Revenue Bonds Legal Basis
Accounting
Enterprise Fund
Operations in State
• Pre-Revenue Management Program.
• Except for Dorm Construction Fund balance, now
only spend-down.
• Campus collects fees for service provided,
deposits them to State Treasury bank account
and remits to the State Controller’s Office (SCO).
• To pay vendors, the campus cuts a check that
are initially backed by revolving fund resources.
• A claim schedule must be issued and submitted
to the SCO to draw funds from remitted resources
to replenish the revolving fund.
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Enterprise Fund
Operations in State
• The SCO maintains transactional detail by
campus agency, but centralizes the trial balance.
• The Chancellor’s Office picks up the net activity
by campus and any other central transactions to
mimic the SCO structure.
• To eliminate doubling up the reporting of
investment balances, the campuses reflect their
balance in the state using fund balance clearing.
• When the Chancellor’s Office picks up the net
activity, they mirror or show the opposite balance
in the fund balance clearing account for each
campus.
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What is Fund Balance
Clearing?
• Fund balance clearing is used to reflect the
receipts and disbursements that flow through the
State Controller’s Office.
• In governmental or appropriated funds, the
change in equity or revenues/expenses for the
year also close to fund balance clearing.
• However, in enterprise funds, it is only used to
record receipts/disbursements.
• For all funds, period 1-12 activity in fund balance
clearing must match the State’s postings to stay
in synch with State’s ledgers.
• Timing differences are okay until June 30.
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Sample Enterprise
Fund Activity
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0583-000-301
0583-000-301
Account Description
101004 Cash in State Treasury
Debit
Credit
305022 Fund Balance Clearing
1,800
To Record Campus A Activity for the Month
102001 Deposits in SMIF
101004 Cash in State Treasury
Account
Description
Debit
101001 Cash
1,800
Credit
2,200
504003 Parking Permits
2,200
To Record Parking Fees Collected
305022 Fund Balance Clearing
1,700
1,700
To Record State Sweep for Investment Activity
2,200
101001 Cash
2,200
To Record Remittance
660003 Supplies & Services
400
101001 Cash
400
To Record Vendor Invoice & Payment
101001 Cash
305022 Fund Balance Clearing
400
400
To Record Claim Schedule
5
Sample Enterprise
Fund Trial Balance
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0583-000-301
0583-000-301
Account Description
101004 Cash in State Treasury
102001 Deposits in SMIF
Debit
Credit
Account
100
305022 Fund Balance Clearing
1,700
305022 Fund Balance Clearing
1,800
Description
1,800
504003 Parking Permits
1,800
660003 Supplies & Services
Debit
Credit
1,800
2,200
400
2,200
2,200
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
0583-000-301
Account Description
101004 Cash in State Treasury
102001 Deposits in SMIF
Debit
Credit
100
1,700
504003 Parking Permits
660003 Supplies & Services
2,200
400
2,200
2,200
6
What is SRB?
• SRB – Systemwide Revenue Bond Program
• It is a systemwide program that issues bonds to
provide funding for board approved construction
projects.
• Depending on timing, it uses temporary financing,
via Bond Anticipation Notes (BANs) or
commercial paper. If used, the temporary
financing is gathered into a Bond issuance that
pays off the temporary funding and can include
additional funds for the project.
• Revenue is pledged to pay the bond, so program
is restricted to specific programs.
• Housing, Parking, CERF, Health Facility and Auxiliary
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What makes SRB
accounting activity unique?
• Pre-RMP: Nothing unique about Program Operations
Funds
• Housing, Parking, CERF and Health Facility
• Only Chancellor’s Office records the debt on Legal basis
records.
• Only Chancellor’s Office records activity in 0578 - Interest
& Redemption Fund
• The State Treasurer is the trustee of the SRB proceeds.
0576 – Dorm Construction Fund holds proceeds
• The Chancellor’s Office records the activity in cash &
investments
• Campuses given an allocation or a budget to spend
against
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How does the process
start? - Summarized
• A project is identified by the campus. The
campus works with Finance & Treasury (F&T) to
develop a Financial Plan.
• The plan will identify funding sources for the
project.
• The non-financial paperwork is submitted to
CPDC. There are approvals that must be gained
from F&T and CPDC for the project to move
forward.
• Once the project is initially approved by CPDC,
they request a project number.
• Project is placed on the Board of Trustee’s
agenda for approval.
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Two Separate BOT
Approvals
• It is important to
understand that there are
two separate approvals
that must be gained from
the Board of Trustee’s.
• Until the second approval
has been granted all the
costs of the project to
that point are funded by
the campus.
• The F&T non-state bond
funded flowchart shows
all of the steps.
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Once the project is a
go…
• The Chancellor’s Office will open accounts at the
SCO for BAN or bond proceeds, revenue and
transfer accounts, and project expense accounts
• Once State accounts are established, FNAT keys
are created, project expense accounts will
include project number.
• F&T will execute the CP or bond sale.
• Chancellor’s Office will remit and transfer funds.
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BAN Sale- Remit
Proceeds & Transfer
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0576-200-227
Account Description
Debit
101004 Cash in State Treasury
4,307,000
190012 Amount to be Provided
4,307,000
Credit
201005 Note Payable
4,307,000
509002 Proceeds from Bonds
4,307,000
Account
Description
Debit
Credit
To Record Proceeds from BAN Sale & Debt
680026 Transfer Out
4,307,000
101004 Cash in State Treasury
4,307,000
To Record Transfer Out to Upfront Accounts
0576-700-222
Account Description
101004 Cash in State Treasury
506026 Transfer In
Debit
Credit
4,307,000
4,307,000
To Record Transfer In from Clearing Accounts
12
Issue Allocation Order
• Chancellor’s Office will issue an Allocation Order
to establish Budget or spending authority in
campus project expense account.
13
Pay Vendors and Cash
Transfer Letters
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0576-700-222
0576-000-222
Account Description
680026 Transfer Out
Debit
Credit
Account
Description
6070xx Construction Expense
853,520
101004 Cash in State Treasury
853,520
305022 Fund Balance Clearing
Debit
Credit
830,883
830,883
To Record Vendor Payment
To Record Transfer Out to Project Accounts
0576-000-222
Account Description
6070xx
Construction Expense
Debit
Credit
22,637
101004 Cash in State Treasury
22,637
To Record Bond or Central Expense
101004 Cash in State Treasury
853,520
506026 Transfer In
853,520
To Record Transfer from Upfront Accounts
305022 Fund Balance Clearing
101004 Cash in State Treasury
830,883
830,883
To Record Campus Activity in Project Account
14
Bond Sale
• A sources and
uses schedule is
prepared by bond
counsel. This
nails down all of
the details of the
transaction.
15
Bond Sale- Remit
Proceeds & Transfer
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0576-201-227
Account Description
101004 Cash in State Treasury
Debit
Credit
Account
Description
Debit
Credit
23,956,418
509002 Proceeds from Bonds
23,956,418
To Record Proceeds from Bond Sale
680011 Transfer Out DIRF
1,746,532
101004 Cash in State Treasury
1,746,532
To Record Transfer of Capitalized Interest to DIRF
680026 Transfer Out
22,209,886
101004 Cash in State Treasury
22,209,886
To Record Transfer Out to Upfront Accounts
0576-300-222
Account Description
101004 Cash in State Treasury
506026 Transfer In
Debit
Credit
22,209,886
22,209,886
16
Bond Sale- Remit
Proceeds & Transfer
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0948-000-472
Account Description
190012 Amount to be Provided
Debit
Credit
Account
Description
Debit
Credit
23,730,000
262003 Bond Payable
23,730,000
To Record Bond Payable
0578-000-246
Account Description
101004 Cash in State Treasury
506010 Transfer In - DCF
Debit
Credit
1,746,532
1,746,532
To Record Receipt Capitalized Intrest from Bond Proceeds
17
Issue Allocation Order
for the Bond
• Chancellor’s Office will issue an Allocation Order
to establish Budget or spending authority in
campus project expense account.
18
Move Project Expenses
from BAN to Bond
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0576-700-222
Account Description
101004 Cash in State Treasury
Debit
Credit
1,457,262
506026 Transfer In
1,457,262
To Record Transfer In from Project Accounts
1,457,262
101004 Transfer In
1,457,262
To Record Transfer to Upfront Accounts
101004 Cash in State Treasury
Description
305022 Fund Balance Clearing
607xxx
1,395,886
Construction Expense
Debit
Credit
1,395,886
Construction Expenses
1,395,886
0576-600-222
607xxx
Construction Expenses
305022 Fund Balance Clearing
1,457,262
305022 Cash in State Treasury
607xxx
Account
To Record Clear Out of Expenses in BAN Account
0576-000-222
680026 Cash in State Treasury
0576-000-222
1,395,886
1,395,886
To Record BAN Expenses in Bond Project Account
61,376
To Record Clearing of BAN Project Account
0576-300-222
680026 Transfer Out
1,457,262
101004 Cash in State Treasury
1,457,262
To Record Transfer In from Project Accounts
0576-600-222
101004 Cash in State Treasury
1,457,262
506026 Transfer In
1,457,262
To Record Transfer from Upfront Accounts
305022 Fund Balance Clearing
607xxx
Construction Expense
1,395,886
61,376
101004 Cash in State Treasury
To Record Campus Activity in Project Account
1,457,262
19
Issue De-Allocation
Order for the BAN
• Chancellor’s Office will issue an De-Allocation
Order to removing the Budget or spending
authority in campus project expense account.
20
Pay Off BAN
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0576-700-222
Account Description
680026 Transfer Out
Debit
Credit
Account
Description
Debit
Credit
4,350,161
101004 Cash in State Treasury
4,350,161
To Record Transfer Out to Pay Off Debt
0576-200-227
Account Description
101004 Cash in State Treasury
Debit
Credit
4,350,161
506026 Transfer In
4,350,161
To Record Transfer from Upfront Accounts
660006 Interest Expense
660007 Principal
39,278
4,310,883
101004 Cash in State Treasury
4,350,161
To Record BAN Pay Off
201005 Note Payable
190012 Amount to be Provided
4,350,161
4,350,161
To Remove BAN Debt
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Pay Vendors and Cash
Transfer Letters
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0576-300-222
0576-600-222
Account Description
680026 Transfer Out
Debit
Credit
101004 Cash in State Treasury
Account
Description
6070xx Construction Expense
3,182,454
3,182,454
305022 Fund Balance Clearing
Debit
Credit
3,138,137
3,138,137
To Record Vendor Payment
To Record Transfer Out to Project Accounts
0576-600-222
Account Description
6070xx
Construction Expense
Debit
Credit
44,317
101004 Cash in State Treasury
44,317
To Record Bond or Central Expense
101004 Cash in State Treasury
3,182,454
506026 Transfer In
3,182,454
To Record Transfer from Upfront Accounts
305022 Fund Balance Clearing
101004 Cash in State Treasury
3,138,137
3,138,137
To Record Campus Activity in Project Account
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Transfer Debt Service
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0948-000-472
0948-000-472
Account Description
108090 Investments
Debit
Credit
571000 Interagency Transfer In
1,559,733
Description
Debit
108090 Investments
Credit
1,559,733
1,559,733
To Record Debt Service Transfer
To Record Campus Debt Service Transfer
680011 Transfer Out to 0578
Account
671000 Interagency Transfer Out
1,559,733
1,559,733
108090 Investments
1,559,733
To Record Debt Service Transfer to 0578
0578-000-246
Account Description
101004 Cash in State Treasury
506025 Transfer In from 0948
Debit
Credit
1,559,733
1,559,733
To Record Transfer from 0948 and Remittance
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Debt Service Payment
Chancellor’s Office
Campus
Legal Basis Ledgers
Legal Basis Ledgers
SCO Fund - Subfund - CSU Fund
SCO Fund - Subfund - CSU Fund
0578-000-246
Account Description
Debit
660006 Interest Expense
1,064,733
660007 Principal on Debt
495,000
101004 Cash in State Treasury
Credit
Account
Description
Debit
Credit
1,559,733
To Record Debt Service Payment
0948-000-472
Account Description
262003 Bond Payable
190012 Amount to be Provided
Debit
Credit
495,000
495,000
To Reduce Bond Payable for Principal Payment
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