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Central Washington University

Statement regarding State Auditor Office Review of Administrative Support Costs Allocation to Services and Activities Fund


March 26, 2013
On March 18, 2013, CWU received a letter from the Washington State Auditor's Office (SAO) regarding the allocation of administrative support costs to the Services and Activities fee fund. State auditors had contacted the university in February for information about these allocations to the Services and Activities (S&A) fund and CWU promptly and openly responded to all inquiries. The SAO did not conduct an audit or report official audit findings in the 18th letter. The letter simply summarizes the SAO's review.  
Since 2011, CWU has allocated administrative support costs to self-support programs that utilize these services. This fee pays for services required to operate the various programs. Examples of services include accounts payable, travel, purchasing, contract management, payroll, human resources, mail, and information technology. 
Prior to the allocation of the administrative support costs, the university had funded all of these services out of the state operating general fund. This account is comprised of state funds and is the primary source of staff and faculty salaries. In 2009, the state reduced funding for the university by 30 percent, a cut taken from the university's general fund.  
Funding all administrative services solely out of the university general fund would have been impossible without incurring some combination of staff or faculty reductions, or program closures. Consultation with the Washington State Office of the Attorney General (OAG) determined that state law would allow the university to allocate certain administrative support costs to the S&A fund that uses these services. 
Over the past two years, CWU has worked closely with the OAG and the S&A Committee to ensure that S&A fees support only those administrative functions that serve S&A programs and activities. At the request of students, the university altered the calculation method for charges to S&A, and has twice reduced charges to the S&A fund. 
The SAO reviewed the program, seeking clear connections between S&A activities and the administrative costs charged to the S&A fund. The letter the auditor released on the 18th is a summary of the review of charges to the S&A fund. The letter established that it is appropriate to charge the S&A fund for services that can be clearly demonstrated to support S&A programs and activities. The letter identifies three categories of administrative support costs: 
          • those the SAO deems reasonably supported, 
          • those for which the SAO seek further information, and 
          • those the SAO believes not in compliance with RCW.  
CWU is now preparing additional information for the auditor and will provide this detailed report as soon as possible. Charges which the auditor deemed unjustified will be returned to the S&A fund. 

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