6545 Fund Balance
- 6000: Fiscal Management Goals
6545 Fund Balance
GASB has issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54). The objective of this Statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied.
Fund Balance Classification (pursuant to GASB Statement 54)
Fund balance amounts will be reported by the District according to the following classifications:
Non-spendable – consists of assets that are inherently non-spendable in the current period either because of their form or because they must be maintained intact, including prepaid items, inventories, long-term portions of loans receivable, financial assets held for resale and principal of endowments.
Restricted – consists of amounts that are subject to externally enforceable legal purpose restrictions imposed by creditors, grantors, contributors or laws and regulations of other governments; or through constitutional provisions or enabling legislation. Because the State regulates the establishment, funding and use of school district reserves, generally, will be classified as restricted fund balance.
Committed – consists of amounts that are subject to a purpose constraint imposed by a formal action of the District’s highest level of decision-making authority before the end of the fiscal year and that require the same level of formal action to remove the constraint.
Assigned – consists of amounts that are subject to a purpose constraint that represents an intended use established by the Board or their designated official. The purpose of the assignment must be narrower than the purpose of the general fund. In funds other than the general fund, assigned fund balance represents the residual amount of fund balance. Assigned fund balance generally includes encumbrances and appropriated fund balance.
Unassigned – represents the residual classification for the government’s general fund and could report a surplus or deficit. In funds other than the general fund, the unassigned classification should be used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned.
Fund balance measures the net financial resources available to finance expenditures within current or future periods. The District’s unassigned general fund balance will be maintained to provide the District with financial stability and a margin of safety to fund unanticipated contingent expenditures that may occur unexpectedly during the fiscal year. The unassigned general fund balance used for these purposes may only be appropriated by resolution of the Board of Education unless voter approval is required.
Any portion of fund balance may be applied or transferred for a specific purpose either by voter approval if required by law or by formal action of the Board of Education if voter approval is not required. Amendment or modification to the applied or transferred fund balance must also be approved by formal action of the Board of Education.
The Board of Education shall delegate the authority to assign fund balance, for encumbrance purposes, to the purchasing agent or the substitute purchasing agent who has the delegated authority to sign purchase orders.
In circumstances where an expenditure is incurred for a purpose for which amounts are available in multiple fund balance classifications (i.e., expenditures related to reserves) the Board will assess the current financial condition of the District and then determine the order of application of expenditures to which fund balance classification will be charged.
Approved by the Board of Education: 03/16/17