Part of the State accounting process each year is to project our beginning and ending fund balance, much like an individual might estimate their savings account goals. If the district spends less than our revenue in a given year, the remainder is fund balance.
The ending fund balance has two parts to it: reserved fund balance and unreserved fund balance:
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The reserved fund balance exists for assets we have for a specific purpose. This includes carryover – or unspent funds – from programs with inflexible expenditures. It also includes things such as our inventory of food items that have not yet been made into a meal and served/sold to students.
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The unreserved fund balance is liquid cash – available to use on any district expenditure and saved for other eventualities, such as lower enrollment than expected or an unexpected expense.
Board Policy 7130 states, in part: The budgeted unreserved fund balance is held to compensate for economic uncertainties and should be targeted at a range between 4.0% and 5.0% of budgeted General Fund expenditures.
