1. INDEPENDENT SCHOOL DISTRICT #883
INTRODUCTION TO SCHOOL FINANCE

2. Requirements to Maintain Fiscal Integrity
MAINTAIN fund balance according to Board Policy 701.2R (8% -10%)
Continue to balance revenue to expenses
Maintain systems that ensure financial stability

3. Funds General Fund (01) Food Service (02) Community Service (04)
Bldg. Construction (06)
Debt Service (07)
OPEB Trust (45 & 47)

4. Definition of Funds
The General Fund (01) is used to account for all revenues and expenditures of the school district not accounted for elsewhere. K-12 educational activities; instructional and student support programs; superintendent; district administration; normal operations and maintenance; transportation; and operating capital expenditures (including health & safety).
The Food Service Fund (02) is used to record financial activities of a school district's food service program. Food service includes activities for the purpose of preparation and service of milk, meals, and snacks in connection with school activities

5. Definition of Funds (cont.)
The Community Service Fund (04) is used to record all financial activities of the Community Service program. The Community Service Fund is comprised of four components; Community Service, Community Education, School Readiness and Early Childhood Family Education.
The Debt Service Fund (07) is used to record revenues and expenditures for a school district's outstanding bonded indebtedness.

6. Definition of Funds (cont.)
The Building Fund (06) is used to record revenues and expenditures for voter approved capital projects. If any fund balance remains after the projects are completed, the funds are to be transferred to the debt service fund.
The OPEB Funds (45 and 47) are used to record OPEB expenditures annually (45) and levy and bond payments for OPEB repayment (47).

7. Definition of Terms Basic General Education Formula
Dollar amount per pupil unit of revenue set by state legislature
Adjusted Pupil Units (APU)
Students membership times weighting factors
EC, K-6 (1.0) 7-12 (1.2)
Weighting Factor
Set by state legislature

8. Definition of Terms (cont.)
Unreserved Fund Balance
Revenues minus expenditures
Necessary for sound financial management of District
Necessary for cash flow, credit ratings, unexpected changes in enrollment, revenues, and expenditures
Reserved Fund Balance
State restrictions and mandates to reserve and spend funds toward a specific purpose

9. Revenue Categories Local Taxes State Aid Federal Aid
Operating Referendum
Bonds for Building Projects
State Aid
General Education
Categorical Aid
Federal Aid
Other (i.e. interest, fees, rentals)
Categorical Aid includes: Local Optional, Operating Capital, Equity Revenue, Transition Revenue, Referendum Revenue

10. Expenditure Categories
District and School Administration
School board, superintendent, principals, director of building & grounds, Director of Technology, Business Manager, Activity Director
District Support Services
General and other office support, human resources, community relations, elections, census, legal, business support services, and information systems services
Regular Instruction
All activities dealing directly with the teaching of students K-12, English Language Learner, Co-Curricular, Athletics, and Area Learning Center
District & School Administration Prog
District Support Services Prog
Regular Instruction –

11. Expenditure Categories (cont.)
Vocational Instruction
Agriculture, Career & Tech and ACTE (disabled SpEd)
Special Education Instruction
Speech, Mild, Moderate and Severe Disabilities, Physically Impaired, Hearing Impaired, Visually Impaired, Specific Learning Disability, Emotional/Behavior Disorder, Autistic Spectrum Disorders, Early Childhood, and Federal Programs
Instructional Support Services
Activities for assisting the instructional staff with the process of providing K-12 learning experiences. Curriculum, Staff Development, Technology Integration, Education Media
Vocational Instruction Prog
Special Educatoin Instruction Prog
Insturctional Support Services Prog

12. Expenditure Categories (cont.)
Pupil Support Services
All services provided to students not classified as direct instruction. Counseling, Health Service, Psychological Service, Social Work, and Transportation
Site, Buildings and Equipment
Acquisition, operation, maintenance, repair, and remodeling of all physical plant, facilities, and grounds
Fiscal and Other
Property and Liability Insurance
Pupil Support Servies Prog
Site-Building, Equipment Prog (B&G & LTFM)
Fiscal & Other Prog (Property, liability Ins)

13. UFARS (Uniform Financial accounting & reporting standards)
Dimension Overview
17 digit ( )
01 Fund (General Fund)
005 Organization (District-Wide)
010 Program (School Board)
000 Course (local use)
000 Finance (state, federal, child nutrition, etc.)
401 Object (supply, detail)/Source (revenue)

14. 2018-19 Budget Overview revenues

15. General fund revenue budget

16. 2018-19 budget overview expenditures

17. How are general fund dollars spent?
Expenses incurred in the operation of the district are paid from the General Fund. The following schedule relates how the dollars allocated to the General Fund are spent:

18. General fund expenditure budget

19. Budget and factors Budget is a moving target Enrollment
Labor Agreements
Funding Formulas (set by state)
Facility Needs
Fund Balance Targets
Inflation

20. State special education
Five Components in the formula
Initial Aid – (prior year data) Three formula options – Least of the three calculation
Excess Cost Aid – (prior year data)Two formula options – Greater of the two calculations
Transportation – (prior year data) 100% of transportation expenditures but subject to minimum and maximum in the formula
Tuition Adjustment – formula calculation done by MDE
Occurs when a district other than the resident district provides education to a special education student
The district serving the student is responsible for providing the special education services

21. State special education (cont.)
Hold Harmless/Growth Limit (based on FY 2016 Special Ed. Data)
Calculation that assures districts will not receive less aid than if the state special education aid formula had not changed in previous years.
Growth limit calculation was designed to ensure that districts will get some increase in the state special education aid over the old formula calculations.
Per MDE, this is not necessarily true. Resulting in districts having to pay excess cost of providing education to special education students.
Special Education extra cost
Fiscal year $1.1 million

22. Additional information
Funding Education in Minnesota (81 page document)
Minnesota School Finance – A guide for Legislators (136 page doc.)
Minnesota Association of School Business Officials
School Finance Video
Special Education Funding Video