03.100 FUND BALANCE

SECTION 03 – BUSINESS and AUXILIARY SERVICES

03.100 FUND BALANCE
It is the policy of the District to maintain a fund balance at a level appropriate to provide adequate working capital and to honor all prior commitments.

Nonspendable Fund Balance – Amounts that are not in a spendable form such as prepaid expenses, or are required to be maintained intact such as the corpus of an endowment fund.

Restricted Fund Balance – Amounts designated for specific purposes by their providers such as bondholders, grantors, or imposed by law through constitutional provisions or enabling legislation. The Building Fund is restricted by statute to certain capital related costs.

Committed Fund Balance – Amounts designated for specific purposes by the District’s highest level of decision-making authority (Board of Education) and cannot be used for any other purposes unless the same highest level (Board of Education) takes action to remove or change the designation.

The District commits a portion of the Accrual Basis Fund Balance to honor the commitments made by the District for encumbrances (purchase orders) for which goods or services have not yet been received. The fund balance committed to encumbrances will be equivalent to the purchase orders rolled forward from one fiscal year to the next fiscal year. The Director of Finance will determine the balance of committed fund balance as part of the accrual conversion for the audit.

Assigned Fund Balance – Amounts the District intends to use for a specific purpose; intent can be expressed by the governing body or by an official to which the governing body delegates the authority.

The District assigns a portion of the fund balance in both the General Fund and Building Fund for funding the cash flow needs during the first half of each fiscal year. The collection of property taxes occurs mainly December through March, which creates a temporary cash flow deficit during the first part of each fiscal year. The assigned fund balance is used to finance this temporary cash flow deficit. The Superintendent and the Director of Finance will determine the amount of assigned fund balance at the end of the fiscal year.

Unassigned Fund Balance – Amounts that are available for any purposes; reported only in the general fund. Fund Balance represents the funds not restricted in use by statute nor encumbered by purchase orders or legal contracts.