Trust Fund Guidelines

Per California Education Code section 89721, money received by the University, aside from State support, must meet certain sources or purposes and shall be deposited and maintained in a Trust Fund.

These include:

1. Any student loan or scholarship funds.
2. Room, board, and similar expenses of students enrolled in 菠菜网lol正规平台's international programs.
3. Funds held on deposit and subject to return upon approval of a proper application (e.g., equipment deposits.)
4. Mandatory student fees (fees all students pay to enroll at San José State)
5. Optional (non-mandatory) fees and charges for services, materials, and facilities. All fees that are deposited shall be used solely to meet the costs of providing these services, materials, and facilities.
6. Fees for parking, health facilities or health services, and for extension programs, special sessions, and other self-supporting instructional programs.
7. Lottery Funds.

Establishing a New Trust Fund

Most requests to establish a new trust fund stem from the collection of a new fee. New fees must be submitted to the Campus Fee Advisory Committee and approved before the related trust fund can be established. Revenues should not be collected in advance of receiving approval for a new trust fund. Please refer to the Campus Fee Program for more information.

Each trust fund established by 菠菜网lol正规平台 shall be supported by an executed Trust Fund Agreement [DocuSign], which clearly indicates the source and purpose of the trust fund. Supporting documentation should always accompany a trust fund agreement. In most cases, a proforma showing anticipated revenues and expenditures for the current fiscal year should be included. Other documents, such as agreements, documented restrictions or reporting requirements that will impact administration of the fund, should also be attached to the trust fund agreement. Questions regarding requesting a new trust fund should be directed to the Budget & Financial Management analyst assigned to your unit.

Each trust fund agreement is reviewed by Budget & Financial Management and then forwarded to the Senior Associate Vice President for Finance and Business Services for approval. Upon approval, Accounting Services assigns a new trust fund number and establishes the new fund in the CFS. The requester and the Bursar's Office are notified when the fund is ready for use.

Trust fund agreements are subject to renewal every three years.

Trust Fund Administration

Trust funds should only generate revenue to fund expenses associated with providing a service or activity, as specified in the Trust Fund Agreement. Trust funds should not generate significant surpluses. Trust fund expenditures may only be made against existing deposits - expenditures may not be made in advance of collecting revenues, even if revenues are strongly anticipated. The cash balance must not be negative.

Once established, the trust fund owner should review financial reports generated by the CFS Data Warehouse regularly to verify revenues, expenditures and fund (cash) balance.

It is the responsibility of account owners to pro-actively notify their account contact in Finance and Business Services of any change in authorized signers or authorized user/approver of the account.

Please include the new information:

• Name
• Position Title
• Effective date of the change

Allocation of Expense and Interest to Trust funds

Large self-supporting operations and auxiliary organizations that are included in the University Cost Allocation Plan are not governed by this section of the Trust Fund Guidelines.

Trust Funds essentially represent self-supporting activities. As such, the cost of providing insurance, and business and financial services must be recovered from (charged to) the Trust Fund. This section explains the charges that are assessed to Trust Funds and how they are determined.

Special Exemptions. Some trust funds are automatically exempted from charges. These include:

• Scholarship funds: in order to preserve the greatest support for student aid, these funds are not assessed risk or administrative charges.
• Lottery Education Funds: Lottery funds are considered a state appropriation, not a self-supporting activity.
• Miscellaneous course fees: Per Executive Order 1054, miscellaneous course fees (category III fees) may only be assessed for the actual cost of the materials or services provided and may not include any administrative charges or inflationary components.
• Capital Funds: Funds established to record Capital Projects [pdf].
• Internal Services Funds: These funds represent fees collected from campus units that are covered by the CSU Operating Fund, or by self-supporting units that reimburse the CSU Operating Fund for risk coverage and administrative services through the University Cost Allocation Program.
• Pass-through Funds: These are funds established to facilitate activities that do not fall under self-supporting activities, but instead are passed through campus accounts by necessity (an example is the Associated Student fee collected by the campus and passed through to Associated Students).
• Other: Special exemptions may be granted on a case-by-case basis where revenues are generated by activities that result from a student's enrollment in a course.  An example of this is theater productions, where participation in theater performance is required component of a course, and the performance generates revenues from ticket sales.

Other funds may be exempted from charges at the President and/or Chief Financial Officer's discretion, typically when a fund's dollar volume will be very small.

Some Trust Funds receive interest earnings on cash balances based on specific agreements with the President and Chief Financial Officer.

• Risk Coverage Fee

  • The risk coverage fee is a charge for insurance provided by the CSU Risk Management Authority (CSURMA). It covers workers' compensation, industrial liability, non-industrial liability, unemployment and risk liability costs.

    In addition to the automatic exemptions already described, the risk coverage fee will not be charged to specific operations that carry their own insurance (e.g., construction project contracts and auxiliary organizations), nor to mandatory campus fees (category II fees).

    The risk coverage fee is posted by Accounting Services on a basis, and will appear as an expenditure in account 660010-Insurance Expense. The fee is calculated as 1% of all expenditures posted during a 12-month period between June 1^st and May 31^st. Each quarter, the risk coverage fee is calculated as 1% of year-to-date expenses, and then any risk coverage fees assessed in prior quarters of the current year are deducted. The quarters end on August 31^st, November 30^th, February 28^th and May 31^st. Encumbrances and transfer out expenditure accounts (accounts starting with "670") are excluded from the 1% calculation.

    Note that the 1% risk coverage fee rate is recalculated each fiscal year and may change depending upon changes in the risk premiums charged to the University.

• Administrative Services Fee

  • Administrative services fees reimburse the Administration & Finance Division for providing business and financial services to Trust Fund activities. Charges come through one of two mechanisms: 1) the annual cost allocation plan, which includes large self-supporting units (e.g. Housing, Parking, CIDS, etc.), or 2) the administrative services fee.

    Units that are not included in the cost allocation plan and have trust funds with revenues of $5,000 or more collected/deposited in a given fiscal year will be charged the administrative services fee. Transfer In accounts (account codes starting with "570"), and cost recovery revenues (accounts 580094 and 580095) are excluded from the revenue base.

    The administrative services fee is calculated as 8% of all new revenues posted during a 12-month period between June 1^st and May 31^st. Administrative services charges are posted quarterly by Accounting Services and will appear as an expense in account 660898-Bus & Fin Services.

• Trust Fund Investment Income

  • Interest Earnings/Charges

    Income earned on trust fund investment balances (e.g., cash) is generally held and managed centrally by 菠菜网lol正规平台 under the purview of the President and the Chief Financial Officer/Vice President for Administration & Finance. However, exceptions are made for large self-supporting units, and scholarship and endowment funds. This section applies only to these funds.

    Investment earnings for large self-supporting units and scholarships/endowments are calculated based on the trust fund's average daily cash balance (ADB) during the month, and are posted by Accounting Services annual, or as information is provided by the Chancellor's Office. Funds that are eligible to earn interest will also be assessed interest charges if the average daily balance is negative.

    1. Income earned on endowment funds is posted as revenue to account 510090-Endowment-Others.
    2. Income earned on investment balances held for auxiliary organizations are posted to depository account 206803-Depository Accounts-Invmt Earn.
    3. All other investment income is posted as revenue to account 508001-Interest Fr External Invest.
• Centrally Paid Costs and Debt Service

  • Each year the Chancellor’s Office allocates direct and indirect costs to campuses as well as Systemwide Revenue Bond (SRB) debt service. The indirect costs are made up of the Department of Finance State Pro Rata charges and Chancellor’s Office (CO) overhead expenses. The State Pro Rata charges and CO overhead expenses are essentially a reimbursement to the State and the Chancellor’s Office for their costs associated with administering each campus’ non-state supported activities. The direct costs are made up of expenses related to bonds issued by CSU to build non-state facilities (e.g. 菠菜网lol正规平台’s Campus Village Housing Complex). 

    Each year, campuses receive a memo listing the annual amounts for State Pro Rata and Chancellor’s Office overhead charges (see link below). These charges are assessed through quarterly Interagency Financial Transaction (IFT). Each campus is then required to reallocate the direct and indirect expenses to the appropriate campus funds.

    The 菠菜网lol正规平台 funds that are impacted by these CO direct and indirect costs include: Professional & Continuing Education Fund (PaCE), Housing, Parking, Health Center (facility related only), Auxiliary Organizations, Student Union, and the following special trust funds:

    • All funds beginning with “65” (Miscellaneous Trust, CSU Fund 496)
    • Fund 76000 ( Capital Project Management, CSU Fund 542)
    • All funds beginning with “77” (Cost Recovery/Reciprocal and Nonreciprocal Campus, CSU Fund 543)
    • All funds beginning with “78” (Cost Recovery/Exchange and Nonexchange Auxiliary Orgs/3rd party, CSU Fund 544) – note that State Pro Rata charges for CSU 544 are waived beginning in FY 2012-13 per the Sr. AVP for Finance and Business Services

    The annual memo from the Chancellor’s Office specifically distributes direct and indirect costs to each of the self-support and auxiliary enterprises. However, the charges to the special trust funds listed above must be calculated and distributed by each campus. Because most of the indirect cost portion is for retired annuitant health and dental benefit costs, the Chancellor’s Office distributes these costs based on actual expenses recorded in account code 603005 (retirement costs) as of two years ago (this is the latest actual data they have when the charges are calculated). San José State distributes the expenses in the same way to the funds listed above.