Any and all District reserve funds will be properly established and maintained to promote the goals of creating an open, transparent, and accountable use of public funds. The District may engage independent experts and professionals, including but not limited to, auditors, accountants and other financial and legal counsel, as necessary, to monitor all reserve fund activity and prepare reports that the Board may require. The District will maintain fund balances in accordance with law. Pursuant to GASB 54, fund balances will be reported in the following classifications, where applicable.
Non-Spendable will be reported for amounts that cannot be spent because they are either not in spendable form (inventories, prepaid amounts, long-term receivables) or they are legally or contractually required to be maintained intact (e.g. the principle of an endowment fund).
Restricted Fund Balance will be reported when constraints placed on the use of the resources are imposed by grantors, contributors, laws or regulations of other governments or imposed by law through enabling legislation. Enabling legislation includes a legally enforceable requirement that these resources be used only for the specific purposes as provided in the legislation. This fund balance classification will be used to report funds that are restricted for debt service obligations and for other items contained in General Municipal or Education Law.
Committed Fund Balance will be reported for amounts that can only be used for specific purposes pursuant to formal action of the Board. These funds may only be used for the purpose specified unless the District removes or changes the purpose by taking the same action that was used to establish the commitment. This classification includes certain designations established and approved by the Board.
Assigned Fund Balance will be reported for amounts constrained either by the Board or Board appointed Purchasing Agent to assign amounts for a specific intended purpose. An assignment cannot result in a deficit in the unassigned fund balance in the General Fund. This classification will include amounts designated for balancing the subsequent year's budget and encumbrances. Assigned fund balance in all other governmental funds represents any positive remaining amount after classifying non-spendable, restricted or committed fund balance amounts.
Unassigned/Unrestricted Fund Balance will be reported for amounts not classified as non-spendable, restricted, committed or assigned. The General Fund is the only fund that would report a positive amount in unassigned fund balance. For all governmental funds other than the General Fund, unassigned fund balance would be used to report a deficit balance, since the fund's liabilities, together with amounts already classified as non-spendable, restricted, and committed would exceed the fund's assets.
Purpose
This policy will ensure the District maintains adequate fund balance retained earnings and reserves in the District’s various operating funds to provide the capacity to:
Provide sufficient cash flow for daily financial needs;
Secure and maintain investment grade bond ratings;
Offset significant economic downturns or revenue shortfalls;
Provide funds for unforeseen expenditures related to emergencies; and
Ensure that construction projects or public works projects are fully completed
Periodic Review and Annual Report
The Board will periodically review all reserve funds. The District will also prepare and submit an annual report of all reserve funds to the Board.
The Board shall utilize the information in the annual report to make necessary decisions to adequately maintain and manage the District’s reserve fund balances while mindful of its role and responsibility as a fiduciary of public funds.
The Superintendent shall develop any necessary and/or appropriate regulations to implement the terms of the Board policy.
Adoption date: June 20, 2011
Amended date: September 12, 2022
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