Revised: July 16, 2014 662.3
Revised: May 13, 2015
Revised: June 8, 2016
Revised: April 28, 2021
GENERAL FUND BALANCE
The Evansville Community School District Board of Education recognizes the need for carrying an operating reserve in the General Fund to:
- Provide adequate working capital sufficient to meet the District's cash-flow requirements, thus minimizing any cash-flow (short-term) borrowing during the annual operating cycle;
- Function as a safeguard to fund unanticipated expenses that the District might incur; and
- Demonstrate fiscal responsibility resulting in a higher credit rating, which will help to reduce District borrowing costs.
In recognition of these needs, the Board shall strive to develop a District budget which, will add sufficient Funds each year to the Fund 10 Fund Balance. The Board's goal for the unreserved designated Fund Balance shall be between 9-18% at fiscal year-end.
The Fund Balance will consist of five components according to the Government Accounting Standards Board Statement 54 designed to indicate both:
- Constraints on how resources of the Fund can be spent; and
- The sources of those constraints.
Non-Spendable Fund Balance: The Non-Spendable Fund Balance classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example, inventories and prepaid amounts.
Restricted Fund Balance: The Restricted Fund Balance classification should be reported as Restricted when constraints placed on the use of resources are either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or (b) Imposed by law through constitutional provisions or enabling legislation.
Committed Fund Balance: The Committed Fund Balance classification are amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Board of Education. Those Committed amounts cannot be used for any other purpose unless the Board of Education removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Committed Fund Balance also should incorporate contractual obligations to the extent that existing resources in the Fund have been specifically committed for use in satisfying those contractual requirements.
The formal action of the Board of Education that commits Fund Balance to a specific purpose should occur prior to the end of the reporting period, but the amount, if any, which will be subject to the constraint, may be determined in the subsequent period.
Assigned Fund Balance: The assigned Fund Balance classification are amounts that are constrained by the district’s intent to be used for specific purposes, but are neither Restricted nor Committed, except for stabilization arrangements. Intent should be expressed by the Business Manager. Assigned Fund Balance includes (a) all remaining amounts (except for negative Balances) that are reported in governmental Funds, other than the General Fund, that are not classified as Non-Spendable and are neither Restricted nor Committed and (b) amounts in the General Fund that are intended to be used for a specific purpose.
Unassigned Fund Balance: The Unassigned Fund Balance classification is the residual classification for the general Fund. This classification represents Fund Balance that has not been assigned to other Funds and that has not been Restricted, Committed, or assigned to specific purposes within the general Fund. The General Fund should be the only Fund that reports a positive Unassigned Fund Balance amount. In other governmental Funds, if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to those purposes, it may be necessary to report a negative Unassigned Fund Balance.
Legal Ref.: Section 65.90 Wisconsin Statutes (Municipal Budgets)
Governmental Accounting Standards Board Statement #34 (GASB 34)
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