SHORT-TERM INDEBTEDNESS | Administrative Guideline Manual

6145 - SHORT-TERM INDEBTEDNESS

The School Board has directed that the Superintendent monitor the financial status of each fund established in the School Corporation. A monthlywritten financial report shall be given to the Board at an official meeting at which time the Board will be informed of any emergencies that may exist in any of the funds.

The Superintendent, when directed by the Board, shall initiate procedures to alleviate the emergency by obtaining revenue from advance draws, emergency loans and tax anticipation warrants.

Advance Draws

The Superintendent shall apply to the County Treasurer to obtain advances in revenue which may be available from the tax levied by the School Corporation and collected by the County Treasurer. The request shall be made monthly.

Emergency Loans

An emergency loan may be made by the issuance of a note(s) by the School Corporation. To initiate the procedure the Superintendent shall prepare a resolution for consideration by the Board to establish that an unbudgeted emergency exists in a particular fund(s). The procedure for the issuance of a note(s) is the same as for issuance of bonds.

If the Board authorizes an emergency loan, the Board shall, at the time for making the next annual budget and tax levy for the Corporation, make a levy to the credit of the fund for which the expenditure is made sufficient to pay the loan and the interest on the loan. However, the interest on the loan may be paid from the debt service fund.

Tax Anticipation Warrants

When a Corporation determines that the current expenses within a fund(s) will exceed the available revenue in that fund, the Board may declare that an emergency exists and authorize the Superintendent to borrow money in anticipation of the receipt of known tax revenue. The Superintendent shall prepare a resolution declaring the emergency for consideration by the Board.

If the Board authorizes a tax anticipation warrant, the principal of warrants issued is payable solely from the fund for which the taxes are levied or from the Corporation's education fund in the case of anticipated state tuition support distributions. However, the interest on the warrants shall be paid from the debt service fund. The amount of principal of temporary loans maturing on or before June 30 for any fund may not exceed eighty percent (80%) of the amount of taxes and state tuition support distributions estimated to be collected or received for and distributed to the fund at the June settlement. The amount of principal of temporary loans maturing after June 30 and on or before December 31 may not exceed eighty percent (80%) of the amount of taxes and state tuition support distributions estimated to be collected or received for and distributed to the fund at the December settlement.

If the amount of the warrants exceeds $20,000.00, the procedure for the sale of the warrants shall follow the required procedure for the selling of bonds, except that the notice of sale need not be published outside the county nor for more than ten (10) days before the date of the sale.

Any emergency loans, advance draws, or tax anticipation warrants authorized by the Board must be issued in compliance with I.C. 20-48-1 and Federal law.