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The Purpose Of The Fund Balance; What's the real purpose?
Topic Started: Nov 8 2006, 09:43 AM (210 Views)
fyi
Principal
Quote:
 
Supt. Randy Liepa said the district uses a variety of factors in setting student count numbers. As for cuts, Liepa said, the district doesn't make mid-year cuts, in fact teacher contracts forbid layoffs after June 1.

"That's why you have a fund balance," he said. "We'd just as soon go to the fund balance to balance the budget in the middle of the year."


I thought the fund balance was used to cover expenses while the district waits to get paid from the State(i.e., startup costs, etc.) :blink:

We were told the fund was dangerously low.....now they can afford to dip into it mid-year to balance the budget?

Does anyone know when the district gets the $$$ from the State? How much $$$ do they need to cover expenses until they get paid?
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mikefromholland
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Principal
I'm curious as to what your district's fund balance is, in dollars, and as a percentage of the annual budget.

I believe that MASB recommends that districts maintain a fund balance above a certain percentage, 10 or 15 percent if I'm not mistaken.

BTW, Holland's fund balance has been in the 1 to 3 percent range for at least the last 2 or 3 years. It is not recommended and not desirable, but nor has the district been forced into receivership. (We were threatened with that as part of the sales pitch for the focus schools ... sounds familiar, huh?)

The biggest problem we have due to the low fund balance is meeting cash flow at certain times of the year. We have to borrow money for cash flow purposes, usually in the mid to late spring, and then pay it off later in the year. If we had a healthy fund balance this would not be necessary.
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NFarquharson
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Principal
mikefromholland
Nov 8 2006, 09:40 PM
I'm curious as to what your district's fund balance is, in dollars, and as a percentage of the annual budget.

I believe that MASB recommends that districts maintain a fund balance above a certain percentage, 10 or 15 percent if I'm not mistaken.

BTW, Holland's fund balance has been in the 1 to 3 percent range for at least the last 2 or 3 years. It is not recommended and not desirable, but nor has the district been forced into receivership. (We were threatened with that as part of the sales pitch for the focus schools ... sounds familiar, huh?)

The biggest problem we have due to the low fund balance is meeting cash flow at certain times of the year. We have to borrow money for cash flow purposes, usually in the mid to late spring, and then pay it off later in the year. If we had a healthy fund balance this would not be necessary.

Our fund balance is in the 10.5 million neighborhood, about 6% of the total general ed budget. This does not include the "center" special ed fund, which is kept seperately. There are also special funds like the sinking fund and a technology fund available, so my guess without looking at the grand total is that we are really at or above that 10% level in reality. We have a very small debt load and are not even close to receivership, contrary to the scare tactics that have been used. Unfortuantly we could now go through that balance pretty fast unless the district starts to correct things, plugging the hole that may continue to leak more and more students fom this district.
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f11
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LPS, transportation for all
mikefromholland
Nov 8 2006, 09:40 PM
I'm curious as to what your district's fund balance is, in dollars, and as a percentage of the annual budget.

I believe that MASB recommends that districts maintain a fund balance above a certain percentage, 10 or 15 percent if I'm not mistaken.

BTW, Holland's fund balance has been in the 1 to 3 percent range for at least the last 2 or 3 years.  It is not recommended and not desirable, but nor has the district been forced into receivership.  (We were threatened with that as part of the sales pitch for the focus schools ... sounds familiar, huh?)

The biggest problem we have due to the low fund balance is meeting cash flow at certain times of the year.  We have to borrow money for cash flow purposes, usually in the mid to late spring, and then pay it off later in the year.  If we had a healthy fund balance this would not be necessary.

Stated at the audit review board meeting:

Almost $11 million = about 6.9%
last year 6.1%

Heres my "big" questions after pouring over this meeting numerous times, and now seeing what the enrollment numbers are.

1) It was stated by the auditor that if certain criteria are met, i.e, a fund balance less than 5% and expeditures significantly exceeding revenues, that it would trigger a state level action (public act 621 ?)....

It now should be obvious to everyone of the position the district is now in. We will be less than 5% if they pull money out of the general fund(to cover the enrollment losses) and obviously our revenues are going to be down significantly.

2)My other question...and I bet they are going to do this...Mark my words...
Are they going to pull money out of the "center program" fund to cover their a$$?
Its going to be a shell game, it WILL get swept under the rug.

My other point in all of this: If nothing had changed(no closed schools) things WOULD be all "sunshine & rainbows".... the scare tactics they were using before were BULL$$it!
We were in pretty good shape, until the LIe....
:ph43r:
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