Carryforward Fund Policies

1. Carryforward Fund Policies October 24-25, 2007 Colleen Nickles

2. General Policy Statement • Operating Trust Fund balances: • Provide stability • Are allowable and encouraged • May be required to meet on-going working capital and temporary funding requirements • Are defined as the portion of Unrestricted Net Assets related to that fund (after GAAP adjustments) • Must be reviewed and certified annually by the campus CFO • If they exceed the guidelines, as determined by the CO, they are subject to reallocation

3. General Policy Statement (contd) • Differences of fund sources define need for carryforward balances • Annual revenue flows • Operating activities of funds • Business needs for working capital and accumulation of cash balances • Predictability and renewal of funds • Ability for the campus to control the funds • Need to self-support an activity can justify the need for greater carryforward balances

4. Support-Budget Operating Revenues • Used to smooth fluctuations in State support and student enrollment • Defined as General Fund plus Student Fees • 3% of actual Support-Budget Operating Fund Revenues may be carried forward • Excess of 3% must have an expenditure plan, subject to review by CO

5. Support-Budget Operating Revenues • Balances may not be pledged toward Capital programs • Balances used must be consistent with support of the mission of the CSU • Interest earned on balances should be accounted for separately • Interest may be used for Capital programs

6. Lottery Funds • Campuses should spend all allocated Lottery Funds each year • If campuses carryforward Lottery Funds, the carryforward amount is limited to <80% of that year’s allocation – excess funds are subject to de-allocation by the CO • Carryforward balances must be spent for the original purpose of the allocation for instructionally-related activities • No balances or interest earned can be used for acquisition of real estate, construction of facilities, financing of research, or any other non-instructional purpose.

7. Continuing Education Revenue Fund • CERF balances may be carried forward to aid in smoothing fluctuations in operations and to serve as working capital • Carryforwards – limited to 6 months of actual operating expenditures • Balances above the limit must have a Presidentially-approved business plan, which is subject to review and written approval of the Executive Vice Chancellor/CFO • Excess balance requirements may include planned capital improvements, programmatic changes requiring start-up capital

8. Continuing Education Revenue Fund (contd) • If no approved Business Plan, then carryforward balances may be declared excess by the campus President and used by other campus programs in the SRB • Carryforward balances consistently in excess of 6 months and without an approved Business Plan are subject to review and written approval of the Executive Vice Chancellor/CFO • Deficit carryforward balances are not permitted • CERF rates should be set to meet operating demands • If in deficit, then loans for other campus self-supporting activities must be made to CERF to eliminate the deficit

9. Other Self-Support Activities, Enterprise Funds, and Special Projects Funds • Guidelines still to be developed: • Housing • Parking • Student Unions • Health Facilities • Other Special Funds

10. Reporting • Operating Trust Fund Carryforward reports, based on GAAP, will be required each year • Contain estimates of Beginning-Year balances, Operating Revenues, Operating Expenditures, and Year-end balances • Actual “legal” basis balances will still be required, by fund

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