IRS conducting university audit
By Wayne Walley
associate city editor
Audit is a four-letter word to a normal taxpayer. One often assumes the person being audited is a liar and a cheat.
But in contrast, to a university, an audit just means a review to assure the Internal Revenue Service (IRS) that the university is operating as a tax-exempt organization within the provisions of the law.
Last spring, the university was formally notified of its selection, on a random-sample basis, for an examination of its tax return for the fiscal year ending June 30, 1974.
“It is nothing serious, but more a routine audit,” Colin MacLeod, director of Financial Services, said Tuesday.
He did say, however, IRS agents will be on campus full time, starting next week.
The audit will be of a dual nature, MacLeod said. First, agents will review specific financial data relating to the university’s 1973-74 tax return.
Then an overall review will be made of university activities to make sure the university does not have any unrelated business income.
In preliminary meetings with IRS officials last spring, the university set specific arrangements for the examination, MacLeod said. By June, agents were on campus to initiate the audit and start a comprehensive review.
MacLeod said the IRS agreed to submit all requests to the university’s Internal Audit Office so that logs could be maintained of all data exchanged and to minimize duplication of efforts and wasted time.
“It saves time and eliminates confusion so we will continue to follow those arrangements in working with the IRS,” MacLeod said.
He said the university was selected on a random basis for such an in-depth review, but that because of a new “Exempt Organizations Divison,” an increasing number of colleges and universities are being audited by the IRS.
Since 1969, all nonprofit tax-exempt organizations, including universities, colleges, and foundations, have been required to file information tax-return forms.
The IRS then created an organization to audit the returns of such nonprofit organizations on an on-going basis.
MacLeod said the university has been filing the required tax return starting with the fiscal year that ended June 30, 1971. He said he anticipated no problems with the audit.
“The IRS and USC are working together to accomplish this audit,” he said. “We expect several IRS agents to be involved in completing it within the next few months.”
HIGH ATOP THE BUILDING—Silhouetted against Tuesday's cloudy sky, a construction man continues to work on the Annenberg School of Communications. The school is part of the new Performing Arts Complex
being constructed next to the Physical Education Building. The Annenberg building is due to be completed by May. DT photo by Mike Ito.
Daily tif Troian
University of Southern California
Volume LXVIII, No. 16	Los Angeles, California Wednesday, October 8, 1975
MORE PARKjNG, HOUSING
Bonds finance structures
By Carolyn Horn
associate city editor
A total of $18,750,000 in tax-exempt bonds will be issued to finance construction of three parking structures and additional student housing, said Anthony D. Lazzaro, vice-president for business affairs.
One of the parking structures has already been built on the
Pane/ formed to seek provost
By Dorothy Reinhold
staff writer
The recently formed provost search committee has met and officially started its search for an individual to fill the new office of university provost.
The provost will be the chief academic office for the university, excluding the health sciences. The establishment of such an office is one of two major steps proposed in the recent massive reorganization of university governance.
President John R. Hubbard announced the formation of the committee at the annual faculty breakfast Sept. 20, upon the recommendation of a President’s Advisory Council task force.
Paul Knoll, chairman of the search committee, said, “The committee will try to find an individual who best combines the intellectual prowess, academic stature and proven administrative ability that this position demands.”
Knoll said the committee will solicit recommen-
dations and accept applications for provost, as well as posting formal notification and advertisements in select journals. In addition, the committee plans to survey officials in higher education outside the university and consider their recommendations.
Hubbard said at the breakfast that he was “seeking a person (for provost) of unquestioned intellectual quality and accomplishment and so recognized throughout the scholarly community. Obviously a mere visionary will not do, and just as obviously, an incumbent deluged in a ritual of paper shuffling will fail miserably.”
Knoll said the 14-member committee is balanced because it includes representatives from the present administration, faculty, students and the President’s Advisory Council.
“I expect our search to be thorough and intensive enough to finc^ the right individual.” he said. “I think we have open minds about it We don’t preclude finding a suitable person from outside the campus or even from abroad.”
(continued on page 5)
Health Sciences Campus. The other two are now under construction on the main campus.
Much of the bond revenue will be used to build or contract housing in the campus community for at least 1,000 students, Lazzaro said.
“This year we had a waiting list of 1,000 students who needed housing, and we didn’t have the facilities,” he said. “The shortage of parking space is apparent to all of us.
“So the construction we have planned is absolutely necessary, and we don’t have the cash to build with.
“If we went to conventional financing services at today’s rates, we’d have to pay at least 9lA% interest. By going through a bond issue, we should be getting a substantially lower rate, ultimately saving millions of dollars.”
The university plans to use the money only for parking and housing projects because revenues from parking permits and housing contracts can be used to repay the debt on the bonds, Lazarro said.
The cost of the three parking structures was estimated at $8,400,000 and the housing at $8,560,000, Lazzaro said.
The university is required by law to hold $l,615,000of the bond revenue as a reserve fund in case of financial emergency. An additional $141,600 will be used to pay for the processing of the bonds.
The Board of Trustees approved the bond proposal at a meeting on Oct. 1.
The bonds will be issued under the auspices of the California Educational Facilities Authority, which was created in 1972 by the state legislature.
This is the first time USC has issued bonds under the authority.
Under the authority, tax-exempt bonds may be issued for the university to finance academic and related facilities.
The interest rate of the bonds will be determined in bidding on Oct. 21. Banks and other financial interests are expected to bid for the bonds.
“The bidder offering the lowest rate of interest will probably become the bondholder,” Lazzaro said. “It is our pledge to meet our annual debts to that bondholder annually.”
New board to hear students’ food complaints
By Julie Fosgate
Students with complaints about food in the campus eating facilities may soon have an outlet for their suggestions through a new committee being formed by the Food Services Office.
The committee comes under the jurisdiction of Tom Bevan, manager of the Commons Complex, and his assistant, Karen Pekuri. Bevan has appointed Tom Dubbs, a sophomore in business, to organize the committee along with Pekuri.
The purpose of the committee is to provide a feedback system, Pekuri explained. “We want to know what the students do like and what they don’t like,” she said.
The 10-member committee will be made up of two representatives from each of the following groups: the residence halls, commuters, the Row, faculty and staff.
The committee will hold meetings twice a month which will be open to the student body. Bevan will also be present as a rep-
IMPROVEMENTS TO COME—The food in the Grill may not always look appetizing, but soon students will be able to make complaints and suggestions through a new committee being formed by the Food Services Office. DT photo by Mike Seedman.
resentative of Food Services management.
Pekuri said Ken Bridges, director of Food Services, will attend meetings as his schedule permits. He will also receive a copy of the minutes from all meetings.
Dubbs said the committee will be a vehicle for student opinion.
“I don’t expect to see any radical changes because of certain financial and legal situations. But we do hope that food management will become more aware of student needs and desires.” he said.
Pekuri added, “The students are our customers. We need their input in order to serve them better.”
Committee positions will be open to all interested students, determined by Dubbs and Pekuri through an application
process
Further information concerning applications may be obtained by calling Dubbs at 748-0049.
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