REVISED RED-LINED Board Policy DCL Fund Balance

                                                                                                     Board Policy Manual
                                                                                             DeKalb County School District

 Board Policy DCL: Fund Balance                                                                           Status: DRAFT - 2nd
                                                                                                                     Reading
 Original Adopted Date: 11/16/2011 | Last Revised Date: 12/14/2011 | Last Reviewed Date: 12/14/2011

Fiscal Goals and Objectives
The DeKalb County Board of Education recognizes that the maintenance of a fund balance is essential to the
preservation of the financial integrity of the DeKalb County School District and is fiscally advantageous for both the
District and its taxpayers. This policy is enacted to specifically define fund balance categories and ensure long-term
district viability though the maintenance of healthy fund balances reserves. This policy establishes goals and provides
guidance concerning the desired level of fund balance maintained by the District to mitigate financial risk that can
occur from unforeseen revenue fluctuations, unanticipated expenditures, and similar circumstances. The District also
seeks to maintain the highest possible credit ratings which are dependent, in part, on the District’s maintenance of an
adequate fund balance.
Fund balance is a measurement of available financial resources and is the difference between total assets and total
liabilities in each fund.
In accordance with Governmental Accounting Standards Board (GASB) Statement 54, the Board recognizes the
following categories of fund balance for financial reporting purpose:
Fund balance amounts will be reported in the following categories, listed from most to least restrictive:
  1. Nonspendable fund balance – amounts that are not in a spendable form (e.g., inventory) or are legally or
     contractually required to be maintained intact (e.g., permanent fund principal).
  2. Restricted fund balance – amounts that can be spent only for the specific purposes stipulated by external
     parties (e.g., grants or donations) or imposed by law through either constitutional provision or enabling
     legislation.

  3. Committed fund balance – amounts that can be used only for the specific purposes determined by a formal
     action of the Board (e.g., the Board’s commitment in connection with future construction projects).
     Commitments may be changed or lifted only by the same form of formal action that imposed the constraint
     originally. The District shall establish and maintain a committed fund balance per the below descriptions.
         a. Working Capital Reserve - This will be established based upon 5% of annual budgeted expenditures and
            is intended to be permanent in nature and not subject to draw down.
         b. Catastrophic Event Reserve - This reserve will also be established based upon 5 % of budgeted annual
            expenditures and may be drawn down in the event of unanticipated catastrophic events.
         c. Revenue Stabilization Reserve - This will be established based upon 5​% of budgeted annual expenditures
            and may be drawn down in the event of a decrease in property tax digest or reduction to state funding.
  4. Assigned fund balance – amounts intended to be used by the District for specific purposes as determined by
     the Superintendent or a designee. The Superintendent shall delegate to the Chief Financial Office the
     authority to assign funds for particular purposes:

  5. Unassigned fund balance – includes all amounts not contained in other classifications and is the residual
     classification of the general fund only. Unassigned amounts may be used for any legal purpose. The District
     shall strive to achieve and maintain a prudent level of unassigned fund balance in the general fund at fiscal
     year-end adequate to ensure continuous operations. Upon completion of the fiscal year, the District may
     utilize excess funds for the following purposes:
         a. One-time expenditures that are non-recurring in nature and which will not require additional future
            expense outlays for maintenance, additional staffing or other recurring expenditures; or
         b. Establishing and funding a "Local" Capital Project Fund; or
         c. To balance future budgets; or
         d. Reduction of taxes.
The District shall strive to achieve and maintain combined unassigned, assigned, and committed fund balances in the
general fund at fiscal year end of between 5% and 7% of budgeted expenditures while complying with O.C.G.A. 20-
2-167(a)5.