701 - Financial Accounting System

701 - Financial Accounting System dawn.gibson.cm… Wed, 08/17/2022 - 09:14

701.1 - Depository of Funds

Each year at its annual meeting, the board will designate by resolution the name and location of the Iowa located financial depository institution or institutions to serve as the official school district depository or depositories. The maximum deposit amount to be kept in the depository will be stated in the resolution. The amount stated in the resolution must be for all depositories and include all of the school district's funds.

It is the responsibility of the board secretary to include the resolution in the minutes of the meeting.

Note: While this policy is not mandatory, the content of it is.

Legal Reference: Iowa Code §§ 12C.2; 279.33

Cross Reference: 210.1 Annual Meeting
206.4 Treasurer [or 206.3, Secretary-Treasurer]
704.1 Local - State - Federal - Miscellaneous Revenue

Approved August 15, 2022 Reviewed Revised

dawn.gibson.cm… Wed, 08/17/2022 - 09:14

701.2 - Transfer of Funds

When the necessity for a fund has ceased to exist, the balance may be transferred to another fund or account by board resolution. School district monies received without a designated purpose may be transferred in this manner. School district monies received for a specific purpose or upon vote of the people may only be transferred, by board resolution when the purpose for which the monies were received has been completed. Voter approval is required to transfer monies to the general fund from the capital projects fund and debt service fund.

If all requirements for district use of funds under the Preschool Foundation Aid, Professional Development Supplement, Home School Assistance Program, Teacher Leadership Supplement or any discontinued fund have been met and funds remain unexpended and unobligated at the end of the fiscal year, the district may transfer all or a portion of remaining funds by passage of a board resolution into the district’s flexibility account in accordance with law. Before the expenditure of amounts in the flexibility account, the district shall publish notice of the time, date, and place of a public hearing on the proposed resolution approving said expenditures. The board must find and certify that the statutory requirements of each original source of funds have been met before adopting the resolution approving the expenditures. The district will present a copy of the signed board resolution to the Department of Education.

The District may transfer by board resolution from the general fund to the student activity fund an amount needed to purchase or refurbish protective and safety equipment required for any extracurricular interscholastic athletic contest or competition sponsored or administered by the Iowa High School Athletic Association or Iowa Girls High School Athletic Union.

If the before and after school program exceeds the amount necessary to operate the program, the excess amount may, following a public hearing, be transferred by resolution of the board of directors of the school corporation for deposit in the general fund of the school corporation to be used for school district general fund purposes. The district will present a copy of the signed board resolution to the Department of Education.

Beginning in FY 2024, unexpended and unobligated dollars that remain at the end of a fiscal year in addition to ongoing revenues may be transferred to the Teacher Salary Supplement (TSS) program from Professional Development Supplement (PDS), Talented and Gifted (TAG), and Teacher Leadership Supplement (TLS) without board action.

The district may choose to request approval from the School Budget Review Committee to transfer funds to make a program whole, prior to its elimination.

Temporary transfers (loans) of funds are permitted between funds but must be repaid to the originating fund, with interest, by Oct. 1 following the end of the fiscal year.

It is the responsibility of the board secretary to make recommendations to the board regarding transfers and to provide the documentation justifying the transfer.

FINANCIAL RECORDS

Financial records of the school district are maintained in accordance with generally accepted accounting principles (GAAP) as required or modified by law. School district monies are received and expended from the appropriate fund and/or account. The funds and accounts of the school district will include, but not be limited to:

Governmental fund type:

∙ General fund – This fund is the chief operating fund of the district. It is used to account for all financial resources except those accounted for and reported in another fund.

∙ Special revenue fund – These funds account for the proceeds of specific revenue sources other than trusts or major capital projects, that are legally restricted or committed to expenditure for specified purposes other than debt service or capital projects.

--Management Levy fund

--Public Education and Recreation Levy fund (PERL)

--Student activity fund

∙ Capital projects fund - These funds are used to account for financial resources to acquire or construct major capital facilities or other capital assets (other than those of proprietary funds and trust funds) and to account for revenues from SAVE.

--Physical Plant and Equipment Levy fund (PPEL)

--Secure and Advanced Vision for Education (SAVE)

∙ Debt service fund – This fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.

Proprietary fund type – This fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.

∙ Enterprise fund

--School nutrition fund

--Child care fund

--Internal service fund

--Community Education

--Preschool (nonvoluntary, state)

Fiduciary funds: - These funds are used to account for monies or assets held by the school district on behalf of, or in trust for, another entity.

∙ Trust

--Expendable trust funds

--Nonexpendable trust funds

--Pension trust funds

Custodial Funds

Non-Fiduciary Scholarship Fund

Account groups - The groups are the accounting records for capital assets and long-term debt.

∙ General capital assets account group

∙ General long-term debt account group

The board may establish other funds in accordance with generally accepted accounting principles and may certify other taxes to be levied for the funds as provided by state law. The status of each fund must be included in the annual report.

It is the responsibility of the superintendent in conjunction with the school business official to implement this policy and bring necessary changes in the maintenance of the school district's financial records to the attention of the board.

NOTE: The list of funds above does not include the "Library levy fund," which is only available to one school district. The school district eligible to levy the library levy must add this fund to its policy.

Legal Reference: Iowa Code §§291; 298; 298A.

281 I.A.C. 98

Cross Reference: 704 Revenue

705 Expenditures

Approved August 15, 2022 Reviewed Revised March 18, 2024

dawn.gibson.cm… Wed, 08/17/2022 - 09:15

701.3 - Financial Records

Governmental fund type:

∙ General fund – This fund is the chief operating fund of the district. It is used to account for all financial resources except those accounted for and reported in another fund.

--Management Levy fund

--Public Education and Recreation Levy fund (PERL)

--Student activity fund

--Physical Plant and Equipment Levy fund (PPEL)

--Secure and Advanced Vision for Education (SAVE)

∙ Debt service fund – This fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.

Proprietary fund type – This fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.

∙ Enterprise fund

--School nutrition fund

--Child care fund

--Internal service fund

--Community Education

--Preschool (nonvoluntary, state)

Fiduciary funds: - These funds are used to account for monies or assets held by the school district on behalf of, or in trust for, another entity.

∙ Trust

--Expendable trust funds

--Nonexpendable trust funds

--Pension trust funds

Custodial Funds

Non-Fiduciary Scholarship Fund

Account groups - The groups are the accounting records for capital assets and long-term debt.

∙ General capital assets account group

∙ General long-term debt account group

Legal Reference: Iowa Code §§291; 298; 298A.

281 I.A.C. 98

Cross Reference: 704 Revenue

705 Expenditures

Approved August 15, 2022 Reviewed Revised March 18, 2024

dawn.gibson.cm… Wed, 08/17/2022 - 09:17

701.4 - Governmental Accounting Practices and Regulations

School district accounting practices will follow state and federal laws and regulations, generally accepted accounting principles (GAAP) and the uniform financial accounting system provided by the Iowa Department of Education. As advised by the school district’s auditor, determination of liabilities and assets, prioritization of expenditures of governmental funds and provisions for accounting disclosures shall be made in accordance with governmental accounting standards.

In Governmental Accounting Standards Board (GASB) Statement No. 54, the board identifies the order of spending unrestricted resources applying the highest level of classification of fund balance - restricted, committed, assigned, and unassigned - while honoring constraints on the specific purposes for which amounts in those fund balances can be spent. A formal board action is required to establish, modify and or rescind a committed fund balance. The resolution will state the exact dollar amount. In the event the board chooses to make changes or rescind the committed fund balance, formal board action is required.

The Board authorizes the Board Secretary to assign amounts to a specific purpose in compliance with GASB 54. An ‘assigned fund balance’ should also be reported in the order of spending unrestricted resources, but is not restricted or committed.

Fund Balance Reporting

Financial reporting for the balances in the District’s governmental funds is based on Governmental Accounting Standards Board (GASB) Statement 54, Fund Balance Reporting and Governmental Fund Types Definitions. Fund balance refers to the difference between assets and liabilities in the governmental funds balance sheets. GASB 54 established a hierarchy that is based on “the extent to which the government is bound to honor constraints on the specific purpose for which the amounts in those funds can be spent.”

The governmental funds can have up to five fund balance classifications. The classifications are defined below from most to least restrictive.

Nonspendable Fund Balance includes amounts that cannot be spent because they are either not in spendable form, or legally or contractually required to be maintained intact. This includes items not expected to be converted to cash, including inventories and prepaid expenses. It may also include other property acquired for resale and the principal of a permanent fund.

Restricted Fund Balance should be reported when constraints placed on the use of resources are either externally imposed by creditors, grantors, contributors, or law or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. This includes “categorical balances.”

Committed Fund Balance reflects specific purposes pursuant to constraints imposed by formal action of the board. Such constraints can only be removed or changed by board action.

Assigned Fund Balance reflects amounts that are constrained by the government’s intent to be used for specific purposes but meet neither the restricted nor committed forms of constraint. Unless the amount is negative, the assigned fund balance is the residual classification for the governmental funds other than the general fund. If the amount is negative, then the residual amount is shown as unassigned.

Unassigned Fund Balance is the residual classification for the general fund only. As noted above, if a negative residual amount exists in other governmental funds then the amount is reported as unassigned.

It is the responsibility of the superintendent to develop administrative regulations implementing this policy. It is also the responsibility of the superintendent to make recommendations to the board regarding fund balance designations.

Note: This policy is an optional policy. Should the board not adopt a policy implementing GASB54, the default is to reduce – committed, assigned and unassigned fund balances – in that order. Adoption of a policy gives boards the ability to have greater control over their fund balances.

Legal Reference: Iowa Code §§ 257.31(4); 279.8; 297.22-.25; 298A.

Cross Reference: 701.3 Financial Records

703 Budget

704 Revenue

Approved _August 15, 2022 Reviewed ________ Revised ___March 18, 2024

dawn.gibson.cm… Wed, 08/17/2022 - 09:19

701.5 Fisal Management

The Board recognizes its fiduciary responsibility to oversee the management of school district funds in keeping with the school district vision, mission and goals. To achieve this purpose, the board may engage in learning about the financial needs, operations and requirements of the district as appropriate for the board’s understanding of the district’s financial position. The Board also commits to engaging in annual financial goal setting for the district based upon measurable data and projections for the district.

After the fiscal year has closed, the Superintendent or their designee will provide to the Board concise, timely, well organized financial data. The Board will exercise its oversight responsibilities by reviewing relevant PK-12 public education sector indicators to understand the financial trends of the district.

The board will establish and review financial goals annually. The District will measure whether these goals were obtained as of June 30, but only after completion of the Certified Annual Report due September 15^th each year.

Providing the best possible educational experience for all students and meeting federal, state, and local academic goals for each student requires maximizing General Fund resources for use in the instructional program. The board may request from the School Budget Review Committee (SBRC) additional modified spending authority (MSA) where it may be available for items such as:

Special education deficit balances
Advances to support increasing student enrollment
Supports for students identified as English Learners
At risk / dropout prevention programming
Initial staffing associated with opening new buildings or programs
Any other lawful purpose

Any award of modified supplement amount will be levied as a cash reserve based on the recommendation of the superintendent/designee and approved by the Board of Education in keeping with the fiscal management performance measures provided for in district policy.

NOTE: Districts should include any optional uses of MSA the district uses in the bulleted list.

Legal Reference: Iowa Code §§ 257.7, 31; 279.8

Approved September 18, 2023 ____________ Reviewed ________ Revised:

bgreene@cresto… Thu, 09/28/2023 - 10:32

701.05R1 Financial Metrics

The following relevant PK-12 public sector indicators will be provided to the Board annually to better understand the financial trends of the district. These indicators will be an accurate depiction as of June 30^th of the preceding fiscal year and will depict at a minimum of 5 years of data.

Total revenues and expenditures by fund and major sources;
Financial Solvency Ratio - assigned plus unassigned fund balances divided by total revenue minus AEA flow through;
Unspent Authorized Budget Ratio - amount of maximum spending authority left at year end after deducting the general fund expenditures incurred during the year;
Unspent Authorized Balance Ratio Net of Restricted Fund Balances (Categorical Fund Balances) - amount of maximum spending authority left at year end after deducting both the general fund expenditures incurred during the year and the total restricted fund balances (categorical fund balances) at year end;
Enrollment Trend - funding follows the student so it is important to understand district enrollment numbers;
Staff costs as a percent of total general fund.

Financial Projections

Five-year financial projections of the general fund will be prepared and updated annually. The general fund is the operating fund of the district where the majority of salaries and benefits are funded. Projections will help the board determine sustainability of the annual operating budget and help make future budgetary decisions.

The District is committed to utilizing the following financial metrics in determining district financial goals:

Unspent Authorized Budget Ratio: Maintain unspent authorized budget ratio within the 5-15 % target range. The current year’s projected balance will be discussed with the Board before staffing and other spending decisions are finalized for the succeeding year.
Unspent Authorized Budget Net of Restricted Fund Balances (Categorical Balances): Maintain unspent authorized budget ratio net of restricted fund balances (categorical balances) within the 5-15% target range. The district will attempt to spend the restricted (categorical) annual allocation in the year received to the extent possible.
Solvency Ratio: Maintain an unrestricted, uncommitted general fund balance within the 7-17% target range with 7[ % being a minimum goal, not to exceed 25%. The current year’s projected balance will be discussed with the Board before establishing the succeeding year’s cash reserve levy and before staffing and other spending decisions are finalized.

bgreene@cresto… Thu, 09/28/2023 - 10:38