independent auditor’s report, financial statements and … · 2016-12-08 · september 22, 2015 ....

CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATION (A Component Unit of California

State University, Los Angeles)

Independent Auditor’s Report, Financial Statements

and Supplementary Information

June 30, 2015

CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATION

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 ...................................................................................................................... 19

Schedule of Revenues, Expenses, and Changes in Net Position .......................................................... 20 Other Information ................................................................................................................................. 21 Note to Supplementary Information ..................................................................................................... 27

Independent Auditor’s Report

To the Board of Trustees of California State University, Los Angeles Foundation Los Angeles, California We have audited the accompanying financial statements of the California State University, Los Angeles Foundation (the Foundation), a component unit of California State University, Los Angeles, which comprise the statement of financial position as of June 30, 2015, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Foundation’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the California State University, Los Angeles Foundation as of June 30, 2015, 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.

2

Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information on pages 19 to 27 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Los Angeles, California September 22, 2015

CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATIONStatement of Financial Position

June 30, 2015

Current assets:$ 658,376

Restricted cash 316,240 1,183,010

28,042 Prepaids and deposits 250

492,200 Total current assets 2,678,118

Noncurrent assets:1,013,975

22,460,417 10,432,709

896,700 Total noncurrent assets 34,803,801

Total assets $ 37,481,919

Current liabilities:Accounts payable and other liabilities $ 39,514 Accounts payable to affiliates 34,562 Depository accounts 316,240

Total liabilities 390,316

Net assets:Unrestricted:

General operations 1,175,117 Board designated 923,228 Total unrestricted 2,098,345

Temporarily restricted 10,370,062 Permanently restricted 24,623,196

Total net assets 37,091,603

Total liabilities and net assets $ 37,481,919

Endowment investmentsInvestments, long term portion

Endowment cash and cash equivalents

Pledges receivable, net of current portion

Liabilities and Net Assets

Pledges receivable

Cash and cash equivalents

InvestmentsAccounts receivable

Assets

See accompanying notes to financial statements.3

CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATIONStatement of Activities

For the Year Ended June 30, 2015

522,850$ 2,454,179$ 3,357,292$ 6,334,321$

In-kind donations 9,675 - - 9,675

32,740 391,646 12,958 437,344

1,769,789 (1,769,789) - -

Reclassification of net assets

based on donor intent - (900,000) 900,000 -

2,335,054 176,036 4,270,250 6,781,340

1,056,892 - - 1,056,892

398,343 - - 398,343

Total program services 1,455,235 - - 1,455,235

467,692 - - 467,692

Fundraising and development 103,793 - - 103,793

Total supporting services 571,485 - - 571,485

Total expenses 2,026,720 - - 2,026,720

308,334 176,036 4,270,250 4,754,620

1,790,011 10,194,026 20,352,946 32,336,983

2,098,345$ 10,370,062$ 24,623,196$ 37,091,603$ End of year

Supporting services:

General and administrative

Change in net assets

Net Assets:

Permanently

Restricted Total

Temporarily

RestrictedUnrestricted

Beginning of year

Program services:

Scholarships

College grants

Support and Revenues:

Gifts and contributions

Investment income, net

Net assets released from restrictions

Total support and revenues

Expenses:


CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATIONStatement of Cash Flows


4,754,620$

to net cash provided by operating activities:

Contributions restricted for long-term investments (3,357,292)

Donated securities (5,017)

Net realized gain on sale of investments (1,443,654)

1,974,405

Accounts receivable 2,871

Prepaids and deposits (25)

Pledges receivable (758,228)

Increase (decrease) in liabilities

Accounts payable and other liabilities 2,479

Accounts payable to affiliates (85,930)

Net cash provided operating activities 1,084,229

(27,713,229)

Proceeds from sale of investments 22,309,222

Proceeds from sale of donated securities 5,017

Net cash used in investing activities (5,398,990)

Contributions to the endowment fund 3,357,292

Interest and dividends restricted for long-term investments 12,958

310,500

(374,000)

Net cash provided by financing activities 3,306,750

(1,008,012)

2,996,603

1,988,591$

Cash and cash equivalents components:

Cash and cash equivalents 658,376$

Restricted cash 316,240

Endowment cash and cash equivalents 1,013,975

Total cash and cash equivalents 1,988,591$

Purchase of investments

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Cash flows from financing activities:

Cash receipts from grants received in depository accounts

Cash disbursements from grants made from depository accounts

Net decrease in cash and cash equivalents

Cash flows from operating ativities:

Change in net assets

Adjustments to reconcile change in net assets

Net unrealized loss on investments

Cash flows from investing activities:

(Increase) decrease in assets


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CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATION Notes to Financial Statements

June 30, 2015

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NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization California State University, Los Angeles Foundation (the Foundation), a component unit of California State University, Los Angeles, is a nonprofit public benefit corporation organized under the California Nonprofit Public Benefit Corporation Law. It was incorporated on September 9, 1985, for the primary purpose of encouraging and promoting the scientific, literary, educational, and charitable purposes of California State University, Los Angeles (the University) by providing financial assistance through scholarships, grants, gifts, loans, and other means to the University, its support groups, students, faculty, and staff. Basis of Accounting The accompanying financial statements have been prepared using the accrual basis of accounting. Financial Statement Presentation The Financial Accounting Standards Board (FASB) implemented the FASB Accounting Standards Codification (Codification) effective July 1, 2009. The codification has become the source of authoritative accounting principles generally accepted in the United States of America (U.S. GAAP) recognized by FASB to be applied to nongovernmental entities. On the effective date, the Codification superseded all then existing accounting and reporting standards. All other non-grand-fathered accounting literature not included in the Codification has become non-authoritative. References to U.S. GAAP included in the FASB Codification are noted as Accounting Standards Codification (ASC). Basis of Presentation Net assets and reveues, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Foundation are classified and reported as follows:

Unrestricted net assets – Unrestricted net assets represent net assets that are not subject to donor-imposed 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 donor-imposed 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 donor-imposed stipulations that may or will be met either by actions of the Foundation and/or the passage of time. As the restrictions are satisfied, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the accompanying financial statements as net assets released from restrictions.

Permanently restricted net assets – Permanently restricted net assets include gifts, pledges and

other contributions limited by donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by the actions of the Foundation and reclassifications from or to other classes of net assets as a consequence of donor-imposed stipulations.

CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATION Notes to Financial Statements (Continued)

June 30, 2015

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


June 30, 2015

9

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Reclassification of Net Assets In fiscal year 2014, the Foundation received a $900,000 gift which was recorded as a temporary restricted contribution pending final determination of the intent of the donor. In fiscal year 2015, a final determination was made after consultation with the lawyers administering the gift that the contribution is to endow a Professorship or Lecturer in the Marketing Department of the College of Business and Economics. As such, a reclassification of net assets of $900,000 was made to transfer the contribution from temporarily restricted gifts and contributions to permanently restricted gifts and contributions. Functional Allocation of Expenses The costs of providing various programs and other activities of the Foundation have been summarized on a functional basis in the accompanying statement of activities. Accordingly, certain costs have been allocated among the programs and services benefited. Income Taxes The Foundation is exempt from federal income and state franchise taxes under Section 501(c)(3) of the Internal Revenue Code and Section 23701d of the California Revenue and Taxation Code, respectively. Accordingly, there is no provision for income taxes in the financial statements. However, the Foundation remains subject to taxes on any net income which is derived from a trade or business regularly carried on and unrelated to its exempt purpose. Management has considered its tax positions and believes that all of the positions taken by the Foundation in their federal and state exempt organization tax returns are more likely than not to be sustained upon examinations. The Foundation’s returns are subject to examination by federal and state taxing authorities generally for three and four years, respectively after they are filed. Donated Assets, Services and Facilities The Foundation records the value of assets, services and facilities when there is an objective basis available to measure their value. Donated assets and facilities are reflected as support and expense or capitalized if an investment or capital asset in the accompanying financial statements at fair value. Donated services are recorded at fair value when a specialized skill is provided that would have otherwise been purchased. Donated facilities and assets are reflected in the accompanying financial statements as in-kind donations and gifts and contributions, respectively. The Foundation recorded a total of $9,675 in-kind donations during the year ended June 30, 2015. The Foundation had no donated services during the year. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.


June 30, 2015

10

NOTE 2 – CASH AND CASH EQUIVALENTS Cash and cash equivalents are comprised of the following:

Cash on hand 400$ Cash in bank 392,134Money market funds 1,596,057

Total 1,988,591$

The California Government Code requires California banks and savings and loan associations to secure the Foundation' deposits. Obligations pledged to secure deposits must be delivered to an institution other than the institution in which the deposit is made; however, the trust department of the same institution may hold them. Written custodial agreements are required that provide, among other things, that the collateral securities are held separate from the assets of the custodial institution. The pledge to secure deposits is administered by the California Superintendent of Banks. The market value of pledged securities must equal 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure an agency's deposits by pledging first trust deeds or first mortgages having a value of 150 percent of an agency's total deposits. All such collateral is considered to be held by the pledging financial institutions’ trust departments or agents in the name of the Foundation. At June 30, 2015, cash held by financial institutions for the Foundation of $629,313 was entirely insured and collateralized as described above. The book balance at June 30, 2015 for the Foundation was $392,134. As of June 30, 2015, the balance of the money market funds was $1,596,057, which is uninsured. NOTE 3 – INVESTMENTS Investments are comprised of the following:

Fair ValueLocal Agency Investment Fund 123,452$ Certificates of deposit 4,675,115Exchanged-traded funds 1,951,703Common stocks 16,192,270U.S. treasury securities 50,811U.S. agency securities 409,425Corporate bonds 201,329Mutual funds 10,472,031

Total 34,076,136$


June 30, 2015

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NOTE 3 – INVESTMENTS (Continued) Concentration of Credit Risk As of June 30, 2015, the Foundation invested $123,452 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 $33,952,684 at June 30, 2015. Investments are classified on the statement of financial position as follows:

Investments, current portion 1,183,010$ Investments, long term portion 10,432,709Endowment investments 22,460,417

34,076,136$

Investment income is comprised of the following:

Interest and dividends income 969,385$ Net realized gain on sale of investments 1,443,654Net unrealized loss on investments (1,975,705)

437,334$

Investment management fees were $144,537 for the year ended June 30, 2015. NOTE 4 – PLEDGES RECEIVABLE Pledges receivable consists of several multi-year and one year grants for scholarships and other temporarily restricted purposes. As of June 30, 2015, pledges receivable are expected to be realized in the following period:

Year ending:2016 492,200$ 2017 388,3002018 373,8002019 138,3002020 3,300Thereafter 4,100Subtotal 1,400,000Discount (11,100)Total pledges receivable 1,388,900$

Current portion 492,200$ Noncurrent portion 896,700

1,388,900$


June 30, 2015

12

NOTE 5 – DEPOSITORY ACCOUNTS Depository Accounts and Restricted Cash consist of $316,240 received from The Education Financing Foundation of California for the purpose of funding scholarships awarded to graduating high school and second year students. Eligible students are within the University’s service territory and may attend colleges throughout California. This program is also known as the Los Angeles California Student and Access Program (Cal-SOAP) Consortium. Cal-SOAP is responsible for selecting the candidates and determining the award amount, the Foundation functions as an agent on behalf of Cal-SOAP. 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, 2015 was $923,228. Temporarily Restricted Net Assets Temporarily restricted net assets are available for the following purposes as of June 30, 2015:

Scholarships $ 7,318,013 Student Investment Fund/ Marshall Gellar 202,812 California State University, Los Angeles (CSULA) Environmental Science Fund 507,157 Science Building Wing A&B 51,718 Other College Grants 757,737 Tennis Projects 556,320 Luckman Fine Arts Complex 593,154 University Honors College 22,831 Guglielmo Endowed Chair 360,320

$ 10,370,062

Net Assets Released from Restrictions Temporarily restricted net assets were released from restrictions for the following purposes:

Scholarships 966,577$ College Grants, CSULA 398,343Investment Management Fees 144,537Annual General Fund Support 260,332

1,769,789$


June 30, 2015

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NOTE 6 – NET ASSETS (Continued) Permanently Restricted Net Assets Permanently restricted net assets totaling $24,623,196 are restricted for investments in perpetuity, which represents the Foundation’s endowment funds. At the request of the donor, any interest not awarded to any qualified candidates should be retained as permanently restricted in the same year. The amount of investment income to be retained as permanently restricted was $12,958 for the year ended June 30, 2015. NOTE 7 – FAIR VALUE MEASUREMENTS ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific 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.


June 30, 2015

14

NOTE 7 – FAIR VALUE MEASUREMENTS (Continued) Fair Values Measured on a Recurring Basis Fair values of assets measured on a recurring basis as of June 30, 2015, are as follows:

Local agency investment fund $ 123,452 $ - $ 123,452 $ -

Certificates of deposit 4,675,115 - 4,675,115 -

Exchange-traded funds 1,951,703 1,951,703 - -

Common stocks 16,192,270 16,192,270 - -

U.S. treasury securities 50,811 50,811 - -

U.S. agency securities 409,425 409,425 - -

Corporate bonds 201,329 201,329 - -

Mutual funds 10,472,031 10,472,031 - -

Total $ 34,076,136 $ 29,277,569 $ 4,798,567 $ -

Significant Other Observable

Inputs (Level 2)

Significant Unobservable

Inputs (Level 3)Fair Value

Quoted Prices in Active Markets

for Identical Assets (Level 1)

Fair values for fixed income securities, equity securities and mutual funds are determined by reference to quoted market prices for identical assets actively traded on open exchanges. Fair values for certificates of deposits and the Local Agency Investment Fund are determined by reference to quoted market prices for similar assets. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short term nature of these financial instruments and consequently these instruments are not presented in the table shown above. NOTE 8 – ENDOWMENT FUNDS General Board Policy on Administration of Endowment Funds The Board of Trustees of the Foundation has interpreted the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted 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 donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for spending by the Foundation in a manner consistent with the standard of prudence prescribed by UPMIFA.


June 30, 2015

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NOTE 8 – ENDOWMENT FUNDS (Continued) In accordance with UPMIFA, the organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

(1) The duration and preservation of the fund (2) The purposes of the organization and the donor-restricted 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 long-term. Accordingly, the investment process seeks to achieve an after-cost 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 well-diversified asset mix, which includes equity, debt securities and mutual funds, that is intended to result in a consistent inflation-protected rate of return that has sufficient liquidity to make annual scholarship distributions of approximately 3% to 5% of the fair value of the endowment investments as of December 31, while growing the funds if possible. Investment assets and allocation between asset classes and strategies are managed to not expose the fund to unacceptable levels of risk. Spending Policy for Endowment Funds The Foundation has a policy of appropriating for distribution for scholarships each year approximately 3% to 5% of its endowed investment’s fair value as of December 31. In establishing this policy, the Foundation considered the long-term 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, 2015, appropriation of $812,749 was made from the endowment fund for scholarship distributions. The Foundation has a policy of appropriating 5% of all contributions received for the endowment fund annually to cover general operating expenses of the Foundation of which donors are notified of upon gift acceptance. The amount appropriated from the endowment for general operations as of June 30, 2015, was $208,028, which represented 5% of endowed contributions received. Additionally, the Foundation has a policy of appropriating up to 1.5% of its endowment fund’s fair value as of June 30 of the prior year, for general operating expenses of the Foundation as established in the annual budget for the Foundation in July of the subsequent year. During the year ended June 30, 2015, a $260,331 appropriation was made from the endowment fund for general operations expenses.


June 30, 2015

16

NOTE 8 – ENDOWMENT FUNDS (Continued) Changes in endowment net assets for the year ended June 30, 2015, are as follows:

Endowment net assets,June 30, 2014 $ 955,218 $ 5,163,229 $ 20,352,946 $ 26,471,393

Investment returnInterest and dividends - 884,672 12,958 897,630 Realized and unrealized loss on investments, net (31,990) (475,669) - (507,659)

Total investment return (31,990) 409,003 12,958 389,971

Investment management fees - (144,537) - (144,537)

Gifts and contributions - 912,500 3,565,320 4,477,820 Reclassification of net assets - - 900,000 900,000 Less: Administrative fees - - (208,028) (208,028)

Contributions, net - 912,500 4,257,292 5,169,792

Appropriation of endowed assetsfor scholarships and operations - (1,073,080) - (1,073,080)

Endowment net assets,June 30, 2015 $ 923,228 $ 5,267,115 $ 24,623,196 $ 30,813,539

UnrestrictedTemporarily Restricted

Permanently Restricted Total

Endowment net assets are composed of the following:

Temporarily PermanentlyUnrestricted Restricted Restricted Total

Donor restrictedendowment funds -$ 3,322,594$ 24,623,196$ 27,945,790$

Board designated endowment funds 923,228 1,944,521 - 2,867,749

Endowment net assets June 30, 2015 923,228$ 5,267,115$ 24,623,196$ 30,813,539$

NOTE 9 – RELATED PARTY TRANSACTIONS The Foundation reimbursed the University $446,023 for services performed and other expenses incurred on its behalf during the year ended June 30, 2015. The reimbursed amount was comprised of $73,960 for accounting services and $372,063 for other expenses incurred by the University on the Foundation's behalf.


June 30, 2015

17

NOTE 9 – RELATED PARTY TRANSACTIONS (Continued) University personnel performed administrative services for the Foundation, and the charges related to such services totaled $91,052 during the year ended June 30, 2015, 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, 2015, the total personnel costs were $63,275, of which $3,616 was accrued. Accounts payable between the Foundation and its affiliated parties as of June 30, 2015 was:

Cal State L.A. University Auxiliary Services, Inc 1,517$ University Student Union at CSULA 3,616California State University, Los Angeles 29,428

34,562$

Accounts receivable between the Foundation and its affiliated parties as of June 30, 2015 was:

Cal State L.A. Associated Students, Inc. $ 1,500 California State University, Los Angeles 300

$ 1,800

NOTE 10 – SUBSEQUENT EVENTS The Foundation has evaluated subsequent events and transactions for potential recognition or disclosure through September 22, 2015, which is the date the financial statements were issued.

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SUPPLEMENTARY INFORMATION

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CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATIONSchedule of Net Position

June 30, 2015 (for inclusion in the California State University)

Assets:

Current assets:Cash and cash equivalents $ 974,616 Short-term investments 1,183,010 Accounts receivable, net 28,042 Leases receivable, current portion - Notes receivable, current portion - Pledges receivable, net 492,200 Prepaid expenses and other assets 250

Total current assets 2,678,118

Noncurrent assets:Restricted cash and cash equivalents 1,013,975 Accounts receivable, net - Leases receivable, net of current portion - Notes receivable, net of current portion - Student loans receivable, net - Pledges receivable, net 896,700 Endowment investments 22,460,417 Other long-term investments 10,432,709 Capital assets, net - Other assets -

Total noncurrent assets 34,803,801

Total assets 37,481,919

Deferred outflows of resources:Unamortized loss on debt refunding - Net pension obligation - Others -

Total deferred outflows of resources -

Liabilities:

Current liabilities:Accounts payable 74,076 Accrued salaries and benefits payable - Accrued compensated absences– current portion - Unearned revenue - Capitalized lease obligations – current portion - Long-term debt obligations – current portion - Claims liability for losses and LAE - current portion - Depository accounts 316,240 Other liabilities -

Total current liabilities 390,316

Noncurrent liabilities:Accrued compensated absences, net of current portion - Unearned revenue - Grants refundable - Capitalized lease obligations, net of current portion - Long-term debt obligations, net of current portion - Claims liability for losses and LAE, net of current portion - Depository accounts - Other postemployment benefits obligation - Pension obligation - Other liabilities -

Total noncurrent liabilities -

Total liabilities 390,316

Deferred inflows of resources:Unamortized gain on debt refunding - Non-exchange transactions - Service concession arrangements - Net pension obligation - Others -

Total deferred inflows of resources -

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

Nonexpendable – endowments 24,623,196 Expendable:

Scholarships and fellowships 10,370,062 Research - Loans - Capital projects - Debt service - Other -

Unrestricted 2,098,345

Total net position $ 37,091,603

See accompanying note to supplementary information.19


Schedule of Revenues, Expenses and Changes in Net Position


(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 426,948 Operation and maintenance of plant - Student grants and scholarships 1,056,892 Auxiliary enterprise expenses - Depreciation and amortization -

Total operating expenses 1,483,840

Operating income (loss) (1,483,840)

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 2,977,029 Investment income (loss), net 9,263 Endowment income (loss), net 283,544 Interest Expenses - Other nonoperating revenues (expenses) (388,668)

Net nonoperating revenues (expenses) 2,881,168

Income (loss) before other additions 1,397,328

State appropriations, capital - Grants and gifts, capital - Additions (reductions) to permanent endowments 3,357,292

Increase (decrease) in net position 4,754,620

Net position:Net position at beginning of year, as previously reported 32,336,983 Restatements -

Net position at beginning of year, as restated 32,336,983

Net position at end of year $ 37,091,603



Other Information

June 30, 2015


1 Restricted cash and cash equivalents at June 30, 2015:

Portion of restricted cash and cash equivalents related to endowments $ 1,013,975 All other restricted cash and cash equivalents -

Total restricted cash and cash equivalents $ 1,013,975

2.1 Composition of investments at June 30, 2015:Current

Unrestricted Current Restricted Total Current

Noncurrent

Unrestricted

Noncurrent

Restricted Total Noncurrent Total

State of California Surplus Money Investment Fund (SMIF) $ - $ - $ - $ - $ - $ - $ - State of California Local Agency Investment Fund (LAIF) 123,452 - 123,452 - - - 123,452 Corporate bonds - - - - 201,329 201,329 201,329 Certificates of deposit 877,367 - 877,367 3,797,748 - 3,797,748 4,675,115 Mutual funds - - - - 10,472,031 10,472,031 10,472,031 Money Market funds - - - - - - - Repurchase agreements - - - - - - - Commercial paper - - - - - - - Asset backed securities - - - - - - - Mortgage backed securties - - - - - - - Municipal bonds - - - - - - - U.S. agency securities - - - - 409,425 409,425 409,425 U.S. treasury securities - - - - 50,811 50,811 50,811 Equity securities 182,191 - 182,191 - 16,010,079 16,010,079 16,192,270 Exchange traded funds (ETFs) - - - - 1,951,703 1,951,703 1,951,703 Alternative investments:

Private equity (including limited partnerships) - - - - - - - Hedge funds - - - - - - - Managed futures - - - - - - - Real estate investments (including REITs) - - - - - - - Commodities - - - - - - - Derivatives - - - - - - - Other alternative investment types - - - - - - -

Other external investment pools (excluding SWIFT) Add description - - - - - - - Add description - - - - - - - Add description - - - - - - - Add description - - - - - - - Add description - - - - - - - Add description - - - - - - - Other major investments: Add description - - - - - - - Add description - - - - - - - Add description - - - - - - - Add description - - - - - - - Add description - - - - - - - Add description - - - - - - -

Total investments 1,183,010 - 1,183,010 3,797,748 29,095,378 32,893,126 34,076,136

Less endowment investments (enter as negative number) - - - - (22,460,417) (22,460,417) (22,460,417)

Total investments $ 1,183,010 $ - $ 1,183,010 $ 3,797,748 $ 6,634,961 $ 10,432,709 $ 11,615,719

2.2 Investments held by the University under contractual agreements at June 30, 2015:Portion of investments in Note 2.1 held by the University under contractual

agreements at June 30, 2015 : $ - $ - $ - $ - $ - $ - $ -

2.3 Restricted current investments at June 30, 2015 related to: Amount Add description $ - Add description - Add description - Add description - Add description - Add description - Add description -

Total restricted current investments at June 30, 2015 $ -

2.4 Restricted noncurrent investments at June 30, 2015 related to: AmountEndowment investment $ 22,460,417 Temporary restricted investment 6,634,961 Add description - Add description -

Total restricted noncurrent investments at June 30, 2015 $ 29,095,378



Other Information

June 30, 2015


3.1 Composition of capital assets at June 30, 2015:Balance Transfers of

Balance Prior period June 30, 2014 Completed BalanceJune 30, 2014 Adjustments Reclassifications (restated) Additions Reductions CWIP June 30, 2015

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 depreciable/amortizable capital assets 77,900 - - 77,900 - - - 77,900

Total capital assets 77,900 - - 77,900 - - - 77,900

Less accumulated depreciation/amortization:Buildings and building improvements (77,900) - - (77,900) - - - (77,900) Improvements, other than buildings - - - - - - - - Infrastructure - - - - - - - - Leasehold improvements - - - - - - - - Personal property:

Equipment - - - - - - - - Library books and materials - - - - - - - -

Intangible assets:Software and websites - - - - - - - - Rights and easements - - - - - - - - Patents, copyright and trademarks - - - - - - - - Licenses and permits - - - - - - - - Other intangible assets:

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


Total accumulated depreciation/amortization (77,900) - - (77,900) - - - (77,900)

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

Add descriptionAdd description

Add description

Add descriptionAdd description



Other Information

June 30, 2015


3.2 Detail of depreciation and amortization expense for the year ended June 30, 2014:

Depreciation and amortization expense related to capital assets $ - Amortization expense related to other assets -

Total depreciation and amortization $ -

4 Long-term liabilities activity schedule:

BalanceBalance Prior period June 30, 2014 Balance Current Long-term

June 30, 2014 adjustments Reclassifications (restated) Additions Reductions June 30, 2015 portion portion

$ - $ - $ - $ - $ - $ - $ - $ - $ - Capitalized lease obligations:

Gross balance - - - - - - - - - Unamortized premium / (discount) on capitalized lease obligations - - - - - - - - -

Total capitalized lease obligations - - - - - - - - -

Long-term debt obligations:Revenue Bonds - - - - - - - - - Other bonds (non-Revenue Bonds) - - - - - - - - - Commercial Paper - - - - - - - - - Note Payable related to SRB - - - - - - - - - Other: Add description - - - - - - - - - Add description - - - - - - - - - Add description - - - - - - - - - Add description - - - - - - - - - Add description - - - - - - - - - Add description - - - - - - - - -

Total long-term debt obligations - - - - - - - - -

Unamortized bond premium / (discount) - - - - - - - - -

Total long-term debt obligations, net - - - - - - - - -

Total long-term liabilities $ - $ - $ - $ - $ - $ - $ - $ - $ -

5 Future minimum lease payments - capital lease obligations:Principal and

Principal Interest Interest

Year ending June 30:2016 $ - $ - $ - 2017 - - - 2018 - - - 2019 - - - 2020 - - - 2021 - 2025 - - - 2026 - 2030 - - - 2031 - 2035 - - - 2036- 2040 - - - 2041 - 2045 - - - 2046 - 2050 - - - 2051 - 2055 - - - 2056 - 2060 - - - 2061 - 2065 - - -

Total minimum lease payments -

Less amounts representing interest -

Present value of future minimum lease payments -

Less: current portion -

Capitalized lease obligation, net of current portion $ -

Accrued compensated absences



Other Information

June 30, 2015


6

Principal and Principal and Principal and

Principal Interest Interest Principal Interest Interest Principal Interest Interest

2016 $ - $ - $ - $ - $ - $ - $ - $ - $ - 2017 - - - - - - - - - 2018 - - - - - - - - - 2019 - - - - - - - - - 20202021 - 2025 - - - - - - - - - 2026 - 2030 - - - - - - - - - 2031 - 2035 - - - - - - - - - 2036 - 2040 - - - - - - - - - 2041 - 2045 - - - - - - - - - 2046 - 2050 - - - - - - - - - 2051 - 2055 - - - - - - - - - 2056 - 2060 - - - - - - - - - 2061 - 2065 - - - - - - - - -

Total $ - $ - $ - $ - $ - $ - $ - $ - $ -

7 Calculation of net position

Total

GASB FASB Auxiliaries

7.1 Calculation of net position - Net investment in capital assets

Capital assets, net of accumulated depreciation $ - $ - $ - Capitalized lease obligations - current portion - - - Capitalized lease obligations, net of current portion - - - Long-term debt obligations - current portion - - - Long-term debt obligations, net of current portion - - - Portion of outstanding debt that is unspent at year-end - - - Other adjustments: (please list) Add description - - - Add description - - - Add description - - - Add description - - - Add description - - -

Net position - net investment in capital asset $ - $ - $ -

7.2 Calculation of net position - Restricted for nonexpendable - endowments

Portion of restricted cash and cash equivalents related to endowments $ - $ 1,013,975 $ 1,013,975

Endowment investments - 22,460,417 22,460,417

Other adjustments: (please list)

Add descriptionPrior year rebench - 374,409 374,409

Add descriptionPledges and bequest receivable - 774,395 774,395

Add description - - -








Net position - Restricted for nonexpendable - endowments per SNP $ - $ 24,623,196 $ 24,623,196

All other long-term

debt obligations Total

Auxiliary Organizations

Year ending June 30:

Long-term debt obligation schedule

Revenue Bonds



Other Information

June 30, 2015


8 Transactions with Related EntitiesAmount

Payments to University for salaries of University personnel working on contracts, grants, and other programs $ 91,052 Payments to University for other than salaries of University personnel 526,794 Payments received from University for services, space, and programs - 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) (29,428) Other amounts (payable to) University (enter as negative number) - Accounts receivable from University 300 Other amounts receivable from University -

9 Other Postemployment Benefits Obligation (OPEB)

Annual required contribution (ARC) $ - Contributions during the year -

Increase (decrease) in net OPEB obligation (NOO) -

NOO - beginning of year -

NOO - end of year $ -

10 Pollution remediation liabilities under GASB Statement No. 49:

Description Amount Add description $ - Add description - Add description - Add description - Add description - Add description - Add description - Add description - Add description - Add description -

Total pollution remediation liabilities -

Less: current portion -

Pollution remedition liabilities, net of current portion $ -



Other Information

June 30, 2015


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

Net PositionClass Amount

Dr. (Cr.)

Net position as of June 30, 2014, as previously reported $ 32,336,983 Prior period adjustments:

1 (list description of each adjustment) - 2 (list description of each adjustment) - 3 (list description of each adjustment) - 4 (list description of each adjustment) - 5 (list description of each adjustment) - 6 (list description of each adjustment) - 7 (list description of each adjustment) - 8 (list description of each adjustment) - 9 (list description of each adjustment) -

10 (list description of each adjustment) -

Net position as of June 30, 2013, as restated $ 32,336,983

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)

$ - $ -


- -


- -


- -


- -


- -


- -


- -


- -


- -


CALIFORNIA STATE UNIVERSITY, LOS ANGELES FOUNDATION Note to Supplementary Information

June 30, 2015

27

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 26, 2015. As a result, these schedules do not represent financial statements prepared in accordance with accounting principles generally accepted in the United States of America.

independent auditor’s report, financial statements and … · 2016-12-08 · september 22, 2015 ....

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