Finance Fundamentals Overview

Account Structure: Chart of Accounts

Fund Codes
Department Codes
Expense & Revenue Account Codes
Program Codes
Project Codes
Class

PeopleSoft Finance System

Authority to Access Systems
Check Run Calendar
Financial Reporting
Stanalytics
Speedcharts

Budget

Budget Activities
Business Analysts Meetings
Carry forward Funding Request
Fiscal Year
Payroll Expense Adjustment (Reallocating Labor Costs)
Position Control
UBAC

Delegated Authority for Financial Transactions

Banking Services

Cost Allocation

Audits

Types of Audits
Internal Controls
Audit Process

Auxiliary Accounts

Student Organizations
Commercial Operations
Campus Programs (Foundation)
Endowments Scholarships


Overview on Account Structure: Chart of Accounts

CSU Stanislaus is one of 23 campuses in California State University public higher education system. Primary responsibility for funding the educational mission and operations of the university, including supporting enrollments, rest with the State. State funds are allocated through the CSU Board of Trustees and the CSU Chancellor to each campus. We are granted authority as to what we can charge for what services, where we deposit funds, and how we use these funds. In addition there are various other funding sources (e.g., tuition, parking, housing, student fees, and lottery funds) all of which have restrictions as to where they can be deposited and how they can be spent. The CSU Stanislaus Vice President of Business & Finance/ Chief Financial Officer (CFO) has been delegated authority by the President to oversee all financial matters and activity. CSU Chancellor Executive Order 1000, Delegation of Fiscal Authority to Campus is the guiding document.

The CSU system uses PeopleSoft Finance as their accounting software. It is sometimes called CFS, short for Common Financial System. PeopleSoft Finance has been configured for the CSU structure to manage funds, budgets, reporting, etc. through the use of chartfields. All employees need to have a basic understanding of the CSU Stanislaus’s chart of accounts because all financial transactions and activities (e.g., buying and paying for things, getting reimbursed for business and travel expenses, managing funds, etc.) utilize this accounting structure.

The PeopleSoft chartfield consists of multiple components.

Example:

FUND DeptID ACCOUNT
G0106 42001 606001

Fund

Five-digits, alpha numeric. Identifies funding that has a specific defined purpose.

Download Fund Glossary

Example:
G0106 - General Operating Fund
A7300 - Associated Students
TM000 - Trust Funds Miscellaneous

DeptID

Five digit numeric. Identifies a unique department within the University organization. Can also be used to identify a major program within a department (e.g., utilities).

Download Department Code List

Example:
20010 - Nursing
42001 - Human Resources

Account

Six digit, numeric. Identifies assets, liabilities, expenses and revenue. Campus departments will most often use Expense and Revenue Accounts (Expense accounts begin with a 6, Revenue accounts begin with a 5)

Download Core Expense Account Code List

Example:
660003 - Supplies and Service
606001 - Travel
619001 - Equipment

Program

Four digit, alpha numeric. Identifies major on-going activity, used with revenue and Expense only

Defines Instructionally Related Activity (IRA) Programs
Example:
A003 - Art Gallery
A013 - Music Jazz Studies

Project

Six digit, alpha numeric. Defines activity with a start and end date. (Required at CSU Stanislaus for all Grants)

Capital Outlay projects
Faculty Support Grants

Class

Three to five digits, alpha and/or numeric. Defines minor on-going activity that is related to a specific department.

 


Overview on PeopleSoft Finance System

Accessing PeopleSoft

If you will be submitting purchase requisitions and/or running departmental financial reports, you will need access to PeopleSoft Finance (also known as CFS). Your supervising manager will assist you in preparing the Office of Information Technology Security Request Form.

Check/EFT Schedule

The fastest payment method is Electronic Fund Transfer (EFT). EFT payments are processed twice a week. Check payments are processed once a week (student checks twice a week).
Download Check Schedule on Resources

PeopleSoft Finance Data Warehouse

Financial reports are built by pulling data from PeopleSoft/CFS Data Warehouse. The Data Warehouse dashboards that will be the most meaningful to you Manage My Budget and Operations. You can obtain Revenue and Expense reports, Fund Balance, Open Purchase Orders, Cash, etc.

The Data Warehouse Management Report has features that make it easy to produce custom management reports for a variety of Auxiliary organization and campus needs.

You will need to request access to PeopleSoft Finance Reporting.
Complete the OIT Security Request Form

Data Warehouse User Guides:

Stanalytics

Stanalytics is the CSU Stanislaus enterprise data warehouse, which is a collection of reporting tables and reporting tools that are specifically structured for querying and analysis. This collection of reporting tables and tools combines data from various data sources, some of which includes the PeopleSoft Student, Finance, and HR systems. Using these various reporting tools and reporting tables, users can create and execute various types of tabular and analytical reports for operational and executive decision making. Stanalytics contains both historical and current data which is reprocessed nightly, and also contains snapshots of data for specific point-in-time analysis (ie: census). For more info and instructions on how to run reports go to http://reports.csustan.edu.

Speedchart

The speedchart in PeopleSoft Finance is used to simplify data entry by eliminating key strokes. It is a "shorthand" number linked to a unique set of Chartfield combinations to ensure that expenses are properly charged to the General Ledger. It is a ten character "shorthand" alpha-numeric value linked to a unique set of Chartfield combinations: for general accounting must include the Fund code and Department ID; for grants must include Fund code, Department ID, and Project code.

Speedcharts are currently used at CSU Stanislaus for any department charges for the following:

  • All PCard purchases
  • All OfficeMax purchases
  • Print Shop orders (including paper purchases)
  • Mail Services (postage, UPS Bulk Mail)
  • Shredding Services
  • Facility Work Orders

Departments using any of these services will need to set up a speedchart for each expense account being utilized.


Overview on Delegated Authority for Financial Transactions

Signature Policy

Executive Order (EO) 1000 from the Chancellor delegates to the campus President authority and responsibility for effective oversight of all state funds held by the campus and all funds held in a fiduciary capacity. The campus Chief Financial Officer (Business & Finance Vice President) has the responsibility for the administration of these delegations of authority and responsibility. To comply with EO 1000, the President executed a CSU Stanislaus Signature Policy for Financial Transactions See Policy

Number of Signatures Required by Financial Services

  • Transactions under $1,000 can be approved by the appropriate College Dean, Assoc./Assist. Vice President, or Vice President (exceptions for Grants and Trusts).
  • Transactions $1,000 or greater must be approved by the appropriate Vice President .
  • Trust Fund transactions under $1,000 can be approved by the authorized Trustee. Trust Fund transactions over $1,000 must be approved by the appropriate Vice President.

Grant Fund transactions of any amount can be approved by the Principal Investigator (PI). No additional approval is required since the fund disbursements are defined in the Grant contract.


Overview on Banking Services

State law and relevant California State University policy require that all money received for goods, services, or donations by the University, or any entity connected with the University be deposited in accounts approved by the University's Chief Financial Officer (CFO). The Chief Financial Officer (CFO) is required to open and maintain bank accounts within the CSU centralized banking system in accordance with CSU policy. Centralized banking is currently with Wells Fargo. Bank accounts cannot be established by University departments or individuals.


Overview on Budget

Budget Office

The University Budget Office exists to provide budget planning and analysis for the University; to ensure both the short term and long term fiscal integrity of all funding sources; to provide guidance in interpreting federal, state and CSU policy regarding expenditure authority; to provide and execute a budget planning schedule for the campus; and, to support the budget information needs of the campus community.

CSU Stanislaus Fiscal Year

The CSU system operates on the same fiscal year as the State of California: July 1 through June 30.

CSU Stanislaus the University Budget Action Committee (UBAC)

The University Budget Advisory Committee is a campus-wide advisory committee to the President charged with advising the President on financial planning and budget allocation matters based on the University mission and strategic plans. Members appointed to the UBAC have primary responsibility to represent the entire campus (faculty, staff, students and administration) in supporting the campus mission with particular attention to division level budgets. Members of UBAC receive their assignments through direct communication from the chair of UBAC.

Budget Activities

General Operating Fund Budget Development Timeline

General Operating Fund Budget Development Timeline

Business Analysts Forum

In Business & Finance, we recognize that together we share the responsibility and work involved in conducting the campus' day to day business operations. The Business Analyst Forum is made up of a group of individuals who all have important roles to play to ensure the full scope of the University's operational needs are met. Our goals are to: improve campus business processes, identify and address business operations training and information sharing issues, and insure that business operations communication channels are open and available.

We believe that by working together we can solve any business problem that arises on campus.

Budget Carry Forward

Departments complete the request form at year end with an expenditure plan for the following fiscal year to request a one time carry forward of general fund restricted and Lottery funds.

Download form

Payroll Expense Adjustment (Reallocating Labor Costs)

Payroll expense adjustments are utilized to move a prior month expense to one or more different funding sources.

Download Payroll Expenditure Transfer Form

Position Control Staff

Position Control is assigning and maintaining a position in the University funding. Position control is handled in the budget office. All documents requiring position control authorization must be signed by the Budget Office.

Download Staff & Management Employment Request Form (SMERS)

Special Consultants

The Special Consultant classification, Class Code 4660, is to provide payment to individuals who perform special assignments of limited duration and no other appropriate classification is available. The Special Consultant process should be avoided when regulations and the situation permit in favor of 1) an independent contractor agreement for services 2) a guest lecturer/honorarium form or 3) regular temporary faculty, management or staff employment procedures.

Special Consultant appointments are approved only for the dates, daily rate, and total number of days specified in this agreement. Any changes in the period of employment, the daily rate, the total number of days authorized, or assignment must be submitted on a new agreement form. Special Consultant requests are processed by Human Resources, but they require approval from the Budget Office. View Guidelines on HR's website


Overview on Cost Allocation

The California State University requires that the President and the Chief Fiscal Officer (CFO) ensure that costs incurred by the CSU Operating Fund (related to state-supported instruction) for services, products, and facilities provided to other CSU funds and to Auxiliary Organizations are properly and consistently recovered with cash and/or a documented exchange of value. Allowable direct costs incurred by the CSU Operating Fund shall be allocated and recovered based on actual costs incurred. Allowable and allocable indirect costs shall be allocated and recovered according to a cost allocation plan that utilizes a documented and consistent methodology including identification of indirect costs and a basis for allocation.

Link to EO 1000


Overview on Audits

An audit is a process for providing a review or verification of programs, activities, or functions. This review is conducted in an independent and objective manner. Purposes of audits include the following assurances:

  • Compliance with policies, laws, and regulations
  • Safeguarding of resources and assets
  • Economical and efficient use of resources
  • Accurate and reliable financial information and reports

The California State University (CSU) and its universities and auxiliaries are subject to a variety of audits including annual and periodic audits in compliance with Government Auditing Standards. The most common audit is a system-wide financial audit in accordance with Generally Accepted Accounting Principles (GAAP) and standards set by the Federal office of Management & Budget. Each campus performs audit fieldwork directed by an external audit firm engaged by the CSU’s Office of the University Auditor (OUA) to collectively report CSU results to the Bureau of State Auditor’s annual single audit of the general purpose financial statements included in the State Controller’s Office Annual Report to the Governor.

Auxiliary organizations are required by California Education Code, Title V, Section 42408 and Nonprofit Integrity Act of 2004 to have an annual fiscal and internal controls audit performed by certified public accountant selected by the auxiliary organization.

Other external audits may consist of, but are not limited to, those that are requested by the State Controller’s Office, the State Department of Finance, the Bureau of State auditors, the State Board of Equalization, the Internal Revenue Service, and granting agencies.

The OUA routinely performs CSU internal audits of specific campus operations based upon an annual risk evaluation. These special area audits entail review of internal controls and operational processes relative to specific programs or projects. The OUA also administers an auxiliary audit program on behalf of the CSU Board of Trustees to provide additional oversight of auxiliary organizations.

The Chancellor, through various Executive Orders, has delegated financial, administrative, and management responsibilities to the President of each campus. Local delegation of the authority and responsibility for centrally managing all aspects of campus audits has been made to the Vice President, Business and Finance, and his designee the Associate Vice President, Financial Services.

Type of Audits

Financial audits examine the accounting and reporting of financial transactions. The auditor reviews controls over the receipt and disbursement of funds, the safeguarding of assets, and the recording of transactions in accordance with Generally Accepted Accounting Principles, or GAAP.

Compliance audits review whether all applicable laws, regulations, policies, and procedures are followed.  Recommendations typically call for improvements in processes and controls intended to ensure compliance with regulations.  CSU Campuses are subject to the following:

  • Internal Revenue Code
  • California Education Code
  • State Administrative Manual (SAM)
  • State University Administrative Manual (SUAM)
  • Resolutions and policies established by the CSU Board of Trustees
  • A-133 Single Audit for nonfederal entities that expend $500,000 or more of federal awards in a fiscal year (OMB Circular A-133)
  • Executive Orders issued by the Chancellor
  • Integrated CSU Administrative Manual (ICSUAM)
  • Policies and directives issued by the Chancellor's Office, usually in the form of Coded Memoranda
  • Auxiliary Triennial Internal Control/Compliance Audit
  • Campus policies and procedures

Internal Control audits are a specialized type of audit that focus on the internal control environment of automated information processing systems and are typically conducted by the Office of the University Auditor.

Investigations are conducted when there is a suspicion or allegation of fraud, embezzlement or waste. Investigations involve the examination of records and interviews of employees to determine if any illegal activities have taken place, which if proven, normally lead to disciplinary action and/or criminal prosecution.

Internal Controls

You may have heard the term "internal control(s)," but what exactly is it? Evaluating internal controls is one of internal auditing's primary responsibilities. The Institute of Internal Auditors (IIA) defines control and control processes as follows:
A control is any action taken by management, the board, and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved. Management plans, organizes, and directs the performance of sufficient actions to provide reasonable assurance that objectives and goals will be achieved.

Control processes are the policies, procedures, and activities that are part of a control framework, designed to ensure that risks are contained within the risk tolerances established by the risk management process. Risk management is a process to identify, assess, manage, and control potential events or situations to provide reasonable assurance regarding the achievement of the organization's objectives.

A broadly accepted definition of internal control comes from the Committee of Sponsoring Organizations (COSO)1 of the Treadway Commission's report entitled The Control-Integrated Framework (COSO Report) as follows:

Internal control is a process, affected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objective in the effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.

Key points about internal control include:

  • It is a process.
  • It is achieved by people.
  • It can only provide reasonable assurance.
  • It is geared to the achievement of objectives.

In the California State University (CSU) environment, internal controls serve the following purposes:

  • Protect the University's Assets
  • Ensure Records Are Accurate
  • Promote Operational Effectiveness and Efficiency
  • Encourage Adherence to Policies
  • Ensure Compliance with Laws, Regulations, and Contracts

Generally, controls are of two types:

  • Preventative Controls: Designed to discourage errors or prevent irregularities from occurring. They are proactive controls that help prevent a loss. Examples: Separation of duties, proper authorization, adequate documentation, and physical control over assets.
  • Detective Controls: Designed to find errors or irregularities after they have occurred. Examples: Reviews, analyses, variance analyses, reconciliations, physical inventories, and audits.

The COSO Report further defines five interrelated components of internal control:

  • Control Environment: This sets the tone of the organization and is the foundation for all other components.
  • Risk Assessment: Management establishes activity-level objectives and mechanisms for identifying and analyzing risks related to their achievement.
  • Control Activities: Polices and procedures that ensure management's directives are carried out and help ensure that necessary actions are taken to address risks to achievement of the entity's objectives.
  • Information and Communication: Information identified, captured, and communicated in a form and timeframe to enable people to carryout their responsibilities.
  • Monitoring: The process that assesses the quality of the system's performance over time, which includes ongoing monitoring activities, separate evaluations or a combination of the two.

Who is responsible for internal controls?

The auditors, right? Wrong! Everyone plays a part in the CSU's internal control system. Ultimately, it is CSU management's responsibility to ensure that controls are in place. That responsibility is delegated to each area of operation, which must ensure that internal controls are established, properly documented, and maintained. Every employee has some responsibility for making this internal control system function. Therefore, all CSU employees need to be aware of the concept and purpose of internal controls. Internal audit's role is to assist management in their oversight and operating responsibilities through independent audits and consultations designed to evaluate and promote the systems of internal control.

What is internal auditing?

The IIA defines internal auditing as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

The internal audit activity evaluates the adequacy and effectiveness of controls encompassing the organization's governance, operations, and information systems. Internal audit reviews include the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws, regulations, and contracts. These reviews also ascertain the extent to which operating and program goals and objectives have been established and conform to those of the organization, as well as the extent to which results are consistent with established goals and objectives and whether operations and programs are being implemented or performed as intended.


Overview on Auxiliary Accounts

Auxiliaries are legal (nonprofit corporations) business entities that have been established and organized by the CSU pursuant to the California Education Code. An auxiliary’s primary purpose is to support the university mission by providing programs, activities, fund source used to furnish facilities, goods or services to faculty, staff, or incidentally to the public. Even though they are corporations, they are first and foremost auxiliary organizations of the CSU and must therefore operate pursuant to the specific statues and regulations applicable to auxiliary organizations. The campus CFO is the single campus officer designated to ensure auxiliaries maintain sound systems of internal controls and remain in compliance with legal and regulatory requirements, including nonprofit law.

CSU Stanislaus has four auxiliaries:

Two student run auxiliaries:

One commercial operation auxiliary:

One fund raising auxiliary:

All Auxiliary financial transactions are handled in the same manner as University financial transactions.