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Associated Students Incorporated of California State University, Stanislaus

Financial Statements

(With Supplementary Information) and Independent Auditor’s Report

June 30, 2017 and 2016

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Index

1

Page

Independent Auditor’s Report 2

Financial Statements

Statements of Financial Position 4

Statements of Activities 5

Statements of Functional Expenses 7

Statements of Cash Flows 9

Notes to Financial Statements 10

Supplementary Information

Schedule of Net Position 19

Schedule of Revenues, Expenses and Changes in Net Position 20

Other Information 21 DRAFT

2

Independent Auditor’s Report

The Board of Directors Associated Students Incorporated of California State University, Stanislaus Report on the Financial Statements We have audited the accompanying financial statements of Associated Students Incorporated of California State University, Stanislaus (a California State University Auxiliary Organization), which comprise the statement of financial position as of June 30, 2017, and the related statements of activities, functional expenses 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 2017 financial statements referred to above present fairly, in all material respects, the financial position of Associated Students Incorporated of California State University, Stanislaus as of June 30, 2017, 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.

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Prior Period Financial Statements

The financial statements of Associated Students Incorporated of California State University, Stanislaus as of and for the year ended June 30, 2016 were audited by other auditors, whose report dated September 15, 2016 expressed an unmodified opinion on those statements. Report on Supplementary Information Our audit was conducted for the purpose of forming an opinion on the 2017 financial statements as a whole. The supplementary information included on pages 19 to 27 is presented for purposes of additional analysis and is not a required part of the 2017 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 2017 financial statements. The information has been subjected to the auditing procedures applied in the audit of the 2017 financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the 2017 financial statements or to the 2017 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 2017 financial statements as a whole.

(REPORT DATE) Los Angeles, California

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Statements of Financial Position

June 30, 2017 and 2016

See Notes to Financial Statements. 4

2017 2016Current assets

Cash and cash equivalents 1,863,442$ 1,504,058$ Restricted cash - custodial accounts 103,553 101,430 Accounts receivable 6,574 1,593 Due from related parties 17,263 332,333 Student fee billing receivable 485,871 163,957 Prepaid expenses and other 3,632 7,325

Total 2,480,335$ 2,110,696$

Current liabilitiesAccounts payable 18,294$ 6,216$ Accrued expenses 6,535 9,718 Custodial accounts 103,553 101,430 Due to related parties 171,370 15,156 Unearned revenue - student fees held by the University 485,586 163,860

Total current liabilities 785,338 296,380

Postretirement benefit obligation 189,081 472,248 Pension obligation 99,610 89,253

Total liabilities 1,074,029 857,881

Commitments and contingencies - -

Net assetsUnrestricted

Undesignated 615,006 461,515 Board designated 750,000 750,000

Total unrestricted 1,365,006 1,211,515

Temporarily restricted 41,300 41,300

Total net assets 1,406,306 1,252,815

Total 2,480,335$ 2,110,696$

Assets

Liabilities and Net Assets

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Statements of Activities

Year Ended June 30, 2017


Temporarily Unrestricted restricted Total

Operating revenuesStudent fees 829,050$ -$ 829,050$ Merchandise sales 103,426 - 103,426 Programs 40,453 - 40,453 Donations 100 - 100 Net assets released from restriction - - -

Total operating revenues 973,029 - 973,029

Operating expensesProgram services

Student programs 281,241 - 281,241 Student leadership 155,778 - 155,778 Merchandise sales 254,291 - 254,291 Distinguished speaker series - - -

Total program services 691,310 - 691,310

General and administrative 420,907 - 420,907

Total operating expenses 1,112,217 - 1,112,217

Change in net assets from operating activities (139,188) - (139,188)

Nonoperating itemsPension related changes other than net periodic costs 283,167 - 283,167 Investment return, net 7,602 - 7,602 Other 1,910 - 1,910

Net nonoperating revenue 292,679 - 292,679

Change in net assets 153,491 - 153,491

Net assets, beginning 1,211,515 41,300 1,252,815

Net assets, end 1,365,006$ 41,300$ 1,406,306$

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Statements of Activities



Temporarily Unrestricted restricted Total

Operating revenuesStudent fees 1,180,899$ -$ 1,180,899$ Merchandise sales 61,626 - 61,626 Programs 13,278 - 13,278 Donations 3,209 - 3,209 Net assets released from restriction 3,700 (3,700) -

Total operating revenues 1,262,712 (3,700) 1,259,012

Operating expensesProgram services

Student programs 268,204 - 268,204 Student leadership 156,206 - 156,206 Merchandise sales 218,917 - 218,917 Distinguished speaker series 3,700 - 3,700

Total program services 647,027 - 647,027

General and administrative 533,872 - 533,872

Total operating expenses 1,180,899 - 1,180,899

Change in net assets from operating activities 81,813 (3,700) 78,113

Nonoperating itemsInvestment return, net 4,311 - 4,311 Other 5,031 - 5,031

Change in net assets 91,155 (3,700) 87,455

Net assets, beginning 1,120,360 45,000 1,165,360

Net assets, end 1,211,515$ 41,300$ 1,252,815$

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Statements of Functional Expenses



DistinguishedStudent Student Merchandise speaker General and

programs leadership sales series administrative Total

Employee benefits 28,435$ 208$ 46,266$ -$ 51,231$ 126,140$ Payroll - taxes 2,565 384 6,812 - 8,032 17,793 Payroll - wages 31,840 - 86,580 - 103,977 222,397 Student assistants 19,065 62,658 22,280 - 15,755 119,758 Workers' compensation - - - - 1,515 1,515

Total salaries and related expenses 81,905 63,250 161,938 - 180,510 487,603

Accounting and legal - - - - 10,342 10,342 Advertising 15,000 5,677 35 - 349 21,061 Awards, gifts and donations - 3,316 102 - 2,600 6,018 Bank charges - - - - 2,163 2,163 Computer - 1,410 3,688 - 900 5,998 Contractual services 680 29,730 - - 161,689 192,099 Cost of goods sold - - 86,769 - - 86,769 Employee and board functions - 6,473 - - - 6,473 Event costs 173,789 9,903 274 - 7,583 191,549 Insurance 226 - - - 10,157 10,383 Membership and dues - - - - 915 915 Miscellaneous - - - - 185 185 Printing 2,000 565 142 - 365 3,072 Professional development 163 5,800 - - 146 6,109 Rent - - - - 36,231 36,231 Repairs and maintenance 2,551 - - - - 2,551 Student club allocations - 9,030 - - - 9,030 Supplies 2,777 441 243 - 2,412 5,873 Telephone 430 1,901 1,054 - 1,496 4,881 Travel 1,720 18,282 46 - 2,864 22,912

Total 281,241$ 155,778$ 254,291$ -$ 420,907$ 1,112,217$

Program services

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Statements of Functional Expenses



DistinguishedStudent Student Merchandise speaker General and

programs leadership sales series administrative Total

Employee benefits 22,036$ 8,839$ 45,830$ -$ 156,988$ 233,693$ Payroll - taxes 3,347 2,409 6,882 - 5,987 18,625 Payroll - wages 42,523 25,586 88,666 - 76,898 233,673 Student assistants 19,247 57,598 23,617 - 19,590 120,052 Workers' compensation - - - - 2,036 2,036

Total salaries and related expenses 87,153 94,432 164,995 - 261,499 608,079

Accounting and legal - - - - 10,550 10,550 Advertising 8,297 2,455 95 - 446 11,293 Awards, gifts and donations 400 7,991 - - 3,932 12,323 Bank charges - 15 4 - 3,509 3,528 Computer 1,709 5,544 1,165 - 1,345 9,763 Contractual services 742 4,570 300 - 131,285 136,897 Cost of goods sold - - 49,666 - - 49,666 Depreciation - - - - 1,718 1,718 Employee and board functions - 5,325 - - 50,000 55,325 Event costs 149,850 7,036 682 3,700 7,096 168,364 Insurance - - - - 10,358 10,358 Membership and dues 1,048 - - - 1,477 2,525 Miscellaneous - 74 - - 524 598 Printing 1,811 389 - - - 2,200 Professional development 1,403 5,043 76 - 1,941 8,463 Rent - - - - 36,231 36,231 Repairs and maintenance 2,408 - - - - 2,408 Student club allocations - 7,001 - - - 7,001 Supplies 9,635 - 694 - 4,322 14,651 Telephone 730 2,862 1,150 - 1,740 6,482 Travel 3,018 13,469 90 - 5,899 22,476

Total 268,204$ 156,206$ 218,917$ 3,700$ 533,872$ 1,180,899$

Program services

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Statements of Cash Flows

Years Ended June 30, 2017 and 2016


2017 2016

Cash flows from operating activitiesChange in net assets 153,491$ 87,455$ Adjustments to reconcile change in net assets to net cash provided by operating activities

Depreciation - 1,718 Changes in operating assets and liabilities

Accounts receivable (4,981) (867) Due from related parties 315,070 16,904 Student fee billing receivable (321,914) (237) Prepaid expenses and other 3,693 73 Accounts payable 12,078 1,679 Accrued expenses (3,183) 3,203 Custodial accounts 2,123 15,451 Due to related parties 156,214 (14,611) Unearned revenue - student fees held by the University 321,726 (81,127) Postretirement benefit obligation (283,167) 126,380 Pension obligation 10,357 (7,063)

Net cash provided by operating activities 361,507 148,958

Net increase in cash and cash equivalents 361,507 148,958

Cash and cash equivalents, beginning 1,605,488 1,456,530

Cash and cash equivalents, end 1,966,995$ 1,605,488$

Cash and cash equivalents consist of the followingCash and cash equivalents 1,863,442$ 1,504,058$ Restricted cash - custodial accounts 103,553 101,430

1,966,995$ 1,605,488$

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Notes to Financial Statements

June 30, 2017 and 2016

10

Note 1 - Organization and summary of significant accounting policies

Business activity Associated Students Incorporated of California State University, Stanislaus (the “Organization”) was incorporated in the State of California on September 9, 1991. The Organization was formed and operates as a non-profit auxiliary organization of California State University, Stanislaus (“CSU Stanislaus” or the “University”) which has campuses in Turlock and Stockton, California. The Organization conducts the student government and student activities for the benefit of the students of the University. The Organization’s primary source of revenue is student fees that have been remitted to the University and are available upon request by the Organization.

Basis of accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Financial statement presentation The Organization reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

Unrestricted - Net assets that are not subject to explicit donor-imposed stipulations. Unrestricted net assets may be designated for specific purpose by action of the Board of Directors.

Board Designated Temporarily restricted - Net assets whose use by the Organization is subject to either explicit donor-imposed stipulations or by operation of law that can be fulfilled by actions of Associated Students or that expire by the passage of time.

Permanently restricted - Net assets subject to explicit donor-imposed stipulations that must be maintained permanently by the Organization and stipulate the use of income and/or appreciation as temporarily restricted based on donor-imposed stipulations or by operation of law. At June 30, 2017 and 2016, the Organization does not have any permanently restricted net assets.

Cash and cash equivalents Cash and cash equivalents includes cash on hand, demand deposits and all highly liquid investments with initial maturity at date of purchase of three months or less.

Accounts receivable Accounts receivable are stated at unpaid balances less an allowance for doubtful accounts. The Organization provides for losses on receivables using the allowance method which is based on experience and other circumstances. The Organization considers all accounts receivable to be fully collectible and, as such, an allowance for doubtful accounts is not considered necessary.

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Fair value measurements The Organization values certain of its financial assets and liabilities based on 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. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in inactive markets; or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data. Level 3 - Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The carrying value of cash and cash equivalents, receivables, and payables approximates fair value as of June 30, 2017 and 2016, due to the relative short maturities of these instruments.

Property and equipment Property and equipment are stated at cost less accumulated depreciation. The Organization capitalizes all expenditures for property and equipment in excess of $5,000. Equipment and improvements are recorded at cost or at estimated fair value at date of gift if donated. Depreciation is computed using the straight-line method over the estimated useful life of the asset of 5 years. Repairs and maintenance are charged to expense as incurred. As of June 30, 2017 and 2016, fixed assets of $8,593 were fully depreciated.

Student fees Each matriculated student of the University is required to pay $61 per semester for student body fees. These payments support the Organization’s operations and are collected and held by the University. Funds are released to the Organization on a reimbursement basis after expenditures have been incurred and billed to the University. The Organization records student fees as unearned revenue when collected by the University and records revenues as expenditures are billed to the University throughout the year. Advertising costs The Organization uses advertising to promote its programs among the audiences it serves. Advertising costs are expensed as incurred. Advertising expense for the years ended June 30, 2017 and 2016 was $21,061 and $11,293, respectively. Income taxes The Organization is a not-for-profit organization exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and Section 23701(d) of the Revenue Taxation Code of California. Accordingly, no provision for income taxes is included in the accompanying financial statements. The Organization has no unrecognized tax benefits at June 30, 2017 and 2016. The Organizations' federal and state income tax returns prior to 2014 and 2013, respectively, are closed and

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management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. If applicable, the Organization recognizes interest and penalties associated with tax matters as part of income tax expense and includes accrued interest and penalties with accounts payable and accrued expenses in the statements of financial position. Functional allocation of expenses The costs of providing programs and activities have been summarized on a functional basis in the statements of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications Certain reclassifications of 2016 amounts have been made to conform with the 2017 presentation.

Subsequent events The Organization has evaluated subsequent events through (REPORT DATE), which is the date the financial statements were available to be issued.

Note 2 - Cash and cash equivalents

The Organization maintains its cash in bank deposit accounts that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to a limit of $250,000 per depositor. At June 30, 2017, the Organization’s deposits with financial institutions held uninsured cash of $688,880. In addition, the Organization has deposited cash in the State Treasury’s Local Agency Investment Fund (“LAIF”). Deposits in LAIF are carried at fair value as reported by LAIF and are not insured by the federal government nor the State of California.

2017 2016

Cash on hand 350$ 550$ Deposits with financial institutions 932,687 577,670 Investments in LAIF 1,033,958 1,027,268

Total cash and cash equivalents 1,966,995$ 1,605,488$

Restricted cash - custodial accounts The Organization is a custodian for monies received and paid by various clubs on campus. A portion of the cash included in deposits with financial institutions, $103,553 and $101,430,

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June 30, 2017 and 2016

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represents the amount held by the Organization for these clubs at June 30, 2017 and 2016, respectively.

Investments in LAIF As of June 30, 2017 and 2016, investments are in LAIF, which is a voluntary program created by statute as an alternative for California’s local governments and special districts that allows them to participate in a major investment portfolio. It is under the administration of the California State Treasurer’s Office and it is used to fund any operating deficit. The amounts held in LAIF are considered liquid and therefore treated as a cash equivalent. Realized gains, losses and interest income are included in investment return in the statements of activities. The Organization’s investments in LAIF are measured and reported at fair value based on quoted prices for similar assets in an active market (Level 2).

Note 3 - Designated net assets

Unrestricted net assets were designated by the Board for the following purposes:

2017 2016

Current operating contingency 350,000$ 350,000$ Catastrophic events 200,000 200,000 Deferred health - postretirement 200,000 200,000

750,000$ 750,000$

Note 4 - Restrictions on temporarily restricted net assets

Temporarily restricted net assets of $41,300 were available for the Designated Speaker Series as of June 30, 2017 and 2016, respectively.

Note 5 - Leases and contingencies

The Organization subleases 4,645 square feet from the University Student Union of California State University, Stanislaus for $3,019 monthly. Rental expense for the years ended June 30, 2017 and 2016 was $36,231. On June 20, 2017, the Organization renewed its space lease, extending the lease expiration date through February 2018. The future minimum lease payments are $24,154 for the year ended June 30, 2018.

Note 6 - Related party transactions

The Organization enters into transactions with related parties, including:

California State University, Stanislaus (“CSU Stanislaus”) California State University, Stanislaus Auxiliary and Business Services (“ABS”) California State University, Stanislaus Foundation (“Foundation”) University Student Union of California State University, Stanislaus (“USU”)

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Transactions with related parties consist of the following for the year ended June 30, 2017:

CSUStanislaus ABS Foundation USU Total

Due from related parties 16,978$ -$ 285$ -$ 17,263$ Due to related parties (167,909) - - (3,461) (171,370) Payments made to related parties 192,977 3,899 5,102 48,313 250,291 Payments received from related (1,715,446) (517) (5,786) (25,189) (1,746,938)

Transactions with related parties consist of the following for the year ended June 30, 2016:CSU

Stanislaus ABS Foundation USU Total

Due from related parties 331,999$ -$ 334$ -$ 332,333$ Due to related parties (12,749) (298) - (2,109) (15,156) Payments made to related parties 189,868 4,101 11,447 52,120 257,536 Payments from related parties (1,405,838) (460) (10,803) (26,300) (1,443,401)

During the years ended June 30, 2017 and 2016, the transactions primarily consist of leases paid to related parties and reimbursements for expenses incurred. In addition, the student fee billing receivable of $485,871 and $163,957, respectively, as of June 30, 2017 and 2016 is due from the University.

Note 7 - Pension plan

The Organization contributes to the California Public Employees’ Retirement System (“CalPERS”), a cost-sharing multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating entities within the State of California. The four auxiliary organizations at California State University, Stanislaus contribute to CalPERS through ABS. All direct full-time Organization employees are covered by the plans. Reimbursed employees are covered by CSU Stanislaus’ plan.

The defined benefit plan uses the Entry Age Normal Actuarial Cost Method, which is a projected benefit cost method. According to this cost method, the normal cost for an employee is the level amount that would fund the projected benefit if it were paid annually from the date of employment until retirement. The auxiliaries fund the plan based upon a percentage of qualified payrolls. CalPERS also uses the level percentage of payroll method to amortize any unfunded actuarial liabilities.

In addition to a contribution made by the Organization, active participating employees are required to contribute a portion of their monthly salaries to the pension plans. Employees whose start date was before June 30, 2013 contribute 5% of their monthly salary to the Classic Plan. Employees with hire dates after June 30, 2013 contribute 6.25% to the PEPRA pension account. For the years ended June 30, 2017 and 2016, the Organization contributed 8.8% and 9.16% respectively of payroll expense.

The Organization had multiple pension plans in place at June 30, 2017 and 2016. The Classic and PEPRA (the “Active”) plans are underfunded by $50,472 and $40,115 as of June 30, 2017 and 2016, respectively. According to the actuarial report for the plan years ended June 30, 2017 and 2016, the total pool accrued liability was $13,889,938,645 and 13,137,020,035 respectively. Total

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June 30, 2017 and 2016

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pooled plan assets for the years ended June 30, 2017 and 2016 were $11,466,469,739 and 10,349,221,827, respectively.

For the years ended June 30, 2017 and 2016, plan assets, allocated by CalPERS were $246,883 and $225,945, and the total actuarial present value of accumulated plan benefits is $299,638 and 266,060, and contributions from all employers totaled $17,771 and $17,741, respectively. The plan was 82% and 85% funded, respectively, for the years ended June 30, 2017 and 2016. The total pension obligation for the active plans is $50,472 and $40,115 as of June 30, 2017 and 2016, respectively. The Organization represents less than 5% of total plan assets.

In addition to the Active plans, the pension has a plan which was transferred from ABS and assumed by the Organization. The plan had an outstanding pension obligation of $49,138 at June 30, 2017 and 2016. No comprehensive annual financial report is issued by CalPERS for the pension plan and it is recorded at the value set upon transfer. The plan is inactive and no new participants are added into the plan.

CalPERS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the CalPERS’ annual financial report may be obtained from the CalPERS Headquarters Office, 400 Q Street, Sacramento, California 95811. Information about benefits and contributions expected to be paid in each of the next five fiscal years and thereafter has not been provided by CalPERS.

Note 8 - Postretirement benefit plan

ASI provides lifetime post-retirement medical coverage to employees (and their dependents) who retire at age 50 or older with at least five years of service with ABS, USU, or the Organization. The Organization pays a portion of the cost of the benefit, up to a predetermined cap. Retirees are responsible for costs in excess of the cap. At June 30, 2017 and 2016, the Organization had six employees who were eligible to participate in the plan. The Organization did not make any contributions to the plan during the years ended June 30, 2017 and 2016.

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June 30, 2017 and 2016

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2017 2016Obligations and funded status at June 30

Change in benefit obligationBenefit obligation at beginning of year 472,248$ 345,868$ Service cost 25,737 19,709 Interest cost 7,041 15,218 Actuarial (gain)/loss (313,221) 95,734 Benefits paid (2,724) (4,281)

Benefit obligation at end of year 189,081$ 472,248$

Funded statusBenefit obligation 189,081$ 472,248$ Unrecognized net actuarial (gain) loss (127,442) 182,093

Accrued benefit cost 316,523$ 290,155$

Measurement date June 30, 2017 June 30, 2016

Unfunded status at end of year (189,081)$ (472,248)$

Amounts recognized in the statements of financial position

Postretirement benefit obligation 189,081$ 472,248$

Service cost 25,737$ 19,709$ Interest cost 7,041 15,218 Amortization of transition obligation - 2 Amortization of net loss (gain) (3,686) 2,589

Net periodic benefit cost 29,092$ 37,518$

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing costs between the employer and plan members to that point.

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Actuarial methods and assumption Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and the plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

Assumptions

2017 2016Weighted average assumptions at June 30,

Discount rate 3.84% 3.62%Expected long-term return on plan assets N/A N/ARate of compensation increase N/A N/AMedical trend

Initial 5.50% 5.80%Ultimate 4.50% 4.50%Number of years to ultimate 4 years 5 years

Expected benefit payments

2018 2,869$ 2019 3,105 2020 3,343 2021 3,585 2022 3,828 2023-2026 23,119

The Organization expects to contribute $2,869 during the next fiscal year. DRAFT

Supplementary Information

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Schedule of Net Position

June 30, 2017 (for inclusion in the California State University)

See Independent Auditor’s Report. 19

AssetsCurrent assets:

Cash and cash equivalents 829,484$ Short-term investments 1,033,958 Accounts receivable, net 509,708 Capital leases receivable, current portion - Notes receivable, current portion - Pledges receivable, net - Prepaid expenses and other current assets 3,632

Total current assets 2,376,782

Noncurrent assets:Restricted cash and cash equivalents 103,553 Accounts receivable, net - Capital leases receivable, net of current portion - Notes receivable, net of current portion - Student loans receivable, net - Pledges receivable, net - Endowment investments - Other long-term investments - Capital assets, net - Other assets -

Total noncurrent assets 103,553 Total assets 2,480,335

Deferred outflows of resources:Unamortized loss on debt refunding(s) - Net pension liability - Others -

Total deferred outflows of resources -

LiabilitiesCurrent liabilities:

Accounts payable 189,664 Accrued salaries and benefits 3,492 Accrued compensated absences, current portion 3,043 Unearned revenue 485,586 Capital lease obligations, current portion - Long-term debt, current portion - Claims liability for losses and loss adjustment expenses, current portion - Depository accounts - Other current liabilities 103,553

Total current liabilities 785,338

Noncurrent liabilities:Accrued compensated absences, net of current portion - Unearned revenue - Grants refundable - Capital lease obligations, net of current portion - Long-term debt, net of current portion - Claims liability for losses and loss adjustment expenses, net of current portion - Depository accounts - Other postemployment benefits obligations 189,081 Net pension liability 99,610 Other liabilities -

Total noncurrent liabilities 288,691 Total liabilities 1,074,029

Deferred inflows of resources:Service concession arrangements - Net pension liability - Unamortized gain on debt refunding(s) - Nonexchange transactions - Others -

Total deferred inflows of resources -

Net position:Net investment in capital assets - Restricted for:

Nonexpendable - endowments - Expendable:

Scholarships and fellowships - Research - Loans - Capital projects - Debt service - Others 41,300

Unrestricted 1,365,006 Total net position 1,406,306$

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Schedule of Revenues, Expenses, and Changes in Net Position

Year Ended June 30, 2017 (for inclusion in the California State University)


Revenues:Operating revenues:

Student tuition and fees, gross 829,050$ Scholarship allowances (enter as negative) -

Student tuition and fees (net of scholarship allowances of $ 0) 829,050 Grants and contracts, noncapital:

Federal - State - Local -

Nongovernmental - Sales and services of educational activities -

Sales and services of auxiliary enterprises, gross 16,657 Scholarship allowances - aux ent (enter as negative) -

Sales and services of auxiliary enterprises (net of scholarship allowances of $ 0) 16,657 Other operating revenues 40,453

Total operating revenues 886,160

Expenses:Operating expenses:

Instruction - Research - Public service - Academic support - Student services 726,292 Institutional support 161,689 Operation and maintenance of plant - Student grants and scholarships - Auxiliary enterprise expenses 167,521 Depreciation and amortization -

Total operating expenses 1,055,502 Operating income (loss) (169,342)

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 100 Investment income (loss), net 7,602 Endowment income (loss), net - Interest expense - Other nonoperating revenues (expenses) - excl. interagency transfers 315,131 Other nonoperating revenues (expenses) - interagency transfers -

Net nonoperating revenues (expenses) 322,833 Income (loss) before other revenues (expenses) 153,491

State appropriations, capital - Grants and gifts, capital - Additions (reductions) to permanent endowments -

Increase (decrease) in net position 153,491

Net position:Net position at beginning of year, as previously reported 1,252,815 Restatements - Net position at beginning of year, as restated 1,252,815 Net position at end of year 1,406,306$

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Other Information

Year Ended June 30, 2017 (for inclusion in the California State University)


1 - Noncurrent restricted cash and cash equivalents at June 30, 2017:Portion of restricted cash and cash equivalents related to endowments -$ All other restricted cash and cash equivalents 103,553

Total restricted cash and cash equivalents 103,553$

2.1 - Composition of investments at June 30, 2017: Current Unrestricted Current Restricted Total CurrentNoncurrent Unrestricted

Noncurrent Restricted Total Noncurrent Total

State of California Surplus Money Investment Fund (SMIF) -$ -$ -$ -$ -$ -$ -$ State of California Local Agency Investment Fund (LAIF) 1,033,958 - 1,033,958 - - - 1,033,958 Corporate bonds - - - - - - - Certificates of deposit - - - - - - - Mutual funds - - - - - - - Money market funds - - - - - - - Repurchase agreements - - - - - - - Commercial paper - - - - - - - Asset backed securities - - - - - - - Mortgage backed securities - - - - - - - Municipal bonds - - - - - - - US agency securities - - - - - - - US treasury securities - - - - - - - Equity securities - - - - - - - Exchange traded funds - - - - - - - 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:- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Other major investments:- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Total investments 1,033,958 - 1,033,958 - - - 1,033,958 Less endowment investments (enter as negative number) - - - - - - -

Total investments, net of endowments 1,033,958$ -$ 1,033,958$ -$ -$ -$ 1,033,958$

2.2 - Investments held by the University under contractual agreements at June 30, 2017 :Portion of investments in note 2.1 held by the University under contractual agreements: - - - - - - -

2.3 - Restricted current investments at June 30, 2017 related to:- - - - - - - - - -

Total restricted current investments at June 30, 2017 -$

2.4 - Restricted noncurrent investments at June 30, 2017 related to:Endowment Investments -

- - - - - - - - -

Total restricted noncurrent investments at June 30, 2017 -$

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2.5 - Fair value hierarchy in investments at June 30, 2017: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) 1,033,958 - 1,033,958 - - Corporate bonds - - - - - Certificates of deposit - - - - - Mutual funds - - - - - Money market funds - - - - - Repurchase agreements - - - - - Commercial paper - - - - - Asset backed securities - - - - - Mortgage backed securities - - - - - Municipal bonds - - - - - US agency securities - - - - - US treasury securities - - - - - Equity securities - - - - - Exchange traded funds - - - - - 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:- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Other major investments:- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Total investments 1,033,958$ 1,033,958$ -$ -$ -$

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3 - Capital assets

3.1 - Composition of capital assets at June 30, 2017:Balance June 30,

2016Prior Period Adjustments Reclassifications

Balance June 30, 2016 (Restated) Additions Reductions

Transfer of completed CWIP

Balance June 30, 2017

Non-depreciable/Non-amortizable capital assets:Land and land improvements -$ -$ -$ -$ -$ -$ -$ -$ Works of art and historical treasures - - - - - - - - Construction work in progress (CWIP) - - - - - - - - Intangible assets:

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 non-depreciable/non-amortizable capital assets - - - - - - - -

Depreciable/Amortizable capital assets:Buildings and building improvements - - - - - - - - Improvements, other than buildings - - - - - - - - Infrastructure - - - - - - - - Leasehold improvements - - - - - - - - Personal property:

Equipment 8,593 - - 8,593 - - - 8,593 Library books and materials - - - - - - - -

Intangible assets:Intangible assets - - - - - - - - Software and websites - - - - - - - - Rights and easements - - - - - - - - Patents, copyrights and trademarks - - - - - - - - Licenses and permits - - - - - - - -


Total intangible assets - - - - - - - - Total depreciable/amortizable capital assets 8,593 - - 8,593 - - - 8,593

Total capital assets 8,593 - - 8,593 - - - 8,593

Less accumulated depreciation/amortization: (enter as negative number, except for reduction, enter as positive number)Buildings and building improvements - - - - - - - Improvements, other than buildings - - - - - - - Infrastructure - - - - - - - Leasehold improvements - - - - - - - Personal property:

Equipment (8,593) - - (8,593) - - (8,593) Library books and materials - - - - - - -

Intangible assets:Intangible assets - - - - - - - - Software and websites - - - - - - - - Rights and easements - - - - - - - - Patents, copyrights and trademarks - - - - - - - - Licenses and permits - - - - - - - -


Total intangible assets - - - - - - - - Total accumulated depreciation/amortization (8,593) - - (8,593) - - - (8,593)

Total capital assets, net -$ -$ -$ -$ -$ -$ -$ -$

-$ - -$

4 - Long-term liabilities activity schedule

Balance June 30, 2016

Prior Period Adjustments Reclassifications

Balance June 30, 2016 (Restated) Additions Reductions Balance June 30, 2017 Current Portion Long-term Portion

Accrued compensated absences 6,974$ -$ -$ 6,974$ 12,492$ (16,423)$ 3,043$ 3,043$ -$ Claims liability for losses and loss adjustment expenses - - - - - - - - -

Capital lease obligations:Gross balance - - - - - - - - - Unamortized net premium / (discount) on capital lease obligations - - - - - - - -

Total capital lease obligations - - - - - - - - -

Long-term debt:Auxiliary revenue bonds - - - - - - - - - Other bonds (non-revenue bonds) - - - - - - - - - Commercial paper - - - - - - - - - Notes payable related to SRB - - - - - - - - - Other: (list by type)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Total - - - - - - - - -

Unamortized net bond premium / (discount) - - - - - - - - Total long-term debt - - - - - - - - -

Total long-term liabilities 6,974$ -$ -$ 6,974$ 12,491$ (16,423)$ 3,043$ 3,043$ -$

3.2 - Detail of depreciation and amortization expense for the year ended June 30, 2017:Depreciation and amortization expense related to capital assetsAmortization expense related to other assets

Total depreciation and amortization

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5 - Future minimum lease payments

Year Ending June 30: Principal SRB Interest SRBPrincipal and Interest SRB Principal Only Interest Only

Principal and Interest Other Principal Interest

Principal and Interest

2018 -$ - - - - - - - -

2019 - - - - - - - - -

2020 - - - - - - - - -

2021 - - - - - - - - -

2022 - - - - - - - - -

2023 - 2027 - - - - - - - - -

2028 - 2032 - - - - - - - - -

2033 - 2037 - - - - - - - - -

2038 - 2042 - - - - - - - - -

2043 - 2047 - - - - - - - - -

2048 - 2052 - - - - - - - - -

2053 - 2057 - - - - - - - - -

2058 - 2062 - - - - - - - - -

2063 - 2067 - - - - - - - - - Total minimum lease payments -$ - - - - - - - - Less: amounts representing interest - Present value of future minimum lease payments - Unamortized net premium / (discount) on capital lease obligation - Total capital lease obligations - Less: current portion -

Capital lease obligations, net of current portion -$

Agree with FN46 - Long-term debt schedule

Year ended June 30: Principal Only Interest OnlyPrincipal and

Interest Principal Only Interest OnlyPrincipal and

Interest Principal Only Interest OnlyPrincipal and

Interest2018 -$ - - - - - - - - 2019 - - - - - - - - - 2020 - - - - - - - - - 2021 - - - - - - - - - 2022 - - - - - - - - -

2023 - 2027 - - - - - - - - - 2028 - 2032 - - - - - - - - - 2033 - 2037 - - - - - - - - - 2038 - 2042 - - - - - - - - - 2043 - 2047 - - - - - - - - - 2048 - 2052 - - - - - - - - - 2053 - 2057 - - - - - - - - - 2058 - 2062 - - - - - - - - - 2063 - 2067 - - - - - - - - -

Total minimum debt payments -$ - - - - - - - - Less: amounts representing interest - Present value of future minimum payments - Unamortized net bond premium / (discount) - Total long-term debt - Less: current portion -

Long-term debt, net of current portion -$

7.1 Net investment in capital assetsCapital assets, net of accumulated depreciation -$ Capital lease obligations, current portion - Capital lease obligations, net of current portion - Long-term debt, current portion - Long-term debt, net of current portion - Portion of o/s debt that is unspent at year-end (i.e. unspent bond proceeds) (enter as positive number) - Unamortized loss (gain) on debt refunding - Other adjustments: (please list)

- - - - - - - - - -

Net position - net investment in capital assets, per SNP -$

7.2 Restricted for nonexpendable - endowmentsPortion of restricted cash and cash equivalents related to endowments -$ Endowment investments - Other adjustments: (please list)

- - - - - - - - - -

Net position - Restricted for nonexpendable - endowments per SNP -$

7 - Calculation of net position per Statement of Net Position (SNP)

Capital lease obligations related to SRB Total capital lease obligations

Auxiliary revenue bonds All other long-term debt Total long-term debt

All other capital lease obligations

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Note 8 - Transactions with Related Entities

Payments to University for salaries of University personnel working on contracts, grants, and other programs -

Payments to University for other than salaries of University personnel 192,977

Payments received from University for services, space, and programs 1,715,446

Gifts-in-kind to the University from discretely presented component units -

Gifts (cash or assets) to the University from discretely presented component units -

Accounts (payable to) University (enter as negative number) (167,909)

Other amounts (payable to) University (enter as negative number) -

Accounts receivable from University 17,263

Other amounts receivable from University -

Note 9 - Other Postemployment Benefits Obligation (OPEB)

Annual required contribution (ARC) -$ Contributions during the year: (enter as negative number) - Increase in net OPEB obligation (NOO) -

Other adjustments -

NOO - beginning of year 472,248 NOO - end of year 189,081$

Percentage of annual OPEB cost contributed during the year ended June 30, 2017 0%

10 - Pollution remediation liabilities under GASB 49: (List brief description and dollar amounts)

Descriptions: AmountNone -$

- - - - - - - - -

Total pollution remediation liabilities - Less: current portion (enter as negative number) - Pollution remediation liabilities, net of current portion -$

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Note 11 - Prior Period Adjustments

11.1 - The nature and amount of the prior period adjustment(s) recorded to beginning net position:

Net Position Class AmountNet position as of June 30, 2016, as previously reported 1,252,815$

Transaction1 - Transaction2 - Transaction3 - Transaction4 - Transaction5 - Transaction6 - Transaction7 - Transaction8 - Transaction9 - Transaction10 -

Net position as of June 30, 2016, as restated 1,252,815$

11.2 - Provide a detailed breakdown of the journal entries (at the financial statement line items level) booked to record each prior period adjustment as listed above:

Debit CreditTransaction1

Net Position Classification -$ -$ - - - - - - - - - - - - - - - -

Transaction2

Net Position Classification - - - - - - - - - - - - - - - - - -

Transaction3


Transaction4


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Transaction5


Transaction6


Transaction7


Transaction8


Transaction9


Transaction10


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