6170 - Reserve Funds

 

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

6170 Reserve Funds

The Board of Education recognizes the importance of reserve funds to promote overall sound financial planning and management of the School District.  Reserve funds provide a mechanism to minimize the impact of future financial obligations for infrastructure projects, equipment and other requirements. In uncertain economic times, reserve funds can also provide the District with a welcomed budgetary option that can help mitigate the need to cut services or to raise taxes. In good times, money not needed for current purposes can often be set aside in reserves for future use. Therefore, the District may establish and maintain reserve funds in accordance with Commissioner’s Regulations, General Municipal Law, Education Law, and applicable legal requirements.  The District shall comply with the reporting requirements of the Governmental

Accounting Standards Board (GASB), including GASB Statement Number 54, Fund Balance Reporting and Governmental Fund Type Definitions. The District may engage independent experts and professionals, including but not limited to, auditors, accountants, and other financial and legal counsel, as necessary, to monitor all reserve fund activity and prepare any and all reports that the Board may require.

PERIODIC REVIEW AND ANNUAL REPORT
The Superintendent and Assistant Superintendent for Business shall be responsible for recommending to the Board of Education the creation and projected funding needs of each specific reserve fund.  Additionally, the Superintendent and Assistant Superintendent for Business shall recommend the expenditure of reserve funds and the liquidation of any reserve funds no longer needed as permitted by law.

On an annual basis the Assistant Superintendent for Business will prepare and submit to the Board and the public, a reserve plan that will be updated based on the current and long term needs of the District.
a)  The type and description of the reserve fund;
b)  The date the fund was established;
c)  The interest earned by the fund;
d)  The total amount and date of each withdrawal from the reserve fund;
e)  The total assets of the reserve fund showing cash balance and a schedule of investments;
f)  An analysis of the projected needs for the reserve fund in the upcoming fiscal year and a recommendation regarding funding those projected needs.

The Board shall utilize the information in an annual report to make necessary decisions to adequately maintain and manage the District’s reserve fund balances while mindful of its role and responsibility as a fiduciary of public funds.

UTILIZATION OF RESERVES
Restricted Funds are utilized for the specific purpose of the established reserves. The committed fund balance, assigned fund balance and unassigned fund balance, shall be, when possible, appropriated to fund one-time expenditures or expenses that do not result in recurring operating costs, or other one-time costs including but not limited to the establishment of, or increase in, a legitimate reserve fund.

In the event that the Unassigned Fund Balance exceeds the maximum permissible amounts, the excess may be utilized for any lawful purpose approved by the Board. Each year, when establishing the annual tax levy as well as during budget development, the Board of Education shall consider utilization of fund balance in the following order:
1.  Restricted;
2.  Assigned Fund Balance; and
3.  Unassigned/Unrestricted Fund Balance.

Nothing contained within this policy shall be interpreted to imply that the Board of Education must completely exhaust one fund balance before considering the use of another fund balance classification.

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