Transcript Document

Auxiliaries:
Part of the CSU Team
March 8-11
2009
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Auxiliary Organizations:
Part of the CSU Team
Presented by:
Michèle Goetz
SDSU Research Foundation
[email protected]
2009
Overview:
 Auxiliary Enterprises
 Auxiliary Organizations
 Organizational Structure
 Traditional Roles / Concerns
 Fundamental Operating Principles
 Types of Auxiliaries
 Auxiliary Organizations Association
 Current issues impacting Auxiliaries
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Auxiliary Enterprises
The distinguishing characteristic of an auxiliary
enterprise is that it is managed on an essentially
self-supporting basis.
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Auxiliary Enterprises (cont.)
 A program, activity, or fund source used to furnish facilities,
goods or services to faculty, staff, students, or incidentally to
the public.
 Typically charges a fee directly related to, although not
necessarily equal to, the cost of the facilities, goods or
services.
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Auxiliary Enterprises (cont.)
 Auxiliary Enterprises managed by campuses:
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Also known as Enterprise or Special Funds
Funds deposited in a trust
Can be invested
Governed by state rules related to program funds
Can be very restrictive
Examples:
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Housing
Parking
Continuing Education
Recreation Center Facilities
Student Health Centers
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What’s the difference between
an auxiliary enterprise and an
Auxiliary organization?
CSU Auxiliary Organizations are included in the
definition of an auxiliary enterprise along with other selfsupporting activities.
Auxiliary Organizations are self-supporting entities while
auxiliary enterprises are self-supporting activities.
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Auxiliary Organizations
Over 90 Auxiliaries within the CSU
Primarily 501(c)(3) non-profit corporations
First Auxiliary established in 1922
(Fresno State College Association)
Major functions:
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Commercial Services
Faculty/Staff/Student Housing
Student Unions/Recreation Centers
Student Body Organizations (ASI)
Philanthropic/Endowment Management
Grant and Contract Administration
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Organizational Structure
 Incorporated as 501(c)(3) federally tax-exempt nonprofits
A 501(c)(3) organization provides charitable, religious,
scientific, literary, or educational services to the public,
and is an organization which qualifies for tax-deductible
donations.
 Special legislation within the Education Code spell
out the parameters under which auxiliaries are
authorized to operate within the CSU.
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Criteria for Formation
Auxiliary in good standing
Bylaws
Articles of Incorporation
Operating Agreement with CSU
Scope of Authority
Education Code
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Operational Framework
Private entities nestled within a public framework
Separate but related
Subject to California corporate law, the Education Code,
and CSU policies and procedures
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Operational Framework
Provides essential services that fit within and
complement CSU’s core academic mission
Serve at the will of the institution
Institutional control thru board appointment
Assets revert to Trustees / institution
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Traditional Roles of Auxiliaries
Established to facilitate essential services and
activities not easily performed through existing
state
Shield CSU against liability by managing risk
and exposure for certain activities
Different spending restrictions
Enhanced budgetary flexibility
Accumulate reserves*
Invest in equities to maximize returns*
(*Campuses previously couldn’t do this)
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Traditional Roles of Auxiliaries
 Facilitate certain types of financing
 Ability to purchase and sell real estate
 Ease of construction management
particularly in public/private partnerships
“At-will” employment of personnel
 Focused service orientation
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Potential Issues
 Possible duplication of functions
 Competition with state-based efforts,
e.g. student housing, copy centers
 Auxiliary activities extending beyond the scope of
operating agreements.
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Potential Issues (cont.)
 Additional risk of audit exposure for the university
based on auxiliary activities
Public relations exposure – public sees auxiliaries
and campus as one entity.
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Fundamental Operating Principle
The University President and CFO
(per EO 731) are accountable for all
auxiliary organization activities
Need to ensure compliance with law,
Trustee policy, and good business practices
of the university
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Contracting with Auxiliaries
 For contractual services between campus and
auxiliaries, auxiliaries should be viewed as an
external entity
 Need a written agreement (MOU) to establish
scope of operations and address other contractual
issues
 Operating agreement with the CSU defines
approved activities for each auxiliary
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Contracting with Auxiliaries
 Most auxiliary employees are not state employees,
even though salary and benefits are to be “comparable”
Auxiliaries may donate an employee’s time to the state
(the reverse is not true.)
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Allocation of Costs to Auxiliary Enterprises
EO 1000 (Previously EO 753)
Auxiliary enterprises shall be charged the
allowable direct costs plus an allocable portion
of indirect costs associated with facilities, goods,
and services provided by the University funded
from the General Fund.
Costs allocations shall be determined in
accordance with a written cost allocation plan
approved annually by the campus chief financial
officer.
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Cost Allocation Guidelines
GENERALLY
SPECIFICALLY
 Reasonable
 Direct Costs
 Actual
 Consistent
 Accumulation
 Estimation
 Indirect Costs
 Cost Allocation Plan
 Documentation
 MOUs
 Other written agreements
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Policy Governing Non-General Fund
Receipts
EO 1000 (previously EO 919)
Provides guidance to campuses on the administration
of non-general fund receipts to ensure funds are held in
appropriate accounts and administered in accordance
with the applicable laws and regulations.
Continuing Education:
– Non-credit courses only
– Cannot use campus name or image
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Administration of Grants and Contracts in
Support of Sponsored Programs
Executive Order 890
Sets policy to be followed by campuses and auxiliaries
administering sponsored programs to ensure the entity
maximizes the benefits of sponsored programs and
supports faculty, students and administrators in
effectively securing and carrying out sponsored
programs.
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Specific Auxiliary Services
 Commercial Services
 Faculty/Staff/Student Housing
 Student Unions/Recreation Centers
 Student Body Organizations (ASI)
 Philanthropic/Endowment Management
 Grant and Contract Administration
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Commercial Services
Provides services focused primarily on operation of
bookstores, food services and agricultural projects.
Campus Stores:
Bookstore vs. Campus Store concept
E-Commerce and digital books
Privatization/Partnerships
Food Services:
Self-operation
Franchises or company-owned
Impact of Convenience stores
Pouring Right (Coke vs. Pepsi)
Liquor license
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Housing Corporations
Student Housing:
Apartments vs. Residence Halls
 Meal Plans: Traditional vs. a la carte
Faculty Housing :
Assists with recruitment
Sale vs. Rental
Assist with down payments
Conference Services:
Business opportunity
Fills beds during seasonal lows
Brings diverse groups to campus
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Student Centers/Unions
 Funded by student union fees
 Operate and manage student union facilities
 Campus destination point: not just for students
 Facilities to create and celebrate community
 Service anchors which drive foot traffic
 Food a valued component
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Associated Student Body
Organizations
Student run organizations
Funded through student approved fees
Manages extra-curricular student activities:
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Student Government
Student newspapers
Intra-mural athletics
Cultural programs
Student clubs
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Philanthropic Foundations
 Provide focus for fund-raising activities
Diversified investment strategies for endowment
management
 High-profile donor involvement on boards
Typical model – contract with other auxiliaries for
fiscal infrastructure.
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Research Foundations
 Administer externally funded research,
instruction and other sponsored project which
have a direct relationship to the educational
purpose of the campus.
Wide variety of models across CSU campuses
Specialized expertise needed in research
administration
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Research Foundations
Flexibility in processes required for grants
management:
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Project to date vs. fiscal year
Temporary/part-time employees
Billing flexibility and cash flow management
Financial and programmatic reporting
Compliance issues
Liaison between sponsors and faculty
Wide variety of additional federal, state, and
other sponsor rules and regulations
• Audits, audits, audits!
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Auxiliary Organizations Association (AOA):
Mission Statement
We are a consortium of diverse, entrepreneurial,
service-oriented California State University
auxiliary organizations whose purpose is to
assist in exemplary services, programs, and
facilities that further the educational mission
of each campus.
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Auxiliary Organizations Association (AOA):
Mission Statement
AOA is a separate 501©3 organization: however, it is
not an auxiliary of the CSU.
AOA’s mission is to facilitate the role of individual
auxiliaries on their respective campuses by providing
the resources and services that enable them to be
more effective.
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AOA Services:
Professional website:
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Information sharing
Membership directory
Networking bulletin board
Legislative and legal updates
Library of resource materials
Job postings
Sample policies, procedures and forms
www.csuaoa.org
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AOA Services (continued):
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AOA Annual conference
Access to legal counsel
Group Insurance and Pooled Benefit Programs
Professional Development Programs
Biennial Salary Survey
Special Research Projects and Monographs
Resolution of common issues affecting members
Representation of collective interests of auxiliaries to
policy-making groups of the CSU and State of
California.
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Current AOA Officers
 Leslie Davis, President
 Michele Goetz, Past-President
 Dave Edwards, President-Elect
 Richard Jackson, Secretary/
Treasurer
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CSU Sacramento
University Union
San Diego State Univ
Research Foundation
CSU Long Beach
Associated Students
CSU Chico
Research Foundation
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Current Issues
Strengthening liaisons and partnerships
Supporting the CSU during the economic crisis
Viability of business in changing times
Union challenges to auxiliary employment
Increased compliance issues
Endowment management in declining markets
Integrated CSU Administration Manual (ICSUAM)
Enhancing group insurance/benefit programs
VEBA Trusts – unfunded liabilities
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Summary
Random House definition:
Auxiliary
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Subsidiary; additional; supplementary
Used as a reserve (auxiliary engine)
Giving support; serving as an aide; helpful
Questions?
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