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- Appendix A—Scope and Methodology
- Appendix B—Additional Investment Account Data
- Appendix C—Additional Parking Program Data
Scope and Methodology
The Audit Committee directed the California State Auditor (State Auditor) to examine information related to CSU’s outside accounts and parking programs, including the balances of CSU’s outside accounts and CSU’s use of revenue from parking fees and fines. Table A below lists the objectives that the Audit Committee approved and the methods we used to address them.
|1||Review and evaluate the laws, rules, and regulations significant to the audit objectives.||Reviewed and evaluated laws and policies significant to CSU’s outside accounts and parking programs.|
|2||Review and evaluate the Chancellor’s Office’s role in overseeing the management and operations of the parking program at the following CSU campuses: Channel Islands, Fullerton, Sacramento State, and San Diego State. Specifically evaluate the aspects of the program related to setting and enforcing systemwide policies and procedures to ensure compliance with parking program statutes.
||Reviewed policies and procedures related to campus parking programs and interviewed key officials at the campuses and Chancellor’s Office.|
|3||For the four campuses identified in Objective 2, perform the following:||
a. Review and evaluate the policies, procedures, and practices for determining parking rates and fees and for allocating parking permits.
|b. For the most recent 10 years, determine the annual number of permits issued and the reasons for any limits on the number of parking permits issued; annual parking program revenues and the sources of the revenues; and changes in parking fee rates and revenues, including the reasons for the changes.||
|c. Assess the adequacy of parking available to students, administrators, and employees (faculty and support staff).||
|d. Determine the cost per parking space for each existing parking facility.||
|e. Determine whether any parking structures are fully paid for and, if so, whether parking rates decreased as a result.||Reviewed bond schedules and CSU audited financial statements and interviewed finance officials at the campuses and the Chancellor’s Office to determine if CSU has paid off any parking structures since 1995.
|4||Determine whether the parking program complies with Education Code provisions pertaining to the allocation of parking revenues for the construction of parking facilities. For the four campuses identified in Objective 2, determine the following:||
|a. Methods, criteria, and data used in determining alternate methods of transportation.||
|b. Frequency and evidence of the campus alternative transportation committee meetings and the extent to which the committee consulted with students and local government officials.||Obtained and reviewed alternate transportation committee meeting minutes to determine the frequency of meetings during our audit period and the extent to which the committees consulted with students and local government officials.|
|5||Review and evaluate the parking fund expenditures for the four campuses identified in Objective 2 and identify the following:||
|a. The extent to which the campus used parking revenue for the study, development, enhancement, operation, and maintenance of alternate methods of transportation.||
|b. The alternate methods of transportation funded by parking revenue, the year the programs originated, and the set-up and ongoing costs of the programs.||
|c. The extent to which the campus used parking revenue for parking facility acquisition, construction, and improvement.||
|d. Whether funds or money received as parking fines and forfeitures were used exclusively for activities and programs as prescribed by the Education Code.||
|e. To the extent possible, whether campus officers who enforce parking are given quotas for parking violations.||Reviewed parking program policies, procedures, and practices at the four campuses and interviewed parking enforcement officers.|
|6||Identify any outside accounts held by CSU and perform the following:||
|a. Identify the fund balances, funding sources, interest earned, and major category of expenditures for the most recent 10 years. Determine the reasons for any unusual trends.||
|b. Determine whether interest or other earnings received from investments of parking revenues were properly deposited into the State University Parking Revenue Fund. In addition, assess the criteria or justification for the level of fund balance and the timing and amount of deposits, and assess withdrawals for reasonableness and compliance with relevant laws and rules.||
|c. Determine the sources and uses of funds included in the CSU operations category and whether support staff salary savings are held in this account.||
|7||Analyze and provide a comparison of laws, rules, policies, and practices related to oversight, controls, and accountability for CSU accounts held in the state treasury to outside accounts. Determine whether CSU’s outside accounts are more susceptible to abuse and, to the extent possible, whether the CSU bypassed or could bypass any state rules or its own policies by placing funds in outside accounts.||
|8||Review and assess any other issues that are significant to the audit.||Reviewed documents that the Chancellor’s Office provided to legislators and students about CSU’s available resources and budget needs that are significant to the transparency of CSU’s outside accounts.|
Source: Analysis of the Audit Committee’s audit request number 2018-127, as well as information and documentation identified in the table column titled Method.
Assessment of Data Reliability
In performing this audit, we relied on electronic data files that we obtained from the Chancellor’s Office and the four campuses we visited. These electronic data files related to CSU’s outside accounts, including the revenues and expenses of its operating and parking funds, and to campus parking and transportation programs. The U.S. Government Accountability Office, whose standards we are statutorily obligated to follow, requires us to assess the sufficiency and appropriateness of computer‑processed information we use to support our findings, conclusions, or recommendations. To perform this assessment, we compared accounting data to CSU’s audited financial statements and determined that they reasonably agreed. For campus parking program data, we assessed trends in the data and other related information, and determined the data to be generally reasonable. We did not perform accuracy and completeness testing of these data so they are of undetermined reliability for our audit purposes. Although we recognize that these limitations may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.
Additional Investment Account Data
The Audit Committee directed the State Auditor to determine and identify data and trends related to CSU’s outside accounts. We did this for the investment account that, as we explain in the Introduction, comprised the majority of the money CSU held in its outside accounts.
10-Year Investment Account Data Trends
Table B.1 presents the total discretionary and restricted revenue and expenses for the investment account from fiscal years 2008–09 through 2017–18. CSU’s discretionary surplus balance increased at a significantly higher rate than its restricted balance. We analyze the growth of the discretionary surplus in CSU’s operating fund earlier in our report, beginning here.
CSU’s Discretionary Surplus Grew at a Higher Rate Than Its Restricted Surplus
||REVENUE AND EXPENSES FROM
FISCAL YEARS 2008–09 THROUGH 2017–18
|SURPLUS AT THE BEGINNING
AND END OF THE AUDIT PERIOD
|REVENUE||PORTION OF REVENUE FROM INVESTMENT EARNINGS AND INCOME||EXPENSES||SURPLUS AS OF
JUNE 30, 2009
|SURPLUS AS OF
JUNE 30, 2018
Source: Analysis of CSU’s account data.
Table B.1 also identifies the portion of revenue that came from interest earnings and other investment income. CSU’s investment earnings over the audit period generally aligned with changes in the yield rate for the State’s Surplus Money Investment Fund, which has the same requirements related to investment risk as most of the money CSU invests in outside accounts. At the time of the 2006 change to state law that allowed CSU to manage tuition in its own accounts outside of the state treasury, the Legislative Analyst’s Office noted that interest earnings that had previously accrued to the State’s General Fund would now accrue to CSU. Because of this loss to the General Fund, the Legislature sometimes reduced appropriations to CSU from the General Fund during the audit period based on an assessment of the amount of interest earnings CSU accrued.
Investment Account Data for the Campuses and Chancellor’s Office
All the campuses and the Chancellor’s Office transfer surplus money to the investment account. Table B.2 shows the surplus balance for each campus and the Chancellor’s Office as of June 30, 2018.
Each Campus and the Chancellor’s Office Had Millions of Surplus Dollars
As of June 30, 2018
AS OF JUNE 30, 2018
|San Diego State||$456,012,349|
|San José State||338,538,363|
|Cal Poly Pomona||266,921,547|
|Cal Poly San Luis Obispo||224,037,783|
|San Francisco State||191,722,085|
Source: CSU’s investment activity report as of June 2018.
In addition to campuses and the Chancellor’s Office, the CSU Risk Management Authority and the CSU Institute transfer surplus funding to CSU’s investment account. The CSU Risk Management Authority is a joint powers authority created to provide insurance and risk management services, such as workers’ compensation and property insurance programs, for CSU campuses and auxiliary organizations. The CSU Institute is an auxiliary organization whose stated purposes include furthering CSU’s educational, research, and public service missions by performing functions such as administering educationally-related programs and assisting with the development of small business enterprises. These organizations are included in Table B.2 in the row labeled Other.
The total surplus balance in Table B.2 is the same as the investment account balance presented in Table 1 of the Introduction. This total is based on CSU’s bank statements. It differs slightly from the total surplus that Table B.1 presents, which is based on CSU’s account data. Because of the timing of transfers in and out of the investment account, values from the account data and bank statements are generally consistent but do not match exactly.
Additional Parking Program Data
The Audit Committee directed the State Auditor to identify data and trends related to the campus parking programs.
Parking Program 10-Year Data Trends
Table C.1 presents the annual number of permits sold by the four campuses that we reviewed; their total annual parking program revenues including fees and fines; changes in their revenue and parking fee rates; and their expenses for parking facility acquisition, construction, and improvement. Permit prices are for semester permits. The parking permit prices for CSU’s represented staff were lower than student prices and changed less frequently because the staff’s collective bargaining agreements place limits on when and how much the campuses can adjust prices.
Parking Program Data by Campus
Fiscal Years 2008–09 Through 2017–18
||DOLLARS IN THOUSANDS||SEMESTER PERMIT|
|ANNUAL PARKING FEES AND FINES REVENUE||PARKING FACILITY
FEES AND FINES SURPLUS
|STUDENT||REPRESENTED STAFF†||NUMBER OF PERMITS SOLD||TOTAL CAMPUS PARKING SPACES|
|PERMIT PRICE||PERCENT INCREASE||PERMIT PRICE||PERCENT INCREASE|
|2015–16||9,838||2,584||29,117||168||↑ 2||72||↑ 6||52,668||13,091|
|2016–17||10,299||2,688||32,171||171||↑ 2||77||↑ 7||51,241||12,150|
|San Diego State|
|2015–16||12,261||2,632||27,181||162||↑ 20||106||↑ 3||54,636||14,127|
|2016–17||11,141||5,197||28,679||165||↑ 2||111||↑ 5||50,406||14,439|
Source: Analysis of parking program accounting data, permit data, and parking inventories.
NA = The data was unavailable because Channel Islands replaced its permit management system in 2012, according to Channel Islands.
* Parking facility expenses in a given fiscal year include annual debt payments, as well as one-time costs for construction, maintenance, acquisition, and improvement. These expenses do not include parking operations or alternate transportation, which we present in Figure 7.
† This column includes the permit prices for represented staff only. Faculty permit prices remained unchanged during our audit period and were $98 at Channel Islands, $59 at Fullerton, $69 at Sacramento State, and $119 at San Diego State.
‡ Sacramento State’s unusually high percent change for parking facility expenses is due to its upfront contribution for its new parking structure in fiscal year 2017–18. Without this cost, the 10‑year percent change would be 31 percent.
Cost per Parking Space
Table C.2 shows the annual cost per parking space for each existing parking facility at the four campuses. The facilities with outstanding debt have a higher cost per space because of the annual debt payment.
Average Annual Cost Per Parking Space By Campus
|CAMPUS||PARKING FACILITY||AVERAGE ANNUAL OPERATING COST PER SPACE FOR ALL CAMPUS SPACES||ANNUAL DEBT
PAYMENT PER SPACE FOR FACILITIES CURRENTLY BEING PAID OFF
|Channel Islands||Parking Lot A3||$578||$217||$795|
|Student Housing Lot 1||98||676|
|Student Housing Lot 2||112||690|
|All other paid-off facilities*||578|
|State College Structure||787||1,490|
|All other paid-off facilities*||703|
|Sacramento State||Parking Structure 2||361||370||731|
|Parking Structure 3||590||951|
|Parking Structure 5||659†||1,020|
|All other paid-off facilities*||361|
|San Diego State||Parking Structures 3 and 7||473||413||886|
|South Campus Plaza||3,009‡||3,482|
|All other paid-off facilities*||473|
Source: Analysis of parking program financial data, debt payment schedules, and parking inventory reports from each campus.
* For this category, the number of facilities and spaces per facility varies by campus. The important distinction is that none of the spaces in this category have outstanding debt.
† Sacramento State financed Parking Structure 5 in fiscal year 2017–18, but its first debt payment was not until fiscal year 2018–19. To capture the cost of the additional parking spaces, we include the scheduled debt payment here.
‡ The debt payment per space is unusually high because the South Campus Plaza parking facility is a six-story structure with only 300 spaces, while the other structures that Fullerton, Sacramento State, and San Diego State financed since 1995 have an average of 1,900 spaces.
Alternate Transportation Programs
Each of the four campuses we reviewed offered a variety of transportation options for commuters, but only some options were likely to reduce the number of single occupancy vehicles on campus and were funded using parking revenues. Table C.3 shows the alternate transportation programs that the four campuses generally funded with parking revenue and that were likely to reduce the number of single occupancy vehicles on campus. The table also includes the year these programs originated, and the start-up and ongoing costs associated with the programs. Other programs the campuses offered would likely not significantly reduce the number of single occupancy vehicles on campus, such as car sharing programs (i.e. Zipcar) and electric vehicle parking and charging stations. Moreover, other programs were not included in the table if they may reduce the number of vehicles on campus but were offered at little or no cost to the campus. For example, Sacramento State promotes student discounted tickets on Amtrak, but does not have a formal agreement in place with Amtrak and does not sell Amtrak tickets. Finally, all four campuses allow bicycling in designated areas on campus and provide bicycle infrastructure, such as bike racks and designated bike lanes or paths. Because we did not use this information to draw conclusions, we did not assess the reliability of the data.
Alternate Transportation Programs, Start Year, Startup Cost, and Ongoing Costs by Campus
|ONGOING ANNUAL COST*|
|Local Transit Subsidy||1999||$0||$460,000|
|Shuttle to Local Transit†||2014||0||25,000|
|Local Transit Subsidy||2003||$0||$269,600|
|Shuttle to Off-site Parking†||2017||0||285,900|
|Local Transit Subsidy‡||1996||$0||$804,800|
|San Diego State|
|Local Transit Subsidy||2001||0||93,400|
Source: Parking program contracts, financial documents and data, and program staff confirmations.
Unavailable = Campus was unable to provide information.
* We generally used the most recent annual costs as ongoing annual costs varied from year to year.
† Fullerton and Channel Islands contract for professional shuttle services and San Diego State and Sacramento State operate their own shuttle service, which requires vehicle purchase or lease. San Diego State and Sacramento State made their initial vehicle purchases before our audit period. To provide context for the cost of this type of purchase, Sacramento State paid $178,000 in December 2014 for two 30‑foot transit buses.
‡ Sacramento State’s local transit subsidy program is funded with a transportation fee that is separate from its parking revenues. We listed this program in this table to demonstrate that a local transit subsidy is provided at all campuses.