Board Policy DCL: Fund Balance

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. 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:

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 . 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.

4. 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.

5. 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.

6. 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.

7. Assigned fund balance – amounts intended to be used by the District for specific purposes . The Superintendent shall delegate to the Chief Financial Office the authority to assign funds for particular purposes:

8. 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:

9. 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

10. Establishing and funding a "Local" Capital Project Fund; or

11. To balance future budgets; or

12. Reduction of taxes.