Delegate Meeting
Wednesday, December 11, 2013, 9:00 a.m. – 11:30 a.m.
Teleconference
MembersX / Doug Wade (Bakersfield) / X / Josee Larochelle (San Jose)
X / Missy Jarnagin (Channel Islands) / X / Lorlie Leetham (San Luis Obispo)
X / Stacie Corona (Chico) / X / Mary Hinchman (San Marcos)
X / Karen Wall (Dominguez Hills) / X / Letitia Coate (Sonoma)
X / Darrell Haydon (East Bay) / X / Julie Benevedes (Stanislaus)
X / Clinton Moffitt (Fresno) / X / George Ashkar (Chancellor’s Office)
X / Don Green for Brian Jenkins (Fullerton) / Rodney Rideau (Chancellor’s Office)
X / Carol Lorentzen (Humboldt) / Jean Gill (Chancellor’s Office)
X / Sharon Taylor (Long Beach) / X / Mike Redmond (Chancellor’s Office) (call-in)
X / Mae Santos (Los Angeles) / X / Tom Roberts (Chancellor’s Office)
X / Ken Toet for Steve Mastro (California Maritime Academy) / X / Michelle Schlack (Chancellor’s Office)
X / John Fitzgibbon (Monterey Bay) / Nancy Freelander-Paice (Chancellor’s Office)
X / Deborah Wallace (Northridge) / X / Lily Wang (Chancellor’s Office)
X / Darwin Labordo (Pomona) / X / Sedong John (Chancellor’s Office)
X / Justine Heartt (Sacramento) Chair / Jessie Lum (Chancellor’s Office)
X / Ming-Tung “Mike” Lee (Sacramento) CABO Liaison / X / Michelle Norton for Mick McBride (Chancellor’s Office)
X / Monir Ahmed (San Bernardino) / X / Chris Canfield (Chancellor’s Office)
X / Lorretta Leavitt (San Diego)
X / Gloria Tseng for Agnes Wong Nickerson (San Francisco)
Welcome
1. Agenda Approval
The meeting commenced at 9:02 a.m. with Chair Heartt noting a couple of minor updates to the agenda. Colleen Zenger, Senior Financial Manager, CSU Banking and Treasury Operations will give information on ACH fraud alerts (see below). Karen Wall will be presenting information on the FOA Officer Nomination Process (Item #9) in Agnes Wong Nickerson’s absence.
Added to agenda…
Colleen Zenger warned of recent attempts of fraudulent activity from students/persons in China utilizing CashNet. To recap, the students attempt to make online payments for huge amounts. CashNet then forwards these funds and Wells Fargo gets credited. CashNet attempts to collect from the student and the amount is unrecoverable. The incoming dollar amount goes into a special queue for review. This usually means Wells Fargo will get emailed. The campus will then be notified.
FOA should be aware that these transactions should be reviewed properly for fraud. Wells is reviewing this activity in their risk department and wanted to make CSU aware. Colleen noted that in consultation with Wells, there are a couple of recommendations: 1) Put dollar thresholds in the item code on the student payment screen (Call Josie Almeida, Student Financial Services at Fresno for additional) in an effort to deter this problem, 2) Reverse the ACH versus reject, because you may reject legitimate payments, 3) Block the student’s accounts, 4) Call or email Colleen for additional information. Colleen also noted that there are very strong controls in place and no campus has lost dollars to date.
Action: It was suggested that this information be sent to the SARS group in addition to the best practices to prevent this issue.
On a related note, East Bay noted that students are attempting to pass counterfeit $100 bills at dining facilities.
2. Treasurer’s Report – Lorretta Leavitt
Lorretta Leavitt reviewed the Treasurer’s Report (Balance Sheet as of December 10, 2013) as presented. She noted the projected expenses of approximately $10,000 for the upcoming Business Conference and that the CSU 101 in 2014 will probably break even.
3. CABO Update – Ming-Tung “Mike” Lee
Mike Lee reported that the next CABO meeting is slated for January 13, 2014 in Sacramento. He noted that during the last meeting there was a lot of appreciation for Dr. Ben Quillian for his service, integrity and dedication to the CSU. As a follow up to the last FOA meeting, Mike has been working with Mike Redmond on the integration of the ICSUAM, SAM in addition to the P2P. Mike noted that there is a group reviewing the different proposals for the consultant on the P2P and this group will be communicating additional as it becomes available.
4. Budget Update – Robert Turnage and Ryan Storm (Time certain at 9:30 a.m.)
Robert Turnage/Ryan Storm reported on the budget update from Sacramento. Mr. Turnage noted that conversations are continuing with DOF as the CSU tries to influence the content of the Governor’s budget to be released January 10.
Mr. Storm noted the other development (budget) was the release of the LAO fiscal outlook report. This is the first crack at an active budget in the state. Basically, three entities do revenue forecasting, with the LAO being one. The report is relatively good news. With the passage of Prop 30, there are additional revenues and the state will have excess revenues through 17-18 (approximately $2 – $3 billion). There is some potential that the January budget may reflect some ability for CSU to capitalize on that funding.
Mr. Storm noted a couple points of interest on the report. First, the LAO does not speak to recessionary dips in the economy. In addition, there is a large reliance on personal income tax as a significant revenue source. The report does not take into account the number of cost pressures, i.e. social services programs freeze on COLA’s. It also does not incorporate the Governor’s $280MM multi-year projections. As a reminder, Mr. Storm noted that this report is just a snapshot, but there is optimism about some of the revenues. There are a few unknowns that should be viewed with caution.
Discussion was opened for questions:
Why is there hesitancy in adopting the Governor’s multi-year plan? Mr. Turnage noted that there are certain assumptions made, based on current law, and this is the best projection. There are no current laws for expenditures for multi-year.
Justine thanked Mr. Turnage for his service to the CSU.
5. CO Financial Services Updates – George Ashkar
George noted the upcoming financial presentations to the BOT in January 2014, specifically the A-133 single audit, the NCAA audit, Auxiliary financials and the consolidated financial statements. The stand-alone financial reports are not reviewed by the BOT. The campuses will be expected to clear any findings related to any of the reports. George noted that there were no financial findings and one financial aid finding. Larry Mandel will also present a final report during this same meeting.
George reported that the CO is engaged in a couple of RFPs, namely, the P2P consultant agreement and the system wide audit. George may be calling on a few FOA members to assist with the audit RFP review. At the November BOT, an extension was granted to KPMG for another year as decisions are being made on the next award. March or May 2014 is anticipated for the timeline to present a recommendation to the BOT.
George reported on the follow-up items from the last meeting. 1. Status of system upgrades and projects - Lily talked to George about the status of projects. George noted that there is a road map of projects that exist. Lily has been working to get this updated. Action: Lily will send link to the information to be disseminated to the FOA group.
2. The imaging contract - there have been a couple of robust conversations with the CMS Executive Committee. Tom Roberts is working on a master pricing agreement. There are currently between nine to eleven campuses that have agreements with Hyland at this time ($1.2 million currently being spent). The CO is currently working on an agreement that may save the CSU and campuses on the contracts. The first step is to get advantageous pricing. George noted that Tom Roberts will be the contact person if campuses have questions.
Discussion opened for questions:
What is the process to get projects on the projects list? How are these items prioritized? George noted that there needs to be a robust discussion about the process outside of this particular conference call, maybe an in-person meeting. There is more than one avenue to get something approved. The CO may determine priorities. This may compete with items that have gone through a lengthy process. George noted it may be helpful to outline the process. Mike Lee noted that the Council of Presidents can also make recommendations to prioritize some of these projects.
There was a brief discussion on the topic. Mike Redmond noted that a detailed plan is being reviewed. George recommended that the FOA rely on their CABO members to communicate current information.
a. System-wide Guideline – Claims for Stale Dated Checks against the CSU (attachments) – Lily Wang
Lily Wang reported that this item is a follow-up. Attached to the agenda was the information…system wide recommended process. Delegates should review and send comments to Lily. Action: It was recommended that this discussion be deferred to the February meeting since Lily is unable to attend the January meeting. Lily would like feedback prior to that meeting. Action: Lily recommended and it was agreed by the delegates that January 31 be the deadline to provide feedback to Kristina Randig with a copy to Lily.
There was additional discussion on the process to inform/advertise to individuals that they have money outstanding. Action: Mike Redmond noted that he would be happy to host a small group to call-in (January) and discuss further. Subsequent Event: Link distributed to the Delegates on 12/11/2013.
b. Plan for Allocation of Unrelated Business Income Tax (UBIT) Liability – Sedong John
Sedong John noted that a memo has been sent to the Delegates outlining how the allocations will be submitted to each campus. Each year the campuses are asked to provide data on the UBIT to the CO. The net operating loss (NOL) can be used to offset any outstanding tax. In the meantime, the NOL has been decreasing. Sedong noted that ending June 30, 2013 there is not enough NOL balance to offset taxable income. Based on -$248K estimated taxable income vs. $128K NOL, $42K estimated tax on the difference for 12-13, was paid before Nov. 15. 2013. There must also be an estimate of outstanding taxes for 14-15. The trend is that the tax will increase in the future. The CO is using last year’s data to estimate current year. Since the CO needs to make these payments, the CO will collect from the campuses using a rolling average. A report will be provided on an annual basis to each campus.
In addition, a plan is being developed to accelerate the UBIT report. A request for 12-13 was sent to tax coordinators a couple of weeks ago. Since the financial statements are being completed earlier, an accelerated timeline for UBIT should not be an issue. The CPO to collect the estimated tax payment will be sent shortly.
6. CSU 101 Update – Justine Heartt
a. As previously noted, need final names for new hires by this Friday, December 13th, for CO, Fresno, Humboldt, Maritime and Sonoma. Delegates should send to Justine the attendee’s Name, Title, Work Unit, Phone Number and Email Address.
Justine reported that the binders are being printed and that attendees of record have been notified. The committee needs names for the lodging lists- those campuses outstanding include: CO, Fresno, Humboldt and Maritime. In addition, the $1,100 CPO will be processed shortly for the expenses.
Lorlie reported that she will be completing information to determine a per person rate for the next CSU 101 (Oct. 2014), Pismo Beach. The tentative dates are October 19-22 or October 26-29. There will be room for four attendees per campus.
7. CSU Business Conference Update – Sharon Taylor
Sharon reported that the Chancellor is unable to speak at the conference. Different alternatives are being reviewed, including Assembly Speaker Perez and past AOA Presidents. Suggestions are welcomed. To date, there are approximately 120 people registered.
8. Discussion of FOA (and other CSU organizations) Banking at the CO – Lorretta Leavitt
Lorretta initiated the discussion on centralizing the trust account at the CO for the FOA bank account. She noted that as Treasurer’s change that money moves between campuses. Instead of moving dollars from campus to campus, can P-Cards be facilitated for spending?
Tom Roberts noted that there is no restriction on the paying entity and where the P-Card is housed. The CO AP may have to provide reconciliation for this fund.
Justine noted that there may have to be some procedures/policies developed by FOA if the CO does adopt the process of the CO keeping the funds. Jean Gill noted that account/viewing access may be an issue unless access is granted from the CO. The CO would also need to charge an administrative fee, in addition, would expect a justification of the fund balance. Action: Jean asked that past Treasurer’s compile data on the activity for the past few years. Justine noted that this information would come later if the FOA decides to go with the CO administering the fund. It was noted that during a given day of inquiry, balances may not be reflective of the actual activity.
There was a brief discussion on the matter.
Action: It was recommended that a sub-committee be established and that procedures be developed for meal and hotel rates for FOA events. Justine also made a call for considerations for the new Treasurer since Lorretta has announced her retirement.
9. FOA Officer Nomination Process (2-year Member-at-Large, Secretary, and Vice Chair) – Agnes Wong Nickerson
Karen Wall reported on the process for Agnes. Chair Heartt announced congratulations to Lorretta Leavitt (SDSU), who is retiring this spring. Karen noted that the past chair will select a 3-person committee, probably the 2-year members at large, Lorlie or Julie and another volunteer to assist with the process. The FOA Delegates will nominate candidates and ballots will be certified for eligibility.