What are designated balances and reserves?
Designated balances and reserves are an integral part of how CSU manages operating activities and are held and utilized for designated purposes, as articulated by state law and CSU policy. Designated balances and reserves accumulate annually primarily from tuition, fees, and other revenues in excess of annual expenses. Designated balances and reserves do not include monies that are held on behalf of another entity, such as the federal government for student financial aid, or held pursuant to a bond indenture or other similar requirement
Designated Balances and Reserves
Designated balances and reserves are maintained for CSU operating activities, which include student housing, campus parking, student unions, health facilities, university educational operating activities, among others. Balances and reserves for all CSU activities over the past five years are displayed here.Designated balances and reserves fund non-recurring expenses to manage short-term obligations and commitments, provide funding for capital infrastructure repairs and maintenance, pay for costs associated with catastrophic events and natural disasters, and help ensure that operating costs can be paid during times of economic and budget uncertainty.
Within the short-term obligation category, funds are designated for open commitments, encumbrances, near-term debt service payments, and financial aid obligations. These amounts vary year-to-year and are typically paid during the following fiscal year.
Reserves for short-term obligations are sufficient to cover the expected need.
Capital facilities and maintenance designated balances are accumulated over time to repair, replace, and construct academic buildings, student housing, parking, and student body centers, among others.
Reserves for capital facilities and maintenance fall short of the goal to eliminate deferred maintenance and pay at least ten percent of future capital needs.
Balances maintained to pay for costs associated catastrophic events and natural disasters such as fires, floods, or earthquakes.
Catastrophic event balances may also be used to pay for self-insured retention amounts associated with insurance coverage for such events.
Reserves for economic uncertainty
Reserves for economic uncertainty are intended to provide a prudent reserve ranging from to three to six months of operating costs to sustain operations during potential recessionary cycles or state budget fluctuations.
By policy, reserves are maintained for CSU operating activities, which include student housing, campus parking, student unions, health facilities, university educational operating activities, among others.
Current reserves for economic uncertainty are much less than the goal, with existing reserves in this category representing just over one month of operating costs compared to the three to six month guideline.