HSU and the Recent State Audit

Humboldt State University has received a number of inquiries about a recent state audit of the CSU system’s reserves. Below is campus-specific information.

CSU information about the audit
CSU Chancellor statement about the audit

HSU works to be fiscally prudent and responsible. We designate certain funds for specific uses as required by law and policy. We also maintain a “savings account” in case of economic downturn or unexpected costs, and we set aside funds for maintenance and future construction.

Financial activity at public universities is complex, to say the least. While HSU didn’t create the complexity, we are bound to follow the laws, policies, and guidelines about the use of various types of funds.

The recent audit report indicates that the CSU has $1.5 billion in “surplus” operating funds. It also states that CSU’s fund management is common and appropriate, and recommends that the system should have larger reserves for economic uncertainty.

The audit report has an appendix that lists cash balances at each campus, showing $62 million at HSU. Most of these HSU funds are designated for particular purposes and cannot be used for ongoing expenses like employee compensation or energy costs.

These funds are all one-time and have accumulated over time. (If, for example, $500,000 is used to bolster a program for a year, that funding would not continue the next year.)

HSU’s truly available rainy day fund is $6.3 million, which would cover less than one month of operations. This is well below the CSU’s recommendation of five months reserves. HSU has been working to increase the level of these reserves, and the current goal set by the University Planning and Resources Committee is more than one month (10 percent).

Also worth noting is that all 23 campuses within the CSU system are expected to contribute 10 percent of capital projects (like new buildings) from reserves. This is based on expectations of the Governor and Legislature.

As reflected in the CSU system’s “Financial Transparency Portal” website, below is a breakdown of the $62 million cash balances at HSU. Note that designated funds may only legally be used for specific purposes, and the monies were originally collected for that purpose.

Legally designated and restricted-use funds
Totals $44.5 million

Student Housing – $16.7 million

Local Trust Funds – $5 million
This is a catch all category for activities ranging from state held endowments and grants and contracts to Instructionally Related Activities student fees, student club accounts and misc. campus trusts.

Capital and Special Projects – $9.5 million

Financial Aid – $3.5 million

Professional and Continuing Education – $3.7 million

Parking – $3.8 million

Student Body Center Programs – $1.6 million

Lottery – $400,000

Health Facilities – $300,000

Operations funds, some of which are undesignated
Totals $17.1 million

Economic Uncertainty – $6.3 million
This is, in essence, HSU’s savings account. It covers less than one month of operations. HSU’s current goal is to have more than one month (10 percent) of operations in reserve, while CSU has recommended that campuses have five months of reserve.

Outstanding Encumbrances – $850,000
This amount is committed but not yet spent.

Outstanding Operating Fund Commitments – $2.9 million
These funds were allocated to be spent during the current academic year (2018-19).

Maintenance and Construction – $2.4 million
This is for construction management on large construction projects such as the seismic retrofit projects, unexpected repairs such as damaged roofs or electrical systems, and energy efficiency projects.

State Innovation Award Grant – $2.3 million
Funds from the state for local education partnerships and early outreach programs. Approximately $800,000 was expended in the current year.

Student Health Center – $1.9 million

CSU Restricted Programs (Agricultural Research Institute, COAST, CSUPERB, similar) – $400,000