annual report - auxiliary fresno fdn...annuity agreement liabilities -current pottion (note 9) 7,334...

CALIFORNIA STATE UNIVERSITY,

FRESNO FOUNDATION

ANNUAL REPORT

2011·12

.

.

CALIFORNIA STATE UNIVERSITY, FRESNO FOUNDATION ANNUAL REPORT

TABLE OF CONTENTS

Page Number

Corporate Information 1 - 3

Independent Auditors' Report 4 - 5

Statements of Financial Position 6

Statements of Activities 7

Statements of Cash Flows 8

Notes to the Financial Statements 9 - 29

Schedule of Expenditures of Federal Awards 30 - 36

General Fund Administration Cost Center 37

Report on Internal Control Over Financial Reporting and on Compliance and Other 38 - 39 Matters Based on an Audit of Financial Statements PerfOlmed in Accordance with Government Auditing Standards

Independent Auditors' Report on Compliance with Requirements Applicable to Each 40 - 41 Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133

Schedule of Findings and Questioned Costs 42 - 43

Summary Schedule of Prior Audit Findings 44

Additional Information Restated for California State University Reporting 45 - 49

California State University Fresno, Foundation Corporate Information

For the Year Ended June 30,2012

BOARD OF GOVERNORS: Mr. Nat DiBuduo Ms. Octavia Diener Ms. Cathy Frost Dr. Eric Hanson Mr. R. Stephen Heinrichs Mr. John E. Horstmann Mr. Sam Iacobellis Ms. Maurine Jones Mr. Hal Kissler Hon. Annette LaRue Mr. Claude C. Laval III Dr. William M. Lyles Ms. Debra Nalchajian-Cohen Mr. Ken Newby Hon. Robert H. Oliver Mr. R. Michael Patton Ms. Vinci Ricchiuti Ms. Yrma Rico Ms. Helen Smades Mr. Richard F. Spencer Mr. Ray Steele, Jr. Mr. Kyle Stephenson M:o>. Kristine Walter Dr. JohnD. Welty Dr. Rick Whitten Mr. A. Emory Wishon III Mr. O. James Woodward III

CORPORATE OFFICERS: Mr. Ray Steele, Jr. Ms. Vinci Ricchiuti Mr. Hal Kissler Dr. John D. Welty

EXECUTIVE STAFF: Ms. Debbie Astone Mr. Keith Kompsi Mr. John Melikian

Executive Committee: Mr. Ray Steele, Jr. Ms. Vinci Ricchiuti Mr. Hal Kissler Dr. John D. Welty Mr. A. Emory Wishon III Dr. Eric Hanson

Fresno, California Fresno, California Fresno, California Fresno, California Hillsborough, California Fresno, California Calabasas, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California Fresno, California

Chair Vice Chair Treasurer Secretary

Executive Director Director of Foundation Financial Services StaffCOlllsel

Chair Vice Chair Treasurer Secretary Immediate Past Chair Member at Large


For the Year Ended June 30, 2012

Audit Committee: Mr. Kyle Stephenson Ms. Cathy Frost Han. Annette LaRue Ms. Vinci Ricchiuti

Budget Committee Ms. Vinci Ricchiuti Mr. Claude C. Laval III Dr. William M. Lyles Mr. Ken Newby Mr. Ray Steele, Jr. Dr. Rick Whitten

Development Committee Ms. Kristine Walter Mr. Nat DiBuduo Mr. Sam Iacobellis Ms. Maurine Jones Ms. Debra Nalchajian-Cohen Ms. Helen Smades Mr. Richard Spencer

Governance Committee Mr. O. James Woodward III Mr. John Horsttnann Mr. Claude C. Laval III Mr. Ken Newby Ms. Helen Smades

Investment Committee Mr. R. Stephen Heinrichs Mr. Hal Kissler Mr. William M. Lyles Mr. R. Michael Patton Mr. A. Emory Wishon III

Membership Committee Ms. Cathy Frost Ms. Octavia Diener Mr. John E. Horsttnann Mr. Claude C. Lavall III Han. Robert H. Oliver Mr. R. Michael Patton Ms. Kristine Walter Mr. A. Emory Wishon III

Chair

Chair

Chair

Chair

Chair

Chair

2


For the Year Ended June 30, 2012

CORPORATE DATA

Executive Offices

Auditors

Investment Advisors

3

4910 N. Chestnut Ave Fresno, CA 93726-1852 Telephone: (559) 278-0850

Moore Grider & Company Certified Public Accountants 325 E. Sierra Ave. Fresno, CA 93710-3707 Telephone: (559) 440-0700

Goldman Sachs 555 California St. 45 th Floor San Francisco, CA 94104 Telephone: (415) 393-7500

A Partnership Including Accountancy Corporations

Richard 1. Holland, C.P.A.

Thomas 1. Bell, c.P.A., ACODuntJncy Corporation

Denise S. Hurst, C.P.A.

Kenneth J. Labendeira, C.P.A., Accountu"'T Corpotnt;on

Pamela J. Gallemore, c.P.A., Accountancy Corporation

Karl 1. Noyes, C.P.A., AccountumT Corporation

Cory J. Bell, C.P.A.

Cheryl A. Storel; c.PA., A.P.A.

Kendall K. Wheeler, CPA.

Necia Wollenmal1, C.P.A.

Rena R. Avedikian, ep.A.

Kclli D. Steele, C.PA.

Julie B. Fillmore, CPA.

Car~ie M. Wiebe, C.P.A.

Nora E. Crow, C.P.A.

Nicholas Medeiros, CPA.

. Oscm Espinoza, C.P.A.

1. Jerome Moore, erA. Retired

Robert E. Grider, C.P.A. Retired

!Vl{] Moore Grider & Company

Certified Public Accountants

INDEPENDENT AUDITORS' REPORT

Board of Governors California State University, Fresno Foundation Fresno, California

We have audited the accompanying statement of financial position of California State University, Fresno Foundation as of June 30, 2012, and the related statements of activities, and cash flows for the year then ended. These financial statements are the responsibility of California State University, Fresno Foundation's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of California State University, Fresno Foundation as of June 30, 2011, were audited by other auditors whose report dated September 30, 2011, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing staodards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of California State University, Fresno Foundation's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the [mancial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of California State University, Fresno Foundation as of June 30, 2012, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated September 27, 2012, on our consideration of California State University, Fresno Foundation's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.

4 325 E. Sierra / Fresno, CA 93710/559440-0700 fax 559 440-0600

VVWw.lTlOOregTider.cOlTl

That report is an integral part of an audit perfonned in accDrdance with Government Auditing Standards and should be considered in assessing the results of our audit.

Our audit was conducted for the purpose of fonning an opinion on the basic fmancial statements. The schedule of expenditures of federal awards on pages 30 to 36 is presented for purposes of additional analysis 8B required by U.S. Office of Management and Budget Circular A-l33, Audits of States, Local GDvernments and NDn-Profit Organizations, and is not a required part Df the basic fmancial statements. The infonnation included in this report Dn page 37 is presented for purposes of additional analysis and is not a required part of the fmancial statements. The infDrmation reflected on pages 45 to 49 is presented as required by the Chancellor of the California State University. Such infonnation is the respDnsibility Df management and was derived from and relates directly to the underlying accounting and other records used to prepare the fmancial statements. The infDnnatiDn has been subjected to the auditing prDcedures applied in the audit Df the financial statements and certain additiDnal procedures, including comparing and recDnciling such information directly tD the underlying accounting and other records used to prepare the fmancial statements or to the fmancial statements themselves, and other additional procedures in accDrdance with auditing standards generally accepted in the United States Df America. In Dur opiniDn, the infDnnation is fairly stated in all material respects in relation to the fmancial statements as a whole.

September 27, 2012

5

CALIFORNIA STATE UNrYERSITY, FRESNO FOUNDATION THE CALIFORNIA STATE UNIVERSITY AUXILIARY ORGANIZATION

STATEMENTS OF FINANCIAL POSmON AT JUNE 30 2011 AND 2012

2011 TOTAL

ASSETS Current Assets:

Cash and cash equivalents (Note 1, Pg. 9) $ 47,647,763

Short-term investments (Note 4) 939

Receivables: Grants and contracts 5,871,582 Pledges receivable (Note 2) 2,128,685 Other accounts receivable 7,058,254 Notes receivable, net (Note 3) 20,894

Total Receivables 15,079,415

Prepaid expenses 189,386

Total Current Assets 62,917,503

Long-tenn investments, at market (Note 5) 111,156,608

Non-current receivables: Pledges receivable (Note 2) 7,957,629

Allowance for uncollectibles (180,0001 Net pledges receivable 7,777,629

Notes receivable, net (Note 3) 10,800 Total non-current receivables 7,788,429

L'1ud and improvements 615,563

Fixed Assets: Equipment 436,336 Less accumulated depreciation (332,276)

Net Fixed Assets 104,060 TOTAL ASSETS $ 182,582,163

LIABILITIES AND NET ASSETS Liabilities:

CUiTent liabilities: Accounts payable $ 1,740,551 Accrued salaries and benefits payable 684,240 Receipts in excess of-expenditures on specific sponsored programs 3,918,158

Accrued compensated balances 31,401 UnitlUst agreement liabilities - cunent portion (Note 9) 99,171 Annuity agreement liabilities - current pottion (Note 9) 7,334

Total Current Liabilities 6,480,855

Long-tenTI liabilities_: Accounts payable 286,176 Notes payable (Note 10) 2,000,000 Unitrust agreement liabilities - long-tenu portion (Note 9) 85,473 Annuity agreement liabilities - long-tenu portion (Note 9) 53,632 Agency accounts 1,563,905

Total Liabilities 10,470,041

Net Ass'cts: Unrestricted (1,206,118) Unrestricted-board designated reserves (Note 11) 536,132 Temporarily restricted 94,848,316 Permanently restricted 77,933,791

Total Net Assets 172,1l2,l22 TOTAL LIABILITIES & NET ASSETS $ 182,582,164

$

$

$

$

The accompanying notes are an integral part of the financia! statements

6

2012 TOTAL

39,119,290

0

7,851,497 5,522,352 5,810,992

64,576 19,249,417

337,900

58,706,607

115,032,348

5,677,903 (180,000)

5,497,903 87,530

5,585,433

520,563

459,773 (350,989) 108,784

179,953,735

1,835,103 873,834

3,287,863 42,872 98,188

5,392 6,143,252

264,445 2,000,000

32,902 65,215

1,734,562 10,240,376

(4,704,800) 1,293,054

92,048,009 81,077,096

169,713,359 179,953,735

CALIFORNIA STATE UNNERSITY, FRESNO FOUNDATION THE CALrFORNIA STATE UNNERSITY AUXILIARY ORGANIZATION

STATEMENTS OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2011 AND 2012

2011 TOTAL

Changes ill Unrestricted Net Assets: Revenues, Gains and Other Support:

Federal grants and contracts $ 18,507,425 State grants and contracts 5,721,219

Other grants and contracts 5,312,931 Indirect cost recovery from sponsored programs 2,100,995 Handling fees 368,481 Investment income 490,580 Realized/unrealized gains (losses) 2,821,839 Endowment administrative fees 1,323,000 Gift assessmen.t fees (Note 1, Pg. 1O) 475,301 Advancement expense reimbursement 462,150 Income for campus support 7,072,291 Other 21,876 Net assets released from restrictions:

expiration of donor-imposed restrictions 12,235,913 Total Unrestricted Revenues, Gains and Other Support 56,914,001

Expenses and Losses: Instruction 10,540,280 Public service 11,964,137 Research 7,037,158 Special Programs 2,532,020 Campus Support 12,971,384 Student grants and scholarships 3,198,319 Management and general (Note 8) 2,311,982 Endowment administrative fees 1,435,202 Donations to agem;y u(;(;uunlS (surplus allocation) 1,326,604 Fund raising 901,782

Total Expenses and Losses (Note 14) 54,218!868 Changes in Unrestricted Net Assets 2,695,134

Transition Obligation (Note 18) Amortized transition obligation 9,13?

Increase (Decrease) in Net Assets after Remaining Transition Obligation $ 2,704,266

CHanges- ill Tem(2oral'itr. Restricted Net Assets: Gain on investments:

Realized $ 1,035,050 Unrealized 10,365,997

Investment income 2,289,662 Non-operating revenue (Note 21) 27,760,642

Contributions" Net 5,218,512 Non-operating expense (547,695) Net assets, released from restrictions (12,235,913)

Changes in Temporarily Restricted Net Assets 33,8861255

Changes in Permallelltlr. Restricted Net Assets: Contributions 3,171,369 Change in value of split interest agreements (Note 9) 86,558

Changes in Permanently Restricted Net Assets 3,257,927

Total Increase (Decrease) in Net Assets 39,848,448 Net Assets at Beginning ol'Year 132,263,673 Net Assets at End of Year $ 172,112,122

$

$

$

$

The accompanying notes are an integral part of the financial statements

7

2012 TOTAL

23,408,471 5,980,913 4,650,457

2,388,551 390,800 802,141

(2,272,733) 1,423,000

371,601 455,878

9,044,801 36,266

IOl794,346 57,474,492

12,654,426 14,570,002 6,815,413 2,442,513

12,936,854 3,679,119 2,155,902 1,490,007 2,714,023

767,271 60,225,530 (2,751,038)

9,132

(2,741,906)

(2,342,105) (6,114,518) 7,891,803

7,216,219 1,291,102

(10,794,346) (2,851,845)

3)11,021 (16,033)

3,194,988

(2,398,763) 172,112,122 169,713,359

CALIFORNIA STATE UNIVERSITY, FRESNO FOUNDATION THE CALIFORNIA STATE UNIVERSITY AUXILIARY ORGANIZATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2011 AND 2012

Cash flows from operating activities: Increase (decrease) in net assets Adjustments to reconcile increase (decrease) in net assets to net

cash provided (used) by operating activities: Depreciation Contributions restricted for long-term investment Net realized and unrealized (gains) and losses on investments Changes in value of split interest agreements Donated land Changes in assets and liabilities:

Grants, contracts and accounts receivable Pledges receivable Prepaid expenses and other assets Accounts payable Accrued salaries and benefits Accrued compensated balances Deferred revenue (Receipts in excess of expenditures) Depository accounts

Net cash provided (used) by operating activities

Cash flows from investing activities: Purchase of investments Proceeds from sales and maturities of investments Increase in notes receivable Acquisition of capital assets

Net cash provided (used) by investing activities

Cash flows from financing activities: Repayment on line of credit Proceeds from loan Contributions restricted for long-term investment

Net cash provided by financing activities

Net increase (decrease) in cash Cash at beginning of year Cash at end of year

$39,848,448

17,655 (4,395,970)

(14,105,098) (144,032)

o

(85,510) 2,537,868

146,946 (944,045)

96,540 (5,047)

(933,240) (26,962,648)

(4,928,133)

(10,550,329) 7,446,928

(24,549) (19,073)

(3,147,026)

(200,000) 2,000,000 8,260,569

10,060,569

1,985,410 45,662,353

$47,647,763

The accompanying notes are an integral part of the financial statements 8

($2,398,763)

18,713 (12,566,239)

4,892,929 (43,913) 95,000

(732,653) (1,113,941)

(148,514) 72,822

189,594 11,471

(630,295) 170,657

(12,183,132)

(18,273,736) 5,641,407 (120,412)

(23,437) (12,776,178)

o o

16,430,837 16,430,837

(8,528,473) 47,647,763

$39,119,290

NOTES TO THE FINANCIAL STATEMENTS

CALIFORNIA STATE UNIVERSITY, FRESNO FOUNDATION


AS OF AND FOR THE YEARS ENDED JUNE 30, 2011 AND 2012

Note 1- Organization and Significant Accounting Policies

Organization

The California State University, Fresno Foundation (the "Foundation") was incorporated on June H, 193L It is a recognized auxiliary of the California State University and is organized and operated exclusively for educational purposes as a tax-exempt organizatiol1 under the provisions of section 50 I (c )(3) of the Internal Revenue Code and section 23701(d) of the California Revenue and Taxation Code. The Foundation was formed and is operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of California State University, Fresno (the "University"). The Foundation is supported primarily by revenues generated from the recovery of indirect costs from federal, state and other grants, fees on gifts, donations and other sources and investment earnings.

Basis of Accounting

The Foundation maintains its accounting records and prepares its fmancial statements on the accrual basis of accounting.

Use of Estiroates

The preparation of fmancial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estiroates 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.

Basis of Presentation

Financial statement presentation is in. accordance with generally accepted accounting principles for not-forprofit organizations. Under this guidance, the Foundation is required to report information regarding its fmancial position and activities a-ccording to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

Cash and Cash Equivalents

The Foundation maintains all of its cash and cash equivalents in accounts held with a large national bank ($5,273,669 and $5,845,013 for the years ended June 30, 2011 and 2012, respectively), in the State of California Local Agency Investment Fund (LAIF) ($42,374,094 and $6,780 for the years ended June 30, 2011 and 2012, respectively), and within a balanced investment portfolio with Goldman Sachs ($0 and $31,202,802 for the years ended June 30, 20Jl and 2012, respectively).

The Federal Depository Insurance Corporation insures cash balances held in banks up to $250,000. At June 30, 2011 and 2012 The FOWldation's uninsured cash balances held in banks totaled $8,802,141 and $6,982,431, respectively. Management believes that the FOlmdation's diversification of cash deposits, combined with prudent business practices help assure that, in accordance with 45 Code of Federal Regulations, Part 74.21(b)(3), any Federal deposits in excess of insurance or collateralization are adequately safeguarded.

9


Accounts Receivable

Accounts receivable are stated at unpaid balances. Receivables are considered impaired if full principal payments are not received in accordance with the contractual tenns. It is the Foundation's policy to write off uncollectible accounts receivable when management detennines the receivable will not be collected. The Foundation maintains a Reserve for Contingency - Sponsored Programs against which such write-offs can occur.

Investments

Investments are primarily held in corporate equity securities, bonds, and U.S. government bonds and are reported at fair value based upon quoted market price. Any temporary difference between cost and fair value of an investment is presented as a separate component of change in net assets. The specific identification method is used to detennine realized gains and losses on investments.

The Foundation maintains master investment accounts for its donor-restricted and board-designated endowments. Realized and unrealized gains and losses from investments in the master aCcOlmts are allocated annually to the individual endowments based on the relationship of the market value of each endowment to the total market value oLthe master investment accounts, as adjusted for additions to or deductions from those accounts.

Fixed Assets

Fixed assets are reflected on the fmancial statements at cost. Depreciation is computed using the straightline method based upon estimated useful lives of three to ten years. The Foundation capitalizes all expenditures in excess of $5,000 for property and equipment at cost.

Indirect Cost Rate

The Foundation provides accounting and administrative services for grants and contracts entered into by the Foundation on behalf of the University. In many cases, these agreements provide for the reimbursement of indirect costs based on a percentage.ofthe direct costs of the grants and contracts.

The University and the Foundation make every attempt to obtain from the granting agencies the federally approved maximum indirect cost reimbursement rate of 38.4% of the total direct costs of the grant and contract agreements. However, few grant and contract agreements allow for the maximum federal rate. The FOlmdation's actual average indirect cost reimbursement rate for grants and contracts was 7.5% for both fiscal years 2011 and 2012.

Donor Imposed Restrictions

All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor for specific purposes are reported as temporarily restricted or permanently restricted donations. Realized and unrealized gains (losses) from securities transactions in the Endowment Fund are recognized as temporarily restricted for those purposes specified by the donors for income from the endowed gift. The Foundation collects reasonable administrative fees on contributions as applicable law pennits. Donors have the option for exemption from or reduction of the administrative fees and the Foundation has complied with any request from donors to exercise these options. The Foundation Board of Governors votes annually on the amount of the endowment administrative fees. Currently the administrative fees cannot exceed 2.5% of the fair market value of the funds at June 30 of each year.

The Foundation Board of Governors authorized that a 5% gift assessment be placed on all cash gifts.

Pledges Receivable

Unconditional pledges receivable from donors that are expected to be collected within one year are recorded at net realizable value. Long-tenn pledges receivable that are expected to be collected in a period beyond one year are recorded at a discount using the present value of their estimated future cash flows. The discounts on long-tenn pledges receivable are computed using risk-free interest rates applicable to the period in which the pledges to give are received. Amortization of the discounts is included in contribution revenue. Conditional promises to give are not included as support until the conditions are substantially met.

10

NOTES TO THE FINANCIAL STATt::MENTS

Management has determined that an allowance of $180,000 for both 2011 and 2012 for uncollectible pledges receivable is sufficient based on historical levels of write offs.

Contributed Property and Equipment

Donated property and equipment are recorded at fair market value at the date of donation.. If donors stipulate how long the assets must be used or how the proceeds from the sale of the property or equipment are to be used, the donations are recorded as restricted contributions. In the absence of such stipulations, donations of property and equipment are recorded as unrestricted contributions.

Income Taxes

The Foundation is incorporated as a non-profit Califomia corporation and is exempt from income taxes under Internal Revenue Code Section 501(c)(3) and .California Revenue and Taxation Code Section 23701d.

Tax returns are med in U.S. federal and state of California jurisdictions. Tax returns remain subject to examination by the U.S. federal jurisdiction for three years after the return is med and for four years by the California jurisdiction, There are currently no tax years under examination.

Note 2 - Pledges Receivable

At June 30, 2011 and 2012, Pledges Receivable includes the following unconditional pledges to give:

Pledges Receivable 2011 2012:

Unconditional pledges to give before unamortized discount and $ 12,946,221 $ 13,561,042 allowance for uncollectible pledges

Less: Unamortized discount (2,859,907) (2,360,787)

Subtotal 10,086,314 11,200,255

Less: Allowance for uncollectible pledges (180,000) (180,000)

Net unconditional pledges to give $ 9906314 $ 11,020255

Amounts due in:

Less than one year $ 2,277,693 $ 5,908,917

One to five years 6,406,846 3,384,523

More than five years 4,261,682 4,267,602

Total $ J2 946 221 $ J 3 561,042

11


The average discount rate used to calculate the present value of promises to give expected to be collected in periods beyond one year was 7% for both fiscal years 2011 and 2012. Total gross pledges received were $2,074,900 and $4,395,162 for the years ended June 30,2011 and 2012, respectively. Pledges receivable are considered a Level 3 asset under the fair value hierarchy established by ASC 820.

Pledges receivable activity are ! as follows: 2011 2012

,

Beginning of year balance $ 15,930,110 $ 12,946,221

New pledges 2,074,900 4,395,162

Pledge payments received (4,949,289) (3,737,006)

Write-offs (109,500) (43,335)

End of year balance $ 12946221 $ 13561 042

Note 3 - Notes Receivable

The Foundation maintains a Student Loan Fund that allows students to borrow funds as approved by the University's Office of Financial Aid. The Foundation did not write off any uncollectable student loans for both fiscal years 2011 and 2012. Management believes the current reserve level is adequate for future uncollectible student loans.

Notes receivable for the years ended June 30, 2011 and 2012 are as follows:

Note Receivable (Interest Rate) 2011 2012

Student loans (12%) $ 34,194 $ 154,606

Subtotal notes receivable 34,194 154,606

Less allowance for uncollectible student loans (2,500) (2,500)

Net notes receivable $ 31,694 $ 152,106

Current portion $ 20,894 $ 64,576

Long term portion $ 10,800 $ 87,530

Note 4 - Short-Term Investments

The Foundation holds short-term investments, which are defined as investments with original maturities of greater than 90 days, but less than one year. As of June 30, 2011 and 2012, the Foundation's short-teml investments consist primarily of mutual fimd investments that the Foundation intends to hold until needed in operations, Short-term investments are reported at fair value.

12


Short-term investment activity at fair value for the years ended June 30, 2011 and 2012 is as follows:

Short-term investments 2011 I 2012

Short-term investments at beginning of year $ 566,167 $ 939

Withdrawals (574,562) (1,313)

Return on investments:

Dividends and interest 18,981 0

Unrealized gains (losses) (9,647) 374

Total retnrn on investments 9,334 374

Short-term investments at end of year $ 932 $ Q

.

Note 5 - Long-Term Investments

Generally accepted accounting principles require the Foundation to report investments in securities at fair value and to recognize and report realized and unrealized gains or losses in the statements of activities.

Unrealized gains or losses occur when the fair value of investments increases or decreases as of June 30th

each year. Realized gains or losses occur when an investment is sold. However, the amount of the realized gain or loss reflected on the statements of activities should not include any unrealized gain or loss recognized in prior years. With the large number of securities comprising long-term investments, it is impractical for the Foundation to determine the amount of unrealized gain or loss previously recognized on securities sold during the years ended June 30, 2011 and 2012. Netting the realized gains (losses) and the unrealized gains (losses) does properly recognize the required adjustment to reflect investments at fair value as ofJune 30, 2011 and 2012.

Long-term investment activity at fair value for the year ended June 30, 2011 is as follows:

Long-term investments I Total

Long-term investments at beginning of year

Additions

Amounts withdrawn for:

Scholarships and donor restricted purposes

Gift assessments

Total amounts withdrawn


Dividends and interest (net of investment fees of $384,609)

Realized gains

Unrealized gains

Total return on investments

Long-term investments at end of year

$ 97,247,480

4,399,202

(5,549,364)

(110,627)

(5,659,991)

2,378,268

1,124,373

11,667,276

12,791,649

.:L1l1,156608

13


Long-term investment activity at fair value for the year ended June 30, 2012 is as follows:

Long-term investments I Total

Long-term investments at begirming of year

Additions

Amounts withdrawn for:

Scholarships and donor restricted putposes

Gift assessments

Total amounts withdrawn


Dividends and interest (net of investment fees of $496,161)

Realized gains (losses)

Unrealized gains (losses)

Total return on investments

Long-terrrt investments at end of year

$ 111,156,608

12,395,394

(5,640,093)

(67,007)

(5,707,100)

2,080,749

(312,354)

(4,580,949)

(4,893,303)

$ 115,032,348

Long-term investments at fair value consist of the following:

Long-term investments 2011 2012

Money market

Common stocks

Bonds

Mutual funds

Life income contracts

Alternative investments

Total1ong-term investments, at market

Note 6 - Fair Value Measurements

$ 3,965,412 $

60,194,161

30,094,148

5,539,877

453,713

10,909,297

2,748,034

55,934,041

45,405,879

1,690,926

452,278

8,801,190

$ 111.156608 $ 115,032,348

Generally accepted accounting principles establishes a framework for measuring fair value, F ASB ASC 820 applies to all fmancial statements that are being measured and reported on a fair value basis,

F ASB ASC 820 defmes fair value as the price tilat would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, FASB ASC 820 establishes a fair value hierarchy that plioritizes the inputs to valuation techniques used to measure fair value, The hierarchy give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Levell measurements) and the lowest pliolity to measurements involving significant observable inputs (Level 3 measurements), The three levels of the fair value hierarchy are as follows:

Levell - Inputs are quoted market prices (unadjusted) in active markets for identical assets or liabilities. Valuations for assets and liabilities traded in active exchange markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities,

14


Level 2 - Inputs other than quoted prices within Level I that are observable, either directly or indirectly. Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or similar assets or liabilities.

Level 3 - Inputs are unobservable. Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounts cash flow models and similar tecimiques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

Following is a description of the valuation methodologies used to measure fair value. There have been no changes in the methodologies used at June 30, 20ll and 2012.

Cash and cash equivalents, short-term investments, and money market accounts: The carrying a1}lount is a reasonable estimate of fair value.

Common stocks: Valued at the closing price reported on the active markets on which the individual securities are traded.

Bonds: Valued at the price quoted within custodial statements.

Mutual Funds: Valued at the net asset value of shares held.

Alternative Investments: Based on the net asset values provided by the fund manager and other market factors. Other factors include, but are not limited to, estimates of liquidation value, prices of recent transactions in the same or similar funds, current pcrfonnancc, future expectations of the patiicular investment, and changes in market outlook and the financing environment.

The table below presents the level within the fair value hierarchy at which cash and investments are measured at June 30, 2011:

Total Levell Level 2 Level 3 I Cash and cash eqttivalents $ 47,647,763 $ 47,647,763 $ 0 $ 0

Short-term investments $ 939 $ 939 $ 0 $ 0

Long-term investments:

Money market $ 3,979,289 $ 3,979,289 $ 0 $ 0

Common stocks 60,233,827 60,233,827 0 0

Bonds 30,438,320 30,438,320 0 0

Mutual funds 5,539,877 5,539,877 0 0

Alternative investments 10,965,295 0 0 . 10,965,295

Total long-term investments, at market $ I II,156,608 $ 100,191,313 $ 0 $ 10,965,295

Total $ 158805.310 U41,840.015 L 0 t. 10.965 295

15


The table below presents the level within the fair value hierarchy at which cash and investments are measured at June 30, 2012:

Total Levell Level 2 Level 3 I

Cash and cash equivalents $ 39,119,290 $ 39,119,290 $ 0 $ 0

Short-term investments $ 0 $ 0 $ 0 $ 0

Long-term investments:

Money market $ 2,757,756 $ 2,757,756 $ 0 $ 0

Common stocks 55,985,906 55,985,906 0 0

Bonds 45,733,955 45,733,955 0 0

Mutual funds 1,690,926 1,690,926 0 0

Alternative-investments 8,863,805 0 0 8,863,805

Total long-term investments, at market $ 115,032,348 $ 106,168,543 $ 0 $ 8,863,805

Total $ 154,151,638 $ 145,287,833 $ 0 $ 8 863,805

The following schedule shows changes in Level 3 Assets for the years ending June 30, 2011 and 2012:

2011 2012:

Level 3 Assets at beginning of year $ 8,287,553 $ 10,965,295

Transfer in (out) of Level 3 2,000,000 (1,412,889)

Purchases, issuances, and settlements 0 0

Total gains or losses (realized/unrealized) 677,742 (688,601)

Level 3 Assets at the end of the year $ 10965 295 $ 8 863 805

The amount of total gains or losses for the years ended June 30, 2011 and 2012 included in net assets (all permanently restricted) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date was $677,742 and ($688,601), respectively.

Note 7 - Endowment

Effective July 1, 2008, the Fouudation adopted the provisions established by accounting literature for Endowments of Not-far-Profit Foundations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds. The accounting literature provides guidance on the net asset classification of donor restricted endowment funds for a not-for-profit Foundation that is subject to an enacted version of the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIF A) and also requires disclosures about endowment funds, both donor restricted endowment funds and board-designated endowment funds.

The Foundation's endowment consists of approximately 590 individual funds established lor a variety of purposes. Its endowment includes both donor-restricted endowment funds and funds designated by the Board of Governors to function as endowments. As required by GAAP, net assets associated with endowment funds, including funds designated by the Board of Governors to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions.

16


Interpretation of Relevant Law

The Board of Governors of the Foundation has interpreted the California Unifonn 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 to the pennanent 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 pennanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Foundation in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, the Foundation considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

(I) The duration and preservation of the fund (2) The purposes of the Foundation 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 Foundation (7) The investment policies of the Foundation.

Endowment Net Asset Composition by Type of Fund

Endowment net assets consist of the following at June 30, 2011:

Temporarily Permanently Unrestricted Restricted Restricted Total

Donor-restricted endowment funds $ (2,392,092) $ 41,715,628 $ 76,924,776 $ 116,248,312

Board-designated endowment ftmds 0 0 0 0

Total endowed net assets L(V92,092) $ 41,715628 ,$ 76,924,776 ,$ 116248,312

Endowment net assets consist ofthe following at June 30, 2012:


Donor-restricted endowment ftmds $ (4,664,825) $ 45,594,318 $ 79,999,633 $ 120,929,126

Board-designated endowment funds 0 0 0 0

Total endowed net assets $ (4664825) $ 45594,318 $ 79999,633 .Ll2Jl,929126

17


Changes in Endowment Net Assets

The following schedule shows changes in endowment net assets for the year ending June 30, 2011:


Endowment net assets, July 1, 2010 $ (5,213,931) $ 33,280,279 $ 73,866,053 $ 101,932,401

Activity in pooled endowment assets:

Investment return:

Irivestment income 0 2,289,662 0 2,289,662

Net appreciation 2,821,839 11,401,047 0 14,222,886

Total investment return 2,821,839 13,690,709 0 16,512,548

Contributions * 0 597,187 3,171,369 3,768,556

Appropriation of endowment assets for expenditure 0 (5,400,424) 0 (5,400,424)

Net increase in pooled endowment assets 2,821,839 8,887,472 3,171,369 14,880,680

Net increase (decrease) in other endowment net assets * 0 (452,123) (112,646) (564,769)

Endo'WIllent net assets, June 30, 2011 L(2,392 092) $ 41715628 176,924776 $ 116248,312

* Note: Some contributions shown within pooled endowment activity relate to other endowment net assets (including pledges receivable).

18


The following schedule show changes in endowment net assets for the year ending June 30, 2012:

Tcmpotarily Permanently Unrestricted Restl"icted Restricted Total

Endowment net assets, July I, 2011 $ (2,392,092) $ 41,715,628 $ 76,924,776 $ 116,248,312

Activity in pooled endowment assets:

Investment return:

Irtvestment income 0 7,879,409 0 7,879,409

Net appreciation (depreciation) (2,272,733) (8,456,623) 0 (10,729,356)

Total investment retum (loss) (2,272,733) (577,214) 0 (2,849,947)

Contributions * 0 9,998,492 3,052,944 13,051,436

Appropriation of endowment assets for expenditure 0 (5,700,626) 0 (5,700,626)

Net increase (decrease) in pooled endowment assets (2,272,733) 3,720,652 3,052,944 4,500,863

Net increase (decrease) in other endowment net assets * 0 158,038 21,913 179,951

Endowment net assets, June 30, 2012 $ . (4 664,825) $ 45594318 $ 79999633 $ 120929,126

* Note: Some contributions shown within pooled endowment activity relate to other endowment net assets (including pledges receivable).

Description of Amounts Classified as Permanently Restricted Net Assets and Temporarily Restricted Net Assets

2011 2012 Permanently Restricted Net Assets

The portion of perpetual endowment funds that is $ 76,924,776 $ 79,999,633 required to be retained permanently either by explicit donor stipulation or by UPMIF A

Total endowment funds classified as permanently restricted net assets $ 76924776 $ 79 999 633

Temporarily Restricted Net Assets

Term endowment funds

The portion of perpetual endowment funds subject to a time restriction under UPMIF A:

Without purpose restrictions

With purpose restrictions

Total endowment funds classified as temporarily restricted new assets

19

$ o $

o 41,715,628

o

o

45,594,318

$ 41715.628 $ 45594,318


Endowment Funds with Deficiencies

From time to time, the fair value of assets associated with individual donor restricted endowment funds may fall below the level that the donor or UPMIFA requires the Foundation to retain as a fund of perpetual duration. In accordance with GAAP, deficiencies of this nature that are reported in unrestricted net assets as of June 30, 2011 and 2012 are $2,392,092 and $4,664,825, respectively. These deficiencies resulted from unfavorable market fluctuations that occurred shortly after the investment of new permanently restricted contributions and continued appropriation for certain programs that was deemed prudent by the Board of Governors.

Return Objectives and Risk Parameters

The Foundation has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Foundation rimst hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. Under this policy, as approved by the Board of Governors, the endowment assets are invested in a manner that is intended to produce results consistent with an overall objective of safety of principal combined with capital appreciation. Since the Foundation has long-term investment goals, some risk of principal is acceptable to achieve higher overall returns. The investments of the funds, which include equities, should exceed the rate of inflation by four percent (4%), over full market cycles.

Strategies Employed for Achieving Objectives

To satisfy its long-term rate-of-return objectives, the Foundation relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Foundation targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints.

Spending Policy and How the Investment Objectives Relate to Spending Policy

The Foundation Board each year approves an appropriation for distribution from its endowment to University programs after considering the analysis and input from its Investment and Budget Committees who, .in tum, consider factors contained within UPMIF A, as well as the nee4s of University programs that benefit from the distribution. The distribution is measured as a percentage of its endowment fund's average fair value over the prior 12 quarters through the calendar year-end preceding the fiscal year in which the distribution is planned. In establishing this policy, the Foundation considered the long-term expected return on its endowment. Accordingly, over the long term, the Foundation expects the current spending policy to allow its endowment to grow consistent with its return objectives and risk parameters.- This is consistent with the Foundation's objective to maintain the purchasing power of the endowment assets held in perpetuity or for a specified term as well as to provide additional real growtll through new gifts and investment return. The total endowment payout for the years ended June 30, 2011 and 2012 (as a percentage of the endowment's average market value for the twelve quarters ending the preceding December 31), was 6.00% and 5.55% respectively.

Nole 8 - Management Services

The Foundation receives corporate management and financial services from the California State University, Fresno Association, Inc. ("Association") through a Management Services Agreement (MSA). The Foundation's gross administrative fees paid to the Association for the years ended June 30, 2011 and 2012 were $589,700 and $644,700, respectively.

20


The Foundation also reimburses the Association for the salaries and benefits of the Foundation Financial Services staff, The amount reimbursed for the years ended June 30, 2011 and 2012 were $954,211 and $920,926, respectively, Benefit reimbursement includes current year defined benefit pension contributions and retired employees' health benefit payments for persons employed by the Association but performing services for the Foundation, The disclosures relating to these plans are not considered significant to the Foundation's fmancial statements.

Note 9 - Unitrust and Annuity Agreement Liabilities

Unitrust Agreements consist of the following:

Unitr"st Agreement No, 2

On June 15, 1998, a unitrust agreement was established by donors under which stock was contributed to a trust for which the Foundation is acting as trustee and will receive the residual value of trust assets upon the death of the donor. The stock was sold during fiscal year 1999 and the Foundation received net proceeds of approximately $106,000, The annuity liability was recorded at approximately $74,000 and beginning on September 30, 1998, quarterly payments of $2,120 to the donor commenced under the ten)]s ofthe unitrust agreement. In May 2002, an additional gift of stock was received from the donor and the stock was sold in June 2002 with an initial fair value of $506,000, An additional annuity liability was recorded in the amount of approximately $307,000 and beginning on September 30, 2002, additional quarterly payments of $10,120 to the donor commenced, The life ofUnitrust Agreement No, 2 was originally estimated to be )3,9 years.

Unitrust Agreement No.3

On December 4, 1998, a unitrust agreement was established by donors under which three propt:rlies in Kern County were contributed to a trust for which the Foundation is acting as trustee, The Foundation will receive the residual value of trust assets upon the donor's death, The first property was sold by the Foundation in March 2002 for $83,160, The second property was sold in December 2002 for $109,000, The third property was sold in December 2003 for $300,000, AJI assets of the trust will be distributed to a designated endowment on December 31, 20)3, Payments to the donors under the Unitrust Annuity Agreement were initially the lesser of the annual trust income or 7% of the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (the "Valuation Date"), Commencing at the beginning of the trust's first taxable year following the sale of all the property pieces, the unitrust payments are equal to 7% of the fair market value of the tmst assets at the Valuation Date, The life of Unit rust Agreement No, 3 was originally estimated to be 15,0 years,

Financial info11llation related to Unitrust Agreements is as follows for the year ended June 30, 2011:

Fiscal 2011 6130/11 Change in Present Liability 6/30/11 Split Value Unitrllst

Initial Fair Initial Net 6/30/11 Present Net Interest Discount Payment Value CootributiooA Fair'Value Value B Value c Value D Rate Rate

No.2 612,021 218,362 460,985 76,686 384,299 41,751 7.0% 8.0%F

No,3 964,100 340,444 434,678 107,958 326,720 99,955 7.0% 7.0%F

Total $ 1,576,121 $ 558,806 $ 895,663 $ 184,644 $ 711,019 141,706

21

Remain-iog Life ~

1.9

3


Financialinfonnation related to Unitrust Agreements is as follows for the year ended June 30, 2012:

Fiscal 2012 6/30/12 Chaligc in Present

Liability 6/30112 Split Value Ullitrnst Initial Fair Initial Net 6/30112 PrC5cnt Net Interest Discount P:lymcllt

Value ContributioliA Fair Value VltlUC II Value C ValueD Rate Rate

No.2 612,021 218,362 414,751 35,759 378,992 40,927 7.0% 8.0%F

No.3 964,100 340,444 419,980 95,331 324,649 (16,695) 7.0% 7.0%~

Total $ 1,576,121 $ 558,806 $ 834,731 $ 131,090 $ 703,641 24,232

A The initial net contribution equals the initial fair value less the initial liability present value at the date of the donation to the Foundation.

B The liability measured at the present value of expected future cash flows to be paid to the beneficiary.

C The net value equals the fair value less the liability present value. This represents the net asset value to the Foundation as of June 30.

o A revaluation of unitrust assets and corresponding liabilities at June 30 resulted in a change in permanently restricted endowment fund net assets, which was included as a change in the value of split interest agreements on the Statements of Activities.

E Based on life expectancy tables included in the Internal Revenue Code.

F The unitrust agreement provides that the donors, during their lifetimes, shall be paid an amount equal to the percent of the net fair market value of the assets of the trust Cas indicated in the above table), based on a revaluation at the beginning of each taxable year.

Annuity Agreements consist of the following:

Annuity Agreement No.5

On November 25, 1998, a charitable gift annuity agreement was established by donors under which property at Cedar and Teague, in Fresno County, was contributed. The Foundation will receive the residual value of assets upon the death of the donors. The property was sold during fiscal year 2001 for $450,000. The annuity liability was initially recorded at approximately $156,000. Payments in the amount of $9,500 are made to the donor on a quarterly basis. As this is a Charitable Gift Annuity, the Foundation remains liable to continue making payments to the donor during their lifetime, regardless of the remaining liability balance. The life of Annuity Agreement No.5 was originally estimated to be 5.0 years. Wells Fargo is acting as administrator for this charitable gift annuity.


On November 19, 2004, a deferred charitable gift annuity agreement was established by donors under which cash was contributed. The Foundation will receive the residual value of assets upon the death of the donors. The annuity liability was initially recorded at approximately $25,000. Payments in the amount of $456.25 are made to the donors on a quarterly basis, beginning on March 31,2009. As this is a Charitable Gift Annuity, the Foundation remains liable to continue making payments to the donors during their lifetime, regardless of the remaining liability balance. The life of Annuity Agreement No.7 was originally estimated to be 19.3 years. Wells Fargo is acting as administrator for this charitable gift annuity.

22

Rcmain-iug Lire

~ .9

2



On October 25, 2005, a deferred charitable gift annuity agreement was established by donors under which cash was .contributed. The Foundation will receive the residual value of assets upon the death of the donors. The annuity liability was initially recorded at approximately $25,000. Payments in the amount of $468.75 are made to the donors on a qnarterly basis, beginning on March 31, 2010. As this is a Charitable Gift Annuity, the Fonndation remains liable to continue making payments to the donors during their lifetime, regardless of the remaining liability balance. The life of Annuity Agreement No.8 was originally estiillated to be 18.7 years. Wells Fargo is acting as administrator for this charitable gift annuity.


On November 30, 2005, a charitable gift annuity agreement was established by donors under which cash was contributed. The Foundation will receive the residual value of assets upon the death of the donors. The annuity liability was initially recorded at approximately $10,000. Payments in the amount of$212.50 are made to the donor on a quarterly basis, beginning on March 31, 2006. As this is a Charitable Gift Annuity, the Foundation remains liable to continue making payments to the donor during their lifetime, regardless of the remaining liability balance. The life of Annuity Agreement No.9 was originally estimated to be 8.3 years. Wells Fargo is acting as administrator for this charitable gift annuity.

Annuity Agreement No.1 0

On October 13, 2006, a deferred charitable gift annuity agreement was established by donors under which cash was contributed. The Foundation will receive the residual value of assets upon the death of the donors. The annuity liability was initially recorded at approximately $25,000. Payments in the amount of $481.25 are made to the donors on a quarterly basis, beginning on September 30, 2010. As this is a Charitable Gift Annuity, the Foundation remains liable to continue making payments to the donors. during their lifetime, regardless of the remaining liability balance. The life of Annuity Agreement No. 10 was originally estimated to be 18.2 years. Wells Fargo is acting as administrator for this charitable gift annuity.

Annuity Agreement No. 11

On June 9, 2008, a charitable gift annuity agreement was established by a donor under which cash was contributed. The Foundation will receive the residual value of assets upon the death of the donor. The annuity liability was initially recorded at approximately $18,664. Payments in the amount of $340.31 are made to the donor on a quarterly basis, beginning on June 30, 2008. As this is a Charitable Gift Annuity, the Foundation remains liable to continue making payments to the donor during her lifetime, regardless of the remaining liability balance. The life of Annuity Agreement No. 11 was originally estimated to be 4.6 years. Wells Fargo is acting as administrator for this charitable gift annuity.

Annuity Agreement No. 12

On October 11, 2011, a deferred charitable gift annuity agreement was established by donors under which cash was contributed. The Foundation will receive the residual value of assets upon the death of tile donors. The annuity liability was initially recorded at approximately $25,000. Payments in the amount of$393.75 will be made to the donors on a quarterly basis, beginning on January 31,2014. As this is a Charitable Gift Annuity, the Foundation remains liable to continue making payments to the donors during their lifetime, regardless of the remaining liability balance. The life of Annuity Agreement No. 12 was originally estimated to be 15.3 years. Wells Fargo is acting as administrator for this charitable gift annuity.

23


Financial information related to Annuity Agreements is as follows for the year ended June 30, 2011:

Fiscal20t 1 6/30/11 Change ill Present Re-

I

Initial Initial Net Liability 6/30/11 Split Value Annuity mnillillg Fair Qm!r!:: 6/30/11 Present Net Intcrest Discount Payment Life

Value htdion A Fair Vallie Value B Vallie' Valuc D Rate Rate E ~ No.5 255,000 99,117 122,043 0 122,043 0 7.0% 11.7% 0

No.7, 75,000 27,523 90,486 51,514 38,972 1,676 7.0% 7.3% 14.2

8 & 10

No.9 10,000 5,689 7,431 1,950 5,481 649 7.0% 8.5% 3.3

No.11 50,000 31,336 40,569 7,502 33,067 0 7.0% 11.3% 1.6

Total $ 390,000 $ 163,665 $ 260,529 $ 60,966 $ 199,563 $ 2,325

Financial information related to Annuity Agreements is as follows for the year ended June 30, 2012:

FiscalZOl2 6/30112 Change in Present Rc-

I Initial Iititial Net Liability 6/30/12 Split Value Annuity maining Fair Contri- 6/30112 Present Net Interest Discount Payment Life

I Value !Jution A Fair Value Value 8 Value C Value 0 Rate R:ite E ~

No.5 255,000 99,117 40,187 0 40,187 0 7.0% 11.7% 0

Nos. 7, 8,10 & lOO,OOO 35,547 148,347 66,684 81,663 1,805 7.0% 7.3% 15.3

12

No.9 10,000 5,689 8,403 1,24-1- 7,159 706 7.0% 8.5% 2.3

No.ll 50,000 31,336 41,282 2,679 38,603 4,823 7.0% 11.3%

Total $ 415,000 $ 171,689 $ 238,219 $ 70,607 $ 167,612 $ 7,334

A The initial net contribution equals the initial fair value less the initial liability present value at the date of the donation to the Foundation.

a The liability measured at the present value of expected future cash flows to be paid to the beneficiary.

C The net value equals the fair value less the liability present value. This represents the net asset value to the Foundation as of June 30.

D Revaluation of annuity assets and corresponding liabilities at June 30 resulted in a change in pennanently restricted endowment fund net assets, which was included as a change in the value of split interest agreements on the Statements of Activities.

E The annuity agreement provides that the donors, during their lifetimes, shall be paid an amount equal to the percent oftl,e net fair market value of the assets (as indicated in the above table), based on the valuation as of the date of conveyance to the Foundation.

F Based on life expectancy tables included in the Internal Revenue Code.

24

.6


Note 10 - Notes Payable

A summary of notes payable a~ ofJune 30, 2011 and 2012, is as follows:

Notes Payable I 2011 2012

1.0% Trinity Health Corporation payable in its entirety on or before Juoe 30, 2016, with interest paid annually each September 30th

Less portion considered current Total notes payable

Maturities of long term debt for the next five years are as follows:

I Amouut Years Ended June 30 IJirlncipal Interest 2013 20,000 2014 20,000 2015 20,000 2016 $ 2,000,000 20,000

Total $ 2,000,000 80000

$

$

2,000,000 o

2.000000

$

$

2,000,000 o

2000000

Interest accrued was $3~333 and $20,000 during the years ended June 30, 2011 and 2012, respectively.

Note 11- Net Assets: Unrestricted - Board Designated Reserves

Unrestricted net assets include amounts designated by the Foundation's Board of Governors for specific uses. These amounts consist of the following:

Reserve for Contingency - General

The purpose of this reserve is to cover the general cash flow needs of the Foundation to maintain fmancial viability.

Reserve for Contingency - Sponsored Programs (Designated Fund)

The Foundation is the primary fiscal agent for California State University, Fresno, which administers research and special projects funded by Federal agencies. The Federal rules and regulations are very complex and are subject to audit. As such, certain expenditures may be disallowed as a result of an audit. This reserve provides funds for any disallowed costs. Included in "Net Assets, Unrestricted-Board Designated Reserves" are the following:

25


Board Designated Reserves 2011 2012

General Fund:

Reserve for Contingency - General $ 300 000 $ 900000

Designated Fund:

Reserve for Contingency - Sponsored Programs 236,132 393,054

Total Designated Fund Reserve $ 236132 $ 393054

Total Board Designated Reserves $ 536,132 $ I 293,054

Management believes that as of June 30, 2011 and 2012 the reserve balances are sufficient for their intended purposes.

Note 12 - Non-Cash Transactions

The Foundation donated equipment to the University with a cost of $788,963 and $1,141,077 during the years ended June 30, 2011 and 2012, respectively.

Note 13 ~ Leases and Agreements

The FOlmdation has entered in an operating lease for office space at 5180 N. Prhnitivo Way, Apt. 302, Fresno, CA for. a sponsored program (Wayfinders). The payment is $1,420 p.er month. The lease expired in July 2012.

The Foundation has entered into an operating lease for office space at 5070 North Sixth Street, Suite 134, Fresno, CA for a sponsored program (STEAD/Success Training). The payment is $2,006 per month. The lease has been extended and expires in June 2013.

The Foundation has entered into an operating lease for office space at 2201 Broadway, Suite 705, Oakland, CA for a sponsored program (Central CA Training Academy-Bay Area Academy). The payment is $6,090 per month. The lease expires in June 2013.

The Foundation has entered into various operating lease agreements with Dell Financial Services for the nse of office equipment by the Fresno State Foundation (4910 N. Chestnut Ave.). The annual expense for these leases is $8,472. The leases expire between August 2012 and April 2015.

The Foundation has entered into an operating lease agreement with IKON Financial Services for the use of office equipment in a campus program (AEI). The payment is $5,295 armually. The lease expires in July 2013.

The Foundation has entered into an operating agreement with the Trustees of the California State University. The purpose of this agreement is to set forth tenns and conditions under which the Foundation may operate as an auxiliary organization pursuant to Title 5 of the California Code of Regulations. The agreement expires in June 2017.

Rental expenses under operating leases during the fiscal year 2011 and fiscal year 2012 were $26,670 and $21,340, respectively.

26


Future minimum payments on the leases are as follows:

Year Ended June 30:

2013 2014 2015

Note 14 - Expenses

$ 112,142 $ 8,913 $ 8,472

For the Year Ended June 30, 2011:

/

General & Fund Raising Expenses Program Administrative (Development) Total

Salaries and wages $ 13,925,235 $ 629,352 $ 0 $ 14,554,587

Fringe benefits 3,444,329 366,563 3,810,892

Equipment 706,980 706,980

Student support 6,255,639 6,255,639

Campus support 12,971,384 12,971,384

Capital outlay 125 125

Overhead 2,037,470 2,037,470

Donations-agency accounts (surplus allocations) 1,326,604 1,326,604

Other costs 7,805,318 3,710,386 1,039,483 12,555,187

Total $ 41116,480 $ 6,032905 $ 1,039483 .L5'l218,868

For the Year Ended June 30, 2012:

General & Fund Raising Expenses Program Administrative (Development) Total

Salaries and wages $ 15,276,523 $ 619,312 $ 0 $ 15,895,835

Fringe benefits 3,817,284 350,647 4,167,931

Equipment 541,443 541,443

Student support 6,779,995 6,779,995

Campus support 12,936,854 12,936,854

Capital outlay

Overhead 2,317,422 2,317,422

Donations-agency accounts 2,714,023 2,714,023

Other costs 10,476,300 3,628,236 767,491 14,872,027

Total $ 52,145821 $ 731221£ $ 761 ±2l $ 60,225530

27


Note 15 - 40Hk) Profit-Sharing Plan

The Foundation has a 401(k) profit-sharing plan for benefited employees working on grants, contracts, or campus programs. Employer contributions to the plan are based on available budget funding from grantor agencies or campus programs. Employer contributions to the plan charged to sponsored programs or campus programs during fiscal year 2011 and fiscal year 2012 were $408,395 and $492,333, respectively.

Note 16 - Joint Venture

Effective July 1, 2011, the Foundation transitioned from the Auxiliary Organizations Unemployment Insurance Trust (AOmT) to the California State University Risk Management Authority AORMA Unemployment Insurance Program (CSURMA AORMA mp) which is a self-insurance fund for member auxiliaries' unemployment claims. All members of the Program are nonprofit, public benefit auxiliary organizations affiliated with the various campuses of the California State University system. Cominittee oversight of the Program is provided by elected member representatives.

On October 28, 2011, the AOmT distributed to the Foundation residual reserve funds in excess of the required safe level in the amount of $641,864 and transferred remaining reserves of $210,047 to the CSURMA AORMA DIP. The Foundation's share of the AOmT/CSURMA AORMA DIP Fund Balance at June 30,2011 and 2012 was $870,608 and $134,723, respectively.

Note 17 - Transfers

At the end of each fiscal year, the amount of Endowment Administrative Fees related to current endowment holdings are calculated and recorded. These fees, which were $1,323,000 and $1,423,000 for the years ended June 30, 2011 and 2012, respectively, were collected from the Endowment Flmd by the General Emd and subsequently transferred to the Designated Fund. The amounts earned from these fees are designated by the Foundation's Board of Governors for distribution to the University.

Note 18 - Transition Obligation

As described in Note 8 - "Management Services", the Fouridation reimburses the Association for retired employees' health benefit payments for persons employed by the Association but perfonning services for the Foundation. The FOlmdation reflects within its Statements of Financial Position the liability associated with these future payments as calculated in accordance with the Defined Benefit Plans Topic of the FASB Accounting Standards Codification. Any change within this calculated balauce is reflected within the Statements of Activities as a change in Unrestricted Net Assets. For the years ended June 30, 2011 and 2012 the amortized transition obligation is $9,132 each year.

The post retirement obligation as of June 30, 2011 and 2012, is included in accounts payable (long-term portion) and accmed salaries and benefits payable (current portion) as follows:

Current portion

Long-term portion

Total

I 2011 2012 I

$ 25,000 $ 40,000

215,231 190,780

$ 240,231 $ 230,780

28


As of both June 30, 20 II and 2012, the post retirement obligation is unfunded.

Note 19 - Uncertain Tax Positions

Generally Accepted Accounting Principles (GAAP) requires organizations to determine and assess all material tax positions taken in any income or information returns, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. GAAP addresses the recognition and measurement of income tax positions using a "more-likely-than-not" (ML TN) threshold. The ML TN threshold means that:

• A benefit related to an uncertain tax position may not be recognized in the fmancial statements tmless it is ML TN that the position will be sustained based on its technical merits; and

• There must be more than a 50 percent likelihood that the position would be sustained if challenged and considered by the highest court in the relevant jurisdiction.

Management evaluated all material tax positions as required by GAAP and determined that this requirement had no impact on the Foundation's fmancial statements.

Note 20 - Subsequent Events

Management has evaluated subsequent events through September 27, 2012 (date financial statements available to be issued) and determined no events have occurred subsequent to June 30, 2012 that would require adjustment to, or disclosure in the fmancial statements.

Note 21 - Change in Accounting for Agency Accounts

Effective July 1,2010, the Foundation changed the way it accounts for agency trust accounts it custodies and administers in support of University programs. In response to Ext:cutive Order 1059 issued by the California State University's Office of the Chancellor, the balances and activities for these trust accounts are now reflected within the Foundation's Statements. of Activities and Statements of Financial Position as of and for the year ended June 30, 20 II.

The Foundation's Temporarily Restricted Net Assets reflect Non-Operating Revenue of$27,760,642 for the year ended June 30, 2011 representing the July I, 2010 cash balance of these accOtmts which were previously reflected within Long-term Liabilities on its June 30, 2010 Statements of Financial Position.

29

California State University, Fresno Foundation Schedule of Expenditures of Federal Awards

For Fiscal Year Ended June 30, 2012

Federal Pass~Through Federal CFDA Grant Award or Contract Program

Federal GrantorlProgram Title or Cluster Title Number Pass~Through Grantor Number Expenditures

Research & Development

U.S. Department of Agricultu1'e: USDA Forest Service~ Joint Venture IO.RD $ 3,260 Agricultural Research Basic and Applied Research 10.001 $ 60,913 Federal·State Marketing Improvement Program 10.156 $ 1,168

California Department of Food and Specialty Crop Block Grant Program 10.169 Agriculture $ 27,540 P

Regents ofthe University of California Specialty Crop Block Grant Program - Farm Bill 10.170 Berkeley 7675 $ 58,451 P

Grants for Agricultural Research:Special Research Grants 10.200 $ 610,407 University of California Office of the

Grants for Agdcultural Research:Special Research Grants 10.200 President SA7651 $ 15,718 P Grants for Agricultural Research:Competitive Research UA AES 90944-01, Grants 10.206 University of Arkansas AMENDMENT 1 $ 37,414 P Hispanic Serving Institutions Education Grants 10.223 $ 40,057

09-002771-03 -Agriculture and Food Research Initiative (AR'Fn 10.310 University of California Davis AMENDMENT #2 $ 23,943 P

UAF 12-0021-Agriculture and Food Research Initiative (ARFn 10.310 University of Alaska Fairbanks fuVlENDMENT #1 $ 19,845 P

Regents of the University ofCalifomia Agriculture and Food Research Initiative (ARFn 10.310 Davis 2010-85112-20523 $ 109,439 P Agriculture and Food Research Initiative (ARYn 10.310 $ 123,115

Department of Commerce Measurement and Engineering Research 11.609 $ 8,281

Department of Def~nse: Basic and Applied Scientific Research 12.300 $ 127,469 Air Force Defense Research Sciences Program 12.800 Edwards Air Force Base FlS0BD0197MOOl $ 13,980 P

Department of the Interior: Fish and Wildlife Coordination Act 15.517 $ 119,113 Cultural Research Management 15.224 Bureau of Land l\:1anagement· CESU L11AC20075 $ 657 P Fish and Wildlife Management Assistance 15.608 $ 55,455 Resources of the National Park System 15.945 $ 8,602

Departmcnt ofTl'ansportation: Office of Traffic Safety/California State

State and Community Highway Safety 20,600 University, Fresno SA60288 $ 89,720 P

National Aeronautics and Space AdmInistration: Technology Transfer 43.002 Jet Propulsion Laboratory 1287038#4 $ 26,148 P Technology Transfer 43.002 Jet Propulsion Laboratoty 1431581 $ 28,323 P Technology Transfer 43.002 Jet Propulsion Laboratory 143791 $ 77,007 P

American Recovery & Reinvestment Act of20 I 0 43.006 University Corporation at Monterey Day 5029401 A-ll 0325-S-A $ 86,868 P Space Operations 43.007 $ 2,800

National Science Foundation: Enginecling 47.041 $ 17,402 Mathematical and Physical Sciences 47.049 $ 134,075 Geosciences 47.050 $ 58,400 Biological Sciences 47.074 $ 74,402 Social, Behavioral and Economic Sciences 47.075 $ 37,611 Education and Human Resources 47.076 Old Dominion University 12-129-311641 $ 3,735 P Education and Human Resources 47.076 Cleveland State University DELAT37M $ 15,060 P ARRA -Trans~NSF Recovery Act Research Support 47.082 $ 299,158

Environmental Protection Agency: Surveys, Shldies, Investigation, Training and Special Purpose Activities Related to Environmental Justice 66.309 $ 1,937

U.S. Department of Energy Renewable Energy Research and Development 81.087 National Renewable Energy Laboratory DE-AC36-08G028308 $ 5,749 P

30



Federal Pass~ Tlu·ough Federal CFDA Grant Award or Contract Program

Federal Grantor/Program Title or Cluster Title Number Pass~Through Grantor Number Expend~tures

Department of Education: Higher Education: Institutional Aid 84.031 West Hills Community College WESTHILLS $ 15,000 p

Department of Health and Human Services: Substance Abuse and Mental Health Services_Projects of Regional and National Significance 93.243 Fresno County Superior Court SUPER10R12 $ 41,160 p

Substance Abuse and Mental Health Services_Projects of Regional and National-Significance 93.243 Fresno County Superior COUli SUPERIOR13 $ 11,448 p

Teenage Pregnancy Prevention Program 93.297 Boston Medical Center 1733 $ 11,694 P Minority Health and Health Disparities Research 93.307 $ 687,215 Cancer Centers Support Grants 93.397 National Cancer Institute 5P20CA138025·02 $ 220,764 P Affordable Care Act - Teachfug 93.530 Valley Consortium for Medical VCME2012 $ 14,376 p

Child Health and Human Development EJ!:tramural Research 93.865 $ 107,184 Total Research and Development $ 3,532,063 .. TRIO Cluster

Department of Education: TRIO S.tudent Support Services 84.042 $ 293,658 TRIO Talent Search 84.044 $ 290,004 TRIO Upward Bound 84.047 $ 604,205 TRIO Educational Opportunity Centers 84.066 $ 327,780 TRIO McNair Post Baccalaureate Achievement 84.217 S 264,808 Total TR10 $ 1,780,455

WlA Cluster

Department of Labor: WIA - Adult Program (WIA Cluster) 17.258 Employment Development Depmtment K077374 $ 1,159,099 P WIA AdultlDislocated Workers 17.258/260 Central Valley Business Incubator 679.1 $ (94) P WIA AdultlDislocated Workers 17.258/260 Cenrral Valley Business Incubator 679.1 $ 145,683 P WIA Pilots, Demonstrations, and Research Projects 17.261 County of Fresno A·1O·380 $ 351,347 P Total WIA Cluster $ 1,656,035

Vocational Rehabilitation Cluster

Department of Education: Rehabilitation Services: Vocational Rehabilitation Grants to California Depaliment of Rehabilitation States 84.126 ICalifomia State University, Fresno SA 59952 $ 134,693 p " ARRA - Rehabilitation Services-Vocational Rehabilitation Grants to States, Recovery Act 84.390 California Department or-Rehabilitation $ 281 P •• ARRA ~ Rehabilitation Services~Vocational Rehabilitation Grants to States, Recovery Act 84.390A California Department of Rehabilitation H390A090005 $ 27,560 p •• Total Vocational Rehabilitation Cluster $ 162,534

,other

U,S. Department of Agriculture: Ag:ticultural Research Basic and Applied Research 10.001 $ 113,615 Specialty Crop Block Grant 10.170 California PolYtechnic Corporation 10·010-49995 $ 46,368 P Hispanic Serving Institutions Education Grants 10.223 S 115,850 Hispanic Serving Institutions Education Grants 10.223 California State University, San Bernadino GT 10298 $ 15,350 P Summer Food Service Program for Children 10.559 $ 45,979 Community Connect Grant Program 10.863 Califomia Coalition for Rural Housing $ 5,078 P Cochran Fellowship Program ~ International Training -Foreign Pmticipallt 10.962 S 468,980 •• Department of Commerce: Economic Development- Teclmical Assistance 11.303 Economic Adjustment Assistance 11.307 $ 145,673

North Carolina Agricultural & Technical Educational Partnership Program 11.481 State University 270040C $ 64,017 p

Department Of Housing And Urban Development

Sustainable Communities Regional Planning Grant Program 14.703 $ 1,264,870 •• Corporation for Nationnl and Community Service:

31



Federai Pass~Through Federal CFDA Grant Award or Contract Program

Federal Grantor/Program Title or Cluster Title Number Pass~Through Grantor Number Expenditures Community Capacity Development Office 16.595 Paradise South Weed & Seed AGREEMENT4 $ 9,648 P Department of Transportation:

Office of Traffic Safety/California State State and Community Highway Safety 20.600 University, Fresno SA64425 $ 125,686 P

Office of Traffic SafetyfUniversity of State and Commlmity Highway Safety 20.600 Central Oklahoma UCO-2012-GR.101 $ 16,614 P National Endowment for the Humanities: Promotion of the Humanities·Public Programs 45.162 $ 56,524 National Science Foundation: Computer, Info Science and Engineering 47.070 $ 12,000 Biological Sciences 47.074 $ 34,530 Education & Human Resources 47.076 $ 351,449 .. Education & Human Resources 47.076 California State University Trustees PO 70509 $ 4,429 P ..

HRD-0802628-515291 Education & Human Resources 47.076 University Enterprises Incorporated AMD 515294 $ 74,532 P .. Education & Human Resources 47.076 University Enterprises Incorporated HRD-0802628-519881 $ 7,949 P ..

HRD-0802628-515291 Education & Human Resources 47.076 University Enterprises Incorporated A 515295 $ 9,061 P ..

University of California Office of the -Education & Human Resources 47.076 President 11-MESA-63188-4-46 $ 6,146 P .. ARRA· Trans NSF Recovery Act Research Support 47.082 $ 425,604 " Small Business Administration:

Regents of the University of California, Small Business Development Centers 59.037 Merced F300GNAl17 $ 212,095 P

Regents of the University of California, Small Business Development Centers 59.037 Merced F300GNA9100 $ 63,944 P

Regents ofthc University of California, Small Business Development Centers 59.037 Merced F300GPA109 $ 20,000 P

Regents of the University ofCalifomia, Small Business Development Centers 59.037 Merced F300GPA156 $ 107,933 P

Regen~s of the University of California, Sma,ll Business Development Centers 59.037 Merced F300GPA156 $ 16,280 P Department of Education: Title I Grants to Local Education 84.010 Fresno Unified School District VINLAND0470 $ 5,000 P Title I GrantS to Local Education 84.010 Fresno County Office of Education 119202 $ 3,898 P Improving the Graduat'ion Rate of Hispanic Students 84.031S $ 634,566 .. Career and Technical Education - Basic Grants to States 84.048 California Department of Education CN090355 $ 7,735 P Career and Technical Education - Basic Grants to States 84.048 California Department of Education CN100141 $ 12,556 P Career and Technical Education - Basic Grants to Statcs 84.048 California Department of Education CN100260 $ 34,167 P Career and Technical Education - Basic Grants to States 84.048 California Dcpartment of Education CN110078 $ 204,567 P Career and Technical Education - Basic Grants to States 84.048 California Department of Education CN110JlO $ 5,433 P Career and Technical Education - Basic Grants to States 84.048 California Department of Education CNIlOJ77 $ 20,761 P Rehabilit,tion Long-Term Training 84.129 $ 682,194 .. Migrant Education Coordination Program 84.144 San Joaquin County Office of Education SANJOAQCG $ 400 P Migrant Education Coordination Program 84.144 Tulare County Superintendent TULARECOCAMP 11 .$ 32 P

TULARE CAMP Migrant Education Coordination Program 84.144 Tulare County BRIDGE ACADAMY $ 328 P

CAMPTULRESRDAY1 Migrant Education Coordination Program 84.144 Tulare County Office of Education $ 2,195 P

CAMPDELANOEVEN Migrant Education Coordination Program 84.144 Delano Union Elementary School District TS11 $ 773 P Migrant Education Coordination Program 84.144 Kern County Office of Education C#203488 $ 7,421 P

CAlvl1)MERCEDEVEN Migrant Education Coordination Program 84.144 Merced County Office of Education TS12 $ 1,005 P

Migrant Education Coordination Progr~m 84.144 Tulare County CAMPLEMOOREH1GH $ 529 P TULAREUNIONH1GH

Migrant Education Coordinatiou Program 84.144 Tulare Union High School MIGRANTDAY12 $ 291 P CAMPSANJOAQUlNC

Migrant Education Coordination Program 84.144 San Joaqtlin County Office of Education OSTOC $ 1,115 P

32

California State University, Fresno Foundation Schedule of Expenditurcs of Federal Awards


Federal Pass-Through Federal CFDA Grant Award or Contract Program

Federal Grantor/Program Title or Cluster Title Number Pass-Through Grantor Number Expenditures Migrant Education Coordination Program 84.144 Fresno County Office of Education $ 5,716 p

Migrant Education Coordination Program 84.144 Tulare County Office of Educatibn $ 1,048 p

Migrant Education Coordination Program 84.144 County of Monterey $ 2,364 p

CAMPLEMOOREUNIO Migrant Education Coordination Program 84.144 Lemoore Union Elementary School District NLEAD $ 1,075 P Migrant Education Coordination Program 84.144 Tulare City School District $ 1,063 P Migrant Education Coordination Program 84.144 San Joaquin County Office of Education $ 15,120 p

CAMPLODI MIGRANT Migrant Education Coordination Program 84.144 San Joaquin County Office of Education ED $ 3,790 p

CAMPSJOE MIGRANT Migrant Education Coordination Program 84.144 San Joaquin County Office of EducatioIi ED $ 719 P Migrant Education Coordination Program 84.144 Reef Sunset Unified School District CAMPREEFSUNSET $ 13,740 p

Migrant Education Coordination Program 84.144 San Joaquin County Office of Education CAMPCAHSEE $ 52,385 p

CAMPTULAREALLEN Migrant Education Coordination Program 84.144 Tulare City. School District SWORTH $ 1,726 p

Migrant Education Coordination Program 84.144 Monterey County Office of Education CAMPMONTEREY $ 20,406 p

CAMPMONTEREYYO Migrant Education Coordination Program 84.144 Monterey County Office of Education PUEDO $ 71,237 p

CAMPTULARECOSU Migrant Education Coordination Program 84.144 Tulare City School District MMERE $ 1,095 P

CAMPTULARECOSU Migrant Education Coordination Program 84.144 San Joaquin County Office of Education MMERE $ 15,389 p

Migrant Education Coordination Program 84.144 Tulare City School District CAMPSJCOGED $ 9 p

Migrant Education Coordination Program 84.144 Lindsay Leadersllip Academy MIGRANT REGION 24 $ 1,500 P

CAMrSJOE MIGRANT Migrant Education Coordination Program 84.144 San Joaquin County Oflice of Education ED LEADERSHIP $ 13,035 p

Migrant Education College Assis~ance Migrant Program 84.149 $ 446,594 Bilingual Education- Professional Development 84.195 $ 317,246 Fund for the Improvement of Education 84.215 Clovis Unified School District CllSD12 $ 127,302 P Fund for the Improvcment of Education 84.215 Clovis Unified School District CUSD070110 $ 108 P Special Education·Personnel Development to Improve Services and Results for Children with Disabilitics 84.325 $ 265,088 Mathematics and Science Partnerships 84.366 Sanger Unified School District SANGERUSD $ 13,899 P

0714512-6252-00 Mathematics and Science Partnerships 84.366· Washington Union High School SllBCONTRACT2 $ 1,501 P Mathematics and Science Partnerships 84.366 Fresno Unified School District 146861 $ 6,516 P Mathematics and Science,Partnerships 84.366 Fresno Unified School Dish'ict 196009 $ 19,556 P Mathematics and Science Partnerships 84.366 Kings Canyon Unified School Dislrict CAMSP2011 $ 117,408 P Mathematics and Science Partnerships 84.366 Central Unified School District CSUD2009 $ 37,231 P Mathematics and Science Partnerships 84.366 Kings Canyon Unified School District CAMSPGRANT p

Mathematics and Science Partnerships 84.366 Sanger Unified School District CAMSP-SUSD $ 34,993 P California Department of EducationiUniversity of Cali fomi a Office of (FAU)NO.4-623948-

Improving Teacher Quality State Grants 84.367 the President HK-18310 p

Califomia Postsecondary Education Committee/Califomia State University,

Improving Teacher Quality State Grants 84.367 Fresno lTQ-PU4-2-424 YR 4 $ 71,360 p

Califomia Department of EducationiUniversity of California Office of

Improving Teacher Quality State Grants 84.367 the President NCl.B7-CWP-FRSNO $ 15,714 P Califomia Departmcnt of EducationiUniversity of California Office of

Improving Teacher Quality State Grants 84.367 the President NCLB7-CRLP-FRESNO $ (1,607) P Califomia Department of EducationiUniversity of Cali fomi a Office of

Improving Teacher Quality State Grants 84.367 the President NCLB7-CMP-FRESNO $ (2,507) P University of California Office of the

Improving Teacher Quality State Grant~ 84.367 President NCLB8-CSP-FRESNO $ 21,603 P University of Cali fomi a Office ofthe

Improving Teacher Quality State Grants 84.367 President NCLB8-CMP-FRESNO $ 78,710 P

33

California State Uruvel'sit), Fresno Founda,tioll Schedule of Expenditures of Federal Awards


Federal P.ass-Through Federal CFDA Grant A ward or Contract Program

Federal GrantorlProgram Title or Cluster Title Number Pass-Through Grantor Number Expenditures University ofCalifolUia Office of the

Improving Teacher Quality State Grants 84.367 President NCLB8-CRLP-FRESNO $ 53,801 p

University ofCalifolUia Office of the NCLB8-CWP-FRESNO Improving Teacher Quality State Grants 84.367 President SAN JOAQUIN $ 42,620 P

University of California Office of the Improving Teacher Quality State Grants 84.367 President NCLB8-CSP-FRESNO $ 4,395 p

California Student Aid Commission/Central College Access Challenge Grant Program 84.378 Valley Higher Education Consortium G-IO-OIO $ 31,339 p ..

California Student Aid Commission/Central College Access Challenge Grant Program 84.378 Valley Higher Education Con~ortium G-10-011 $ 221,413 p .. Transition Programs tor Students with Intellectual Disabilities into Higher Education 84.407A $ 504,361 ..

93-CA16, Amendment National Writing Project 84.928 National Writing Project No. 27 $ (446) p

93-CA16 US DEPT OF National Writing Project 84.928 National Writing Project EDUCATION $ 23,575 P Department of Health and Human Services:

Allied Health Special Projects 93.191 Clinica Sierra Vista CSV-11 ADDENDUM 1 $ 54,736 p

Public Health Training Centers Grant Program 93.249 Regents of the University of california 7389 AMENDMENT 1 $ 46,830 P Teenage Pregnancy Prevention Program 93.297 Tulare Corrununity Health Clinic TCHC-10-0 $ 57,148 P

Health Resources aild Services Advanm;u Euucaliun Nur~ing Traineeships 93.358 Administration AlOHP22092 $ 49,937 P Nurse Education, Practice and Retention Grants 93.359 $ 144,009 ARRA - Equipment to Enhance Training for Health Professionals 93.411 $ 12,684 .. Community Transfonnation Grants Program 93.531 County of Fresno 12-227 $ 3,498 p

TemporalY Assistance for Ne_edy Families 93.558 County of Fresno A-IO-526 $ 1,379 P Temporaty Assistance for Needy Families 93.558 County of Fresno AGT#JO-526-1 $ 303,728 p

Child Welfare Services Training Grants 9i.648 California Depaltment of Soci~l Service 08-3043 $ 11,725 p .. Child Welfare Services Training Grants 93.648 California Depattment of Social Service 11-3019 $ 1,901,999 p .. Child Welfare Services Training Grants 93.648 County of San Mateo 71695 $ 127,268 p " Foster Care-Title IV-E 93.658 California Department of Social Service 08-3043 $ 91,267 p .. Foster Care-Title IV-E 93.658 California Depaltment of Social Service 11-3034 $ 1,365,203 p .. Foster Care-Title IV-E 93.658 California Department of Social Service $ 1,537 p .. Foster Care-Title IV-E 93.658 California Department of Social Service 12-3008 $ 6,090 p .. Foster Care-Title IV-E 93.658 County ofFresno 08-492 $ 4,747 p

Regents of the University of California Foster Care-Title IV-E 93.658 Berkeley 7101 $ (35) P

Califomia Department of Social Servicel Foster Care-Title IV-E 93.658 University of California Berkeley $ 2,357 P Foster Care-Title IV-E 93.658 County of Fresno A-11-379 $ 402,385 P

California Department of Social Service! Foster Care-Title IV-E 93.658 University of Cali fomi a Berkeley 66675 $ (26) P

Calitornia Department of Social Service! Foster Care-Title IV-E .93.658 University of California Berkeley 7798 $ 611,503 P

California Department of Social Service! Foster Care-Title IV-E 93.658 University of California Berkeley 7798 $ 1,799,241 P

COSANFRANCCTABA Foster Care-Title IV~E 93.658 County of San Francisco ATRAlNlNG $ 496,131 P ARRA - Head Start 93.708 California Department of Education CN110375 $ 142,991 P .. Health C'areers Opportunity Program 93.822 $ 215,002 Scholarships for Health Pl:ofessions Shldents from Disadvantaged Backgrounds 93.925 $ 132,769 Maternal and Child Health Services Block Grant to the California Department of Health and States 93.994 Human Services 10-95126 $ 56,114 p

Corporation. for N ntional and Community Service:

34

Federal GrantorlProgram Title or Cluster Title

Learn and Serve America_Higher Education

Learn and Serve America_Higher Education AmeriCorps

AmeriCorps Volunteers In Service to America

Department of Homeland Security: Homeland Security Grant Program

Miscellaneous: Miscellaneous

Total Other Grand Total Federal Awards

** Identifies Major Federal Programs P Pass Through Funds


For Fiscal Year Ended June 30,2012

Federal CFDA Number

94.005

94.005 94.006

94.006 94.013

97.067

99

Pass~Through Grantor

American Association of State Colleges and Universities California State University Office of the Chancellor Jumpstart

Jumpstart

California State University Trustees

University of California San Diego

35

Pass-Through Federal Grant Award or Contract Program Number Expenditures

ClVMETED-12 $ 7,735 P

X0026110-FRAUX $ 9,189 p

130200 $ 11,371 p

CFDA-94.006-JS-SITE#13 $ 51,104 p

$ 1,738

X002I 109-FRAUX $ 14,418 p

P1277890 $ 1,251 P $ 16;277,383

$ 23,408,470

Note 1. Basis of Presentation



The accompanying schedule of expenditures offederal awards (the "Schedule") includes the federal grant activity of California State University, Fresno Foundation under programs of the federal government for the year ended June 30, 2012. The infOlmation in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Because the schedule presents only a selected portion of the operations of California State University, Fresno Foundation, it is not intended to and does not present the financial position, changes in net assets or cash flows of California State University, Fresno Foundation. Note 2. Summary ofSignificallt Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-21, Cost Principles for Educational Institutions, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative alliounts shown on the Schedule represent adjustments or credits made in the nonnal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying n~mbers are presented where available. Note 3. Suhrecipients Of the federal expenditures presented in the schedule, California State University, Fresno Foundation provided federal awards to subrecipients as tollows:

Program Name Specmlty Crop Block Grant Program Specialty Crop Block Grant Program - Farm Bill Grants for Agricultural Research:Special Research Grants Grants for Agricultural Research:Competitive Research Grants Hispanic Serving [nstitutions Education Grants Agriculture and Food Research Initiative (ARFI) Community Connect Grant Program Educational Partnership Program Air Force Defense Research Sciences Program Cultural Research Management Community Capacity Development Office WIA ~ Adult Program (WIA Cluster) WIA Adult/Dislocated_Workers WJA Pilots, Qemonstrations, and Research Projects State and Community Highway Safety Tec1mology Transfer American.Recovery & Reinvestnlent Act of2010 Education and Human Resources Small Business Development Centers Renewable Energy Research and Development Title I Grants to Local Education Higher Education: Institutional Aid Career and Technical Education ~ Basic Grants to States Rehabilitation Services: Vocational Rehabilitation Grants to States Migrant Education Coordination Program Fund for the Improvement of Education Mathematics and Science Partnerships lmptoving Teacher Quality State Grants College Access Challenge Grant Program ARRA • Rehabilitation Services~Vocational Rehabilitation Grants to States, Recove'ry Act National Writing Project Allied Health Special Projects Substance Abuse and Mental Health Services ]rojects of Regional and National Significance Public Health Training Centers Grant Program Teenage Pregnancy Prevention Program Advanced Education Nursing Traineeships Cancer Centers Support Grants Affordable Care Act - Teaching Community Transformation Grants Program TemporalY Assistance for Needy Families Child Welfare Services Training Grants Foster Care-Title IV-E ARRA - Head Stalt Maternal and Child Health Services Block Grant to the States Learn and Serve America_Higher Education AmeriCorps Homeland Security Grant Program Miscellaneous

36

CFDANumber Amount Provided toSubrecipients 10.169 $ 27,540 10.170 $ 104,819 10.200 $ 15,718 10.206 $ 37,414 10.223 $ 15,350 10.310 $ 153,227 10.863 $ 5,078 11.481 $ 64,017 12.800 $ 13,980 15.224 $ 657 16.595 $ 9,648 17.258 $ 1,159,099 17.258/260 $ 145,589 17,261 $ 351,347 20.600 $ 232,020 43.002 $ 131,478 43.006 $ 86,868 47.076 $ 120,912 59.037 $ 420,252 81.087 $ 5,749 84.010 $ 8,898 84.031 $ 15,000 84.048 $ 285,219 84.126 $ 134,693 84.144 $ 235,506 84.215 $ 127,410 84.366 $ 231,104 84.367 $ 284,089 84.378 $ 252,752 84.390 $ 27,841 84.928 $ 23,129 93.191 $ 54,736 93.243 $ 52,608 93.249 $ 46,830 93.297 $ 68,842 93.358 $ 49,937 93.397 $ 220,764 93.530 $ 14,376 93.531 $ 3,498 93.558 $ 305,107 93.648 $ 2,040,992 93.658 $ 4,780,400 93.708 $ 142,991 93.994 $ 56,114 94.005 $ 16,924 94.006 $ 62,475 97.067 $ 14,418 99 $ 1,251

$ 12,658,666

CALIFORNIA STATE UNIVERSITY, FRESNO FOUNDATION GENERAL FUND ADMINISTRATION COST CENTER - CHANGE IN NET ASSETS

July 1, 2011 to Jlme 30, 2012

INDIRECT COSTS AND OTHER INCOME: BUDGET ACTUAL Indirect cost recovery $ 1,995,000 $ 2,388,552 Handling charges 289,500 390,800

Subtotal - Iudirect and Handling 2,284,500 2,779,352 Miscellaneous Income 11,878 Short term investments 157,400 464,396 Endowment management fee 1,423,000 1,423,000 Subtotal 3,864,900 4,678,626 Gift assessment fee 400,000 371,601

Total Income 4,264,900 5,050,227

EXPENSES: Personnel:

Monthly 564,600 587,851 Student 35,300 31,461 Employee benefits 293,300 289,856

Retired employee benefit (actual and accrual) 67,200 60,791 Accounting (audit) 100,000 45,413 Board/Committee meetings 9,500 7,192 Consultants 8,073 Management services 644,700 644,700 Depreciation 17,600 18,713 Dues & Memberships 5,400 7,675 Equipment leasing 23,900 21,340 Employee recruitment 1,300 443 General insurance 64,600 59,800 Legal fees:

General 10,000 4,526 Employment 500 2,029 Sponsored ProgramslPatents 4,750 Gifts 1,500 1,485

Licenses, permits & fees 6,300 5,209 Miscellaneous 3,200 1,360 Office supplies 28,000 22,508 Postage 12,000 8,139 Repairs & maintenance 26,000 28,612 Travel/training 5,000 3,380 Telephone 8,900 7,621 Utilities 23,400 20,257

Total Expenses 1,952,200 1,893,184

Gross Surplus Available For Distribution $ 2,312,700 $ 3,157,043

37

A Partnership Including AccoUlttanClj Corporations

Richard 1. Holland, C.P.A.

Thomas 1. Bell, C.P.A., Accountancy Corporation

Denise s. Hurst, C.P.A.

Kenneth J. Labendeira, C.P.A., Accountancy Corporation

Pamela J. Gallemore, C.P.A., Accountancy Corporation

Karl 1. Noyes, C.P.A., Account.ncy CorporatiDn

Cory J. Bell, C.P.A.

Cheryl A. Storer, C.P.A., A.P.A.

Kendall K. Wheeler, C.P.A.

Necia Wollcnman, C.P.A.

Rena R. Avedikian, c.P.A.

Kelli D. Steele, C.1~A.

Julie B. Fillmore, c.P.A.

Carrie M. Wiebc, CeA.

Nora E. Crow, CP.A.

Nicholas .Medeiros, C.I~A.

Oscar Espinoza, C.P.A.

L. Jerome Moore, CP.A. Retired

Robert E. Gridel~ cr.A. Relired

NtleS Moore Grider & Company

Certified Public Acc01111tonts

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS


We have audited the fInancial statements of California State University, Fresno Foundation as of and for the year ended June 30, 2012, and have issued our report thereon dated September 27,2012. We conducted our audit in accordance with aUditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control over Financial Reporting

In planning and performing our audit, we considered California State University, Fresno Foundation's internal control over fmancial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the fmancial statements, but not far the pnrpose af expressing an opinion on the effectiveness of California State University, Fresno Foundation's internal control over fmancial reporting. Accordingly, we do not express an opinion on the effectiveness of the organization's internal control over fmancial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct rnisstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's fmancial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration af internal control over fInancial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identifY all defIciencies in internal control over fmancial reporting that might be defIciencies, signifIcant defIciencies, or material weaknesses. We did not identi:fY any defIciencies in internal control over fInancial reporting that we consider to be material weaknesses, as defmed above.

38 325 E. Sierra / Fresno, CA 93710/559440-0700 fax 559 440-0600

~.lnooregrid er.conl.

Compliance and Other Matters

As part of obtaining reasonable assurance about whetber California State University, Fresno Foundation's financial statements are free of material misstatement, we performed tests of its compliance witb certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on tbe determination of fmancial statement amounts. However, providing an opinion on compliance with tbose provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters tbat are required to be reported under Government Auditing Standards.

'This report is intended solely for the information and use of management, the audit committee, Board of Governors, and federal awarding agencies and pass-through entities and is not intended to be, and should not be, used by anyone otber tban tbese specified parties.

September 27, 2012

39

A Hlrtnership Ineluding Accountatlcy COIporations

Richard L. Holland, CPA.

Thomas 1. Bell, CP.A, Accountancy Corporation

Denise S. Hurst, CP.A.

Kenneth J. Labendeira, c.PA., ACWlllllancy COlpor.lion

Pamela 1. Gallemore, CP.A, . Accountancy Corporatiun

Karl 1. Noyes, CP.A., Accoun(oncy CmFor.lion

Cory J. Bell, CPA.

Che~yl A. Storer, CPA., APA.

Kendall K Wheeler, CP.A.

Necia Wollenman, CPA.

Rena R. Avedikian, CP.A.

KeJ1j D. Steele, CP.A.

Julie B. Fillmore, Cr.A.

Carrie M. Wiebe, CP.A.

Nora E. Crow, CPA.

Nicholas Medeiros, CPA.

Oscar Espinoza, CPA.

1. Jerome Moore, CPA. Retired

Robnt E. GrideL~ CP.A. Re~red

N1(Ji Moore Grider & Company

Certified PuUic Accountants

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133


Compliance

We have audited California State University, Fresno Foundation's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of California State University, Fresno Foundation's major federal programs for the year ended June 30, 2012. California State University, Fresno Foundation's major federal programs are identified in the sununary of auditor's results section of the accompanying schedule of filldings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of California State University, Fresno Foundation's management. Our responsibility is to express an opinion on California State University, Fresno Foundation's complimlce based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Govenunent Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-l33, Audits of States, Local Governments, and NonProfit Organizations. Those standards and OMB Circular A-l33 require that we plan and perfoIDl the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about California State University, Fresno Foundation's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit dOeS not provide a legal deteIDlination of California State University, Fresno Foundation's compliance with those requirements.

ill our opinion, California State University, Fresno Foundation complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2012.

40

325 E. Sierra / Presno, CA 93710/559440-0700 fax 559 440-0600 V\T1NVV.IDooregtider.cou1.

Internal Control Over Compliance

Management of California State University, Fresno Foundation is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered California State University, Fresno Foundation's internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for tbe purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-l33, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of California State University, Fresno Foundation's internal control over compliance.

A deficiency in intemal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in intemal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identifY all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identifY any deficiencies in internal control over compliance tbat we consider to be material weaknesses, asdefmed above.

This report is intended solely for the information and use of management, the audit committee, Board of Governors, federal awarding agencies 8l1d pass-through entities and is not intended to be, and should not be, nsed by anyone other than these specified parties.

~~""~ September 27, 2012

41


SCH:EDULE OF FINDINGS AND QUESTIONED COSTS

YEAR ENDED JUNE 30, 2012

SECTION I - SUMMARY OF AUDITORS' RESULTS

Financial Statements • Type of auditors' report issued: Unqualified opinion

• Internal control over fmancial reporting: Material weakness identified: No Significant deficiencies identified that are not considered to be material weaknesses: None reported

• Noncompliance material to the financial statements noted: No

Federal Awards

• Internal control over major programs: Material weakness identified: No Significant deficiencies identified that are not considered to be material weaknesses: None reported

• Type of auditors' report issued on compliance for major programs: Unqualified opinion

• Any audit fmdings disclosed that are required to be reported in accordance with Section SIO(a) ofOMB Circnlar A-133: No

• Major Programs:

CFDANumber

99.Unknown 84.126/84.390 10.962 14.703 47.076 47.082 84.031S 84.129 84.378 84.407A 93.411 93.648 93.708

42

Name of Federal Program or Cluster

Research and Development Cluster Vocational Rehabilitation Cluster

Cochran Fellowship Program Sustainable Commnnities Region. Planning

National Science Foundation ARRA-National Science Foundation

Improving the Graduation Rate Rehabilitation Long-Term Training

College Access Challenge Transition Program - Intellectual Disabilities

ARRA-Equip to Enhance Training Child Welfare Services Training

ARRA-Head Start


SCHEDULE OF FINDINGS AND QUESTIONED COSTS

YEAR ENDED JUNE 30, 2012

SECTION I - SUMMARY OF AUDITORS' RESULTS (Continued)

• Dollar threshold used to distinguish between Type A and Type B programs for program determination:

• California State University, Fresno Foundation qualified as low-risk auditee.

SECTION II - FINANCIAL STATEMENT FINDINGS

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

43

$702,254

No

None

None


SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS

YEAR ENDED JUNE 30,2012

Section II - Financial Statement Findings

Section ill - Federal Award Findings and Questioned Costs:

Finding 20 I I-I: Research and Development - Equipment and Real Property Management

Federal Grantors: U.S. Department of Health and Human Services/ National Science Foundation

None

Condition: Ten equipment acquisitions purchased with Federal funds were not recorded ill the Foundation's equipment listing.

Recommendation: The Post Award Supervisor should periodically run reports of individually significant expenses, outside of payroll related expense, to identify any material capital acquisitions.

Current Status: The recommendation was implemented during fiscal year 2012. No similar findings were noted in the 2012 audit.

Finding 201 1-2: NSF Recovery Act - Time and Effort Reporting System

Federal Grantor: National Science Foundation

Condition: The Foundation uses a manual payroll distribution and labor effort reporting system.

Recommendation: The Foundation should establish a payroll distribution and labor effort reporting system on an integrated basis that is fully compliant with federal requirements.

Current Status: The recommendation was implemented during fiscal year 2012. No similar findings were noted in the 2012 audit.

44

ADDITIONAL INFORMATION

45


Schedule of Net Assets

June 30, 2012

(for inclusion in the California State University)

Assets:

Current assets: Cash and cash equivalents Short-tenn investments Accounts receivable, net Pledges receivable, net Prepaid expenses and other assets

Total current assets

Noncurrent assets: Student loans recei vable, net Pledges receivable, net Endowment investments Other long-tenn investments Capital assets, net Other'assets

.Liabilities:

Total noncurrent assets

Total assets

Current liabilities: Accounts payable Accrued salaries and benefits payable Accrued compensated absences- current portion Deferred revenue Other liabilities

Total current liabilities

Noncurrent liabilities: Long-term debt obligations, net of current portion Depository accounts Other liabilities

Net assets:

Total noncurrent liabilities

Total liabilities

Invested in capital assets, net of related debt Restricted for:

Nonexpendable - endowments Expendable:

Scholarships and fellowships Loans Other

Unrestricted

Total net assets

46

$

$

5,845,013 33,274,277 13,727,065

5,522,352 337,900

58,706,607

87,530 5,497,903

114,016,960 1,015,388

108;784 520,563

121,247,128

179,953,735

1,835,103 873,834 42,872

3,287,863 103,580

6,143,252

2,000,000 1,734,562

362,562

4,097,124

10,240,376

108,784

125,593,951

3,403,572 1,077,463

43,050,119 (3,520,530)

169,713,359


Schedule of Revenues, Expenses, and Changes in Net Assets

Year Ended June 30, 2012

(for inclusion in the California State University)

Revenues:

Operating revenues: Grants and contracts, noncapital:

Federal State Nongovernmental

Sales and services of auxiliary enterprises (net of scholarship allowances of $0)

Total operating revenues

Expenses:

Operating expenses: Instruction Research Public service Institutional support Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization

Total operating expenses

Operating income (loss )

Nonoperating revenues (expenses): Gifts, noncapital Investment income (loss), net Endowment income (loss), net Other nonoperating revenues (expenses)

Net nonoperating revenues (expenses)

Income (loss) before other additions Additions (reductions) to permanent endowments

Increase ( decrease) in net assets

Net assets: Net assets at beginning of year, as previously reported

Net assets at end of year

47

$

23,408,471 5,980,913 4,650,457

5,029,830

39,069,671

15,096,939 6,815,413

14,570,002 767,491

3,679,119 6,340,999

18,713

47,288,676

(8,219,005)

(2,624,196) 814,535

(2,849,947) (2,571,586)

(7,231,194)

(15,450,199) 13,051,436

(2,398,763)

172,112,122

169,713,359

CALIFORNIA STATEUl'HVERSITY, FRESNO FOUNDATION Other Infonnation

June 30, 2012 (for inc:ltISion in the California State University)

Restricted cash and cash equivalents at June 30, 2012: Not Applicable

2.1 Composition ofinvestm-ents at June 30, 2012: Curreut Noncurrent Noncurrent

Unresll'icled Current Restricted Total Current Unrestricted Restricted Total Noncurrent Total Slate ofC.lifomi. Local Ag<01CY iuv""tm<01l Fund (lAIF) 6,780 6,780 6,780 Debtsecurities 55,934,041 55,934,041 55,934,041 FIxed WCO""" securities (Trw,wynot""' GNMA'.) 45,405,879 45,405,879 45,405,879 Mutual funds 1,690,926 1,690,926 1,690,926 Malley M"rkOl funds 2,748,034 2,748,034 2,748,034 Oth .. !t1lljor in,,,,,,tm<ms,

33,267,497 Non-endowed cash balanced investment ponfolio 33,267,497 33,267,497 AIt<=mative IINestments 8,801,190 8,801,190 8,801,190 Life Income contracts 452,278 452,278 452,278

Total investments 33',27{277 33,274,277 115,032,348 115,032,348 148,306,625

Less endowment investments (enter as negative number) {114,016,960! {114,016,960) (114,016,960)

Total investmenls 33,274,277 33,274,277 1,015,388 1,015,388 34,289,665

2.2 luvesflnents held by the University under conll'actnai agreements at June 30, 2012: Not AJ?plicable

2.3 Restricted current investments at June 30, 2012 related to: Amount Not Applicable

2,4 Restricted noncurrent investments at Juue 30, 2012 related to:· Amount Endowment investment $ 114,016,960

Campus program fund 1,015,388

Total re:sll'kted noncurrent investments at June 30, 2012 $ 115,032,348

3.1 Composition of capitul assets at Jnne 30, 2012: Balance Transfers of

Balance Prior period June 30, 2011 Completed Balance June 30, 2011 Adjustments Reclassifications {restated~ Additions Rednctions CWIP June 30, 2012

'" Depreciable/amortizable capital assets: Personal property:

Equipment 436,336 436,336 23,437 459,773

Total depreciable/amortiwble capital assets 436,336 436,336 23,437 459,773

Total capital assets 436,336 436,336 23,437 459,773

Less accumulated depreciationlamonization: Personal property:

Equipment (332,276) (332,276) (l8,7l3) (350,989)

Total accumulated depreciationlamonization (332,276) {332,276) (18,7131 (350,989}

Total capital assets, net $ 104,060 104,060 4,724 108,784

3.2 Detail of depreciation and amortization expense ror the year ended June30, 2012:

Depreciation and amortization e.'l:pense related to capital assets , 18,713

Total depreciation and amonization $ 1§,713

4 Long-term liabilities activity scbedule:

Balance Balance Prior period Jnne 30, 20ll Balance Current Lon~tenn

Juue30,2011 adjnstments Reclassifications (restated) Additions Reductions June 30, 2012 portion portion

Accrued compensated absences $ 31,401 31,401 11,471 42,872 42,872

Long-term debt obligations: Other:

Private Note Payable 2,000,000 2,000,000 2,000,000 2,000,000

Totalloug-tenn debt obligations 2,000,000 2,000,000 2,000:000 2,000,000

Total long-tenndeb! obligations, net 2,000.000 2,000,000 2,000,000 2,000,000

Totallong-tenn liatnlities $ 31,401 2.000,000 2,031,401 1l~471 2,042,872 _ 42,872 __ . _2_,000,000

;;

5 Future minimum lease payments - capital lease obligations;

Long-term debt obligation schedule

Year ending June 30: 2013 2014 2015 2016

Tow

Calculation orne! assets

$

$

7.1 Calculation orne! assets _ Invested in capital assets, net of related debt

Capital assets, net of a~cumulated depreciation

Net assets - invested in capital assets, net of re1ateddebt

7.2 Calculation of net assets _ Restricted for nonexpendable - endowments Endowment investments

Net assets - Restricted for nonexpendable - endowments per SNA $

8 Transactions with Related Entities

Not Applicable

Principal

CALIFORNIA STATE UI'.'IVERSITY, FRESNO FOUl\.'DATION Other Infunnation

June 30, 2012 (for inclusion in the Califomia State University)

Revellue Bonds

Interest Principal and

Interest Principal

1,000,000

2,000,000

Auxiliarv Ol1!lIuizlltions Total

GASB FAS'S Auxiliaries

108,784 108,784

108,784 108,")84

125.593.951 125,593,951

125,593,951 125,593,951

Amount Payments to University fOT salaries of University personnel worl.:ing on contracts, grants, and other-PrDgnuns $ 4;:~;-O-1,451

Other Postemployment Benefits Obli),:ation (OPEB) Not Applicable

10 Pollution remediation liabilities under GASH Statement No. 49: Not Applkable

II The nature and amount of the prior period adjustment(s) recorded to beginning net a_ssets Not Applicable

AU other long_term debt oblij!ations

Interest

20,000 20,000 20,000 20,000

80,000

Principal and Interest

20,000 20,000 20,000

2,020,000

2,080,000

Principal

2,000,000

2,000,000

Total

Intefest

20,000 20,000 20,000 20.000

80.000

Principal and Interest

20,000 20,000 20,000

2,020.000

2,080,000

annual report - auxiliary fresno fdn...annuity agreement liabilities -current pottion (note 9) 7,334...

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