Fund Balances What are fund balances? Why does _____ ISD maintain a fund balance in the General Fund?

Why is Discussion of District Fund Balances Timely? The State Legislature Convenes on 1/11/2011 State lawmakers estimate a deficit of $18b.+ One option for closing this deficit is to require school districts to use local resources in place of state revenue This option may be attractive to state lawmakers because of misconceptions of fund balance State-mandated use of our fund balance will be devastating to our district

Our District’s Fund Balance Policy Example: _______ ISD Annual Operating Policy: A financial goal of the district shall be to have a sufficient balance in the operating fund to be able to maintain fiscal independence in case of financial needs or crisis. The district shall strive to maintain a yearly fund balance in the general operating fund in which the total fund balance is 22.5% of total operating expenditures and the unassigned fund balance is 15% of the total operating expenditures.

What are Fund Balances? Districts use the General Fund to pay expenses related to instructing and transporting students. Within the General Fund: o Assets – Liabilities = FUND BALANCE The amount reported as district’s fund balance is a snapshot. A fund balances will fluctuate daily.

What are Fund Balances? A fund balance may be: “Reserved”, “Designated”, or “Unreserved, Undesignated” Only the last category of fund balance is available for any legal expenditure Fund balances are the culmination of the board’s financial decisions over many years

What a Fund Balance is not? Fund Balance is not: – a Savings Account – a Rainy Day Fund – the result of unduly high taxes

Why do district’s have fund balances? Cash Management Lower interest rates on district bonds Unforeseen expenditures & Disasters Ongoing support for educational programs Best Practices

What is the Recommended Level of Fund Balance? The Government Finance Officers Association (GFOA) recommends an unassigned fund balance of “no less than two months of…regular general revenue operating expenditures.” The Texas Education Agency’s (TEA) optimum fund balance calculation requires school districts to add two months of cash disbursements to amounts needed to cover any cash flow deficits.

_________ ISD’s Fund Balance ______ ISD’s fund balance as of (end of fiscal year 2009/2010 was $______________ Reserved balances were $ Designated balances were $ The remaining unreserved, undesignated portion of ____________ ISD’s fund balance at (end of fiscal year 2009/2010) was $___________

_________Isd’s Fund Balance – By the Numbers _________ Isd’s fund balance is equivalent to: $_____ per enrolled student _____% of our annual operating budget ____ months of operating expenses Our district’s fund balance [meets/fall short] of the GFOA/TEA standard.

Recent Budget Activities Affecting _______ ISD’s Fund Balance On July/August XX, the school board approved the school year budget This budget uses XXXX of the fund balance to –Example 1 (Give teachers/personnel a salary increase) –Example 2 (Provide xxx program to increase student achievement in ___________) OR: The school year budget added $____ to the fund balance