Illinois Association of School Business Officials Annual Conference May 19, 2010 Accounting for Interfund Transfers – Do You Know the Rules? Lynda GivenAndy Mace Chapman and Cutler LLPMiller, Cooper Co., Ltd

Interfund Loans School Code Section From ed to O&M, transportation or life safety From O&M to ed, transportation or life safety From transportation to ed, O&M or life safety Must be repaid within 3 years 2

Interfund Transfers School Code Section 17-2A Authorized by Board resolution among the ed, O&M and transportation funds Public hearing required – 7-30 days published notice in newspaper of general circulation – 48 hour posted notice at principal office of the School Board – Set forth date, time, place and subject matter of the hearing 3

Transfers of Interest Income Local Government Debt Reform Act Section 9(c) By Board authorization to fund most in need of the interest Does not apply to: – Interest that has been earmarked or restricted by the School Board for a designated purpose – Interest on IMRF levy – Interest on tort immunity levy, tort immunity bonds or debt service levy to pay tort immunity bonds 4

Excess School Building Bond Proceeds School Code Section When purposes have been accomplished and paid for in full Transfer to O&M Fund by School Board resolution 5

Excess Life Safety Bond Proceeds School Code Section When purposes have been accomplished and paid for in full Use for other approved life safety projects Transfer to B&I Fund to pay SFPS Bonds – Secretary within 30 days must direct County Clerk to abate taxes to pay Bonds 6

Special Education School Code Section a Excess Special Education Building Funds may be used for other Special Education purposes (need ROE approval) 7

Lease Levy School Code Section c Transferrable to any fund upon Board determination that they are no longer needed for the stated purpose 8

Working Cash Fund School Code Article 20 Abolish in full to ed fund at end of fiscal year G.I.S. Venture case – February 6, 2009 – Abate to the ed fund Then use Section 17-2A for a permanent transfer to O&M Accounting transfer to Capital Projects Fund 9

Transfers per New IPAM Debt Service Fund Capital Projects Fund 10

Debt Service Fund P&I payments made previously from other funds s/b made from the Debt Service Fund Payments are funded via inter-fund transfers Examples: – Debt Certificates (O&M Fund) – Capital Leases (Ed Fund) 11

Capital Projects Fund Significant capital expenditures previously from other funds s/b made from the Capital Projects Fund Regular/routine capital items may be excluded Example – Debt Certificates (O&M) 12