financial assets; receipt, management and liquidation of University property; operation and maintenance of financial data processing systems; recording and disclosure of financial transactions, results of operations and related data; and establishment and maintenance of adequate and appropriate internal controls.

In accordance with campus policies and under selected delegations of authority by the Vice President for Administration and Finance, the Fiscal Services Department shall assist in carrying out the above responsibilities in an efficient, effective and customer friendly manner; in conformance with applicable rules and laws; and without unnecessary exposure to liability and/or risk. The hierarchy of rules and laws, from highest to lowest, shall be as follows: Federal and State law; State regulations (Title 5); resolutions and rules of the CSU Board of Trustees; orders of the Chancellor; and orders of the campus President.

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341 Cash, Income and Investments

All cash, checks and other payments related to University accounts shall be received and deposited by the University Cashier in the Fiscal Services Department. No other departments are authorized to collect funds unless authorized in writing by the Director of Fiscal Services.

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341.1 Income from Fees and Charges

The trustees of the CSU are authorized to require all persons to pay fees, rents, deposits, and charges for services, facilities or materials provided by the trustees to such persons. The trustees have exercised this authority by establishing various fees and by delegating some authority to the Chancellor and/or to the Presidents. The Chancellor in turn has also delegated some authority to the Presidents.

341.1.1 Fees and Charges

Fees may be collected as a prerequisite to registration in classes in order to offset the costs of educational facilities and programs that are provided for the benefit of all enrolled students. In accordance with CSU policy and state statutes, these fees are deposited either in the General Fund as a source of general operating revenues or in other funds that have been established for designated purposes.

Other fees and charges may be collected where necessary to recover the cost of goods, services, and facilities provided to users who elect to utilize such goods, services, and facilities. These fees and charges shall be structured in a manner that will encourage the most effective and efficient use of such goods, services, and facilities.

Fee policy, including authority to establish and revise fees, is set by the CSU Board of Trustees. In some cases authority to establish and/or adjust fees has been delegated by the Trustees to the Chancellor or the presidents.

341.1.2 Other Charges

Users of campus facilities, goods, and services, including auxiliary enterprises, shall compensate the State for all direct costs and for an appropriate allocation of indirect costs.

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  1. Any laws, regulations or codes of practice which should be referred to in conjunction with the policy:
    1. California Education Code 89700
    2. CSU Executive Order 740
    3. CSU Executive Order 753
    4. California Administrative Code
    5. Title 5 (various)

341.2 Income from Contracts and Grants

341.2.1 Direct Cost Recovery

All direct costs incurred in support of contracts and grants shall be recovered unless there is a benefit to the university that offsets any direct costs that are not recovered. Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity or any other institutional activity, or that can be directly assigned to such activities readily and with a high degree of accuracy.

341.2.2 Indirect Cost Recovery

The University shall seek full indirect cost reimbursement for research and development, training, and other sponsored work performed by the University under grants, contracts, and other agreements with the Federal Government. These agreements are referred to as sponsored agreements and the activities conducted under them are referred to as sponsored activities. Indirect costs, as defined by the Department of Health and Human Services (DHHS), are those costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.

Because indirect costs are real expenses, funds recovered through indirect cost reimbursements are not available to provide additional support for the direct expenses of a project. As indirect cost reimbursements for projects administered fiscally either by the University or by the Foundation are accumulated, they may be utilized by the respective business offices to pay for the financial administration of the projects according to the approved rate. All other recovered funds shall be placed in appropriate Foundation or University trust accounts and shall be used for covering associated costs and for sharing throughout the University.

The indirect cost income received from these grants and contracts shall be distributed in the following order: Foundation controlled: 100% of the administration costs of the Sponsored Programs Office is recovered first; then 100% of the cost of the research facility is recovered; then a reserve is set aside for contingencies, such as audit adjustments. The next level of distribution shall remain in Foundation accounts but shall be University controlled and shall be distributed in the following order: 100% of the cost of Foundation employees and other costs of the Grants Development Office; Centers, Institutes, and Academic Departments that meet certain requirements receive a share; finally, any remaining indirect cost income is put into a research investment pool for continued research and development.

Grants and contracts that are awarded to and administered by the University are usually inter-agency agreements with other State agencies. The indirect cost recoveries associated with these grants and contracts are usually well below the negotiated indirect cost rate for the campus and also less than the cost of administering these grants. Of the amount of such costs recovered, 75% shall be credited to Fiscal Services and the remaining 25% shall be distributed to the Office of Research and Graduate Programs and distributed based upon a proposal for the use of the unallocated overhead that is developed by the Dean for Research and Graduate Programs and sent to the President for approval.

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341.3 Investment Income

Cal Poly, as a California State University (CSU) campus, is authorized to invest trust funds. Funds shall be invested in accordance with current CSU policy by any means authorized for the investment of State money.

341.3.1 Report on Investment Performance

The Director of Fiscal Services shall prepare an annual report to the Vice President for Administration and Finance on the performance of the portfolio.

341.3.2 Investments Committee

An Investments Committee shall provide guidance regarding investment decisions as indicated in the investment policy. The committee shall include the Vice President for Administration and Finance, the Associate Vice President for Finance, and the Director of Fiscal Services. The Investment Committee shall review all revisions to the investment policy.

341.3.3 Sources of Investment Cash

Trust Fund deposits may include gifts and donations; scholarship and loan funds; federal grants and contracts; deposits; optional fees and charges; instructionally related activities fees and program income; fees for parking, health facilities or health services, and for self-supporting instructional programs; and revenue received by the trustees from the California State Lottery Education Fund. Trust fund balances shall be considered available for investment unless excluded by law or policy or required for current operations.

Student body funds shall be invested by Cal Poly under the direction of the Chief Fiscal Officer via the CSU Trust Fund. An agreement with ASI covers the investment of these funds.

341.3.4 Sources of Investment Cash

In accordance with current CSU policy, all investments shall be managed by an external investment manager appointed by the Office of the Chancellor. All eligible trust deposits (with the exception of those that may be used for internal loans as described herein) are transmitted by the campuses for investment purposes. All external investments shall be made via one of the CSU investment pools.

Funds may be loaned within or between funds, as authorized by the Associate Vice President for Finance based on the recommendation of the Director of Fiscal Services. The arrangements shall be documented, and interest shall be paid at a reasonable rate.

341.3.5 Distribution of Investment Income

Income from investments, from negative balances, and from internal loans shall be distributed semi-annually on the basis of income actually received or reported by the investment manager during the prior six month periods from July 1 through December 31 and from January 1 through June 30.

341.3.6 Administration Charge

Seven percent of all interest income earned shall be credited to Fiscal Services in compensation for management of the investment program. This charge shall be deducted from interest earned prior to computing the rate of interest earned for distribution purposes.

341.3.7 Administration Charge

Unless stipulated by an agreement external to this policy, the following distribution classes shall be utilized to determine if an account is interest bearing, and if so, the distribution process that will apply:

341.3.8 Endowment, Quasi Endowment and Related Reserve and Operating Accounts

A target rate will be established for endowment and quasi-endowment spending. Interest up to the target rate shall be credited to each endowment account and interest in excess of the target rate shall be held in related reserve accounts. Such reserve balances may be used to supplement distributions at times if the interest earned is less than the target rate.

341.3.9 Other Interest Bearing Accounts

Similar rules shall apply to the distribution of interest to other interest bearing accounts, except that income in excess of the target rate shall be deposited to a single reserve account, a maximum reserve balance shall be established and maintained in that account, and reserves in excess of that maximum shall be distributed in accordance with a formula approved by the Director of Finance. Other interest bearing accounts shall include: Campus Administered Scholarship and Loan Accounts, Perkins Loan Funds, Federal Financial Aid Grant Funds, IRA Accounts, and other gift and donation accounts.

341.3.10 Non-interest Bearing Accounts

Any interest earned on non-interest bearing accounts shall be credited to Fiscal Services in compensation for the cost of administering these accounts. Non-interest bearing accounts shall include: miscellaneous course fee accounts, Scholarship Accounts - externally designated recipients, State Financial Aid Grant Funds, miscellaneous deposits, optional fees and charges, and others as determined.

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342 Disbursements/Expenditures

Disbursements shall refer to the payment process for payroll, purchases, or other expenditures. Expenditures shall be recorded through the payroll process, through one of the authorized disbursement processes or by approved expenditure transfers. The authorized disbursement processes shall include those processes approved for payment of state obligations for goods and services obtained under University contract and procurement policies, advances and reimbursements for employee business travel expenses, petty cash reimbursements and one time services expenditures, and the financial aid distribution processes.

Approval of all expenditures, including expenditures from trust accounts, will be accomplished through procedures established by the Director of Fiscal Services and approved by the Associate Vice President for Finance. These procedures will ensure that expenditures are made for authorized purposes in accordance with University policy, and that responsible administrators are provided with appropriate opportunity to review the transactions related to such expenditures prior to and/or subsequent to actual disbursements. Procedures will be designed to provide a reasonable level of control relative to risk of improper disbursements and will be reevaluated periodically based on experience.

342.1 Expenditure Transfers

Expenditures may be transferred only between State managed accounts and only with the approval of the organization to be charged. Expenditures incurred by Cal Poly auxiliaries or other non-State entities may not be transferred to State accounts.

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342.2 Disbursement of Financial Aid

Financial aid funds shall be disbursed through the Student Accounts Office at the beginning of every quarter and at other times as appropriate. The funds shall be available to students once they have met requirements as specified by the Financial Aid Office and State and Federal regulations.

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342.3 Payments to Contractors and Other Vendors

Payments for state obligations for materials received and services rendered and advances and reimbursements for travel shall be issued through the Accounts Payable Office. The Assistant Director of Payments Management shall be responsible for the final determination as to whether an individual should be classified as an employee or an independent contractor. This determination shall be based on guidelines issued by the Internal Revenue Service and Employment Development Department of the State of California. An individual who is already an employee of the University shall be considered an employee for any additional services provided.

Most payments in excess of $1,000 to contractors and vendors are authorized by purchase orders. Direct expenses are allowed without a purchase order for memberships and subscriptions, and for one-time services under $1,000 such as guest lecturers, petty cash reimbursements and credit card charges.

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342.4 Reimbursement of Employee Expenditures

Expenditures by employees for approved state purposes may be reimbursed upon approval of their supervisor and as authorized by the State Administrative Manual. No expenditures shall be made for any items used for personal benefit.

342.4.1 Travel, Moving & Relocation, and Other Business Expenses

The California State University Policy and Procedures Governing Travel and Relocation Expense Reimbursement document provides guidelines for reimbursement of employee travel expenses, other employee expenses such as overtime meals and business related meals, out-of-pocket expenses of applicants for University positions, and moving and relocation expenses.

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342.5 Employee Compensation

342.5.1 State Payroll

Salaries of State employees shall be disbursed according to guidelines prescribed by the State Controller’s Office and the CSU.

342.5.2 Pay Dates

The Department of Finance, Fiscal Systems and Consulting Unit prescribes beginning and ending pay period dates. The Cal Poly Payroll Calendar shall list pay dates for all pay plans, observed holidays, and payroll deadlines.

Pay Warrants/Direct Deposit Advices for Faculty and Staff, Intermittent Staff, Overtime/Shift differential, Special Pay, and other supplemental payments shall be released by the University Cashier at 3 p.m. on the prescribed dates as listed on the payroll calendar, subject to availability.

Pay Warrants/Direct Deposit Advices for Student employees shall be released by the Office of Student Accounts at 9 a.m. on the prescribed dates as listed on the payroll calendar, subject to availability.

342.5.3 Direct Deposit

Direct Deposit is a method by which all net earnings may be automatically deposited into the financial institution of the employee’s choice. Once an employee is enrolled, all payments including supplemental payments such as Overtime, Shift differentia, Stipends, etc. are deposited to the employee designated financial institution.

342.5.4 Overtime

Overtime pay, when applicable, shall be compensated by cash payment or in Compensatory Time Off (CTO) and shall be based upon prior written approval signed by a designated supervisor. If necessary due to the nature of work involved, management may retroactively approve this compensation.

342.5.5 Salary Advances

As a State agency, Cal Poly may make payments for salaries earned, in advance of scheduled distribution dates, from the revolving fund, to employees, when (1) there have been errors or delays in submitting or processing documents making it impossible for the State Controller’s Office to prepare and deliver salary warrants within a reasonable time, or (2) separating employees are in immediate need of their final salary payments.

Revolving fund payments of salaries earned may also be allowed where the payment is necessary to alleviate serious, unforeseeable hardship. Specific written procedures shall be followed for this type of advance and no advances on unearned salary are permitted.

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343 Student and Non-student Accounts Receivable, Registration Access, and Student Loans

343.1 Student and Non-student Accounts Receivable

An account receivable is defined as a claim against a person, firm, corporation or other entity for money owed to the University. Accounts receivable shall be established only when necessary and when permitted by relevant law and policy. Procedures shall be established to ensure that appropriate efforts are made to collect all such receivables, and that any uncollectable receivables are written off in a timely manner. Collection action may be continued, even after a receivable has been written off, if justified by the amount of the receivable and the probability of collection. Appropriate supporting documentation will be retained for all open receivables, including those that have been written off, but for which collection action is being continued.

An amount owed to the University by an employee is the equivalent of an overpayment and the California Government Code (19838) requires reimbursement to the state of overpayments made to employees.

The procedures used for collection shall be designed to result in collection of most, if not all, open receivables. Such procedures will include “holds” on registration and student records, timely follow-up by letter, payroll deduction for amounts owed by employees, and tax offset for collection of past due receivables.

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343.2 Registration Access

Registration access shall be granted to those students whose account balances have been cleared, and who have made payment of appropriate registration fees (including non-resident tuition, if applicable) or are eligible for deferment based on approved financial aid. Fee deferment of a portion of registration fees and/or non-resident tuition may be available for students who are not eligible for deferment based on approved financial aid.

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343.3 Student Loans

Student loans are available to Cal Poly students through the FFELP program, through the Perkins Loan program and through a variety of campus administered loan programs. Information regarding loan program application procedures may be obtained through the Cal Poly Financial Aid Office.

Student rights and obligations with regard to the various loan programs are communicated through mandatory exit counseling. This is essential information for any student who has received a loan while at Cal Poly. Information regarding exit-counseling options is available through Fiscal Services - University Collector or through the Student Accounts Office.

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344 University Property

In accordance with CSU Executive Order 649, the University is required to follow State Administrative Guidelines for the protection of State property or to establish a policy more suited to the campus environment. The University has instituted a policy for the receipt and control of University property that requires the tagging (affixing a property accounting decal) and inventorying of non-furniture type fixed assets with a value of $500.00 of more. Fixed assets are defined as land, buildings, improvements, or equipment. Fixed assets with a value of $5,000.00 or more shall be capitalized, and inventory records shall be maintained for land, buildings, and other improvements that meet the capitalization requirements but are not tagged.

The University shall perform monthly reconciliations of equipment expenditures to additions to the capitalized equipment file.

Furniture shall not be tagged or inventoried based on the following factors: relatively secure campus environment, few historical losses, low to moderate risk property, and the high costs and low benefits that would be generated by the process of inventorying and maintaining records for all campus furniture items.

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345 University Accounting, Reconciliations and Reporting

All University accounting, reconciliation and reporting functions shall be performed in accordance with related law and policy.

345.1 Reconciliations

The University shall reconcile with the records of the State Controller’s Office all expenditures, revenues, and budgets for each appropriated, proprietary and capital outlay fund within thirty days of the previous month’s close. The reconciliations shall be prepared in accordance with the CSU’s SAM99 process and will form the basis for the legal basis year-end reports.

The University shall perform monthly bank reconciliations for all University bank accounts. All required reconciliations shall be prepared monthly within thirty days of the end of the preceding month. All required reconciliations shall be retained for at least two years and thereafter can be destroyed after audit or four years, whichever occurs first.

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345.2 Reporting

The University’s legal basis accounting data shall be submitted annually to the State Controller’s Office, in accordance with prescribed procedures, either directly or through the CSU, and incorporated into State of California’s financial reports.

The University shall annually submit financial information prepared in accordance with Generally Accepted Accounting Principles (GAAP) for inclusion in the CSU’s audited GAAP reports. In addition, the University shall publish its own audited GAAP basis reports. The GAAP basis financial statements shall be audited by an independent audit firm of Certified Public Accountants.

The University shall prepare and submit other financial reports, tax returns and/or information as required for use by on and off-campus agencies, other governing bodies, or grant providers.

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References for CAP 340

  1. Date approved by the President: December 5, 2000
  2. Office responsible for implementation: Fiscal Services Department
  3. Related University Policies/Documents/Manuals/Handbooks:
    1. CSU Chancellor's Office Administrative Documents
    2. California State University Policy and Procedures Governing Travel and Relocation Expense Reimbursement
  4. Any laws, regulations or codes of practice which should be referred to in conjunction with the policy:
    1. California Education Code
    2. California Government Code
    3. California Administrative Code, Title 5
    4. State Administrative Manual
    5. State University Administration Manual
    6. State of California Payroll procedures Manual
    7. CSU collective bargaining agreements
    8. CSU Executive Order 661
    9. CSU Executive Order 740
    10. Fair Labor Standards Act>
    11. U.S. Office of Management and Budget Circular A-21
    12. U.S. Office of Management and Budget Circular A-133
    13. U.S. Office of Management and Budget Circular A-110