6235 - FUND BALANCE

The Board places the responsibility of administering the budget, once adopted, with the District Administrator. The District Administrator shall monitor the Fund 10 fund balance and shall report the balance to the Board at the end of each budget year. The fund balance shall be maintained at a level sufficient to:

1. minimize or avoid short-term borrowing for cash flow purposes;
2. cover unforeseen expenditure needs or unrealized revenue sources; and
3. demonstrate financial stability to preserve or enhance the District's bond rating, thereby lowering debt issuance costs.

The Board will reserve adequate funds to maintain a secure financial position. The use of Fund Balance reserves for recurring costs is discouraged.

Budget preparation and management shall adhere to this fund balance expectation. (See Policy 6220 - Budget Preparation and Policy 6231 - Budget Implementation.)

Fund balances will be reported in the categories established by the Government Accounting Standards Board Statement 54 (GASB 54) and in consultation with District auditors. The Board will impose constraints on any funds placed in the committed and assigned classifications through consultation with the District's auditors. The applicable categories for fund balance designations are:

1. Non-spendable Fund Balance

2. Restricted Fund Balance

3. Committed Fund Balance

4. Assigned Fund Balance

5. Unassigned Fund Balance

The District's Unassigned General Fund Balance will be maintained to provide the District with sufficient working capital, to provide a margin of safety to address local emergencies, and to minimize the financial implications of borrowing.

If, during the fiscal year, it appears to the District Administrator that the fund balance will be less than estimated, the District Administrator will bring forward for Board consideration recommendations that will protect the fund balances. Such recommendations shall be in accordance with the requirements of the law.

Revised 6/28/11

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