Wednesday, August 15, 2012 Conference Call

Delegate Meeting

Wednesday, August 15, 2012 Conference Call 9:00 a.m. – 12:00 p.m. Call online Loopup system. Here is the link: https://my.loopup.com/Conferences/join.aspx?ACCESSCODE=0219933

Members X Doug Wade (Bakersfield) Nancy Hayes (San Francisco) CABO Liaison X Missy Jarnagin (Channel Islands) X Agnes Wong Nickerson (San Francisco) Chair X Stacie Corona (Chico) X Josee Larochelle (San Jose) X Karen Wall (Dominguez Hills) X Marc Benadiba for Rick Ramirez (San Luis Obispo) X Debbie Brothwell (East Bay) X Dan Zorn for Mary Hinchman (San Marcos) X Clinton Moffitt (Fresno) Letitia Coate (Sonoma) X Brian Jenkins (Fullerton) X Julie Benevedes (Stanislaus) X Carol Lorentzen (Humboldt) X George Ashkar (Chancellor’s Office) X Sharon Taylor (Long Beach) X Chris Canfield for Rodney Rideau (Chancellor’s Office) X Mae Santos for Jose Gomez (Los Angeles) Jean Gill (Chancellor’s Office)

X Ken Toet for Steve Mastro (California X Mike Redmond (Chancellor’s Office) Maritime Academy) X John Fitzgibbon (Monterey Bay) X Tom Roberts (Chancellor’s Office) X Deborah Wallace (Northridge) X Michelle Schlack (Chancellor’s Office) X Darwin Labordo (Pomona) Nancy Freelander-Paice (Chancellor’s Office) X Justine Heartt (Sacramento) X Lily Wang (Chancellor’s Office) X Dena Chester and Del Anderson for Bob Sedong John (Chancellor’s Office) Wilson (San Bernardino) X Kimberly Reilly for Scott Burns (San X Jessie Lum (Chancellor’s Office) Diego) Mick McBride (Chancellor’s Office)

1) Welcome, Roll Call

Attendance taken utilizing the LoopUp call system

2) Agenda Approval

3) Chancellor’s Office Update (Time certain at 9:03 am)

- Continuing Education Taskforce - Reserves and Recommendations - George Ashkar/Kelly Cox George – The handout is intended for more of an FYI. Some of the delegates may have been involved in the recent review of CERF cash balances. Agnes – Why are we looking at CERF, specifically? George – New legislation passed. CERF may be moving back to the campus side. There is also an ongoing concern with the FOA Executive Committee * Chair, Agnes Wong Nickerson * Vice Chair, Justine Heartt * Secretary, Deborah Wallace * Treasurer, Mary Hinchman * One year Member at Large, Doug Wade * Two year Member at Large, Julie Benevedes * Past Chair, Karen Wall buildup of CERF cash, currently $160m (ending 11-12 fy). We understand some may be encumbered; however, there is still concern as we move forward. The main concern is the CERF cash, especially if the CSU considers lowering pay or raising tuition if the Governor’s November tax initiative does not pass. Clint – This is one-time money. George – We understand this and it was discussed at CABO. Agnes – I understand there is conversation about a possible audit of CERF? George – Possibly…this is not an unusual request. At least one audit has been performed in the last five years to my knowledge. The potential audit will be more of an operational audit vs. a cash review if the request is granted as presented. George will keep us informed if the request becomes formalized.

- Higher One Transaction Fees - George Ashkar/Lily Wang George – Handouts of the articles are being shared to keep everyone informed. Next discussion will be a little deeper regarding the potential charges to students.

- US Bank Rebate Savings Opportunity - George Ashkar/Tom Roberts George - This is only related to P-card and the payment cycle. Reduce payment cycle timeline to 6-8 days turnaround for quick payments – we should be able generate about $250K in revenue. This is on the radar because Dr. Quillian wants to move forward all revenue generating proposals. A periodic review of the payment cycle may be required if interest rates increase.

- AB 633 (Olsen) CSU Vehicle Purchasing Authority - George Ashkar/Tom Roberts Tom reviewed handout on AB633 (Olsen). The bottom line is that the CSU must demonstrate a detailed approach to management and reporting of fleet purchases. George – Governor’s office said we were doing a poor job in reporting. Board member Glazer pleaded our case at Governor’s Office. In the spirit of their objective, DGS wants to reduce the number of vehicles the CSU is using (lower fleet). Last reporting year we lowered by 5%. This year the fleet has increased. At this point there are 2 objectives: (1) full reporting and (2) reducing the fleet. George – Currently working with Charlene Minnick (Risk Management) and Vi San Juan (CPDC) to get information out to campuses for instructions for reporting. Hopefully we can get a quarterly report for the first quarter of the fiscal year. There needs to be quite a bit of dialog about the sharing or transferring of vehicles as an option versus disposal.

George – additional information:

1. Pass down entries have been sent to campuses. Encourage review and contact CO by Thursday. There have been very few questions from GAAP units. Campuses need to get their questions in as soon as possible.

2. Asking for a couple of volunteers from CABO and FOA to review RFP for contract renewal for audit. The group will be assembled in the next 30 to 60 days for the review.

4) CFS/CHRS/CMS/Imaging & Workflow Update – Larry Schlereth/Jessie Lum (Time certain at 9:30 am)

CFS – 2 areas we are focusing our attention. (1) The draft of the Phase I report (Purchasing/Accounts Payable Services Improvement Project) of the CFS steering sub-committee. The draft describes current state/environment of the CSU purchasing and procurement functions. CFS has accepted the draft. The next step will define future state and design, including, functionality and workflow. The next report is due in the Fall. The question is: Does it make sense to move the shared services to a central environment? This analysis is ongoing. The two presidents on the CMS executive committee, Armiñana and Morishita will share any recommendations with Chancellor Reed. (2) On a parallel track, we are focusing on enhanced management of spend. Recent information has been shared with the FOA on the spend analysis for desktops and laptops. In the next 30 days, there is a plan to develop a strategic sourcing report.

CHRS- Moving forward with design phase of the system and using the Fresno model. Things are moving forward quite nicely. By Thanksgiving, committee should be in a position to move forward with full design.

MyCALPay- The SCO payroll system is likely to be moving forward. CSU cannot participate with the MyCALPay unless we are in a single system. This is an additional incentive to move forward with CHRS. The November time frame is ideal as we move through design during that time with CHRS.

of 5 Student – A steering committee has been developed. A review of compact core functionalities for student is underway. The committee is analyzing packages released by Oracle.

Imaging – We know we need a robust system for CHRS, Finance, as well as Student. The committee is currently reviewing w/Jason Wenrick, Sonoma, to better understand the requirements.

Agnes – What is the estimated completion on the SCO MyCALPay? Larry – during the calendar year 2015. Jessie – This timeline ties in nicely with our planned completion in CHRS. Agnes – What is the imaging timeline? I thought it was mentioned that the project depended on the November tax initiative passage…is this the case? Larry – There was a survey done to see how much the campuses are currently spending on imaging packages. We are currently spending approximately $1.4 million. This spend makes the funding question much more senior. A lot of the decision may be based on the Nov. vote; however, we are currently spending dollars on imaging throughout the system.

5) CABO Update – Nancy Hayes

Nancy is away due to a family emergency. Agnes shared the notes from the meeting of 8-8-12. (1) Dr. Quillian and Dr. Reed reviewed the CSU cash situation and did a quick polling to see if large campuses could get through the 12- 13 year. George - Some campuses said they would have issues with cash beginning 13-14, if no change in operations, i.e. reduction of programs, etc. (2) Enrollments – Chancellor Reed said CSU will reduce overenrolled – by 3%. Some of the Board of Trustees suggested higher, but Reed disagrees. (3) The Provost at CSUN commented that there is no good data on the dollars spent to educate a student. Provost requested a task force to review. (3) Audit – Larry Mandel reported that auditors will introduce an audit advisory service at no additional charge to campuses. There will be no follow-up audits. Michelle Schlack – We are currently developing the program. This will be a service to the campuses. Our plan is to review internal controls. We will not issue an audit report. (4) HR issues – CFA contract – will announce results of the 9-3-12 vote. There is a new police contract currently slated for ratification of contract at the September BOT meeting. (5) Chancellor Reed is frustrated by high level of international travel and wants to reduce.

Justine – Question for Nancy for CABO – would we support a combined business conference? Agnes will ask Nancy to bring to CABO. Karen – CABO will support combined meetings, but this doesn’t mean it will be approved. We probably won’t have a conference in 2013. Justine – we need to address.

6) Treasurer’s Report – Daniel Zorn for Mary Hinchman

Not a whole lot to report. $115,485 is the FOA fund balance – Expense activity is from meetings.

7) Office Max Purchase Substitution Plan –Tom Roberts

October 1, 2012 is the launch date – Tom will be meeting with purchasing managers to review (8-16-12) and recommendations to get products on and off the list. Some concerns on campuses – How will this mix with current auto-substitution programs on campuses? This project does not include toner….but no change in current program for auto-substitution. According to Tom, campuses cannot override the program. A Q&A will be sent to Office Max buyers. There are a couple of things to iron out before an Oct 1 implementation date.

8) Commodity Code – Karen Wall

Adding a commodity code was mentioned at CABO. Where are we with this? Can we move forward? We need to report back to Larry if we are moving forward. Sharon (LB) – what is the problem? We don’t want to issue a directive if other campuses could be affected? Some campuses may not be able to implement. Josee –What is the benefit of moving to the commodity code? What is the intended use…buying power? Spikes Cavell is not using commodity code for the spend analysis. Darwin – let’s go back to PSSOA to review. We need to sit down and determine the objective. Sharon – be careful not to step backwards if decision has been made to roll out. Karen – The summary document was handed out in June and what were the questions. Do we want to push back to PSSOA? Tom Roberts – At CFS steering committee I got nominated to review a roll-out. A team will be assembled, including members of the PSSOA, FOA, etc. to address the roll-out. “Ready to go” means that the codes are ready to go. Tom needs to initiate the team and get everything rolling. He will ask the two chairs of the PSSOA and FOA

of 5 to get volunteers and will update Larry on what is going on. There is less urgency to get this wrapped up, versus other projects. Tom will send a note to FOA on how Spikes is using certain codes. Agnes – who would like to volunteer? Darwin and Josee volunteered.

9) PSSOA Informal Feedback to Procurement and AP Services Improvement Project Phase I Report – Kathleen Prunty (Time certain at 10:30 am)

Kathleen – There is a meeting today with PSSOA delegates to draft formal response on the Phase I report of the Purchasing/Accounts Payable Services Improvement project. FOA, please share with Kathleen thoughts and recommendations for the draft. You can send emails to Kathleen for highlights at: [email protected]. The PSSOA just got the report a few weeks ago. The report focuses on transactional activity which is easy for the PSSOA to review. We now have access to Spikes Cavell and we are reviewing common vendors and moving spends into a common contract. Concerns with the Phase I report – reviewing measures – There is much more that should be noted instead of procurement staff devoted to procurement. Report does not address a lot of the other types of functions, i.e. public works contracts. PSSOA wants to submit additional information so report is more robust. Another concern – there appears to be a culture of autonomy, particularly when it comes to faculty choice. We have completed, for example, a consolidated Apple buy - however, across the board there is a culture of autonomy. Changing this culture will require the support of executive leadership. We want to maximize our return on investment. – Finally, procurement is a major focal point for maintaining controls for tax payers. These elements are crucial and necessary and this was not reflected in the report. Goal – take some of the points shared with the PSSOA to contribute and add to the report. Darwin – I will continue to work with PSSOA prior to the Phase II update which is due on Oct 30. Kathleen – I will target getting a draft before the next FOA meeting in September.

10) Chancellor’s Office Update

 Financial Services – Lily Wang Lily – No report. We are holding weekly meetings for questions on the GAAP.

 Budget – Chris Canfield For the upcoming BOT meeting – There will be discussion on the $250m trigger – one recommendation – shared responsibility strategy. Another item – tuition fees – Fall rollback and spring 2013 - $150 increase for undergrad. Ongoing discussion on the transfer of CERF balances to operating fund. There is a provision in the legislature.

If the Governor’s tax initiative passes in November – campuses may be asked to resubmit budgets. $65.9M SUG will also go away. Missy – Will the campus submit FIRMS budget including tuition rollback? Chris – no. only resubmittal – if the tax measure passes. Tuition rollback only if the tax measure passes premised on general fund of $125m augmentation 12-13.

 Procurement – Tom Roberts Rebates – Campuses are concerned that rebates will be swept at year end. There is currently $1.5m to be distributed. Rebates will be coming less frequently at year end and now at the beginning of the year. Carol – let’s recognize rebates in the year it was received. Tom – I will do whatever the campuses desire. Josee – when are rebates supposed to be paid, quarterly? Tom – Most rebates are annual. Josee – Carol is right. We should get them when the CO gets them. The US bank rebate…up in April and they have 90 days to repay. Tom - campuses received this one in July. $900K sent out in July for 11-12. Sharon – Lily, did the CO distribute? Lily- No, we reported as clearing and GAAP adjustment needs to be done. Tom – we need a clear and concise direction on how rebates should be distributed. Sharon – does it need to be a discussion; it should just be handled appropriately. This is a George and Lily issue and not a campus choice. Tom – if FOA is happy with us making the decision, then, no problem. I was taking a lead from campuses for functional purposes. Lily - the issue relates to the rebate crossing fiscal years. If no objections, we will take back to the CO and determine best accounting treatment. Agnes – if no objections, this is the decision.

 Audit – Michelle Schlack 1. International programs pilot audit has been completed. 2. Police services audit beginning at Fresno. 3. CSURMA audit – begins in Sept 2012

of 5 11) Liaison Reports

 Accounts Payable (AP) – Brian Jenkins (1) CO communications – survey for AP using ACH. Lily – this came about by George’s request to pay US bank quicker and the potential to generate additional revenue. (2) Travel to China visas. Requires travelers seeking tourist visas to submit a letter of invitation or confirmation letter of invitation issued by an authorized Chinese agency.

 Student Accounts Receivable (SAR) – Karen Wall List serve questions - Higher One – not accepting VISA on Higher One and convenience fees. Do campuses prorate for non-payment before dropping students? No- once a term begins we don’t want to disrupt classes.

 Purchasing (PSSOA) – Darwin Labordo Darwin – PSSOA teleconference of 6-26-12– PSSOA discussed collaborative spends, such as Home Depot. Looking at the best way to get more bang for our buck. There is ongoing conversation about the Phase I shared services report. Darwin suggested that FOA talk about the Spikes Cavell report at the September 2012 meeting.

 Budget – Missy Jarnagin Missy – no new report.

 Sponsored Programs – Letitia Coate Leticia – on vacation this week.

 CFS Advisory Committee – Josee Larochelle No update – no current activity.

12) Other

Agnes –The FOA in-person meeting in November at Crowne Plaza. The hotel is booked. If anyone needs to stay overnight, please contact Deb Wallace so she can assist with room reservations.

Next Meetings –

August 15, 2012 Teleconference

September 12, 2012 Crowne Plaza

October 10, 2012 Teleconference

November 7, 2012 Crowne Plaza

December 5, 2012 Teleconference