GENERAL FUND BALANCE

GENERAL FUND BALANCE

po6235Adopted August 20, 2018

6235 - GENERAL FUND BALANCE

The general fund balance is the amount by which assets exceed liabilities. The Board believes there is a need to maintain a general fund balance to:

  1. Provide for an adequate cash flow.
  2. To serve as a safeguard against emergency expenditures and/or unrealized revenues.
  3. To generate sufficient interest income from investments to offset the interest expense from temporary borrowing for cash flow needs.
  4. To cover operating costs until the deferred tax revenue is received in August.
  5. To give the district the best possible bond rating, which allows for the lowest interest rate available.

The District's system of accounting shall comply with all requirements of the Governmental Accounting Standards Board, Statement No. 54 (GASB 54). In accordance with GASB 54, the District will report its fund balances in the following categories:

  1. Nonspendable fund balance - amounts that cannot be spent because they are either (a) not in a spendable form (which includes items that are not expected to be converted to cash – e.g.,  inventories or prepaid amounts) or (b) legally or contractually required to be maintained intact (e.g., the corpus of an endowment fund).
     
  2. Restricted fund balance - amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation.
     
  3. Committed fund balance - amounts constrained to specific purposes by the Board; to be reported as committed, amounts cannot be used for any other purpose unless the Board takes action to remove or change the constraint.
     
  4. Assigned fund balance - amounts the Board intends to use for a specific purpose but are neither restricted nor committed; intent can be expressed by the Board or by an official or committee to which the Board delegates the authority.
     
  5. Unassigned fund balance - amounts that are available for any purpose; these amounts are reported only in the general fund.

The Board’s goal is to maintain a General Fund balance of at least 15%, but less than 20% of budgeted expenditures. To provide the best fiscal management of the fund balance, it will be required that appropriation for expenditures from the reserve will require a 2/3 majority vote of the full board.