A: A fund balance is an account in the district’s budget that is not allocated for a specific use. A fund balance is not intended to be used for ongoing expenditures, but for purposes like cash flow, shortfalls in state funding or emergency situations.

There are three types of fund balances:

Unassigned Fund Balance – Funds available to meet current and future years expenditures. These are resources in Fund 1 that are not restricted and have not been committed or assigned to any specific purpose. Current policy requires the unassigned fund balance to be between 8-12% of general fund expenditures.
Reserve Fund Balance – Minnesota State Statute dictates the amount of money kept in the reserve fund balance and the use of that money.
Assigned Fund Balance - The assigned fund balance is money which has been set aside for a specific purpose. This money is assigned by the school board, or a body or an official to which the school board has delegated the authority to assign amounts to be used for a specific purpose. The assigned fund balance also includes donations which have been given for a specific purpose. If the Board sets aside money for a specific purpose they can reassign the money by Board action as needed; however, money given as a donation for a specific purpose cannot be reassigned or used for anything else.

Click here to learn more about fund balances in ISD 192 and how they work.

FAQ

FARMINGTON Area Public Schools