Agenda - 09-29-2003-1 - Laserfiche WebLink

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x ~~ ~ r . i., .. 15 ~ ~=. ~ . TT,NANCE DEPARTIVIENT - ~ ~ ~. ._ ORANGE COUNTY GORDON R. BAICrR DIRECTOR Ta: 'County: Commissioners From: Finance Director.. ~' ...•..... • • ~ •~ -' ~~' Subject: -'Recommended Policy on Fund Balance~of'School Sgstems. Date: February , During the 1985-86 budget process, it was decided that a policy should be developed regarding .the appropriate amount of fund balance available but unappropriated that each school system should maintain. This policy Would be agreed upon by the County Commissioners and the Boards of Education. This recommended policy regarding the fund balance applies to the local current expense fund and addresses the maximum amount of fund balance available but unappropriated that each system should have at the beginning of each fiscal year. she school. systems should maintain only the fund balance~~necessary to meet their cash ilow.needs and. to make relatively-minor adjustments iri their appropriations during the year. •- . The Local-Government Commission monitors the fund balance.. of the General Fund of all tax levying units of government in North Carolina. They have established a policy that ouch.units of.govercmeat should maintain each fiscal year a General Fund fund.•balance available 'in an'amount equal. to at least 8X of the total expend~.Cures.of the Genera. Fund for the year. The expenditures oa which this 8x~.is:computed includes the Couaty,'s expenditures for the school systems' local current expense as well as far their capital outlay. Thus, in meeting the Local Government Commission's minimum standard of 8X, the County's fund balance avail- abl.e'for the General Fund includes a substantial amount that is related to expen- ditures for the school systems. The Local Governaenc Commission does not have such a minimum standard for the school systems themselves. One can conclude from this that they rely'on the counties to. maintain an adequate fund balance level,.fox the school systems. The superintendent and the finance director for Orange County Schools have expressed their desire to build the fund balance a•~ailable but unappropriated in the local Curren se fund to a level of $120,000. This amount would .equal approximatel .2.7X~of the budgeted expenditures in this fund for 1985-86 as originally adopceit-:- Based on the fact that Orange County Schools receive ~he~.:major- portion. of their local current e~cpense revenue from the County in n;.equal amount each month,. and .using the County's SX minimum standard as a -gauge~'aa2.7X-.fund-balance..level-should-be adequate.