D-630 Fund Balance of General and Special Revenue Funds

The College shall maintain fund balance levels adequate to assure the future financial health of the College and provide for financial challenges outside of its ability to complete its mission. Fund balance shall be maintained and used, at the discretion of the District Board, to maintain the ability to meet the College’s financial needs. It shall develop budgets that maintain fund balance within the specified ranges. General Fund (Fund 1) and Special Revenue Fund (Fund 2) are operational funds.

To achieve these goals, the College shall seek to provide (in this order):

1. RESERVES

The reserve fund balance equals end-of-year encumbrances and prepaid expenditures (i.e., inventory and prepaid services) per generally accepted accounting principles.

2. DESIGNATED FOR OPERATIONS

Maintain a fund balance of 16.7% – 25% (60-90 days) of each operational fund’s budgeted appropriation.

• To meet annual cash flow needs and avoid short-term borrowing,

• To provide resources for unexpected expenditures and revenue fluctuations,

• To make orderly adjustments in resources resulting from the termination and reduction in revenue sources,

• To provide seed money for new instructional and support service priorities,

• To support one-time capital equipment acquisitions or building improvements,

• To maintain a strong bond market credit rating and positive impression of the College’s financial position and management.

3. DESIGNATED FOR STATE AIDS FLUCTUATIONS

Maintain a fund balance of up to 10% of the college’s budgeted state aids (classifications 4200-4299, except property tax relief aid) in each operational fund for fluctuations in future years’  budgeted state aid revenue to provide for reductions in state support.

4. DESIGNATED FOR SUBSEQUENT YEARS

Maintain a fund balance of up to 15% of the General Fund’s state aid in the College’s current adopted budget. 

5. DESIGNATED FOR SUBSEQUENT YEAR

All fund balances are not reserved or designated in the above classifications.

The College will develop budgets to reach these fund balance goals and, when necessary, apply fund balances in excess of these goals for capital improvements to supplement the annual investment level supported by the sale of general obligation notes.

The District Board strongly discourages using fund balance as a resource for balancing the operating budget. It prohibits budget managers from exceeding approved appropriations that result in an unapproved reduction of fund balance. The District Board may amend this Policy and applicable procedures at any time.