Financial Policies & Budgeting Basis

The Camas School District Budget encompasses six funds as outlined in CSD Policy 6020.  Each of these six funds is dedicated to a different purpose in accordance with state law and accounting standards.  These funds are maintained by the Clark County Treasurer, although CSD uses local banks to handle day-to-day transactions and reconciles monthly with the Treasurer's account.

General Fund

The General Fund is the primary operating fund for the District, encompassing the vast majority of daily transactions.

The General Fund is financed from local, county, state, and federal sources. These revenues are generally used for financing the current ordinary normal and recurring operations of the school district such as programs of instruction for the students, food services, maintenance, data processing, printing, and pupil transportation. RCW 28A.320.330 requires all school districts have a General Fund.

General Fund expenditures are generally divided as follows:

• Salaries & Benefits (88% of expenditures)

• Materials, Supplies & Other Costs (MSOC) (11% of expenditures)

• Other (Travel, Capital Outlays under $5k) (1% of expenditures)

Capital Projects Fund

The Capital Projects Fund is used to finance and pay for capital improvements. These include the acquisition of land or existing facilities; construction of buildings; purchase of equipment; conduct of energy audits; and the costs associated with implementation of technology systems, facilities and projects. In addition, certain improvements to buildings and/or grounds, remodeling of buildings and the replacement of roofs, carpets and service systems are included in the Capital Projects Fund.  The fund contains revenues from  the sale of bonds, state matching money, State Forest collections from lands held in trust, proceeds of special levies earmarked for building purposes, transfers from the district's General Fund basic education allotment, earnings from fund investment, and rental and property sale proceeds.

Specific uses for the Capital Projects fund are outlined in District Policy 6022.

Debt Service Fund

The money in the Debt Service Fund (DSF) is used to pay the principal of and interest on outstanding voted and non-voted bonds.  It is related to the Capital Projects Fund in that it services debt on Capital Projects bonds.  The Debt Service Fund's primary purpose is to collect funds that are used for the payment of matured general long-term debt principal and interest which is typically due in June and December of each year. The fund balance as of August 31 is a reflection of the estimated payments due the following December and may vary by more than 10 percent depending on the timing of collections and amount of debt principal and interest payments due in each fiscal year.

Associated Student Body Fund

The Associated Student Body (ASB) Fund is used to collect primarily student and some non-student funds for student-directed activities. This fund is considerably smaller than the other funds and can therefore vary significantly across years. Typically, the fund is budgeted fairly conservatively, given that student activities are not completely known at the time of budgeting.  Note that the ASB fund is completely independent of the other funds and is treated as a stand-alone account managed by and for student clubs and activities. Student involvement in the decision-making processes related to the use of this money is an integral part of the associated student body, except that the board may delegate the authority to a staff member to act as the associated student body for any school that does not contain a grade higher than grade six.  ASB club constitutions will provide for participation by ASB representatives in the decisions to budget for and disbursement of ASB Fund money. Schools may have an assigned staff member serving as the ASB secretary, and the fund is centrally audited and overseen by the District Business Services office.

Private Trust

The Private Trust Fund is used to process and hold funds related to donations, scholarships, etc.  It is managed independent of the other funds with no inter-fund transfers occurring.

Transportation Vehicle Fund

The Transportation Vehicle Fund is to be used to account for the expenditures for the purchase and related debt service incurred for pupil transportation equipment (school buses). In addition, major repair and rebuilding of pupil transportation equipment (school buses) as defined in WAC 392-142-260 is permitted. Primary sources of revenue for the Transportation Vehicle Fund include the sale of vehicles, payments from the state for school bus depreciation, non-voted bonds and special Transportation Vehicle Fund levies (Camas does not have a Transportation Levy).

Financial Glossary

Basis of Accounting

Washington school districts prepare their financial statements on the basis of accounting that demonstrates compliance with Washington state statutes and the Accounting Manual for Public Schools in the State of Washington, (issued jointly by the State Auditor and the Superintendent of Public Instruction, by the authority of RCW 43.09.200, RCW 28A.505.140, RCW 28A.505.010(1) and RCW 28A.505.020), which is an Other Comprehensive Basis Of Accounting (OCBOA) that differs from Generally Accepted Accounting Principles (GAAP). Financial statements for school districts in the State fall into one of three categories: (i) GAAP - School districts that issue GAAP financial statements; (ii) OCBOA - School districts that issue GAAP financial statements except that the General Fixed Asset Group, district- wide financial statements and the original budget are not reported; debt is reported in the notes to the financial statements; and management’s discussion and analysis are not required; or (iii) School districts with less than 1,000 FTE students for the preceding fiscal year may issue cash basis financial statements.

The modified accrual basis of accounting  is  used for all governmental and expendable trust funds. Revenues are recognized when they become measurable and available. Property taxes receivable are measurable but not available and are, therefore, not accrued. However, categorical program claims and interdistrict billings are measurable and available and are, therefore, accrued. Expenditures are recognized under the modified accrual basis of accounting when the related fund liability is incurred. The fund liability is incurred when the goods or services have been received. The one exception is the recognition of principal of and interest on long-term debt, which is recognized when due.

Basis of Budgeting

Chapter 28A.505 RCW and Chapter 392-123 Washington Administrative Code (WAC) mandate school district budget policies and procedures.

The board adopts annual appropriated budgets for all governmental funds. These budgets are appropriated at the fund level. The budget constitutes the legal authority for expenditures at that level. Appropriations lapse at the end of the fiscal period. Budgets are adopted on the same modified accrual basis as used for financial reporting. Fund balance is budgeted as available resources and, under statute, may not be negative, unless the district enters into binding conditions with state oversight pursuant to RCW 28A.505.110.

Monthly Review of Budget to Determine Necessity of an Extension

All funds in the budget should be reviewed and analyzed on a monthly basis. The district must complete a budget extension prior to incurring expenditures in excess of the total of such appropriations as required by RCW 28A.505.150. For first class school districts, this means that a budget extension must be adopted and filed prior to incurring expenditures that exceed the appropriation in each fund. For second class school districts, a budget extension must be adopted and approved by both the ESD and OSPI prior to incurring expenditures that exceed the appropriation in each fund. The ESD and OSPI will adjust budget extensions that do not meet this requirement. WAC 392-138-110 requires that the Associated Student Body initially review revisions to the Associated Student Body (ASB) budget. Therefore, an extension of the Associated Student Body Fund budget should occur prior to the closing of school to secure the necessary student involvement.

Extending or Revising the Budget

School districts may adopt and file budget extensions (Form F-200) in accordance with the procedures outlined in RCW 28A.505.170 and RCW 28A.505.180 (WAC 392-123- 071, 392-123-072, and 392-123-079) and instructions published by the Office of Superintendent of Public Instruction. Budget extensions not in compliance with the prescribed format must be resubmitted as outlined in RCW 505.090.

To increase the amount of the appropriation in any fund as provided in RCW 28A.505.170 and 28A.505.180, the school district board of directors shall adopt a written resolution stating:

• The estimated amount of additional expenditures

• The source of funding.

• The specific reason(s) for the extension. The reason(s) may be brief. For example:

  • increased enrollment, purchase of equipment, increased salary demand, etc.

All school districts must submit copies of their latest budget status report (Form F-198) for the appropriate fund along with copies of their budget extensions.

The budget status reports submitted with budget extensions must be complete and in the proper format. Budget extensions are reviewed and edited by the ESDs and OSPI to ensure that the estimates contained in the budget extensions are reasonable. Revised budget edits must be submitted with the budget extension document. Districts will provide explanations and correct problems when requested.

Governance and Policies

The school board sets policy governance policies, which focus on results or “ends” – what graduates should know, understand and be able to do. By governing at this level, the board avoids micro- managing the work of the district. Instead, the school board holds the superintendent accountable for implementing the board’s vision by monitoring results through the use of data, reports and focused discussions. The work of the school board includes listening to the public and gathering their feedback about goals, standards and progress through community outreach linkages.

The policy governance framework includes the fol lowing four policies:

• Governance Process Policies – these “board means” describe the board’s job and how it directs the superintendent to achieve these “ends.” These include board job description, agenda planning, code of conduct, and cost of

• Board/Superintendent Relationship Policies – these policies define the connection between the board and the superintendent, direct the board to act as a unit, create accountability of the superintendent, delegation to the superintendent, and provide for monitoring of the superintendent’s

• Ends Policies – the “ends” describe what results the school board expects. The school board creates policies that define the “ends.” In this way, the board provides strategic leadership by clearly defining what is to be accomplished.

• Executive Limitations – The superintendent doesn’t have complete freedom in making decisions about how to accomplish the "ends." Executive limitations are policies that define what methods cannot be used to get the expected results. In essence, the school board is pre-approving all means that have not been expressly

This gives the superintendent the power to make decisions that create the desired "ends."

Executive Limitation-7: Budget Planning and Execution

In preparing the district budget, the superintendent shall not fail to involve appropriate stakeholder groups, consider board Ends policies, utilize best practices for budgetary planning and financial reporting, and communicate the budgetary development process in a timely manner.

• The superintendent shall not fail to take all reasonable and prudent actions with respect to securing district resources and preparing the district budget, that are typical for similar and highly effective organizations;

• The Superintendent shall not fail to:

  • Present an annual budget aligned with board Ends that is understandable by the Board and the community that:

  • presents all material budgetary assumptions;

  • explains how new or expanded budget initiatives are aligned with board Ends;

• Timely advise the Board of:

  • actual or anticipated material deviations in the adopted budget;

  • changes or conditions that reasonably could be expected to materially affect the district’s financial condition in the current year or foreseeable future;

  • material variances in the prior year’s budget to actual expenditures;

• Prepare a multi-year executive summary budget for building organizational capabilities sufficient to achieve Ends in future years;

• Provide an affirmative (or negative) statement of the following:

  • The District received a clean audit opinion.

District Operating Policy Manual

Under a policy governance model, administrative policies and procedures that describe how the school district operates are set by the superintendent. However, some operational policies related to the board of directors are legally required and are approved by the board. District leadership, comprising the superintendent and administrative staff, have established administrative policies and procedures. Many of the policies and procedures are required by state law. Others provide guidance and regular operating processes. These include the following financial policies.

Budget Preparation, Adoption, and Implementation (6000)

Describes the fiscal year, budget hearing, adoption and filing. Also describes budget implementation.

“A district’s annual budget is tangible evidence of the district’s commitment toward fulfilling the aims and objectives of the instructional program and providing for the efficient and effective operation of the district. The budget expresses the services to be provided, consistent with immediate and long- range goals and resources available and establishes priorities within broad program areas…”

System of Funds and Accounts (6020)

This policy describes the purpose, revenues and activities of each of the district’s funds: General Fund, Capital Projects Fund, Debt Service Fund, Associated Student Body Fund, and Transportation Vehicle Fund.

Fund Balance (6022)

“Fund balance is the excess of a fund over its liabilities and reserves.”

“The fund balance in the Debt Service Fund, Transportation Vehicle Fund, Capital Projects Fund, and Associated Student Body Fund is primarily a function of the scope of the projects and activities found within the operation of each fund.”

In the General Fund...

“The Unassigned Fund Balance should include an Unassigned to Minimum Fund Balance account. This account should be sufficient to compensate for economic uncertainties and shall be maintained at a minimum of three percent (3 percent) and within a range of three (3) to five (5) percent of General Fund expenditures.”  The target fund balance as set by the Board of Directors is (10) percent of expenditures.

Financial Reports (6030)

This policy requires monthly financial budget status reports and an annual financial and statistical report. Significant variations are to be explained in the reports. The district presents governmental fund financial statements and related notes in accordance with Other Comprehensive Basis Of Accounting (OCBOA). All governmental and expendable trust funds are accounted for on a spending or “financial flow” measurement focus. This means that only current assets and current liabilities are included on their balance sheets. The accounts of the district are  organized on the basis of funds, each of which is considered a separate accounting entity. The regulatory agencies require all funds be presented as major funds. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures (or expenses), as appropriate.

Expenditures in Excess of Budget (6040)

“Total budget expenditures for each fund as adopted in the budget shall constitute the appropriations of the district for the ensuing fiscal year.”

Revenues from Local, State and Federal Sources (6100)

This policy describes the district’s sources of revenues and the district’s responsibilities regarding these funds.

Investment of Funds (6120)

Describes the district’s investment practice.

The Clark County Treasurer is the ex officio treasurer for the district. In this capacity, the Treasurer receives deposits and makes investments on the district’s behalf. At the request of one or more local governments that invest their money with a county, a county treasurer may pool those moneys for the purposes of investment (RCW 36.29.022). The County currently has such a pool which operates on an amortized cost-book value basis. The County Finance Committee performs oversight of the pool’s performance. There are no legally binding guarantees for the pool.

Earnings, including any realized gains/losses in the pool, are distributed monthly, calculated on the average daily balance of the participant’s account.

The County is authorized by RCW’s 36.29.020, 39.58, 39.59.020, 39.59.030, 39.60.010,  39.60.050 and 43.84.080 to invest in the following types of securities: United States Treasury Obligations; United States Government Agency Obligations and United States Government Sponsored Enterprises (GSE’s); Banker’s Acceptances (BA’s) purchased through State of Washington Financial Institutions and authorized broker/dealers; Commercial Paper; Non-negotiable Certificates of Deposit; Deposit Notes of Financial Institutions; Repurchase Agreements; Bonds of the State and any local government in the State; General obligation bonds of a state other than the State and general obligation bonds of a local government of a state other than the State; registered warrants and notes for the County and those districts in the County for which the Treasurer is the ex officio treasurer (subject to compliance with RCW 39.56.030); the Washington State Local Government Investment Pool (LGIP) and as defined  in  RCW  39.59.030; mutual bond funds as and subject to the arbitrage provisions of Section 148 of the Federal Internal Revenue Code (if bond covenants permit investment in mutual funds). The LGIP, authorized by chapter RCW 43.250 and administered by the State Treasurer, is comparable to a Rule 2a-7 money market fund, as recognized by the Securities and Exchange Commission, and its weighted average maturity does not exceed 90 days. For a full description of the LGIP and its investment structure visit the Washington State Treasurer’s website at http://tre.wa.gov/LGIP.

WCIP Interest Rate Risk: As a means of limiting its exposure to interest rate risk, the County diversifies its investments by security  type  and  institution, and limits holdings in any one type of investment with any one issuer. The County coordinates its investment maturities to closely match cash flow needs and restricts the maximum investment term to five years from the purchase date unless matched to a specific cash flow. In the case of collateralized mortgage obligations, the average expected life at time of purchase must be under five years.

The County allows 100 percent investment in United States Treasuries and the LGIP. The County limits its holdings in United States Government operated and sponsored entities to 90 percent of the portfolio and 35 percent per issuer; certificates of deposit, public funds deposit accounts and repurchase agreements to 40 percent of the portfolio and 10 percent per issuer; bankers acceptances to 25 percent of the portfolio and 10 percent per issuer; commercial paper to 25 percent of the portfolio and 5 percent per issuer; State and local government bonds to 20 percent, general obligation bonds outside the State to 15 percent, and deposit notes of financial institutions and reverse repurchase agreements to 10 percent of the portfolio.

Purchasing (6210-6230, including procedures) These policies describe the law, policies and procedures for “purchases within the limits of the detailed annual budget for the school year.”

Voucher Certification and Approval (6215) Requires that vouchers be audited and certified by the district’s appointed auditing officer.

Risk Management (6500) According to this policy the “district must identify and measure risks of loss due to the damage or destruction of district property or to claims against the district by others claiming to have been harmed by the action or inaction of the district, its officers, or staff. A risk management program will be implemented to reduce or eliminate risks where possible…”

Construction Financing (6910 and procedure) This policy speaks to potential sources of funding and authority for utilizing these sources of funding.

RCW 28A.505.130 Budget—Requirements for balancing estimated expenditures:

"For each fund contained in the school district budget the estimated expenditures for the budgeted fiscal year must not be greater than the total of the estimated revenues for the budgeted fiscal year, the estimated fund balance at the beginning of the budgeted fiscal year less the estimated reserve fund balance at the end of the budgeted fiscal year, and the projected revenue from receivables collectible on future years as approved by the superintendent of public instruction for inclusion in the budget.

The proceeds of any interfund loan must not be used to balance the budget of the borrowing fund." [Additional notes found at www.leg.wa.gov]