6160 - Fund Balance


Adoption Date: 3/13/2019 
6000 - Fiscal Management

6160 Fund Balance

The Board of Education recognizes that the maintenance of a fund balance is essential to the preservation of the financial integrity of the School District and is fiscally advantageous for both the District and the taxpayer. Unanticipated events may occur that could adversely affect the financial condition of the District and jeopardize the continuation of necessary public services.  Accordingly, this policy is intended to guide the District regarding maintenance of adequate fund balances and reserves in order to:

District reserve funds shall be properly established and maintained to promote the goals of:
(1)  assuring openness, transparency and accountability in the use of public funds;                      
(2)  planning for anticipated and unanticipated needs, expenditures and events; and
(3)  maintaining an unassigned fund balance at a level which complies with legal requirements.                            

The Board recognizes that the maintenance of a fund balance is essential to the preservation of the financial integrity of the School District. The Board will maintain a fund balance in accordance with law. Pursuant to requirements of the Governmental Accounting Standards Board (GASB), including GASB 54, fund balances in the General Fund will be reported in the following classifications, where applicable:

1. NON-SPENDABLE will be reported for amounts that cannot be spent because they are either not in spendable form (inventories, prepaid amounts, long-term receivables) or they are legally or contractually required to be maintained intact (e.g. the principle of an endowment fund).

2. RESTRICTED FUND BALANCE will be reported when constraints placed on the use of the resources are imposed by grantors, contributors, laws or regulations of other governments or imposed by law through enabling legislation. Enabling legislation includes a legally enforceable requirement that these resources be used only for the specific purposes as provided in the legislation.

3. ASSIGNED FUND BALANCE will be reported for amounts constrained either by the Board of Education or Board appointed Purchasing Agent to assign amounts for a specific intended purpose. An assignment cannot result in a deficit in the unassigned fund balance in the General Fund. This classification will include amounts designated for balancing the subsequent year's budget and encumbrances. Assigned fund balance in all other governmental funds represents any positive remaining amount after classifying non-spendable, restricted or committed fund balance amounts.

4. UNASSIGNED/UNRESTRICTED FUND BALANCE will be reported for amounts not classified as non-spendable, restricted, committed or assigned. The General Fund is the only fund that would report a positive amount in unassigned fund balance. For all governmental funds other than the General Fund, unassigned fund balance would necessarily be negative, since the fund's liabilities, together with amounts already classified as non-spendable, restricted and committed would exceed the fund's assets.

The District will maintain adequate fund balance retained earnings and reserves in the District’s various operating funds to provide the capacity to:
1.  Provide sufficient cash flow for daily financial needs;
2.  Secure and maintain investment grade bond ratings;
3.  Offset significant economic downturns or revenue shortfalls;
4.  Provide funds for unforeseen expenditures related to emergencies; and

The Assistant Superintendent for Business shall review this policy annually and make recommendations to the Board for amendments to the policy, if necessary.

Legal References:
Governmental Accounting Standards Board (GASB) Statement Number 54
New York State General Municipal Law
New York State Education Law
New York State Commissioner’s Regulations