CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATION (A Component Unit of California State University, Los Angeles)

Transcription

1 CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATION (A Component Unit of California State University, Los Angeles) Independent Auditor s Report, Financial Statements and Supplementary Information

2 Table of Contents Page(s) Independent Auditor's Report... 1 Financial Statements: Statement of Financial Position... 3 Statement of Activities... 4 Statement of Cash Flows... 5 Notes to Financial Statements... 7 Supplementary Information: Schedule of Net Position Schedule of Revenues, Expenses, and Changes in Net Position Other Information Note to Supplementary Information... 27

3 Certified Public Accountants Sacramento Walnut Creek San Francisco Oakland Los Angeles Independent Auditor s Report Century City Encino Newport Beach To the Board of Trustees of California State University, Los Angeles Foundation Los Angeles, California San Diego We have audited the accompanying financial statements of the California State University, Los Angeles Foundation (the Foundation), a component unit of California State University, Los Angeles, which comprise the statement of financial position as of, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Foundation s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the California State University, Los Angeles Foundation as of, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Macias Gini & O Connell LLP 777 S. Figueroa Street, Suite 2500 Los Angeles, CA

4 Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information on pages 17 to 27 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Los Angeles, California September 29,

5 Statement of Financial Position Assets Current assets: Cash and cash equivalents $ 528,041 Restricted cash Investments Accounts receivable 70,420 1,725,544 23,884 Prepaid expenses and other current assets Pledges receivable 250 3,531,920 Total current assets 5,880,059 Noncurrent assets: Endowment cash and cash equivalents Endowment investments Investments, long term portion Pledges receivable, net of current portion 1,217,638 23,431,577 8,780,424 8,090,962 Total noncurrent assets 41,520,601 Total assets $ 47,400,660 Liabilities and Net Assets Current liabilities: Accounts payable and other liabilities $ 106,974 Accounts payable to affiliates 9,552 Depository accounts 70,420 Total liabilities 186,946 Net assets: Unrestricted: General operations 1,196,526 Board designated 871,817 Total unrestricted 2,068,343 Temporarily restricted 18,669,116 Permanently restricted 26,476,255 Total net assets 47,213,714 Total liabilities and net assets $ 47,400,660 See accompanying notes to financial statements. 3

6 Statement of Activities For the Year Ended Temporarily Permanently Unrestricted Restricted Restricted Total Support and Revenues: Gifts and contributions $ 362,421 $ 10,335,572 $ 1,836,768 $ 12,534,761 Inkind donations 10,305 10,305 Investment income (loss), net 58,127 (331,565) 16,291 (257,147) Net assets released from restrictions Total support and revenues 1,704,953 (1,704,953) 2,135,806 8,299,054 1,853,059 12,287,919 Expenses: Program services: Scholarships 1,095,181 1,095,181 College grants 342, ,218 Total program services 1,437,399 1,437,399 Supporting services: General and administrative 649, ,012 Fundraising and development 79,397 79,397 Total supporting services 728, ,409 Total expenses 2,165,808 2,165,808 Change in net assets Net Assets: Beginning of year End of year (30,002) 8,299,054 1,853,059 10,122,111 2,098,345 10,370,062 24,623,196 37,091,603 $ 2,068,343 $ 18,669,116 $ 26,476,255 $ 47,213,714 See accompanying notes to financial statements. 4

7 Statement of Cash Flows For the Year Ended Cash flows from operating activities: Change in net assets $ 10,122,111 Adjustments to reconcile change in net assets to net cash used by operating activities: Contributions restricted for longterm investments (1,836,768) Donated securities (122,952) Net realized loss on sale of investments Net unrealized loss on investments 269, ,122 (Increase) decrease in assets Accounts receivable 1,482 Pledges receivable (10,233,982) Increase (decrease) in liabilities Accounts payable and other liabilities 67,460 Accounts payable to affiliates (25,010) Net cash used by operating activities (794,433) Cash flows from investing activities: Purchase of investments (15,306,417) Proceeds from sale of investments 14,198,167 Proceeds from sale of donated securities 122,952 Net cash used by investing activities (985,298) Cash flows from financing activities: Contributions to the endowment fund 1,836,768 Interest and dividends restricted for longterm investments 16,291 Cash disbursements from grants made from depository accounts (245,820) Net cash provided by financing activities 1,607,239 Net decrease in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $ (172,492) 1,988,591 1,816,099 Cash and cash equivalents components: Cash and cash equivalents $ 528,041 Restricted cash 70,420 Endowment cash and cash equivalents 1,217,638 Total cash and cash equivalents $ 1,816,099 See accompanying notes to financial statements. 5

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9 Notes to Financial Statements NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization California State University, Los Angeles Foundation (the Foundation), a component unit of California State University, Los Angeles, is a nonprofit public benefit corporation organized under the California Nonprofit Public Benefit Corporation Law. It was incorporated on September 9, 1985, for the primary purpose of encouraging and promoting the scientific, literary, educational, and charitable purposes of California State University, Los Angeles (the University) by providing financial assistance through scholarships, grants, gifts, loans, and other means to the University, its support groups, students, faculty, and staff. Basis of Accounting The accompanying financial statements have been prepared using the accrual basis of accounting. Financial Statement Presentation The Financial Accounting Standards Board (FASB) implemented the FASB Accounting Standards Codification (Codification) effective July 1, The codification has become the source of authoritative accounting principles generally accepted in the United States of America (U.S. GAAP) recognized by FASB to be applied to nongovernmental entities. On the effective date, the Codification superseded all then existing accounting and reporting standards. All other nongrandfathered accounting literature not included in the Codification has become nonauthoritative. References to U.S. GAAP included in the FASB Codification are noted as Accounting Standards Codification (ASC). Basis of Presentation Net assets and revenues, gains and losses are classified based on the existence or absence of donorimposed restrictions. Accordingly, net assets of the Foundation are classified and reported as follows: Unrestricted net assets Unrestricted net assets represent net assets that are not subject to donorimposed restrictions and that may be expendable for any purpose in performing the primary objectives of the Foundation. Board designated unrestricted net assets represent net assets that are not subject to donorimposed restrictions but are restricted as to usage by the Board of Trustees of the Foundation. Temporarily restricted net assets Temporarily restricted net assets represent net assets subject to donorimposed stipulations that may or will be met either by actions of the Foundation and/or the passage of time. As the restrictions are satisfied, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the accompanying financial statements as net assets released from restrictions. Permanently restricted net assets Permanently restricted net assets include gifts, pledges and other contributions limited by donorimposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by the actions of the Foundation and reclassifications from or to other classes of net assets as a consequence of donorimposed stipulations. 7

10 Notes to Financial Statements (Continued) NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Cash Equivalents The Foundation considers all investments with a maturity date of three months or less to be cash equivalents. Cash equivalents consist primarily of money market accounts which can be fully liquidated on demand. Cash and cash equivalent that are part of the Foundation s endowment funds are not used for daily operating purposes. Fair Value of Financial Instruments The Foundation has implemented the provisions of ASC 820, Fair Value Measurements and Disclosures, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Investments Investments purchased by the Foundation or contributed by donors are recorded at fair value. Contributed securities are recorded at fair value at the date of donation. Realized gains and losses on sale of securities are determined based on the cost of the individual securities and the sale price at the date of sale. Unrealized gains and losses on marketable securities are calculated as the difference between cost and fair value of all securities on hand from one year to the next. Interest and dividend income is reported in the year earned. Investment income or loss (including realized and unrealized gains and losses on investments, interest, and dividends) is included in the statement of activities as increases or decreases in unrestricted net assets unless the income or loss is restricted by donor or law. Pledges Receivable Unconditional promises to give to be received in one year or less are recorded as pledges receivable at net realizable value. Pledges receivable expected to be received beyond one year are initially reported at fair value, estimated by discounting them to their present value at a riskadjusted rate. Thereafter, amortization of discounts is recorded as additional contribution revenue. The discount rate used to calculate the present value of the pledges was 0.91%. No allowance for uncollectible pledges has been established since management believes all pledges are collectible after considering such factors as prior collection history, type of contribution, relationship with donors and other relevant factors. Capital Assets Capital assets are recorded at cost at the date of purchase or fair value at the date of donation. Betterments and improvements that significantly enhance an asset or extend the useful life of an asset are capitalized to fixed assets while ordinary repair costs that do not significantly extend the useful life of the asset are expensed as incurred. Depreciation is calculated using the straight line method over an asset's estimated useful life. All capital assets are fully depreciated. 8

11 Notes to Financial Statements (Continued) NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Functional Allocation of Expenses The costs of providing various programs and other activities of the Foundation have been summarized on a functional basis in the accompanying statement of activities. Accordingly, certain costs have been allocated among the programs and services benefited. Income Taxes The Foundation is exempt from federal income and state franchise taxes under Section 501(c)(3) of the Internal Revenue Code and Section 23701d of the California Revenue and Taxation Code, respectively. Accordingly, there is no provision for income taxes in the financial statements. However, the Foundation remains subject to taxes on any net income which is derived from a trade or business regularly carried on and unrelated to its exempt purpose. Management has considered its tax positions and believes that all of the positions taken by the Foundation in their federal and state exempt organization tax returns are more likely than not to be sustained upon examinations. The Foundation s returns are subject to examination by federal and state taxing authorities generally for three and four years, respectively after they are filed. Donated Assets, Services and Facilities The Foundation records the value of assets, services and facilities when there is an objective basis available to measure their value. Donated assets and facilities are reflected as support and expense or capitalized if an investment or capital asset in the accompanying financial statements at fair value. Donated services are recorded at fair value when a specialized skill is provided that would have otherwise been purchased. Donated facilities and assets are reflected in the accompanying financial statements as inkind donations and gifts and contributions, respectively. The Foundation recorded a total of $10,305 inkind donations during the year ended. The Foundation had no donated services during the year. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 2 CASH AND CASH EQUIVALENTS Cash and cash equivalents are comprised of the following: Cash on hand $ 400 Cash in bank 452,271 Money market funds 1,363,428 Total $ 1,816,099 9

12 Notes to Financial Statements (Continued) NOTE 2 CASH AND CASH EQUIVALENTS (Continued) The California Government Code requires California banks and savings and loan associations to secure the Foundation' deposits. Obligations pledged to secure deposits must be delivered to an institution other than the institution in which the deposit is made; however, the trust department of the same institution may hold them. Written custodial agreements are required that provide, among other things, that the collateral securities are held separate from the assets of the custodial institution. The pledge to secure deposits is administered by the California Superintendent of Banks. The market value of pledged securities must equal 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure an agency's deposits by pledging first trust deeds or first mortgages having a value of 150 percent of an agency's total deposits. All such collateral is considered to be held by the pledging financial institutions trust departments or agents in the name of the Foundation. At, cash held by financial institutions for the Foundation of $585,917 was entirely insured and collateralized as described above. The book balance at for the Foundation was $452,671. As of June 30, 2016, the balance of the money market funds was $1,363,428 which is uninsured. NOTE 3 INVESTMENTS Investments are comprised of the following: Concentration of Credit Risk Fair Value Local Agency Investment Fund $ 123,896 Certificates of deposit 5,238,778 Exchangedtraded funds 1,800,582 Common stocks 15,942,217 U.S. treasury securities 32,103 U.S. agency securities 506,901 Corporate bonds 243,947 Mutual funds 10,049,121 Total $ 33,937,545 As of, the Foundation invested $123,896 in the State of California Local Agency Investment Fund (LAIF). This account is not insured by the Federal Deposit Insurance Corporation. The Foundation maintains investment balances of $33,813,649 at brokerage firms located in Southern California of which all such balances are uninsured. Uninsured balances aggregate to $33,937,545 at. Investments are classified on the statement of financial position as follows: Investments, current portion $ 1,725,544 Investments, long term portion 8,780,424 Endowment investments $ 23,431,577 33,937,545 10

13 Notes to Financial Statements (Continued) NOTE 3 INVESTMENTS (Continued) Investment income (loss) is comprised of the following: Interest and dividends income $ 976,079 Net realized loss on sale of investments (269,104) Net unrealized loss on investments $ (964,122) (257,147) Investment management fees were $164,964 for the year ended. NOTE 4 PLEDGES RECEIVABLE Pledges receivable consists of several multiyear and one year grants for scholarships and other temporarily restricted purposes. As of, pledges receivable are expected to be realized in the following period: Year ending: 2017 $ 3,531, ,482, ,246, ,111, ,108,026 Thereafter 2,403,000 Subtotal 11,882,606 Discount (259,724) Total pledges receivable $ 11,622,882 NOTE 5 DEPOSITORY ACCOUNTS Current portion $ 3,531,920 Noncurrent portion 8,090,962 $ 11,622,882 Depository Accounts and Restricted Cash consist of $70,420 received from The Education Financing Foundation of California for the purpose of funding scholarships awarded to graduating high school and second year students. Eligible students are within the University s service territory and may attend colleges throughout California. This program is also known as the Los Angeles California Student and Access Program (CalSOAP) Consortium. CalSOAP is responsible for selecting the candidates and determining the award amount, the Foundation functions as an agent on behalf of CalSOAP. 11

14 Notes to Financial Statements (Continued) NOTE 6 NET ASSETS Board Designated Unrestricted Net Assets Board designated unrestricted net assets consists of funds that are to be used for scholarships. Additionally, earnings have also been designated for scholarships. Board designated unrestricted net assets as of June 30, 2016 was $871,817. Temporarily Restricted Net Assets Temporarily restricted net assets are available for the following purposes as of : Scholarships $ 5,973,905 Student Investment Fund/ Marshall Gellar 201,376 California State University, Los Angeles Environmental Science Fund 442,653 Other College Grants 760,419 Tennis Projects 680,629 Luckman Fine Arts Complex 558,557 University Honors College 21,028 Rongxiang Xu 9,691,245 Guglielmo Endowed Chair 339,304 $ 18,669,116 Net Assets Released from Restrictions Temporarily restricted net assets were released from restrictions for the following purposes: Scholarships $ 905,038 College Grants, Cal State L.A. 342,218 Investment Management Fees 164,964 Annual General Fund Support $ 292,733 1,704,953 Permanently Restricted Net Assets Permanently restricted net assets totaling $26,476,255 are restricted for investments in perpetuity, which represents the Foundation s endowment funds. At the request of the donor, any interest not awarded to any qualified candidates should be retained as permanently restricted in the same year. The amount of investment income to be retained as permanently restricted was $16,291 for the year ended. 12

15 Notes to Financial Statements (Continued) NOTE 7 FAIR VALUE MEASUREMENTS ASC 820 emphasizes that fair value is a marketbased measurement, not an entityspecific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair market value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Investments in an external government investment pool are not subject to reporting within the level hierarchy. Level 1 inputs utilize quoted prices in active market for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liabilities, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based upon inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Fair Values Measured on a Recurring Basis Fair values of assets measured on a recurring basis as of, are as follows: Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Certificates of deposit $ 5,238,778 $ $ 5,238,778 $ Exchangetraded funds 1,800,582 1,800,582 Common stocks 15,942,217 15,942,217 U.S. treasury securities 32,103 32,103 U.S. agency securities 506, ,901 Corporate bonds 243, ,947 Mutual funds 10,049,121 10,049,121 Subtotal $ 33,813,649 $ 28,574,871 $ 5,238,778 $ Local Agency Investment Fund $ 123,896 Investment portfolio total $ 33,937,545 13

16 Notes to Financial Statements (Continued) NOTE 7 FAIR VALUE MEASUREMENTS (Continued) Fair values for fixed income securities, equity securities and mutual funds are determined by reference to quoted market prices for identical assets actively traded on open exchanges. Fair values for certificates of deposits and the Local Agency Investment Fund are determined by reference to quoted market prices for similar assets. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short term nature of these financial instruments and consequently these instruments are not presented in the table shown above. NOTE 8 ENDOWMENT FUNDS General Board Policy on Administration of Endowment Funds The Board of Trustees of the Foundation has interpreted the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donorrestricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Foundation classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts donated to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donorrestricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for spending by the Foundation in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, the organization considers the following factors in making a determination to appropriate or accumulate donorrestricted endowment funds: (1) The duration and preservation of the fund (2) The purposes of the organization and the donorrestricted endowment fund (3) General economic conditions (4) The possible effect of inflation and deflation (5) The expected total return from income and the appreciation of investments (6) Other resources of the organization (7) The investment policies of the organization Investment Policy for Endowment Funds The Foundation has adopted investment and spending policies, approved by the Board of Trustees, for endowment assets that attempt to provide a predictable stream of funding for the scholarships supported by its endowment assets, while also maintaining the purchasing power of those endowment assets over the longterm. Accordingly, the investment process seeks to achieve an aftercost total rate of return, including investment income as well as capital appreciation, which exceeds the annual distribution with acceptable levels of risk. Endowment assets are invested in a welldiversified asset mix, which includes equity, debt securities and mutual funds, that is intended to result in a consistent inflationprotected rate of return that has sufficient liquidity to make annual scholarship distributions of approximately 3% to 5% of the fair value of the endowment investments as of December 31, while growing the funds if possible. Investment assets 14

17 Notes to Financial Statements (Continued) NOTE 8 ENDOWMENT FUNDS (Continued) and allocation between asset classes and strategies are managed to not expose the fund to unacceptable levels of risk. Spending Policy for Endowment Funds The Foundation has a policy of appropriating for distribution for scholarships each year approximately 3% to 5% of its endowed investment s fair value as of December 31. In establishing this policy, the Foundation considered the longterm expected return on its investment assets, the nature and duration of the endowment fund which must be maintained in perpetuity because of donor restrictions, and the possible effects of inflation. The policy is consistent with the Foundation s objective to maintain the purchasing power of the endowment assets as well as to provide additional real growth through new gifts and investment return. For the year ended, appropriation of $924,749 was made from the endowment fund for scholarship distributions. The Foundation has a policy of appropriating 5% of all contributions received for the endowment fund annually to cover general operating expenses of the Foundation of which donors are notified of upon gift acceptance. The amount appropriated from the endowment for general operations as of, was $60,645, which represented 5% of endowed contributions received. Additionally, the Foundation has a policy of appropriating up to 1.5% of its endowment fund s fair value as of June 30 of the prior year, for general operating expenses of the Foundation as established in the annual budget for the Foundation in July of the subsequent year. During the year ended, a $292,733 appropriation was made from the endowment fund for general operations expenses. Changes in endowment net assets for the year ended, are as follows: Unrestricted Temporarily Restricted Permanently Restricted Total Endowment net assets, June 30, 2015 $ 923,228 $ 5,267,115 $ 24,623,196 $ 30,813,539 Investment return Interest and dividends 896,406 16, ,697 Realized and unrealized loss on investments, net (53,847) (1,209,155) (1,263,002) Total investment return (53,847) (312,749) 16,291 (350,305) Investment management fees (164,964) (164,964) Gifts and contributions 2, ,738 1,897,413 2,002,587 Less: Administrative fees (5,137) (60,645) (65,782) Contributions, net 2,436 97,601 1,836,768 1,936,805 Appropriation of endowed assets for scholarships and operations (1,217,482) (1,217,482) Endowment net assets, $ 871,817 $ 3,669,521 $ 26,476,255 $ 31,017,593 15

18 Notes to Financial Statements (Continued) NOTE 8 ENDOWMENT FUNDS (Continued) Endowment net assets are composed of the following: Temporarily Permanently Unrestricted Restricted Restricted Total Donor restricted endowment funds $ $ 1,529,179 $ 26,476,255 $ 28,005,434 Board designated endowment funds 871,817 2,140,342 3,012,159 Endowment net assets $ 871,817 $ 3,669,521 $ 26,476,255 $ 31,017,593 NOTE 9 RELATED PARTY TRANSACTIONS The Foundation reimbursed the University $294,836 for services performed and other expenses incurred on its behalf during the year ended. The reimbursed amount was comprised of $73,960 for accounting services and $220,876 for other expenses incurred by the University on the Foundation's behalf. University personnel performed administrative services for the Foundation, and the charges related to such services totaled $100,872 during the year ended, of which the Foundation reimbursed the University. The University Student Union Board, California State University, Los Angeles (USU) provides the staff used during the Annual Fund Drive. The Foundation reimburses these personnel costs. For the year ended, the total personnel costs were $79,184, of which $3,177 was accrued. The campus provided support to the Annual Fund in the amount of $25,000. Accounts payable between the Foundation and its affiliated parties as of was: Cal State L.A. University Auxiliary Services, Inc $ 4,094 University Student Union at Cal State L.A. 3,177 California State University, Los Angeles $ 2,281 9,552 Accounts receivable between the Foundation and its affiliated parties as of was: Cal State L.A. University Auxiliary Services, Inc. $ 243 $ 243 NOTE 10 SUBSEQUENT EVENTS The Foundation has evaluated subsequent events and transactions for potential recognition or disclosure through September 29, 2016, which is the date the financial statements were available to be issued. 16

19 SUPPLEMENTARY INFORMATION

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21 Schedule of Net Position (for inclusion in the California State University) Assets: Current assets: Cash and cash equivalents $ 598,461 Shortterm investments 1,725,544 Accounts receivable, net 23,884 Leases receivable, current portion Notes receivable, current portion Pledges receivable, net 3,531,920 Prepaid expenses and other current assets 250 Total current assets 5,880,059 Noncurrent assets: Restricted cash and cash equivalents 1,217,638 Accounts receivable, net Leases receivable, net of current portion Notes receivable, net of current portion Student loans receivable, net Pledges receivable, net 8,090,962 Endowment investments 23,431,577 Other longterm investments 8,780,424 Capital assets, net Other assets Total noncurrent assets 41,520,601 Total assets 47,400,660 Deferred outflows of resources: Unamortized loss on debt refunding Net pension liability Others Liabilities: Total deferred outflows of resources Current liabilities: Accounts payable 16,526 Accrued salaries and benefits Accrued compensated absences, current portion Unearned revenue Capitalized lease obligations, current portion Longterm debt obligations, current portion Claims liability for losses and loss adjustment expenses, current portion Depository accounts 70,420 Other liabilities 100,000 Total current liabilities 186,946 Noncurrent liabilities: Accrued compensated absences, net of current portion Unearned revenue Grants refundable Capitalized lease obligations, net of current portion Longterm debt obligations, net of current portion Claims liability for losses and loss adjustment expenses, net of current portion Depository accounts Other postemployment benefits obligations Net pension liability Other liabilities Total noncurrent liabilities Total liabilities 186,946 Deferred inflows of resources: Service concession arrangements Net pension liability Unamortized gain on debt refunding Nonexchange transactions Others Total deferred inflows of resources Net Position: Net investment in capital assets Restricted for: Nonexpendable endowments 26,476,255 Expendable: Scholarships and fellowships 8,419,314 Research Loans Capital projects 10,249,802 Debt service Others Unrestricted 2,068,343 Total net position $ 47,213,714 See accompanying note to supplementary information. 17

22 Schedule of Revenues, Expenses and Changes in Net Position Year Ended (for inclusion in the California State University) Revenues: Operating revenues: Student tuition and fees (net of scholarship allowances of $ ) $ Grants and contracts, noncapital: Federal State Local Nongovernmental Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship allowances of $ ) Other operating revenues Expenses: Total operating revenues Operating expenses: Instruction Research Public service Academic support Student services Institutional support 563,440 Operation and maintenance of plant Student grants and scholarships 1,095,181 Auxiliary enterprise expenses Depreciation and amortization Total operating expenses 1,658,621 Operating income (loss) (1,658,621) Nonoperating revenues (expenses): State appropriations, noncapital Federal financial aid grants, noncapital State financial aid grants, noncapital Local financial aid grants, noncapital Nongovernmental and other financial aid grants, noncapital Other federal nonoperating grants, noncapital Gifts, noncapital 10,708,298 Investment income (loss), net (65,793) Endowment income (loss), net (356,323) Interest expense Other nonoperating revenues (expenses) (342,218) Net nonoperating revenues (expenses) 9,943,964 Income (loss) before other revenues (expenses) 8,285,343 State appropriations, capital Grants and gifts, capital Additions (reductions) to permanent endowments 1,836,768 Increase (decrease) in net position 10,122,111 Net position: Net position at beginning of year, as previously reported 37,091,603 Restatements Net position at beginning of year, as restated 37,091,603 Net position at end of year $ 47,213,714 See accompanying note to supplementary information. 18

23 Other Information (for inclusion in the California State University) 1 Restricted cash and cash equivalents at : Portion of restricted cash and cash equivalents related to endowments $ 1,217,638 All other restricted cash and cash equivalents Total restricted cash and cash equivalents $ 1,217, Composition of investments at : Current Unrestricted Current Restricted Total Current Noncurrent Unrestricted Noncurrent Restricted Total Noncurrent Total State of California Surplus Money Investment Fund (SMIF) $ $ $ $ $ $ $ State of California Local Agency Investment Fund (LAIF) 123, , ,896 Corporate bonds 243, , ,947 Certificates of deposit 1,401,160 1,401,160 3,837,618 3,837,618 5,238,778 Mutual funds 10,049,121 10,049,121 10,049,121 Money Market funds Repurchase agreements Commercial paper Asset backed securities Mortgage backed securties Municipal bonds U.S. agency securities 506, , ,901 U.S. treasury securities 32,103 32,103 32,103 Equity securities 158, ,593 15,783,624 15,783,624 15,942,217 Exchange traded funds (ETFs) 41,895 41,895 1,758,687 1,758,687 1,800,582 Alternative investments: Private equity (including limited partnerships) Hedge funds Managed futures Real estate investments (including REITs) Commodities Derivatives Other alternative investment types Other external investment pools (excluding SWIFT) Other major investments: Total investments 1,725,544 1,725,544 3,869,721 28,342,280 32,212,001 33,937,545 Less endowment investments (enter as negative number) (23,431,577) (23,431,577) (23,431,577) Total investments $ 1,725,544 $ $ 1,725,544 $ 3,869,721 $ 4,910,703 $ 8,780,424 $ 10,505, Investments held by the University under contractual agreements at : Portion of investments in note 2.1 held by the University under contractual agreements at : $ $ $ $ $ $ $ 2.3 Restricted current investments at related to: Amount Add description $ Total restricted current investments at $ See accompanying note to supplementary information. 19

24 Other Information (for inclusion in the California State University) 2.4 Restricted noncurrent investments at related to: Amount Endowment investment $ 23,431,577 Temporary restricted investment 4,910,703 Total restricted noncurrent investments at $ 28,342, Fair value hierarchy in investments at : Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value (NAV) State of California Surplus Money Investment Fund (SMIF) $ $ $ $ $ State of California Local Agency Investment Fund (LAIF) 123,896 Corporate bonds 243, ,947 Certificates of deposit 5,238,778 5,238,778 Mutual funds 10,049,121 10,049,121 Money Market funds Repurchase agreements Commercial paper Asset backed securities Mortgage backed securties Municipal bonds U.S. agency securities 506, ,901 U.S. treasury securities 32,103 32,103 Equity securities 15,942,217 15,942,217 Exchange traded funds (ETFs) 1,800,582 1,800,582 Alternative investments: Private equity (including limited partnerships) Hedge funds Managed futures Real estate investments (including REITs) Commodities Derivatives Other alternative investment types Other external investment pools (excluding SWIFT) Other major investments: less endowment investment (23,431,577) Total investments $ 10,505,968 $ 28,574,871 $ 5,238,778 $ $ See accompanying note to supplementary information. 20

25 Other Information (for inclusion in the California State University) 3.1 Composition of capital assets at : Balance Transfers of Balance Prior period June 30, 2015 Completed Balance June 30, 2015 Adjustments Reclassifications (restated) Additions Reductions CWIP Nondepreciable/nonamortizable capital assets: Land and land improvements $ $ $ $ $ $ $ $ Works of art and historical treasures Construction work in progress (CWIP) Intangible assets: Rights and easements Patents, copyrights and trademarks Internally generated intangible assets in progress Licenses and permits Other intangible assets: Total intangible assets Total nondepreciable/nonamortizable capital assets Depreciable/amortizable capital assets: Buildings and building improvements 77,900 77,900 77,900 Improvements, other than buildings Infrastructure Leasehold improvements Personal property: Equipment Library books and materials Intangible assets: Software and websites Rights and easements Patents, copyright and trademarks Licenses and permits Other intangible assets: Total intangible assets Total depreciable/amortizable capital assets 77,900 77,900 77,900 Total capital assets 77,900 77,900 77,900 Less accumulated depreciation/amortization: Buildings and building improvements (77,900) (77,900) (77,900) Improvements, other than buildings Infrastructure Leasehold improvements Personal property: Equipment Library books and materials Intangible assets: Software and websites Rights and easements Patents, copyright and trademarks Licenses and permits Other intangible assets: Add description Add description Add description Add description Add description Total intangible assets Total accumulated depreciation/amortization (77,900) (77,900) (77,900) Total capital assets, net $ $ $ $ $ $ $ $ See accompanying note to supplementary information. 21

26 Other Information (for inclusion in the California State University) 3.2 Detail of depreciation and amortization expense for the year ended : Depreciation and amortization expense related to capital assets $ Amortization expense related to other assets Total depreciation and amortization $ 4 Longterm liabilities activity schedule: Accrued compensated absences Claims liability for losses and loss adjustment expenses Balance Balance Prior period June 30, 2015 Balance Current Longterm June 30, 2015 adjustments Reclassifications (restated) Additions Reductions portion portion $ $ $ $ $ $ $ $ $ Capitalized lease obligations: Gross balance Unamortized premium / (discount) on capitalized lease obligations Total capitalized lease obligations Longterm debt obligations: Auxiliary revenue bonds Commercial paper Notes payable related to SRB Others: (list by type) Total longterm debt obligations Unamortized bond premium / (discount) Total longterm debt obligations, net Total longterm liabilities $ $ $ $ $ $ $ $ $ 5 Future minimum lease payments capitalized lease obligations: Capitalized lease obligations related to SRB All other capitalized lease obligations Total Principal and Principal and Principal and Principal Interest Interest Principal Interest Interest Principal Interest Interest Year ending June 30: 2017 $ $ $ $ $ $ $ $ $ Total minimum lease payments Less amounts representing interest Present value of future minimum lease payments Unamortized net premium (discount) Total capitalized lease obligations Less: current portion Capitalized lease obligation, net of current portion $ See accompanying note to supplementary information. 22

27 Other Information (for inclusion in the California State University) 6 Longterm debt obligation schedule All other longterm Auxiliary revenue bonds debt obligations Total Principal and Principal and Principal and Principal Interest Interest Principal Interest Interest Principal Interest Interest Year ending June 30: 2017 $ $ $ $ $ $ $ $ $ Total minimum payments Less amounts representing interest Present value of future minimum payments Unamortized net premium (discount) Total longterm debt obligations Less: current portion Longterm debt obligations, net of current portion $ 7 Calculation of net position 7.1 Calculation of net position net investment in capital assets Capital assets, net of accumulated depreciation $ Capitalized lease obligations, current portion Capitalized lease obligations, net of current portion Longterm debt obligations, current portion Longterm debt obligations, net of current portion Portion of outstanding debt that is unspent at yearend Other adjustments: (please list) Net position net investment in capital asset $ 7.2 Calculation of net position restricted for nonexpendable endowments Portion of restricted cash and cash equivalents related to endowments $ 1,217,638 Endowment investments 23,431,577 Other adjustments: (please list) Prior year rebench 374,408 Pledges and bequest receivable 1,452,632 Net position Restricted for nonexpendable endowments per SNP $ 26,476,255 See accompanying note to supplementary information. 23

28 Other Information (for inclusion in the California State University) 8 Transactions with related entities Amount Payments to University for salaries of University personnel working on contracts, grants, and other programs $ 100,872 Payments to University for other than salaries of University personnel 321,519 Payments received from University for services, space, and programs Giftsinkind to the University from discretely presented component units Gifts (cash or assets) to the University from discretely presented component units 117,604 Accounts (payable to) University (enter as negative number) (2,281) Other amounts (payable to) University (enter as negative number) Accounts receivable from University Other amounts receivable from University 9 Other postemployment benefits obligation (OPEB) Annual required contribution (ARC) $ Contributions during the year Increase (decrease) in net OPEB obligation (NOO) Other adjustments NOO beginning of year NOO end of year $ 10 Pollution remediation liabilities under GASB Statement No. 49: Description Amount Add description $ Total pollution remediation liabilities $ Less: current portion Pollution remedition liabilities, net of current portion See accompanying note to supplementary information. 24

29 Other Information (for inclusion in the California State University) 11 The nature and amount of the prior period adjustment(s) recorded to beginning net position Net Position Class Amount Dr. (Cr.) Net position as of June 30, 2015, as previously reported $ 37,091,603 Prior period adjustments: 1 (list description of each adjustment) 2 (list description of each adjustment) 3 (list description of each adjustment) 4 (list description of each adjustment) 5 (list description of each adjustment) 6 (list description of each adjustment) 7 (list description of each adjustment) 8 (list description of each adjustment) 9 (list description of each adjustment) 10 (list description of each adjustment) Net position as of June 30, 2013, as restated $ 37,091,603 Provide a detailed breakdown of the journal entries (at the financial statement line item level) booked to record each prior period adjustment: Debit Credit Net position class: 1 (breakdown of adjusting journal entry) $ $ Net position class: 2 (breakdown of adjusting journal entry) Net position class: 3 (breakdown of adjusting journal entry) Net position class: 4 (breakdown of adjusting journal entry) Net position class: 5 (breakdown of adjusting journal entry) Net position class: 6 (breakdown of adjusting journal entry) Net position class: 7 (breakdown of adjusting journal entry) Net position class: 8 (breakdown of adjusting journal entry) Net position class: 9 (breakdown of adjusting journal entry) Net position class: 10 (breakdown of adjusting journal entry) See accompanying note to supplementary information. 25

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31 Note to Supplementary information NOTE 1 BASIS OF PRESENTATION These schedules are prepared in accordance with the instructions listed in an Administrative Directive, dated June 24, 2003; Financial Reporting Requirements for Auxiliary Organizations, from the California State University Office of the Chancellor and revision dated August 15, As a result, these schedules do not represent financial statements prepared in accordance with accounting principles generally accepted in the United States of America. 27