CSU Financial Guidelines

This information is provided to CSU stakeholders for financial transparency.

Overview

Legal (or, budgetary) basis accounting is a unique form of accounting for governmental units. It allows the state legislature to measure a state agency's performance against the budget it enacts through the annual Budget Act.

The State of California requires all state agencies, including the CSU, to maintain its accounting records on the legal/budgetary basis of accounting and to file its reports of financial data on that basis. Legal/budgetary basis accounting, however, does not comply with U.S. Generally Accepted Accounting Principles (GAAP), which uses a different account basis. To meet both requirements, the CSU converts the legal basis data to GAAP and provides these audited financial statements to the public.

See below for a brief summary of the modified accrual basis accounting and full accrual basis accounting.

Fiscal Year Defined

The fiscal year for the State of California and the CSU, as an agency of the state, is July 1 through June 30.

Adjustments

The following adjustments are made to the financial information reported on the transparency site to present more meaningful financial data:

• Net Transfers - Transfers are a flow of assets, such as cash, between funds without an equal return of assets or expectation of repayment. Transfers in and transfers out are presented in these reports as revenue net transfers.

• Prior Year Adjustments - Prior year adjustments are used to record a change to a revenue or expense reported in a prior year fiscal year. Prior year adjustments are presented as net in these reports as other revenue or expense adjustments.

• Fund Balance Clearing - Fund balance clearing in certain funds represents a use of the authorized state appropriation allocated to the CSU in the state budget act. For certain funds, fund balance clearing is presented in these reports as state appropriations.