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 For the Year Ended June 30, 2013

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... 26

3 Los Angeles 777 S. Figueroa Street, Suite 2500 Los Angeles, CA Sacramento Walnut Creek Independent Auditor s Report Oakland To the Board of Trustees California State University, Los Angeles Foundation Los Angeles, California We have audited the accompanying financial statements of 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 June 30, 2013, 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 entity 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 entity 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 California State University, Los Angeles Foundation as of June 30, 2013, 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. Century City Newport Beach San Diego Seattle

4 Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary schedules from page 17 to page 26 are presented for purposes of additional analysis and are 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 24,

5 STATEMENT OF FINANCIAL POSITION June 30, 2013 Assets Current assets Cash and cash equivalents Investments, current portion Accounts receivable $ 1,569, ,279 24,051 Prepaids and deposits Pledges receivable ,400 Total current assets 3,051,867 Noncurrent assets Endowed cash and cash equivalents 1,175,699 Endowed investments 16,179,700 Investments, long term portion 6,178,135 Pledges receivable, net of current portion 466,000 Total noncurrent assets 23,999,534 Total assets $ 27,051,401 Liabilities and net assets Liabilities Accounts payable and other liabilities $ 17,436 Accounts payable to affiliates 50,035 Depository accounts 329,490 Total liabilities 396,961 Net assets Unrestricted: General operations 900,745 Board designated 864,945 Total unrestricted 1,765,690 Temporarily restricted 6,428,871 Permanently restricted 18,459,879 Total net assets 26,654,440 Total liabilities and net assets $ 27,051,401 See accompanying notes to financial statements. 3

6 STATEMENT OF ACTIVITIES For the Year Ended June 30, 2013 Temporarily Restricted Permanently Restricted Unrestricted Total Support and revenues Gifts and contributions $ 258,705 $ 821,700 $ 2,133,363 $ 3,213,768 Inkind donations 7,875 7,875 Investment income, net 96,969 1,848,244 23,542 1,968,755 Net assets released from restrictions 2,101,749 (2,101,749) Total support and revenues 2,465, ,195 2,156,905 5,190,398 Expenses Program services: Scholarships 1,100,119 1,100,119 College grants 800, ,404 Total program services 1,900,523 1,900,523 Supporting services: General and administrative 493, ,617 Fundraising and development 65,309 65,309 Total supporting services 558, ,926 Total expenses 2,459,449 2,459,449 Change in net assets Net assets Beginning of year End of year 5, ,195 2,156,905 2,730,949 1,759,841 5,860,676 16,302,974 23,923,491 $ 1,765,690 $ 6,428,871 $ 18,459,879 $ 26,654,440 See accompanying notes to financial statements. 4

7 STATEMENT OF CASH FLOWS For The Year Ended June 30, 2013 Cash flows from operating activities Change in net assets $ 2,730,949 Adjustments to reconcile change in net assets to net cash provided by operating activities: Contributions restricted for longterm investments (2,133,363) Interest and dividends restricted for longterm investments (23,542) Donated securities (4,865) Net realized gain on sale of investments Net unrealized gain on investments (669,282) (616,623) (Increase) decrease in assets Accounts receivable (1,683) Prepaids and deposits (225) Pledges receivable (644,627) Increase (decrease) in liabilities Accounts payable and other liabilities 9,846 Accounts payable to affiliates (3,439) Net cash used in operating activities (1,356,854) Cash flows from investing activities Purchase of investments (1,882,850) Proceeds from sale of investments 1,577,490 Proceeds from sale of donated securities 4,865 Net cash used in investing activities (300,495) Cash flows from financing activities Contributions to the endowment fund 2,133,363 Interest and dividends restricted for longterm investments 23,542 Cash receipts from contributions received in depository accounts 302,000 Cash disbursements from grants made from depository accounts (228,000) Net cash provided by financing activities 2,230,905 Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $ 573,556 2,172,055 2,745,611 Cash and cash equivalents components Cash and cash equivalents $ 1,569,912 Endowed cash and cash equivalents 1,175,699 Total cash and cash equivalents $ 2,745,611 See accompanying notes to financial statements. 5

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9 NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2013 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization California State University, Los Angeles Foundation (the Foundation), a component unit of the California State University System, 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 Generally Accepted Accounting Principles (GAAP) recognized by FASB to be applied to nongovernmental entities. On the effective date of Codification, 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 GAAP included in the FASB Codification are noted as Accounting Standards Codification (ASC). Classification of Net Assets The Foundation reports information regarding their financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. A description of each of these net assets is 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 and pledges which require, by donor restriction, that the corpus be invested in perpetuity and only the income be made available for program operations in accordance with donor restrictions. 7

10 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Cash Equivalents For purposes of the statement of financial position and statement of cash flows 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. Fair Value of Financial Instruments The Foundation has adopted 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 stated at fair value on the statement of financial position. 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 are recorded as pledges receivable. Pledges receivable expected to be received beyond one year are recorded at the net present value of anticipated future cash flows. No allowance for uncollectible pledges has been established since management believes all pledges are collectible. Capital Assets Capital assets are recorded at cost at the date of purchase or fair market 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) FOR THE YEAR ENDED JUNE 30, 2013 NOTE 1 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 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. The Foundation has implemented ASC topic , Income taxes Overall Recognition, for uncertainty in tax positions and has determined there is no material impact on the financial statements. The Foundation s federal and state returns for 2012, 2011, 2010 and 2009 are subject to examination, generally for three years (federal) and four years (state) after they were 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 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 statements as inkind donations and gifts and contributions, respectively. The Foundation had no donated services during the year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. 9

12 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 NOTE 2 CASH AND CASH EQUIVALENTS Cash and cash equivalents are composed of the following: Cash on hand $ 400 Cash in bank 359,738 Money market funds 2,385,473 Total $ 2,745,611 The Foundation s cash deposits are contractually insured and collateralized in accordance with California Government Code requirements to secure its deposits by pledging government securities as collateral. The market value of pledged securities is equal to 110 percent of an agency s deposits. California law also allows financial institutions to secure an agency s deposits by pledging first trust deed mortgage notes having a value of 150 percent of an agency s total deposits. Collateral is considered to be held in the name of the Foundation. As of June 30, 2013, the book balance was $359,738 and the bank balance was $421,221, was entirely insured and collateralized as described above. As of June 30, 2013, the balance of the money market funds was $2,385,473, which is uninsured. NOTE 3 INVESTMENTS Investments are composed of the following: Fair Value Local Agency Investment Fund $ 122,847 Certificates of deposit 2,973,179 Equity securities 10,707,301 Government securities 67,585 Mutual funds 9,441,202 Total $ 23,312,114 Concentration of Credit Risk As of June 30, 2013, the Foundation invested $122,847 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 at brokerage firms located in Southern California of which all such balances are uninsured. Uninsured balances aggregate to $23,189,267 at June 30,

13 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 NOTE 3 INVESTMENTS (Continued) Investments are classified on the statement of financial position as follows: Investments, current portion $ 954,279 Investments, long term portion 6,178,135 Endowed investments 16,179,700 Investment income is composed of the following: $ 23,312,114 Interest and dividends $ 682,850 Net realized gain on investments 669,282 Net unrealized gain on investments 616,623 Investment management fees were $102,540 for the year ended June 30, NOTE 4 PLEDGES RECEIVABLE $ 1,968,755 Pledges receivable consists of several multiyear and one year grants for scholarships and other temporarily restricted purposes. Management approximates the net present value of these pledges to be equal to the full amount receivable from donors. As of June 30, 2013, pledges receivable are expected to be realized in the following periods: Year ended: 2014 $ 503, , , ,000 Total pledge receivable $ 969,400 Current portion $ 503,400 Noncurrent portion $ 466,000 NOTE 5 DEPOSITORY ACCOUNTS Depository accounts consist of $329,490 received solely from The Education Financing Foundation of California for the purpose of funding scholarships to graduating high school students that are within the University s service territory to attend colleges throughout California (the scholarship may be renewed for a second year). Since the vast majority of these scholarship funds will go to colleges other than the University, the funds have been classified as a liability. The $329,490 is also included in the Foundation's cash and cash equivalents. 11

14 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 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, 2013, was $864,945. Temporarily Restricted Net Assets Temporarily restricted net assets are available for the following purposes as of June 30, 2013: Scholarships $ 4,067,456 Student Investment Fund/ Marshall Gellar 160,872 CSULA Environmental Science Fund 507,930 Science Building Wing A&B 251,543 Other College Grants 527,033 Luckman Fine Arts Complex 555,708 University Honors College 20,758 Guglielmo Endowed Chair 337,571 $ 6,428,871 Net Assets Released from Restrictions Temporarily restricted net assets were released from restrictions for the following purposes: Permanently Restricted Net Assets Scholarships $ 1,044,191 College Grants, CSULA 800,403 Investment Management Fees 102,540 Annual General Fund Support 154,615 $ 2,101,749 Permanently restricted net assets totaling $18,459,879 are restricted for investment in perpetuity, which represents the Foundation s endowment funds. 12

15 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 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). 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 June 30, 2013, 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) Local Agency Investment Fund $ 122,847 $ $ 122,847 $ Certificates of deposit 2,973,179 2,973,179 Common stock 10,707,301 10,707,301 U.S. government securities 67,585 67,585 Mutual funds 9,441,202 9,441,202 Total $ 23,312,114 $ 20,216,088 $ 3,096,026 $ Fair values for fixed income and equity securities 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. 13

16 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 NOTE 7 FAIR VALUE MEASUREMENTS (Continued) The carrying value of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of fair value due to the short term nature of the 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 expenditure 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 4.5% of the fair market value of the endowed investments as of December 31, while growing the funds if possible. Investment assets and allocation between asset classes and strategies are managed to not expose the fund to unacceptable levels of risk. 14

17 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 NOTE 8 ENDOWMENT FUNDS (Continued) Spending Policy for Endowment Funds The Foundation has a policy of appropriating for distribution for scholarships each year approximately 3% to 4.5% of its endowed investment s fair market 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 June 30, 2013, a $602,313 appropriation 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 June 30, 2013, was $49,922 which represented 5% of endowed contributions received. Additionally, the Foundation has a policy of appropriating up to 1% of its endowment fund s fair market 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 June 30, 2013, a $154,615 appropriation was made from the endowment fund for general operations expenses. Changes in endowment net assets for the year ended June 30, 2013, are as follows: Unrestricted Temporarily Restricted Permanently Restricted Total Endowment net assets, June 30, 2012 $ 779,771 $ 1,891,431 $ 16,302,974 $ 18,974,176 Investment return Interest and dividends 615,151 2, ,393 Realized and unrealized gain, net 41,363 1,230,360 21,300 1,293,023 Total investment return 41,363 1,845,511 23,542 1,910,416 Investment management fees (102,540) (102,540) Grants and contributions 10,000 2,183,285 2,193,285 Less: Administrative fees (49,922) (49,922) Contributions, net 10,000 2,133,363 2,143,363 Transfers 43,811 43,811 Appropriation of endowed assets for scholarships and operations (759,169) (759,169) Endowment net assets, June 30, 2013 $ 864,945 $ 2,885,233 $ 18,459,879 $ 22,210,057 15

18 NOTES TO FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2013 NOTE 8 ENDOWMENT FUNDS (Continued) Endowment net assets are composed of the following: Temporarily Permanently Unrestricted Restricted Restricted Total Donor restricted endowment funds $ $ 2,885,233 $ 18,459,879 $ 21,345,112 Board designated endowment funds 864, ,945 Endowment net assets June 30, 2013 $ 864,945 $ 2,885,233 $ 18,459,879 $ 22,210,057 NOTE 9 RELATED PARTY TRANSACTIONS The Foundation reimbursed the University $259,326 for services performed and other expenses incurred on its behalf during the year ended June 30, The reimbursed amount was comprised of $73,960 for accounting services and $185,366 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 $79,630 during the year ended June 30, 2013, 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 June 30, 2013, the total personnel costs were $63,869, of which $3,099 was accrued. Accounts payable between the Foundation and its affiliated parties as of June 30, 2013 was: Cal State L.A. University Auxiliary Services, Inc. $ 762 University Student Union 3,099 California State University, Los Angeles $ 46,174 50,035 Accounts receivable from Cal State L.A. University Auxiliary Services as of June 30, 2013 was $200. NOTE 10 SUBSEQUENT EVENTS The Foundation has evaluated subsequent events through September 24, 2013, which is the date the financial statements were issued. 16

19 SUPPLEMENTARY INFORMATION

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21 Schedule of Net Position June 30, 2013 (for inclusion in the California State University) Assets: Current assets: Cash and cash equivalents $ 1,569,912 Shortterm investments 954,279 Accounts receivable, net 24,051 Leases receivable, current portion Notes receivable, current portion Pledges receivable, net 503,400 Prepaid expenses and other assets 225 Total current assets 3,051,867 Noncurrent assets: Restricted cash and cash equivalents 1,175,699 Accounts receivable, net Leases receivable, net of current portion Notes receivable, net of current portion Student loans receivable, net Pledges receivable, net 466,000 Endowment investments 16,179,700 Other longterm investments 6,178,135 Capital assets, net Other assets Total noncurrent assets 23,999,534 Total assets 27,051,401 Deferred outflows of resources: Unamortized loss on refunding(s) Total deferred outflows of resources Liabilities: Current liabilities: Accounts payable 67,471 Accrued salaries and benefits payable Accrued compensated absences current portion Unearned revenue Capitalized lease obligations current portion Longterm debt obligations current portion Selfinsurance claims liability current portion Depository accounts 329,490 Other liabilities Total current liabilities 396,961 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 Selfinsurance claims liabilities, net of current portion Depository accounts Other postemployment benefits obligation Other liabilities Total noncurrent liabilities Total liabilities 396,961 Deferred inflows of resources: Deferred inflows from SCAs, grants, and others Total deferred inflows of resources Net position: Net investment in capital assets Restricted for: Nonexpendable endowments 18,459,879 Expendable: Scholarships and fellowships 6,428,871 Research Loans Capital projects Debt service Other Unrestricted 1,765,690 Total net position $ 26,654,440 See accompanying note to supplementary information. 17

22 Schedule of Revenues, Expenses, and Changes in Net Position Year Ended June 30, 2013 (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 Total operating revenues Expenses: Operating expenses: Instruction Research Public service Academic support Student services Institutional support 512,314 Operation and maintenance of plant Student grants and scholarships 1,044,191 Auxiliary enterprise expenses Depreciation and amortization Total operating expenses 1,556,505 Operating income (loss) (1,556,505) 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 1,080,406 Investment income (loss), net 212,551 Endowment income income (loss), net 1,653,663 Interest expenses Other nonoperating revenues (expenses) (792,529) Net nonoperating revenues (expenses) 2,154,091 Income (loss) before other additions 597,586 State appropriations, capital Grants and gifts, capital Additions (reductions) to permanent endowments 2,133,363 Increase (decrease) in net position 2,730,949 Net position: Net position at beginning of year, as previously reported 23,923,491 Restatements Net position at beginning of year, as restated 23,923,491 Net position at end of year $ 26,654,440 See accompanying note to supplementary information. 18

23 Other Information Year Ended June 30, 2013 (for inclusion inthe California State University) 1 Restricted cash and cash equivalents at June 30, 2013: Portion of restricted cash and cash equivalents related to endowments $ 1,175,699 All other restricted cash and cash equivalents Total restricted cash and cash equivalents $ 1,175,699 OK 2.1 Composition of investments at June 30, 2013: 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) 122, , ,847 Wachovia Short Term Fund Wachovia Medium Term Fund Wachovia Equity Fund CSU Consolidated Investment Pool (includes SWIFT and 0948 SMIF) Common Fund Short Term Fund Common Fund Others Debt securities Equity securities 154, ,216 10,553,085 10,553,085 10,707,301 Fixed income securities (Treasury notes, GNMA's) 67,585 67,585 67,585 Land and other real estate Certificates of deposit 677, ,216 2,295,963 2,295,963 2,973,179 Notes receivable Mutual funds 9,441,202 9,441,202 9,441,202 Money Market funds Collateralized mortgage obligations: Inverse floaters Interestonly strips Agency passthrough Partnership interests (includes private passthrough) Alternative investments Hedge funds Other major investments: Total investments 954, ,279 2,295,963 20,061,872 22,357,835 23,312,114 Less endowment investments (enter as negative number) (16,179,700) (16,179,700) (16,179,700) Total investments 954, ,279 2,295,963 3,882,172 6,178,135 7,132, Investments held by the University under contractual agreements at June 30, 2013: Portion of investments in note 2.1 held by the University under contractual agreements at June 30, 2013 : 2.3 Restricted current investments at June 30, 2013 related to: Amount Add description $ Total restricted current investments at June 30, 2013 $ OK See accompanying note to supplementary information. 19

24 Other Information Year Ended June 30, 2013 (for inclusion inthe California State University) 2.4 Restricted noncurrent investments at June 30, 2013 related to: Amount Endowment investment $ 16,179,700 OK Temporary restricted investment 3,882,172 Total restricted noncurrent investments at June 30, 2013 $ 20,061,872 OK 3.1 Composition of capital assets at June 30, 2013: Balance Transfers of Balance Prior period June 30, 2012 Completed Balance June 30, 2012 Adjustments Reclassifications (restated) Additions Reductions CWIP June 30, 2013 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 See accompanying note to supplementary information. 20

25 Other Information Year Ended June 30, 2013 (for inclusion inthe California State University) 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: Total intangible assets Total accumulated depreciation/amortization (77,900) (77,900) (77,900) Total capital assets, net $ OK OK OK 3.2 Detail of depreciation and amortization expense for the year ended June 30, 2013: Depreciation and amortization expense related to capital assets $ Amortization expense related to other assets Total depreciation and amortization $ OK 4 Longterm liabilities activity schedule: Balance Balance Prior period June 30, 2012 Balance Current Longterm June 30, 2012 adjustments Reclassifications (restated) Additions Reductions June 30, 2013 portion portion Accrued compensated absences $ Capitalized lease obligations: Gross balance Unamortized premium / (discount) on capitalized lease obligations Total capitalized lease obligations Longterm debt obligations: Revenue Bonds Other bonds (nonrevenue Bonds) Commercial Paper Note Payable related to SRB Other: Total longterm debt obligations Unamortized bond premium / (discount) Unamortized loss on refunding Total longterm debt obligations, net Total longterm liabilities $ See accompanying note to supplementary information. 21

26 Other Information Year Ended June 30, 2013 (for inclusion inthe California State University) 5 Future minimum lease payments capital lease obligations: Principal and Principal Interest Interest Year ending June 30: Total minimum lease payments Less amounts representing interest Present value of future minimum lease payments Less: current portion OK Capitalized lease obligation, net of current portion $ OK 6 Longterm debt obligation schedule All other longterm Revenue Bonds debt obligations Total Principal and Principal and Principal and Principal Interest Interest Principal Interest Interest Principal Interest Interest Year ending June 30: 2014 $ Total $ See accompanying note to supplementary information. 22

27 Other Information Year Ended June 30, 2013 (for inclusion inthe California State University) 7 Calculation of net position Auxiliary Organizations Total GASB FASB Auxiliaries 7.1 Calculation of net position Net investment in capital assets Capital assets, net of accumulated depreciation $ OK Capitalized lease obligations current portion OK Capitalized lease obligations, net of current portion OK Longterm debt obligations current portion OK Longterm debt obligations, net of current portion OK Portion of outstanding debt that is unspent at yearend Other adjustments: (please list) Net position net investment in capital asset $ OK 7.2 Calculation of net position Restricted for nonexpendable endowments Portion of restricted cash and cash equivalents related to endowments $ 1,175,699 1,175,699 OK Endowment investments 16,179,700 16,179,700 OK Other adjustments: (please list) Pledges and bequest receivable 730, ,072 Prior year rebench 374, ,408 Net position Restricted for nonexpendable endowments per SNP $ 18,459,879 18,459,879 8 Transactions with Related Entities Amount Payments to University for salaries of University personnel working on contracts, grants, and other programs $ 79,630 Payments to University for other than salaries of University personnel 259,326 Payments received from University for services, space, and programs Giftsinkind to the University from Auxiliary Organizations Gifts (cash or assets) to the University from recognized Auxiliary Organizations Accounts (payable to) University (enter as negative number) (46,174) Other amounts (payable to) University (enter as negative number) Accounts receivable from University Other amounts receivable from University See accompanying note to supplementary information. 23

28 Other Information Year Ended June 30, 2013 (for inclusion inthe California State University) 9 Other Postemployment Benefits Obligation (OPEB) Annual required contribution (ARC) $ Contributions during the year Increase (decrease) in net OPEB obligation (NOO) 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 remediation liabilities, net of current portion OK 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, 2012, as previously reported $ 23,923,491 OK 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, 2012, as restated $ 23,923,491 OK See accompanying note to supplementary information. 24

29 Other Information Year Ended June 30, 2013 (for inclusion inthe California State University) 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) OK See accompanying note to supplementary information. 25

30 NOTE TO SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2013 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 9, As a result, these schedules do not represent financial statements prepared in accordance with generally accepted accounting principles issued by the Financial Accounting Standards Board (FASB). 26